Today is Labor Day and the American worker is in deep, deep trouble. What was once the crisis of seamstresses, steel and manufacturing workers is now the crisis of college professors, IT researchers and accountants. Poverty and joblessness are now systemic in our country and our problems have grown worse under your administration, not better. What hope we had when you were elected has been replaced by anger and despair.
Despite trillions invested in the private sector, few - if any - living wage jobs have been created, except in military production and privatized military expression. 79% of the jobs offered by YOUR government are for war, intelligence and homeland security. That’s up from 71% a year ago. Corporations have grown cash-rich and are investing that money overseas, or they are sitting on that cash so they can buy more companies and destroy more jobs. Status quo commitment to neoliberalism has made these problems worse.
Please read on . . .
We Need a Line in the Sand
We need a line in the sand, drawn by you, to mark the end of over thirty years of ‘bipartisan’ economic policies that have destroyed living wage jobs in this country. We need an end to private sector investment and the beginning of real public sector investment in jobs. We need to hear you say that free-trade, supply-side economic policies, - plus reckless war, corporate welfare and tax cuts - have destroyed our economy. We also need to hear you announce a return to New Deal socio-economics and the principles of economic equity and fairness.
And we need to you to stop telling us things are getting better and start talking about just how bad they are. And then we need you to start doing something about it.
We need to start talking about building this country from the BOTTOM UP, not the top down or even the middle-in. You said you would rebuild this country from the bottom up. Starting with the rich and stopping with the investor class is not bottom up economic development. Talking about helping the middle class is not bottom up economic development either. Starting with the poor and the working class is bottom up economic development. And it is the platform necessary to build up small business creation.
Get a Better Measuring Stick
But you can’t illuminate the problem if your own statistics are masking the depth of the damage caused by 30-40 years of neoliberal/neoconservative economic policies.
First, your statistics mask more than they reveal. So start producing statistics that show how bad it is. Let’s start with poverty. The three-times-a-thrifty-basket-of-food measure of poverty is just a sick joke. Even by that measure we have 40 million poor. If we used a ‘three-times-the-average-home-cost’ how many more would be poor. While you administration’s willingness to experiment with National Academy of Sciences alternative measures of poverty, failure is inherent to their proposals because they include government-support in the calculus. Yes, their recommendation marks a significant improvement over the patently false numbers produced since the 1960's. But the inclusion of government subsidy - food stamps, fuel vouchers, etc. - in the calculus will mask poverty and leave those people exposed to losing those subsidies, when those numbers get bandied about without context.
You need a raw number of poor and working poor - that reflects real household expenses - BEFORE government intervention, not after. That’s your baseline. That’s the measure of how poorly the status quo economy is serving the people of this country.
Once you have a metric that accurately reflects how many people are below economic self-sufficency, you need to learn the difference between 'a job' and a 'living wage job'. Stop counting sub-sufficient jobs in your job creation numbers. Anyone who ever knew economic self-sufficiency and now must work for mimimum or near-mimimum wages reads your job creation numbers cyncially.
You also need better unemployment statistics. Too many categories of unemployed people are not included, starting with farm workers, people driven into the ‘small business’ world, but are really just unemployed people scraping for spare cash. You need to include those who have been driven out of the job market entirely, including people hiding in school - because the student loan system is their defacto lifeline - the unemployed partners of working people and all those categories of unemployed workers counted in European statistics. Start with the ILO measure and take it from there.
These two raw numbers will be a shock to the public. We will be starting at 30-40% poverty rates and 20-25% unemployment rates and many Americans will be stunned to discover themselves among those ranks. But once the shock passes, they will understand better why they cannot pay their bills. And you will be able to talk about this crisis using the words that need to be applied to it, in order to do what’s necessary to remedy it: the New Depression.
By refocusing your energies at the economic bottom, by recognizing its community-wide effects, you can begin to build the base of political support necessary to intervene effectively where the effort is most necessary.
Clean Your Own House First
Right now, your policies have only helped banks, Wall Street, corporate America - and at the level of the individual - the cash-rich, the well-employed and those whose economies have never met really damaging crisis. In short, only the privileged have really benefitted from your policies, even when they were ostensibly intended for the economically endangered, like mortgage reform.
Using these reformed numbers to illuminate just how bad things are in this country - and don’t forget wealth disparity statistics or the drift of working people into the poverty classes over time - draw that line in the sand on bipartisan economics that destroyed living wage jobs, put the blame exactly where it belongs and start fighting for new economic policy thinking.
