London and Paris

The rivals

Two great cities are about to hold mayoral elections. Which has the brighter future?

WHEN running for president of France last year, Nicolas Sarkozy made an unusual campaign stop: London. Speaking in a converted fish market, before a rapt crowd of French expatriates, he called Britain's capital “one of the biggest French cities”. It had, he went on, the “vitality that Paris so badly needs”.

The French and British capitals are linked as never before. Since the opening of Britain's first high-speed rail link last November, arriving into beautifully restored St Pancras, only two-and-a-quarter hours separate the two. An estimated 200,000 French people now live in London, serving coffee or trading derivatives; waiting lists groan at the Lycée Français in South Kensington. The British population in Paris, far smaller, still numbers some 22,000.

The two cities fought fiercely to host the 2012 Olympic games, until—to Paris's consternation—London won. That victory still rankles on the banks of the Seine. Both capitals also happen to be run by left-wing mayors, the Socialist Party's Bertrand Delanoë in Paris and Labour's Ken Livingstone in London, whose mandates are about to expire. Voters in each city are heading to the mayoral polls in Paris on March 16th and in London on May 1st.

Londoners and Parisians alike will not simply cast their votes on local grounds. In Paris, voters are partly seizing the chance to snub Mr Sarkozy, whose poll ratings have slumped. Against a lacklustre rival on the right, Françoise de Panafieu, the popular Mr Delanoë looks likely to secure a second term, which would be a spectacular victory in a city considered for decades a stronghold of the Gaullist right. In London, voters could decide to send an electoral message to Gordon Brown, the British prime minister, and will be able to test the new-look Conservatives. The outspoken Mr Livingstone, whose team has been dogged by charges of cronyism, is challenged on the right by Boris Johnson, a mop-haired former journalist and Conservative MP, and in the centre by Brian Paddick, a Liberal Democrat and former police chief.

The jobs at stake are not exactly the same. The Paris mayor does not govern the banlieues, and runs a city numbering just 2.3m people (fewer than the 2.9m in inner London). His London counterpart is in charge of fully 7.4m people, more comparable to the 6.4m who live in Paris and the three departments encircling it combined. The Paris mayor, however, has broader powers: while both cities' mayors are responsible for planning and transport, the Paris town hall also runs social housing and primary schools, for example. This gives Paris's mayor a relatively bigger budget: €7.6 billion next to London's €14 billion (£10.7 billion).

All the same, candidates of every stripe in both Paris and London are campaigning on remarkably similar promises: to make housing affordable, to lower CO₂ emissions, to discourage the use of cars, to green the city; and to burnish the image they want to project to the rest of the world. For Paris and London these days are also fierce competitors: for investment, besides the more intangible qualities of inventiveness and style that make a “world city” in the global mind.

From the balcony on the top floor of the London mayor's lopsided plate-glass office on the south bank of the Thames, the din is deafening. Nine floors below, diggers and drills are ripping into the earth and cement-mixers are churning. The most arresting feature of the London skyline these days is not the new architectural landmarks—the Gherkin, Tate Modern, City Hall—but the staggering number of cranes. In the centre of Paris, there are none.

By most economic tests, London outstrips Paris. Its stock exchange, by market capitalisation, is two-and-a-half times larger. It is the world's biggest market for global foreign exchange, over-the-counter derivatives and international bonds. As a destination for the funds of foreign investors, it is consistently rated the top city in Europe in annual surveys by Cushman & Wakefield, a property-services firm. Between 2002 and 2006, London grabbed 24% of foreign direct investment in Europe's 15 biggest cities, compared with 19% across the Greater Paris region, according to a study by Ernst & Young, an accounting firm. Londoners are also better off than those living in Greater Paris: even when adjusted for purchasing power, they are on average 8% richer per head.

