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It's The Economy, Stupid (Nation: Election Results Weren't Just Driven By Iraq War -huh???)
The Nation ^ | 11/21/06 | Christopher Hayes

Posted on 11/21/2006 12:14:53 PM PST by presidio9

Everyone wants Virginia's Senator-elect Jim Webb to talk about Iraq, but the man The Weekly Standard recently called a "blood-and-soil conservative" wants to talk about something else: economic inequality.

The day after he accepted George Allen's concession, Webb barely let his NPR interviewer get a word in edgewise before jumping in to correct the misperception that his bid for office was motivated solely by opposition to the war. "I decided to run because of my concern ... with the economic breakdown that's happened in this country along class lines."

Class lines? Mr. Webb is a man who has railed against the "collectivist taming" of American culture by Marxists and has served in the Reagan administration. So why is he talking like Eugene Debs? "There are huge income inequalities ... that we haven't seen since the 1880s," he said on NPR. "And wages and salaries ... are at an all-time low as a percentage of wealth."

As idiosyncratic as he is, Webb is not an anomaly. He's part of a broader trend that has been obscured by the fast-congealing conventional wisdom that the election results were driven chiefly by the ongoing disaster in Iraq.

If you drill down a little into those results, it's clear that Iraq and Republican scandal can't account for all the Democratic victory. Consider the Democrats' success at the state level. The party picked up six governors, nine legislative chambers and more than 300 state legislative seats, none of which can plausibly be ascribed to discontent over Iraq.

As Webb suggests, the hidden story of the election was the appeal of economic populism in a country whose middle class is increasingly feeling the squeeze. Coast to coast, Democrats running for local and national office campaigned on raising the minimum wage, repealing welfare for Big Oil and opposing trade deals lacking protection for workers and the environment, and their message resonated with an electorate anxious about the economy.

Half of all voters rated the economy not good or poor, and a full 69 percent said their family's economic situation had either gotten worse or stayed the same since the last election. Democrats won both these groups by wide margins.

Ironically, in the weeks leading up to the midterm election, the Republican Party stole a page from the Democrats' playbook and attempted to shift the focus toward the economy and away from the manifestly unpopular Iraq war.

The thinking was that the years of relatively strong GDP growth coupled with relatively low unemployment would redound to the ruling party's benefit, perhaps canceling out the anger over Iraq and corruption.

The GOP's strategy both worked and backfired. Voters did focus on the economy, but they didn't reward Republicans. Exit polls showed that 39 percent of voters rated the economy as "extremely important" (roughly the same percentage as those who said the same about Iraq and corruption), but Democrats won those voters by 20 points. This shouldn't be surprising. Despite relatively strong growth, manageable inflation, high corporate profits and a bullish stock market, real wages continue to stagnate, productivity gains continue to be captured by the wealthiest 1 percent, income inequality has continued to get worse and, as Jacob Hacker argues persuasively in "The Great Risk Shift," America's middle class finds itself living with far more risk and income volatility than it did a generation ago.

None of these trends are new, but over the past six years the problems have grown so noticeable that even the neoliberal economists who crafted the much-celebrated Clinton economic agenda have begun to focus on correcting the perversely inequitable distribution of the fruits of economic success.

After years of reading the likes of David Sirota and Thomas Frank urging Democrats to embrace their inner populists, Dems finally started getting the message: Aside from opposition to the war, the Democrats focused on attacking subsidies to Big Oil, blasting the corruption endemic to a system in which corporate special interests call the shots and advocating for "fair trade" over the so-called "free trade" agreements that benefit capital over labor.

Even the Democratic Leadership Council, the most outspoken opponent of economic populism, has begun to come around. In 1995, Roll Call reported that "DLC officials think that, if Clinton calls for a minimum-wage increase in the State of the Union ... it could wreak the same political damage as his 1993 vow to veto any healthcare bill that did not provide universal coverage." By this election, the DLC was firmly behind an increase in the minimum wage.

In fact, the minimum wage just might have been Tuesday night's most underreported story. Not only has the Democratic Congress pledged to raise the minimum wage within the first 100 hours but in the six states that featured ballot initiatives to raise the minimum wage above the national — Ohio, Missouri, Montana, Nevada, Arizona and Colorado — every one passed. In Montana it took 73 percent of the vote, and in Missouri 76 percent.