Punctuate that line by firing everyone who used to work for Goldman Sachs from your offices. Hand out pink slips to Geithner, Summers and everyone else responsible for creating this disaster and get some of your outspoken Democratic critics in there ASAP, starting with Reich and Klugman. Don’t bring them in to front for the status-quo neoliberal economic policy. Give them free reign to fundamentally change economic policy and encourage them to push the envelope on their own thinking, not shackle them to support policies that they know in their hearts won’t work.
If you fear a negative message will result in a negative response by Wall Street and the markets, then you have proven the point that Wall Street has entirely too much power in the economy and its is built on hype and bullshit. While investor-class corporations may have a place in this society, they are singularly responsible for the destruction of living wage jobs and have - all too often - devolved into ponzi and pyramid schemes, whether obviously criminal or just legal enough to keep peddling their frauds.
Only by admitting the depth of the problems, you can do what’s necessary to change things. But you cannot simply focus on long-term policies, you need to triage the damage so that we can wait for long-term changes to have their effects.
Triaging the Damage: Homes and Jobs
Start with a primary home foreclosure moratorium and admit that mortgage reform was a failure because the banks refused to cooperate and instead gamed the system to warehouse homes until the market came back in those neighborhoods. This will also equalize home values at the level of potential home ownership, by exposing developers and property giants to the marketplace, while protecting home owners.
Once you’ve done that, the banks will start to experience real pain. Use their pain to squeeze real mortgage reform and debt forgiveness for those with mortgages that exceed home values or their capacity to pay their debts.
What good is it if the value of property in a given area is well-above the median income of that area? It drives home and business rents up past the breaking point for tenants and businesses, encourages property companies to hold communities hostage to their back-breaking rents and kills local economic development off entirely.
While you are at it, strengthen anti-warehousing laws on property so that localities can seize shuddered properties from their absentee landlords and put that property to work in the community, either as homes or as potential places for business. Don’t stop there, add new laws that punish monopoly property control. When two or three landowners own too much of any town, that community will be bled dry by those landowners and their ability to diversify their economic life will be crippled by monopoly landowner greed and selfishness.
It was a fool’s mission to turn primary homes into an investment product. It drove home ownership out of reach for too many people and chained those with homes into bank-breaking debt. It drained local communities of their ability to generate economic activity and destroyed their capacity to create new, small businesses, because the monthly note for new businesses has been raised beyond profitability by the high cost of rent.
But none of that will mean a damn if money doesn’t start circulating at the bottom of the economy. Tax credits for businesses to hire people will be a useless program, if there is no economic activity to drive production or sales. You need to reseed the economy from the bottom up with cash. Not handouts, but hand ups.
We desperately need a public employment program. It should have been the first thing you did, not the thing you never did. Need MORE teachers, nurses, social workers, community workers, street sweepers, recycling workers, road workers, railroad builders.
The private sector has proven in the two years you have been in office that they have no intention of creating living wage jobs, so long as economic policy. The short-term economic logics of monopoly capitalism privileges job destruction because it boosts the numbers.
You don’t need another bureaucracy to do this. Use General Services to hire people and assign them to a range of domestic departments, assigning qualified people to states, provided states agree not to use these workers to replace existing workers. Remove some of the bars to public employment - like good standing with student loan debt or conviction of nonviolent, poverty-inspired crime - and get as many people working as fast as you can across as many job sectors as possible. This is simply triage, but your party will not be in power to finish the job, if you don’t triage the job market now. This should have been done two years ago.
Infrastructure investment is necessary, but keep the private sector out of it. If you have 100 billion to spend on infrastructure, make sure all of that money goes to salaries, materials and equipment. If you let Bechtel, Halliburton or any other company - large or small - get their hands on the money, it will never reach the streets. Privatized infrastructure investment by the public sector can yield as low as a 1% return in the form of jobs. That will lead to charges of pork barrel spending and fraud that will undermine the entire effort.
Long Term Strategies
Start going through every job sector, correcting the rules, laws and regulations that encourage downsizing, outsourcing, privatization, mergers and the shift to part-time and contingent labor practices. This process will take years, but unless it is addressed at the macro and micro level all efforts to regenerate the pool of living wage jobs will fail. Triaging the job market with public employment will stem the bleeding, but staying the course with neoliberalism will only make the problem worse.