In haute cuisine, as in haute couture, Paris may still triumph. It boasts, for instance, nine three-star Michelin restaurants; London has one. But the French capital has been slower to embrace the more informal gastronomic culture, where a three-tier cheese trolley is not necessarily a badge of excellence. Over the past few years, London has spawned a giddy mix of new restaurants and bars, as well as internet start-ups, design studios and art galleries. Inner London's growing population, boosted by immigration, is set to swell by at least 17% by 2026. While its suburbs keep growing, the population of Paris, by contrast, is expected to drop by 3% by 2030 according to INSEE, the official statistics body. French publications feature such titles as “Paris is falling asleep” and “Is Paris dying?”

Indeed, officials at London's City Hall bristle at the idea that the two cities can be compared. “We don't think of ourselves as in competition with Paris,” sniffs John Ross, Mr Livingstone's economic adviser. “We've won that contest. We measure ourselves against New York.”

Managing chaos

Yet as recently as 1992, when the Maastricht treaty to launch the euro was signed, bankers in London were fretting about losing out to the financial centres within the future euro zone, notably Paris and Frankfurt. Back then, the pre-eminence of the British capital was far from assured. At the time, Jack Lang was the cool, polo-necked French Socialist culture minister, rejuvenating Paris with glass and steel, while his British equivalent was in charge of something stuffily called the “Department for National Heritage”. London's streets were gridlocked, its riverside was drab, its food inedible and coffee undrinkable. What went right for the city?

A number of things. First, Big Bang, the deregulation of the financial-services sector in 1986, propelled foreign investment into the City of London (though the markets were rocky in some subsequent years). The Labour government elected in 1997 kept the city attractive with stable economic management and with corporate and income taxes that were low, at least by French standards—though these are set to rise for non-domiciled residents. And it cared about the image of the capital, too. The Labour government not only spent freely on the arts, but also abandoned its resistance to using private sponsorship to build new galleries and museums. In doing so, it helped to shrug off a British indifference towards the look of London. Daring modern architecture proclaimed that this was a true world city.

Perhaps most important, the city has adopted a guiding creed that belongs neither to the political left nor the right: openness to change. “London has flourished not because it has sorted out its transport, or its city management, but because it opened its borders,” argues Tony Travers, director of the Greater London Group at the London School of Economics. These days, there is nothing particularly British about London, bar its tolerance of chaos. It has embraced globalisation to become an international city, while Paris has remained unapologetically French.

Nearly 700,000 extra foreign-born people have made London their home since 1997, bringing the capital's total foreign-born population to over 30%. Not counting illegals, Paris has fewer foreigners (about 14%) and, crucially, it is the more educated ones, whether from India or Poland, who head for London. (In total, Britain has attracted more skilled and professional immigrants: 35% of them have a college education, according to a recent OECD study, against just 18% in France.) The energetic renovation of newly fashionable districts such as Hoxton and Shoreditch is not only spurred by sky-high property prices elsewhere; it also owes something to the friction and renewal of London's messy, cosmopolitan mix. “Creative types don't want bourgeois homogeneity,” says Mr Travers. “They want edginess, and space to grow.”

The Sleeping Beauty

Until recently, two vast competing public renovation projects in Paris stared squarely at each other across the Avenue Winston Churchill, in the capital's smart 8th arrondissement. On one side, workers were busy restoring the 14,900-square-metre glass-domed roof of the Grand Palais, built for the Universal Exhibition in 1900. Opposite, restorers were at work on the scaffolding-clad Petit Palais. Each project was wrapped in a large billboard. “The state is restoring the Grand Palais,” read the first; “The Paris town hall is restoring the Petit Palais,” retorted the second. In their proud and rival aspirations to maintain the city's cultural heritage, these two signs seemed to make a firm statement: that historic Paris is worth investing in, and that the public purse is the way to do it.

Arguably, if London these days is marked by innovation, Paris favours preservation. While London seems to be stressing its desire for change with its new—and often controversial—architectural projects, the City of Light appears more concerned with scrubbing up what it already has. And to stunning effect: the buildings, boulevards and bridges of central Paris gleam. Fleets of cleaning vehicles brush and rinse its surfaces, day and night; floodlit monuments light up a magical night sky.