Consider that the much-publicized stem-cell-research initiative passed in Missouri by only a few percentage points. That means hundreds of thousands pulled the lever for an increased minimum wage and against funding for stem-cell research.

"One of the interesting facts about this campaign is it has been able to bring together people across many political lines," the Rev. Paul Sherry, national organizer for the Let Justice Roll Living Wage Campaign, told me. "I do a lot of speaking around the country, and when I say that a person working at $5.15 an hour full time makes $10,710 a year, you can see people's eyes light up as they begin to think of their own circumstances."

(Not only did the minimum-wage initiatives run a clean sweep but their conservative counterparts fared poorly. Three states — Maine, Nebraska and Oregon — featured ballot referendums modeled on the Grover Norquist-backed Taxpayer Bill of Rights, which severely limits the growth in state government taxing and spending levels. All of them lost.)

At the national level, cable pundits almost immediately focused on a handful of winning Democrats with conservative stances on social issues — Jon Tester's A rating from the NRA, Bob Casey's opposition to choice and, obsessively, former NFL quarterback Heath Shuler, who defeated incumbent Charles Taylor in North Carolina's 11th District while opposing abortion, gay rights and a guest-worker program for immigrants.

But what the pundits didn't mention was the role in Shuler's victory of the district's opposition to "free trade" deals. The area's textile industry has been gutted by NAFTA, so when it came time to vote on CAFTA, Taylor was caught between his district, which wanted him to vote no, and the GOP House leadership, which wanted him to vote yes. So he skipped the vote altogether and CAFTA passed by one vote.

During the campaign, Shuler hammered Taylor for "selling out American families," and he wasn't alone in using trade as a wedge issue. A post-election analysis by Public Citizen found that campaigns cut 25 ads attacking free-trade deals, and that trade played a significant role in more than a dozen House races won by Democrats. In the entire election, Public Citizen noted, "no incumbent fair trader was beaten by a 'free trader.' "

"Democrats have coalesced in favor of trade policy reform over the past decade as President Bill Clinton's NAFTA, WTO and China trade deals not only failed to deliver the promised benefits but caused real damage," said Lori Wallach, director of Public Citizen's Global Trade Watch division.

To get a sense of just how far the consensus on trade in the Democratic Party has come, consider that Shuler was recruited to run for office by none other than Rahm Emanuel, the man charged with ramming NAFTA through a skeptical Democratic Congress in 1993.

Indeed, back when Emanuel was the NAFTA enforcer, he met some of his stiffest resistance from a young freshman Congressman from Ohio named Sherrod Brown, whose 12-point victory over incumbent Senator Mike DeWine was one of election night's highlights.

In a column a few weeks before the election, David Brooks called Brown's Senate contest "the most important political race in the country," because as a "full-bore economic populist" Brown represented the most "vibrant strain" of the Democratic Party.

Brown is an across-the-board progressive: a supporter of gay rights, abortion rights and civil rights who voted against the Iraq war and the Patriot Act (though, disappointingly, for the Military Commissions Act during the campaign). In 2005 National Journal ranked him as more liberal than 86 percent of House members. But he managed to avoid being sliced apart by wedge issues or tarred and feathered as an out-of-touch liberal by focusing with Terminator-like persistence on a simple economic populist message: "fighting for the middle class," as his campaign manager John Ryan put it to me.

Ryan says that even when DeWine attempted to change the topic or attack Brown, the campaign spent 50 percent of its airtime in TV ads responding to the charge "and 50 percent of Sherrod looking onscreen with a working-class message and a middle-class message."

In some ways, Ohio's a special case, having been particularly hard hit by globalization and with 83 percent of voters saying the economy was extremely or very important. The race came down to the have-nots outnumbering the haves: 37 percent of voters rated the economy excellent or good, and DeWine won their vote by 44 points. But 62 percent rated the economy not good or poor, and Brown won those voters by almost 50 points.

I asked Ryan if, given Ohio's particularities, he thought Brown's message would be applicable in other parts of the country.