Raise taxes on the rich and on corporations and get out of these wars to pay for this investment. Close down foreign military bases and let our rich allies know they’ll have to start defending themselves. There’s no reason in the world why we need military bases in over a hundred countries. Close them down and bring the soldiers home. Start negotiating with the Taliban and Hamas, first off-the-radar, but eventually in public. Opposing all Islamist movements is a recipe for their proliferation and radicalization. The Taliban will eventually win the war in Afghanistan, but it doesn’t have to end with helicopters leaving off the roof of the American Embassy. Staying the course with these wars insures that it will and will turn Pakistan into your Cambodia, with nuclear weapons.
When you have done all of this - and unemployment rates have returned to 3-4% (with a healthier social safety net) - then you can turn your attention to deficit reduction. But even then, do deficit reduction with the bankers balls in a vice, squeezing as much debt reduction out of them before taking it out of Americans’ hides.
Strengthen antimonopoly legislation and start breaking up companies. Economies of scale means poverty everywhere. Renegotiate free trade agreements to strengthen local political power, community-wide and national economic self-sufficiency and stability, privilege ecological sustainability, democratize this process and expose the hidden halls of power to the bright glare of public scrutiny. Do the math and just violate agreements when needed, so that domestic production is encouraged over international trade, and let the rest of the world do the same. Sometimes it’s better to pay the fine and do what’s needed.
Don’t just be satisfied with nuclear disarmament, start pushing for universal military disarmament. Getting into an arms race with China will not end well for us anyway. Not against a country than can suit up a hundred million people or more in military uniforms and not when their military technological development almost matches ours. And certainly not when our own military production readiness depends on Chinese production at the lower levels of the supply chain.
Some of this needs to be said today. Indeed some of it should have been said at your inauguration. Some of it requires confidence building and education to ready the American people for its post-imperial future. But all of it is necessary, because we are facing a post-imperial future. The American Empire had a very short shelf life. And its already past its sell-by date.
Slow growth is okay, so long as the wealth is shared. Long term efforts must match Roosevelt-like triaging efforts. Staying the course with neoliberal policies are exactly how your administration ended up in political trouble.
The Suicidal Folly of Realpolitik Thinking
No doubt everyone around you will dismiss my arguments out of hand. Realpolitik thinkers will scoff and laugh at the notion that any of this is even possible. I would argue otherwise.
For political purposes, you need to break down the electorate into four groups:
- Those who will always vote for you because you are a ‘Democrat’ (25-35%)
- Those who vote Democratic or stay home (25-40%)
- Those who may vote for you or against you depending on your policies (about 5-10%)
- Those who will never vote for you (25-35%)
(percentages are ballpark estimations)
Some of what I've suggested above needs to be put out there upfront and center, that bold line in the sand I've talked about. Some of it - like war and defense spending - needs more ground to be prepared, so that getting our military budgets under control and escaping our no-win wars doesn't blow back on you politically.
First, shore up your relationship with the first two groups, with special attention to the second group. They are not filled with potential green or third-party supporters (they are a subgroup of the third group), they are filled with poor, working class and other economically endangered people. This second group will vote with great passion for you, or despair and never get to the polls if they feel abandoned. The last three by elections shows the damage they can cause to your party, so you better get to work really hard for them, because they will be staying away in droves in two months, if you don’t. See my dairy on Saturday - Alienation, Unemployment, Jobs & the Electoral Base - for a breakdown of those numbers and the threat it poses to this party's fortunes.
When these first two groups vote for your party, your party wins big mandates to rule. When the second group doesn’t vote you lose, when the Republicans get their vote out.
Second, forget the fourth group in terms of political considerations, if not socio-economic purposes. They will never vote for you, so pandering to their opinions simply threatens the second group and parts of the third group. Of course, as President, you must serve all the people, including those who never vote for you. But so long as your social and economic policies serve all Americans, who cares what they think of you? So long as the first two groups vote passionately in your favor.
Third, the independents and the swing voters are not a monolithic bloc as the media tends to portray them. They include Reagan Democrats, social liberals/fiscal conservatives, and alienated progressives and countless other minor ideological tendencies. If you pursue strong New Deal socio-economic policies, you’ll probably get half of them to vote for you. Either way, they are not the margin of victory, except in a low-turnout election. Even then, half of them will probably vote Republicans, so pandering to them as if they are a cohesive political bloc is a fool’s mission that threatens your ability to energize the second group, which has been your party’s margin of victory since the days of Roosevelt.
Get out in front on the economic stuff and go to work on the long term stuff and start preparing the ground for the really tough compromises ahead on war and military spending. That will be the only way you can get control over the deficit without handing over the keys to governance to your political opponents. Addressing the deficit on the backs of the poor and the working class is the road to political failure in any economic climate. To do so during the New Depression, is political suicide for any political party, no matter what the corporate pundits might say.