Yet this fondness for its intrinsic elegance seems to have bred a form of conservatism. “In terms of urban planning, Paris has been half-asleep,” says Thierry Jacquillat, head of Paris-Île-de-France Capitale Economique, a lobbying group. “Through its avant-garde architecture, London has an image of dynamism that does not exist in Paris.”

To some of its residents, this is a relief. Apart from La Défense, the business district to the west of Paris, which is due to get a new series of designer skyscrapers in the coming years, the capital has always resisted, for instance, the construction of high towers—much to the frustration of Mr Delanoë, who would like to plant some on the periphery. Indeed, an extraordinary collection of early colour photographs from 1907 onwards, currently on display at the Paris town hall, is a reminder of just how little the city—from its Art Nouveau metro signs to its corner café-bars—has changed physically since then.

In part, this conservatism fits a French tradition. A strong state has long attempted to defend the French way of life. All the capital's tiny boulangeries, selling freshly baked baguettes in twists or knots, or papeteries with their watermarked writing paper in ribbon-wrapped leather boxes, are kept in business partly by custom and taste. But they are also deliberately propped up by a tightly regulated retail industry, under which hypermarkets are not allowed to sell below cost. Successive governments, too—including the current one—have caved in to the militant taxi lobby, and have not dared to increase the number of licences. This keeps the taxi drivers quiet, but makes it almost impossible to hail a cab on the street.

To be sure, it is easier to innovate when there is less to preserve. London's restaurant pioneers had no gastronomic tradition to uphold. London can afford to be bold with its architecture, since its riverside skyline has none of the unbroken elegance of that of Paris. When the French capital has in the past been audacious, as when François Mitterrand commissioned I.M. Pei to build a glass pyramid in the courtyard of the Louvre, it prompted a local outcry. Many of the subsequent grands projets—the Grande Arche at La Défense, or the National Library of France—were pushed out to more peripheral sites.

Nor is it fair to say that Paris has stayed still. “Paris as a museum city is a caricature,” retorts Mr Delanoë. “The city needs to respect its heritage, but also add to it for the future.” He points to Paris Rive Gauche, a modernist redevelopment on the left bank in eastern Paris, complete with a looping pedestrian “Simone de Beauvoir” bridge across the Seine. His Vélib rent-a-bikes, available at 1,450 street corners across the capital, have been a huge hit. Along with a new tramway, widened bus routes and pedestrianised weekend quai-side roads, Mr Delanoë's Paris in many ways captured the ecological mood before it became fashionable.

All the same, as Mr Sarkozy has lamented, Paris seems to lack London's dynamism. Marc Levy, a French novelist who has chosen to make London his home, argues that the conservative attitude towards planning and architecture has a direct effect on creative life. “Paris doesn't take risks, it lacks audacity,” he says. “How can you create a desire to innovate when the ambient culture is oriented towards preservation?”

The price of audacity

London's more chaotic, laissez-faire approach, however, has its downside. It has become a city of excess, in all senses. Its economy is more reliant than Paris's on financial services, a sector prone to global swings such as the current credit crunch. This makes London's property market more volatile, too. Commercial office rents in London's West End are currently the most expensive in the world, according to Cushman & Wakefield: more than twice as much per square metre as those in Paris. Both London and Paris have been favourite destinations for investors in European commercial property, but this year faster-growing Moscow and Istanbul are supplanting them, according to a new study by the Urban Land Institute and PricewaterhouseCoopers. London may breed more start-ups, but also plenty of fold-downs; almost as many restaurants seem to close their doors as open each year.

For residents, too, London has become a victim of its own success. When rents and food prices are taken into account, it is the world's most expensive city, according to a study by UBS: beating New York and way ahead of Paris, in 11th place. High property values price first-time buyers out of the market, besides crowding out other topics of dinner-table conversation. Londoners are more worried now about housing costs than anything else, according to a recent survey by the mayor's office.