"Take Columbus," Ryan said. "Columbus is so much like the rest of the country, demographically, that companies from all over the country conduct focus groups there. There's not a lot of factories, and it might be the one part of the state that might have gained some jobs with NAFTA. We went down to Columbus and we tested [Brown's trade message] to see if it would work. The difference was that in Dayton people would say, I lost two jobs because of NAFTA, and in Columbus people said, I know someone who lost a job. It was one half-step away, but people got it — people understood that the government was not on our side."

In addition, Ryan pointed to Brown's success in southern Ohio, which is by far the most conservative part of the state. In three southern counties, Brown's support exceeded the number of registered Democrats by at least 20,000 votes.

Brown's successful populism and that of other Democrats hasn't gone unnoticed. Commentators have raised the specter of the rise of a "Lou Dobbs"-like wing of the party whose economic arguments are inextricably linked to a racialized nationalism, the kind of populism that's equally comfortable bashing corporations that outsource jobs and "illegal aliens" who take away Americans' jobs here at home, and whose opposition to the Iraq war, like Pat Buchanan's, is rooted in an America-first isolationism.

To be sure, economic populism has a dark side. It's a fine line between railing against corporate-written trade deals because they hurt workers the world over, and scapegoating the brown-skinned other who is stealing our jobs.

Democrats haven't always walked this line carefully: There was more than a whiff of demagoguery in John Kerry's nomination acceptance speech about "closing firehouses in America" while opening them in Baghdad. (Why shouldn't Iraqis have firehouses?)

That subtext ran through many Democrats' ads in this past cycle, as they rushed to declare their opposition to "amnesty," a word as racially loaded today as "quotas" was in the 1980s. Heath Shuler's ads attacking his opponent for "selling out our families" also ridiculed him for voting to set up a scholarship for Russian students (the horror!), while pledging that he would "put American families first." Even Sherrod Brown talked in television ads about the need for "tighter borders."

It's the left's perennial dilemma: Populism is a fundamentally majoritarian mode of politics — the have-nots versus the haves, the many versus the few — but a central part of the left's most noble tradition is protecting the rights and interests of minorities.

Yet if there's going to be a center-left majority in this country, its electoral strength is going to rest on a coalition bound by a shared interest in economic justice. The Democrats face several obstacles to making that coalition stick.

First, the infusion of corporate cash that's about to flow into the now-majority party will provide a disincentive to go after corporate power in ways that voters clearly want. In the past, when caught between the interests of their donors and of their constituents, too often Democrats have advocated for the former: Just look at the vote on the bankruptcy bill.

Second, the Democrats' continued growth rests on a burgeoning Latino population, as well as on young people, who are more socially liberal than the population at large. So whose interests are going to get top priority?

Though difficult, it's not an impossible situation to navigate. With the power to control the agenda, Democrats can leverage the electoral strength of economic populism to protect minority interests by making sure that socially conservative members never get the chance to cast a vote in support of things like a marriage amendment or a "partial birth" abortion ban.

But that strategy will work only if the Democrats can enforce real party discipline and prevent socially conservative Dems from defecting on key issues such as stem-cell funding, choice, abstinence education and immigration.

In the short term, Nancy Pelosi's strategy seems to focus on the economic issues with the broadest range of support. Her agenda for the first 100 hours of her term as Speaker of the House is a package of mainstream, popular, progressive bills that would benefit a variety of the Democrats' constituencies: a raise in the minimum wage, which would greatly benefit blacks, Latinos and single women; a cut in interest rates for student loans, which would benefit young voters; and bulk negotiation of Medicare prescription drugs, which would benefit the elderly.

"The Republicans are here to concentrate the wealth of our country in the top 1 percent, and all the power that comes with that is at the expense of the middle class and those striving to be in the middle class — and that's just plain wrong," Pelosi said in a conference call the day after the election. "That's why we need to get a progressive economic agenda out there. As long as I get my caucus organized around that, that's more important to me than having a checklist."


TOPICS: Business/Economy; Editorial; News/Current Events; Politics/Elections
KEYWORDS: justsayno2socialsm; not4government2do; nutjob; pornpeddler; socialismstinks; webbisakook
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To: oblomov

"Unearned income" is simply an American euphemism for European socialist ranting against the "rentier class".



