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."
That is true about the minimum wage.
I don't believe in shadowy cabals.
I DO believe that human nature is fixed and that mass phenomena evolve according to what for want of a better word I would call "rules".
This global economic system which you would call into being cannot and will not exist without a global political system to safeguard it and to tweak it.
That global political system overthrows MY local political syatem, which I hold dear, and is the enemy of everything I value.
You believe, apparantly, that either the global economy will not call into being a global government, or that such government will be benign.
I don't agree with you.
It has nothing to do with shadowy cabals.
Running everything on a sales tax is complete hogwash.
We have, what? A $12 trillion economy.
Perhaps 40% of that, $4.8 trillion, is retail sales, including house sales.
Government costs about $3 trillion a year.
What are we going to do?
Slap a 75% sales tax on everything, in order to raise that money?
Here folks have been arguing that a 20-30% price increase on textiles from a protective tarriff would be the death ofg the American economy, but to get rid of the income tax, we're just going to slap a 75% on all exchanges. Yes, I have seen the arguments that it won't be nearly that high.
They are wrong. It would have to be. We would have to extract $3 trillion in taxes out of a $4.8 trillion retail economy. Try tha, and the corruption you will see will be unprecedented.
Anyway, we're not going to do anything like that, just as we're not going to do a wealth tax. We have a balanced approach: income, property, sales, capital gains, user fees, and that is about the best that balancing interests in a democracy can do.
What will happen is that the Democrats are going to let the Bush tax hikes expire without renewing them. And then, given political gridlock in Washington, we'll essentially have the Clinton tax code for the foreseeable future.
Bush expended a lot of political capital on Social Security reform, whioch went nowhere, of course, but whicuh certainly agitated a large number of people who saw more of their security imperiled. So, his initiative in that regard was a net political negative, and will remain so.
Apparently, Republicans are determined to remain politically unrealistic about economic security matters, and are going to continue to espouse high theory that most people don't trust and aren't going to accept.
This will remain the Achilles' Heel of the party, and we're destined for a long time in the wilderness, as the Democrats end up getting the credit for the performance of the economy.
It's too bad, but there you have it.
No I do not believe that people engaged in commerce with as little restriction as possible will result or must result in global government.
I am for less government, not more, and I would be against any global government.
You wrote: "Nope, we don't make a lot of stuff here any more. We all know why and there aren't a lot of attractive alternatives."
Like steel, and batteries, and electronics components, the sort of things that go into military hardware and logistics pipelines. We buy these things from China, which also holds our debt.
And this means that, no matter what China does, we can never go to war with China. They own the capstone of our financial economy, and they own the productive means of key components in our military logistics supply chain. THEY make the stuff, we don't. We have truly sold them the rope by which they can hang us, all in order to buy socks for $2 instead of $5.
Economically, it seemed like a good deal.
But we pawned national security for cheap consumer goods.
The means of industrial production are the means for war.
We have gutted the industrial base, and contineu to do so, and we are transferring the industrial base to the country that outnumbers us 5:1 and which is our most likely adversary, and our principal ideological opponent in the industrialized world.
We pawned our birthright for a mess of cheap pottage.
And there is no apparent repentance, or even realization of the problem!, from many rock-ribbed Republicans, per this thread.
The economic mentality of the GOP seems to be Maginot.
First of all, I am no Democrat.
I am a Republican.
I am a militarist. Democrats since McGovern are pacifists.
I am a moralist. I oppose abortion, euthanasia, fetal stem-cell testing and gay marriage.
And I am an economist. Your view of how the economy works is narrow and crabbed, and the Republicans have followed it off an electoral cliff.
De Tocqueville did indeed say that.
And Republicans would say that people figured out they could vote themselves money with the New Deal, in 1932, and that it's all been downhill from there. Well, in a sense that's true: the New Deal certainly does use public power to create social security in the broadest sense of the word: public retirements, public medical insurance, public food programs for the needy, and regulation of the financial and industrial sectors. No doubt about it.
So, supposedly, since 1932 we have been on a downhill slide, because we "socialized" the economy with the New Deal. Newsflash: no part of the New Deal has ever been dismantled, and the economy has grown geometrically since then.