London has also consistently failed to plan for its expansion. The creation of the post of mayor in 2000, and Mr Livingstone's election to the job, helped temporarily to ease jams on the roads thanks to a congestion charge and a big investment in buses. The improvements, however, have been short-lived. The Underground's modernisation project has been a shambles, its financing a fiasco. After decades of wrangling, there is agreement at last on a fast underground Crossrail linking suburbs west and east, but this will not be open until 2017 at the earliest and the cost has spiralled. (By contrast, Paris has for years enjoyed a network of five RER rapid cross-city underground lines.) Heathrow airport is a torture-chamber, and the opening of its new Terminal 5 is unlikely to make much difference.

London's public hospitals, doctors' surgeries and state schools are creaking; its private alternatives are reserved for the rich. The capital as a whole may be thriving, but it still has its share of poverty, underlined by a wave of stabbings and shootings of teenagers in poor areas. Indeed, Mr Livingstone argues that the chief reason he wanted to host the Olympic games was not because of the sport, but in order to secure central-government money for the regeneration of the city's run-down eastern fringes.

Yet Paris, for all its interventionism, has not managed to shelter its own people from poverty. Over the past ten years, rental costs have shot up. Many middle-class families have fled to the cheaper suburbs, leaving an increasingly polarised population in the centre: the rich in the beaux quartiers, and the heavily African poor in the north-eastern neighbourhoods. Students may still occasionally riot at the Sorbonne, but none of them can afford to live near it these days. Above all, Paris is cut off administratively from its heavily Muslim banlieues, the scene of three weeks of rioting in 2005. There, on some housing estates, unemployment touches 50%, over five times the national average. Mr Delanoë's remit stops at the ring-road, the périphérique. Beyond it, each suburb is governed by its own mayor: a staggering 1,281 of them across the Île-de-France.

Swallowing the suburbs

The administrative split carries an unhelpful symbolism. “We're from 9-3,” is an often-heard refrain on the housing estates of Seine-Saint-Denis, the northern banlieue with that postcode, “not from Paris.” The fragmented power structure also holds up decision-making, not least in endless political wrangling between left and right. François Pinault, a business magnate, got so frustrated by political bickering when he tried to build a modern-art museum on the outskirts of Paris that he took his collection to Venice instead.

Politicians are beginning to come round to the idea of a unified city-plus-suburbs structure for Paris. Once this month's elections are over, Mr Sarkozy, on the centre-right, says he wants to create a “Greater Paris”. Mr Delanoë, on the left, talks too of a “Paris Metropole”. Whether they can get over their political differences remains to be seen. As it is, the right accuses the left of wanting to annex the suburbs; those in posh districts, like Neuilly, fear that the city just wants to grab their tax revenues. But the creation of a Greater Paris could well turn out to be a way both to get Paris to reach out to its banlieues, and to give the city a more innovative look outside its historic districts.

As for London, with bonuses, profits and jobs now on the line in the City, the ambience is more morose than it has been for years. Yet the city of excess has been through slumps before, and bounced back. In many ways, its bigger challenge is to cater to those who do not benefit from boomtime, and to manage the inequalities that the city has always bred. One test of this will be how it uses the Olympics, regarded coolly by many of the city's richer western residents, to revive eastern districts for their locals. Sprawling, crowded, hectic, serendipitous: like it or not, London as a whole seems to be kept going by a form of raw energy. And after all, to misquote Samuel Johnson, “When a man is tired of London, he can always go and have a three-star meal in Paris.”

The coming days

The week ahead

The Federal Reserve meets and other news

• THE Federal Reserve's rate-setting committee meets on Tuesday March 18th. The Fed has already slashed its key interest rate from 5.25% to 3% since last September. A further reduction of at least half a percentage point is expected after next week's meeting, in response to fresh signs of fragility in the American economy and the worsening state of global financial markets.

For background, see article

•THE fifth anniversary of war in Iraq comes around on Thursday March 20th. Last year's "surge" of American troops, along with help from Sunni tribes and a truce from the most troublesome Shia leader, Muqtada al-Sadr, has damped down violence. Even so American voters remain mostly eager to quit the country. And Iraqis continue to make only sporadic political progress on such matters as rehabilitating supporters of the previous regime and sharing power between regions.