Uh, no. It's a legal term incorporated into tax code.



http://www.investorwords.com/5141/unearned_income.html


161 posted on 11/21/2006 10:10:39 PM PST by durasell (!)
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To: Vicomte13

Because of the arrogant attitude of developers and municipalities after Kelo, they ended up dropping the buttered toast right on the floor: eminent domain for private development is almost impossible now in Indiana, and in many other states. Looks like the dullards in the flyover states didn't accept the fate you planned out for them.


162 posted on 11/21/2006 10:16:56 PM PST by oblomov (Join the FR Folding@Home Team (#36120) keyword: folding@home)
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To: rhombus
The middle and the bottom do not create jobs

In a free enterprise system everyone creates jobs. In the globalist socialist vision currently promoted by the globalist democrats and republicans, the international elites create the jobs and the rest of us are just serfs.

From which side do you hearken?
163 posted on 11/21/2006 10:17:46 PM PST by hedgetrimmer (I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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To: durasell

I know that it's a legal term, and that it is part of the tax code. Just because the government says so doesn't mean that it has moral legitimacy. Taking risk is work, and income derived from risk-taking is earned.


164 posted on 11/21/2006 10:19:31 PM PST by oblomov (Join the FR Folding@Home Team (#36120) keyword: folding@home)
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To: Ramius
More people in foreign countries benefit from imported $2 socks than benefit from American $5 socks.

If Americans cannot produce as good or better quality sock for the same price, then they should get out of the sock business and find something they can do competitively.If so-called "slave" labor can produce a higher quality product that our domestic skilled labor can... I guess it's not much of a skill then, is it?

America repudiated slavery starting with the civil war. No matter to you global elites who find the money you make from slavery, ample reward for the misery you create for your fellow human beings.
165 posted on 11/21/2006 10:22:29 PM PST by hedgetrimmer (I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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To: Hardastarboard; Bigg Red

['Most' people have no clue about economics and fall prey to emotional appeals and arguments.]

Correction noted and agreed.


166 posted on 11/21/2006 10:34:35 PM PST by KMAJ2 (Freedom not defended is freedom relinquished, liberty not fought for is liberty lost.)
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To: oblomov

You're arguing tax code semantics? Okay, that's a new one...


167 posted on 11/21/2006 10:35:14 PM PST by durasell (!)
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To: Vicomte13

You need to study your economics. You had every socialist strategy in there couched in emotionally appealing rhetoric. You had redistribution of wealth, you had government dictating wages, you had the issue of wage 'fairness' dictated by the nanny state. ALL are anti-capitalism and anti-economic freedom. Then you throw in the protectionist and isolationist message. You might as well sign up to become a left wing democrat to endorse that, because it was Karl Marx in sheep's clothing.


168 posted on 11/21/2006 10:55:58 PM PST by KMAJ2 (Freedom not defended is freedom relinquished, liberty not fought for is liberty lost.)
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To: HHFi
You're right. I must be deluded.

You're probably OK. The deluded ones are the "free traitors" who just got all their limbs whacked off like the guy in the Monte Python skit, and they are still yelling "come back here; I'll bite your leg off".

169 posted on 11/21/2006 11:42:27 PM PST by meadsjn (La Raza is Racist)
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To: Vicomte13

You sound like a commie. No one owes you anything, you should be glad you have a job to go to.


170 posted on 11/21/2006 11:53:46 PM PST by John Lenin (The most dangerous place for a child in America is indeed in its mother's womb)
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To: hedgetrimmer
In a free enterprise system everyone creates jobs. In the globalist socialist vision currently promoted by the globalist democrats and republicans, the international elites create the jobs and the rest of us are just serfs.

Correct. 70% of economic activity in the US is consumer spending -- you could rightly say that consumers create 70% of US jobs. And if consumers lose buying power, as they have in the last few years, they will be creating fewer jobs.

Investors create offshoring and downsizing, import H1-Bs and illegal aliens. Obviously, the majority of voters consider themselves more as producers than investors, even though their 401K and insurance funds are in the market. On election day, they vote their pocketbook today, not 30 years into the future.