So, evidently whatever De Tocqueville was talking about, it's not this.
Anyway, I've had quite enough of being called a Democrat and a fool by you. I do not know your position on national security and morality, but I DO know your position on economic issues. It is the mantra that the Republican party has been following for awhile, and it is foolish. It has created lots of industrial jobs - in other countries - undermined our own industrial base and left us in an economically and militarily precarious situation. Enough people are feeling the pain and fear of economic insecurity in the formerly-world-leading industrial zones of the country that they have turned away from the Republicans and will continue to do so, unless Republicans pull their heads out of their asses and stop listening to people like you, and start listening to people like me.
Want to lose? Keep following that drumbeat down, down, down, to industrially dependent (on China) nation status in the economic world, and permanent minority status in the American political workl.
I've been called "troll" here quite enough, and also "economically ignorant". What I am is the Ulysses S. Grant stepping forward in answer to all of you economic Burnsides and Hookers. Your view has done quite enough damage to the economy of the country and the political fortunes of the Republican Party. My view is going to be heard, WITHIN the Republican Party, where it belongs, and peoope like me are going to stand right here and fight you for control of this party, because it's too important to let you guys keep running things into the ground.
Let's start with the most basic measure of economic achievement: your PERSONAL economic status versus mine.
In our capitalist economy, the guy who makes the most money is the better capitalist, RIGHT?
Study the past to understand the future.
Your "people engaged in commerce with as little restriction as possible" is a fantasy.
IMO.
Easy.
They wouldn't.
Do you think they really care about their "economy"?
They're Marxist-Leninists. They don't even accept the concepts you are talking about.
"Trade" only works if there are property rights to be traded.
Property rights only exist if there is law to defend them.
Law only exists if there is government to enforce it.
You cannot have free trade or capitalism without government to enforce contracts.
And where shall the government that enforces contracts in the global economy be?
In economics, the most powerful economic actor makes the dediion. Nobody pretends the economic marketplace is a democracy. America set the Bretton-Woods rules, et al, because America was the strongest. The wheel is turning to China. You're right: there will not be one world government.
Rather, the Chinese government will set our economic policies for us, just as we have set them for Latin America.
That is, unless we do something about it.
What CAN we do about it?
Plenty.
Impose a corrective tarriff on Chinese goods and other goods produced by unprotected labor, for starters. That will equalize the cost advantage of using slaves, and will make the transport costs of bringing things from China a net cost which could be overcome by producing the same things in the US.
That's how you do it.
That's a whole lotta people you're talking about.
Which is the truth. We do not have the capability to fight a major conflict right now. We just don't have the domestic industry to support it. Which means we have to import war material from other sources. Which puts us in a very compromised strategic position.
My brother in law is very "free trade" and openly talks about how in a few years the US will no longer be able to project power like it does now, because other countries will start dictating how many resources we get.
Your brother-in-law is correct, unless we do something about it.
We are going to do something about it.
The trouble for Republicans is that it will be the Democrats who do the doing, and who will get the electoral credit.
It isn't hard to see the Democratic strategy: protect American INDUSTRY, because that's where the middle class workers are, but grant amnesty to Hispanic menial laborers and fieldworkers in order to gain a massive electoral advantage. That will work very well for the Democrats electorally, and if they do the industrial protections right, they will help engineer an industrial recovery (especially given the availability of masses of newly-regularized Hispanic labor under their amnesty program).
The Republicans have to have an alternative to that.
Apparently their alternative is to pretend that exporting the industrial sector is ok, because it maximizes profits to the holding companies. THAT part is certainly true. However, the price of those profits is national security and economic security for American industrial workers, which is far too high a price.
If there are other Republicans like me willing to stand tall, call a spade and spade, accept the principle that international trade is a good thing, but insist upon balancing factors such as tarriffs or import restrictions to overcome the cost advantage in using unprotected labor, then we have a shot of gaining political control. If the dominant Republican chord remains job-exports-are-efficient-therefore-good, we're not getting power back, maybe ever (Hispanic Immigration dwarfs the "Roe Effect"), and the Democrats will just set all the economic policies.
Since individuals would have substantially more disposable income, the net effect of the tax changes on purchasing power parity-adjusted income would be zero, and could even be made somewhat progressive by exempting groceries and utilities.