• AFTER nine months, Belgium finally gets a proper government on Thursday March 20th. Last June, the Flemish Christian Democrats won elections in the linguistically divided country but the splintered party system, split between speakers of Flemish and French, inhibited coalition-building. Guy Verhofstadt, prime minister since 1999, will make way for Yves Leterme and a new five-party coalition. The deal will lead to a further weakening of Belgium's federal state in favour of regional governments, an unpopular decision in the poorer, Francophone south.

For background, see article

• TAIWAN chooses a new president on Saturday March 22nd. The front-runner is Ma Ying-jeou of the Kuomintang, the Nationalist party. His opponent, Frank Hsieh, hails from the Democratic Progressive Party of the incumbent, Chen Shui-bian. Mr Chen has rankled China by aggressively pushing for Taiwan's independence and tainted Taiwanese politics with corruption scandals, which have plagued his family and associates. Mr Ma and Mr Hsieh would both seek closer ties with the mainland, but Mr Hsieh would do so more grudgingly.

For background, see article

Tibet

Lhasa under siege

Our China correspondent sends an eyewitness report of the continuing crackdown in the Tibetan capital

IN LHASA’S old Tibetan quarter the authorities reasserted control on Sunday March 16th after two days of anti-Chinese rioting. Helmeted troops with rifles are patrolling the narrow alleyways, firing the occasional round. Frightened residents are staying at home. Some are too fearful even to emerge onto rooftops because of the risk of being shot.

So far, in this part of the city, the security forces appear to have acted with relative restraint. There are persistent but unsubstantiated reports of Tibetans killed by security forces during the rioting on Friday and Saturday. The Dalai Lama, Tibet’s exiled spiritual leader, has spoken of unconfirmed reports of up to 100 deaths. But there are no convincing accounts of the kind of bloodshed involved in the crushing of the Tiananmen Square protests in Beijing in 1989 or in the suppression of the last serious outbreak of anti-Chinese unrest in Tibet earlier that year. With the approach of a deadline on Monday for rioters to surrender themselves, however, some residents fear that widespread and indiscriminate arrests will follow.

After hours of rioting on March 14th, a ring of troops was deployed around the large Tibetan quarter during the night. The next day some residents continued to attack the few Chinese-owned businesses still left intact. Your correspondent saw a group smashing the shutter of one shop and, in another alley, throwing looted goods into a huge fire. Smoke billowed up from an area where the city’s main mosque is located. Many ethnic Chinese in this part of Lhasa belong to the Hui, a Muslim minority, whose members control much of the city’s meat trade.

But as the security forces (in this area it appears they are mainly members of the paramilitary People’s Armed Police, a riot-control unit) continued to step up their presence, the rioting receded. At first some residents threw stones at those troops who were not armed with rifles, retreating rapidly when occasional tear-gas shells were fired. Later on Saturday, troops with rifles began moving into the alleyways, shooting single shots from time to time. Some traversed the rooftops of the densely packed, flat-roofed houses. One briefly appeared on the roof of your correspondent’s hotel, terrifying a Tibetan and two Westerners cowering below the parapet.

During the night, many residents took to the rooftops as rumours swept the area that Huis were preparing a revenge attack on Tibetan premises following the burning around the mosque (it is not clear whether the building itself was damaged). Some prepared stones to throw at any attackers. Tension subsided as fresh rumours spread that the military had cordoned off the Hui quarter.

By Sunday, the authorities appear to have regained control of the streets. Occasional shots were still being fired by troops in the alleyways (whether in warning or at human targets is unclear). Few residents in this normally bustling part of Lhasa now dare to venture out.

In a sign that the government is feeling more confident that its security measures are working, two representatives of the Tibetan administration’s Foreign Affairs Office visited this hotel in the riot-torn area. They offered to help arrange a flight out if needed, but gave no order to depart. The Economist remains the only foreign news organisation with official approval to be in Tibet—which was applied for and granted well before the unrest broke out.