171 posted on 11/21/2006 11:55:15 PM PST by meadsjn (La Raza is Racist)
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To: hedgetrimmer

There are two sides, eh? I guess I'm on the other side of this side...maybe I'm on the other side of that side...hmmm. I shop at Walmart. I suppose that answers your question.


172 posted on 11/22/2006 3:33:29 AM PST by rhombus
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To: rhombus

I shop at Walmart. I suppose that answers your question.





The question being: How do you create wealth and jobs in China?


173 posted on 11/22/2006 3:36:12 AM PST by durasell (!)
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To: durasell

I create jobs at Walmart, the largest employer in the US.


174 posted on 11/22/2006 3:55:21 AM PST by rhombus
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To: rhombus

Oh...


175 posted on 11/22/2006 4:08:11 AM PST by durasell (!)
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To: rhombus

Here's a list of the nation's largest employers. Gives you an new perspective of where we are as a country.

Company Employees
1. Wal-Mart 1,800,000
2. McDonald's 447,000
3. United Parcel Service 407,000
4. Sears Holdings 355,000
5. Home Depot 345,000
6. Target 337,000
7. IBM 329,373
8. General Motors 327,000
9. General Electric 316,000
10. Citigroup 303,000
11. Ford Motor 300,000
12. Kroger 289,000
13. Albertson's 240,000
14. United Technologies 222,200
15. Verizon Communications 217,000
16. FedEx 215,838
17. Safeway 201,000
18. Altria Group 199,000
19. Aramark 195,000
20. Berkshire Hathaway 192,012
21. AT&T 189,950
22. Delphi 185,200
23. Bank of America 176,638
24. JP Morgan Chase 168,847
25. Yum Brands 165,920
26. HCA 165,450
27. Lowe's 164,794
28. PepsiCo 157,000
29. Walgreen 155,200
30. Wells Fargo 153,500
31. Boeing 153,000
32. Darden Restaurants 150,100
33. Hewlett-Packard 150,000
34. Gap 150,000
35. JC Penney 150,000
36. Starwood Hotels and Resorts 145,000
37. Marriott International 143,000
38. Sara Lee 137,000
39. Lockheed Martin 135,000
40. Walt Disney 133,000
41. Alcoa 129,000
42. Northrop Grumman 123,600
43. Electronic Data Systems 117,000
44. Honeywell 116,000
45. Johnson & Johnson 115,600
46. Lear 115,113
47. Starbucks 115,000
48. Emerson Electric 114,200
49. CVS 114,000
50. Tyson Foods 114,000



176 posted on 11/22/2006 4:10:18 AM PST by durasell (!)
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To: cinives
I beg to differ in this respect: there are lots of middle class folks who are small business owners and who do employ one or more people. And we all know small businesses make up the bulk of the economy.

You make a good point and I agree with you. These small coffee shops, lawn care companies, construction companies, etc create lots of jobs and suffer from the burdens of Gov't regulation and mandates regarding minimum wages and benefits. Unfortunately it is all too tempting for these small businesses to hire illegals as a way just to stay in business. Certainly the larger meat packing facilities and growers are also responsible but any crack down on illegals would severely impact small businesses which DO as you point out create legal jobs too. I suspect that given the economy inherited by Bush that is one reason he delayed doing anything about immigration and wanted to create a guest worker program...to assist small and medium sized businesses.

177 posted on 11/22/2006 4:12:48 AM PST by rhombus
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To: durasell
Gives you an new perspective of where we are as a country.

I'll say...we buy stuff, we eat stuff and we deliver stuff to each other. :-) I was also surprised to see that GM and Ford were still so high. Where's Toyota? I always hear from liberals how Toyota has plants in the US and employ lots of people too. It seems they avoided hiring that many people. I expect the UAW is not pleased.

178 posted on 11/22/2006 4:18:10 AM PST by rhombus
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To: Vicomte13

"a northern free labor cotton farmer"

Now, that is a REAL oxymoron !


179 posted on 11/22/2006 4:20:44 AM PST by AlexW (Reporting from Bratislava, Slovakia)
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To: rhombus

I'll say...we buy stuff, we eat stuff and we deliver stuff to each other. :-)




But we ain't making a lot of stuff.


180 posted on 11/22/2006 4:22:41 AM PST by durasell (!)
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