When you say this:
Republicans are determined to remain politically unrealistic about economic security matters, and are going to continue to espouse high theory that most people don't trust and aren't going to accept.
What exactly are the policy prescriptions that you would make, besides a wealth tax? When people speak of "economic security" in reference to national policy, the typical recommendations are blatant abrogations of individual liberty, such as caps on CEO pay, etc. Perhaps your recommendations are different.
Speaking for myself only, I am more than happy to accept "the great risk shift" rather than expect corporate or federal paternalism.
If people do not accept the ideas of free market economics, they might as well not accept the idea of gravity. Does this refusal help them in any way? Do we really want to encourage serfdom and peasantry in the US? If I did not have to share a legal system with such people, I would be happy to let them persist in ignorance.
Trade reciprocity would be a good place to start. In other words impose the exact same restrictions, whatever they may be, on a countries goods they impose on ours. Example China imposes a 20%+ tariff on imported goods, we impose the same on them.
The election was successfully NATIONALIZED by the Democrats, with the wimp-libs accusing and the bogus media repeating (ad naseum) Bush screwed up Katrina, Bush lied us into war, Republican corruption galore, HIGHEST death and destruction ever, etc.
And to be honest, the GOP did the same thing to the Democrats in 1994, and the economy THEN was not awful awful awful.
But at the time (1994), the country at large was scared to death that Clinton and the Democrats were gonna mandate a SINGLE-PAYER National Health System, which would have put us ALL in long lines to see a doctor or go into a hospital.
And Newt Gingrich also created the Contract with America, budget cuts, term limits, school choice, etc. with which most Americans agreed.
The difference in '06 is the GOP had the facts on our side.
The national economy is great, perhaps the best ever.
And America is safer today than 2001, and perhaps ever.
Unemployment nationally is lower today, than perhaps ever.
The average youngster has more economic and career choices today, than perhaps ever.
Our military is better trained and more powerful today, than perhaps ever.
Yet we still have many individuals such as yourself who have not yet learned how to support themselves or their families.
My son, just out of school, went to a job fair and IMMEDIATELY got hired by a pharmecutical company making $65K a year, plus benefits.
Within two years, he was offered another job with another company, and now earns more than $100K.
ALL his friends (mid-20s) likewise are ALL working at relatively good jobs, one with a stockbroker, one in the education field, and another an accountant.
And they are NOT geniuses nor are they any different than millions of youngsters across America.
My advice to yourself, if you are having a difficult time economically, is to branch out and perhaps you will find another nitch.
OK, I'll bite.
What IS your view?
What SPECIFIC plan (economic) would you enact if you were Jim Webb, or if you were President?
And in the same vein, what SPECIFIC thing is President GWB doing that is "making" the economy so awful (in your eyes, anyway)?
We could have a productive discussion of (realistic) policy options. I would be happy to tell you what I would propose, but first why don't we take a hard look at the Retail Sales Tax (RST) you've suggested, and analyze it carefully. This would establish the benchmark for professionalism in the conversation.
I didn't propose a wealth tax. If you read back up the thread, you'll see that my response was a theoretical one, to a theoretical question. I said that if I were KING, we would have a wealth tax and no other tax. In the real world, a wealth tax is not on the cards in the USA, at least not for the moment. It certainly would not be part of the serious policy suggestions I would make.
So, let's turn, in a succeeding post, first to the RST you proposed. I will tell you why I don't think it would at all work as planned, why I think it would distort the economy to the point of wrecking it, and why I think it would be grossly inequitable to boot. Then I'll propose my own views as to appropriate policy, which you will then be able to assess. Unfortunately I cannot undertake that analysis of the RST right now, but will attempt it this evening.
Cheers!
You wrote:
"Yet we still have many individuals such as yourself who have not yet learned how to support themselves or their families."
and
"My advice to yourself, if you are having a difficult time economically, is to branch out and perhaps you will find another nitch."
You are very presumptuous, and I am smiling.
How much do you make every year?
The question is no more presumptuous than your statements about me, above.
And the question is highly relevant, because in a capitalist system, the ones earning the most money are the most successful, and have best mastered and understand the system, n'est-ce pas?
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