If residents are not to starve or run out of that daily necessity, yak butter (used in the tea Tibetans drink), a signal will have to be given soon that it is safe to venture out to buy essential supplies. Even when they give this, the authorities will still want to maintain a conspicuous force in the alleyways. Tensions are unlikely to subside rapidly. There are numerous anti-Chinese protests in what China calls the Tibet Autonomous Region as well as in the adjoining ethnic-Tibetan areas of China. Some of the biggest have occurred around Labrang in Gansu Province, one of Tibetan Buddhism’s biggest and most important monasteries. Many Tibetans see the approach of the Olympic games in Beijing in August as an unmissable opportunity to draw attention to their plight.

In Lhasa the authorities fear Tibetans might disrupt an Olympic torch-carrying ceremony planned for May. It will be deeply embarrassing for them if they have to cancel this or hold it with troops filling the streets. But embarrassment will be hard to avoid. China’s main hope is that Western governments will resist demands from Tibet’s sympathisers for a boycott of the games. Of that it is still confident.

Saturday, March 15, 2008

But Which Advisers Have the Candidates' Ears?

It's Still the Economy, Stupid

By ROBERT POLLIN

"It's the economy, stupid" was the one memorable slogan to have emerged out of Bill Clinton's successful first run at the presidency in 1992, and it became the overarching theme of his eight years in office. As the U.S. economy has continued to spiral downward in the first months of 2008, the economy is again emerging as the single most important question of the presidential campaign, even eclipsing the Iraq war as a concern among voters.

What do Barack Obama, Hillary Clinton, and John McCain have to say about our current reality of financial crisis and recession, and the generation-long stagnation in average living standards that has preceded the crisis of the moment? There aren't significant distinctions between Obama and Clinton in terms of their campaign platforms, while both Democratic contenders share huge differences with McCain. But the most important question is not where these candidates stand during the campaign; it's what they would actually do while in office. And this is more a matter of political power-which social groups can exert pressure within a new administration-than of economic philosophy.

This point was highlighted in dramatic fashion near the end of the March 4 primary campaigns in Ohio and Texas when Austan Goolsbe a professor at the University of Chicago and Obama's chief economic advisor, was reported to have told Canadian diplomats that Obama was far more sympathetic to free trade measures such as NAFTA than he was letting on in his campaign speeches. Goolsbe denied saying this. But the fact is, we can't know what Obama will really do on NAFTA and related measures until he becomes president, facing a whole range of pressures. These will include big business continuing to seek free access to Mexico's vast pool of low-wage workers.

In terms of public platforms, McCain advances an uneasy combination of the two strands of thinking that have long been dominant among Republicans-Reaganesque tax cuts that "supply-siders" claim will stimulate economic growth, along with old-school anti-New Deal positions opposing social spending and supporting a balanced federal government budget. It should not be surprising that McCain's approach is a mushy amalgam. McCain openly admitted in late 2007 that "the issue of economics is not something I've understood as well as I should." This is true, despite the fact that he has been a member of Congress for 26 years and a two-time presidential candidate.

Obama and Hillary Clinton are increasingly advancing an agenda focused on job creation, affordable health care, greater equity in the tax code, limits on free trade, and combining economic growth with environmental protection-so-called "green growth." These are certainly desirable goals.

But we must keep in mind that Bill Clinton advanced similar goals in 1992, under his economic program of "Putting People First." Yet Clinton's economic program changed drastically even during the two-month interregnum between his November election and his inauguration in January 1993. During this time, Clinton decided that the first priority of his administration would be to serve the interests of Wall Street. The Clinton years were defined by across-the-board reductions in government spending as a share of the economy's total spending, virtually unqualified enthusiasm for free trade, tepid and inconsistent efforts to assist working people in labor markets, and the deregulation of financial markets.

Bill Clinton even conceded during the period before his inauguration that with his new policy focus, "we help the bond market and we hurt the people who voted us in." Either Hillary Clinton or Barack Obama could easily fall into this same trap if they aren't faced with intense pressure from progressive forces to maintain their campaign commitments. Such a concern was certainly underscored by the reports of Goolsbe's comments to the Canadians on NAFTA.

We get some insights into the likely economic policy approaches of McCain, Clinton and Obama-probably more than by reading their respective platforms-by considering whom they are listening to now, and who would be likely to serve as high-level advisors in a McCain, Clinton, or Obama White House.

