I hesitate to say this in a way that will invite misquotation, but I almost feel as if on some level the media is talking too much about the jobs crisis in America. Kevin Drum, for example, asks “Why Is Unemployment Still So High?” and I saw a CNN chyron the other evening about a “jobless recovery.” This kind of talk seems to imply that there’s something mysterious happening specifically to the labor market and that concerns about the economic situation should be limited to the minority of Americans who are unemployed. The truth, however, is that the bleak economic situation is much broader than unemployed people. Nothing “funny” is happening in the link between output and employment. What happened is that we were chugging along, then output fell by a lot, and then when output stopped falling it started growing at a slow rate.

If unemployment were at 5 percent and the economy was growing slowly nobody would be surprised to see unemployment continue to be at 5 percent. What else would happen? The unemployment rate normally only falls if the economy is growing rapidly, and right now the economy isn’t growing rapidly.

So the question we should ask is: Why such slow economic growth? This opens you up to a bonanza of possible answers. Probably no country on earth has ever had perfectly optimal economic policy. Which means that there are a lot of things the US could do to increase economic growth, and there’s also a lot of disagreement about what those things are. Consequently, at a time of high unemployment and depressed output it’s possible to go down a rabbit hole of controversies about what “the real problem” and the “real solution” and blah blah blah. And of course arguing about how to make economic policy better is often worth doing. But you also should be constantly asking yourself “could we make real output grow faster by boosting demand, or are we facing some binding supply constraints that mean efforts to boost demand will just lead to inflation?” This is an important question because if we could boost real output by boosting aggregate demand, then our failure to do so means we’re leaving money on the table. It means that unemployment is higher than it needs to be, and also that economy-wide production of goods and services is lower than it needs to be.

Unfortunately, we see more and more evidence that policymakers from the Obama administration on down have decided they don’t have a problem with this.

Thomas Jefferson is not my favorite among the founding fathers, but this 1785 letter to James Madison quoted by Daniel Kuehn is another good example of the non-libertarianism of classical liberalism:

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on. If, for the encouragement of industry we allow it to be appropriated, we must take care that other employment be furnished to those excluded from the appropriation. If we do not the fundamental right to labour the earth returns to the unemployed. It is too soon yet in our country to say that every man who cannot find employment but who can find uncultivated land, shall be at liberty to cultivate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state.

As with John Locke you see this concern about concentrated appropriation of finite resources. In practical terms, Jefferson and other leaders of the early Republic were able to sidestep inequality within the white community by redistributing land from Native Americans to white people.

The latest crusade up in FireDogLake land is to castigate the Roosevelt Institute, the Economic Policy Institute, and the Center on Budget and Policy Priorities for having the temerity to participate in the Peterson Foundation’s effort to get six think tanks to write down scored plans for reducing the long-term debt load of the country. I take it that the selloutery of my colleagues at the Center for American Progress goes without saying to such an extent that we don’t even warrant a mention in Yves Smith’s righteous condemnation. But personally I’ve always liked EPI’s work, and CBPP’s, and Roosevelt’s, so I’ll be happy to welcome them into team sellout and let Jane Hamsher keep tending the lonely flame of true faith.

On another level, I believe we should judge an exercise like this based on its outcome. And it seems to me that progressives have a lot to be proud of here. Four of the six proposals (CAP, EPI, Roosevelt, and Bipartisan Policy Center) argue for defense spending cuts. Four of the six proposals (CAP, EPI, Roosevelt, and AEI) argue for a carbon tax. Three (CAP, EPI, Roosevelt) call for financial transaction taxes, and three (CAP, EPI, Roosevelt) argue for a public option. Four (CAP, EPI, Roosevelt, BPC) call for short-term fiscal stimulus. Five of the six proposals feature good ideas about farm subsidies. Four of the six proposals feature higher income revenues than called for by current law.

Now of course there are also of plenty of bad ideas on the table in this exercise. I disagree with the vast majority of AEI’s ideas, basically all of Heritage’s, and many of the Bipartisan Policy Center’s. But the point is that when you look at the debate as a whole inside the Peterson Fiscal Summit, it’s actually a debate that’s titled way to the left of the official debate that’s playing out in congress. On Capitol Hill right now, bank taxes and carbon taxes and defense cuts and income tax hikes are all marginal ideas. Inside Pete Peterson’s Stealth Plan To Destroy The Welfare State they’re at the heart of the debate. That, to me, sounds like a job well done. It sounds to me like progressives ideas have real merit, and that the main thing we learned from this exercise is that progressive policy prescriptions will have to be a major part of any realistic long-term fiscal solution.