McCain has said he will call on people like Pete Peterson and Jack Kemp. Peterson is a billionaire Wall Street investor and a former Commerce Secretary under Richard Nixon. He has long favored cutting deeply into Social Security, Medicare, and other welfare-state policies as a means of maintaining balanced federal government budgets. Not surprisingly, Peterson also believes that Wall Street titans like himself should continue to enjoy lower tax rates than teachers, firefighters, nurses, and waitresses.

Jack Kemp was a congressman during the 1970s and 1980s, and was an original advocate of deep, across-the-board tax cuts as a tool for stimulating economic growth. He was thus instrumental in helping define Reaganomics even before Ronald Reagan took office in 1981. Kemp argues that fiscal deficits are not a serious problem and that Republicans like Peterson practice "root canal" economics by harping on such matters.

Kemp portrays himself as a populist who wants to unshackle the entrepreneurial energies of the American people by lifting their tax burdens. But the Reagan tax cuts, like those under George W. Bush, heavily favored the wealthy. These tax cuts therefore meant more money in the pockets of the rich, with less government revenue to spend on social programs. This created pressures for cuts in social spending. Here is where the Peterson and Kemp politics converge. In both cases, we almost certainly end up with major attacks on social spending, whether the federal budget is in balance or running a deficit.

The economic policy debate should therefore be wide open for either Hillary Clinton or Obama to push hard on an egalitarian agenda focused on jobs, tax fairness, affordable health care, financial regulation, and green growth. At the same time, Obama has said that the people he will want to listen to on economic policy, beyond Goolsbe, include Robert Rubin, Alan Blinder, and Robert Reich. All of them were major economic advisors to Bill Clinton and they are all likely to be recycled by Hillary Clinton.

Rubin, in particular, was Bill Clinton's closest economic advisor as well as Treasury Secretary for four years. And it was Rubin who, even before Clinton's first inauguration, explained to the more populist camp within the newly forming administration that the rich "are running the economy and make the decisions about the economy."
Under a Hillary Clinton or Obama administration, there will almost certainly be a replay of this struggle between Wall Street Rubinites and the working class and middle class people who will have voted a Democrat into office.

Under Bill Clinton, working people and the middle class lost out to Wall Street. But I think the chances are higher for a major shift in direction under a new Democratic administration, particularly one under Obama. My hunch on Obama-and it is only a hunch-follows from how he stacks up as a political figure, compared to Hillary Clinton. Obama is obviously not bound up with the history of Clintonomics. His campaign also emerged as a widespread popular movement that has energized a new generation of voters.

But more important than hunches by me or anyone else is the economic reality before us-that conditions for all but the wealthy have stagnated for a generation, under Reagan, Clinton, and the two Bushes; and that in the short term, we are staring a recession and ongoing financial crisis in the face. The pressures for a viable progressive agenda focused on financial stability, a jobs stimulus, universal health care, and green growth have correspondingly grown. Neither Clinton nor Obama can avoid this reality.

After all, Robert Rubin himself, who has been a director and chair of the executive committee of Citigroup since leaving the Clinton administration in 1999, has been humbled by the massive losses at Citigroup tied to the subprime mortgage crisis. Alan Blinder, who was on Bill Clinton's Council of Economic Advisors when the Clinton administration rammed NAFTA through Congress, is now expressing serious concerns about the effects of globalization on middle class living standards.

In short, a new Democratic administration may well offer possibilities for a dramatic shift in U.S. economic policy, even if some of the same old Bill Clinton crowd is brought back in as advisors. But if such a major policy shift does occur, it will not be primarily because a Democrat-either Hillary Clinton or Obama-will be sitting in the White House. It will rather be because the people who put one of them there will have gathered sufficient political strength to make them stick to their campaign promises.

Robert Pollin is professor of economic and founding co-director of the Political Economy Research Institute at the University of Massachuesetts-Amherst. His groundbreaking book, Contours of Descent: US Economic Fractures and the Landscape of Global Austerity, has just be released in paperback by Verso with a new afterward.