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Sunday, January 5, 2014

Roger Hickey: To Fix The Problem of Inequality, Fight For Full-Employment

Roger Hickey

Posted: 01/05/2014 5:35 pm

Praise the Lord! It looks as though Democrats are starting to act like populists as we go into 2014. A few weeks ago, President Obama declared economic inequality has become the "defining challenge of our time." And Bill de Blasio, sworn in on January 1st as mayor of New York City, won by promising to fight for the forgotten majority of working families, for whom rising inequality has meant a real struggle to survive. And Senator Elizabeth Warren is leading the charge to reform the financial system and to fight back against conservatives who would cut Social Security.
The politicians have been educated and prodded by years of organizing by progressive activists. And now even the most cautious Democrats are gearing up to campaign to extend unemployment insurance and to raise the minimum wage: two issues they think will motivate the young people, people of color and women -- the new American electorate -- to get out to vote in the 2014 Congressional elections.
But Democrats need to beware: Conservatives have their own version of populism. From Rick Santelli's 2009 televised rant that launched the tea party to the crusade against "Obamacare," right-wing activists specialize in attacking liberals who would subsidize the "losers" in the economy while undermining the hard-working middle class. And conservative populism becomes most powerful, as we saw in the last mid-term election in 2010, when liberal politicians ignore the fundamental nature of the economic crisis and leave the field to conservatives on the issue that voters care most about: jobs.
In the run-up to the 2010 elections, conservatives talked about limiting government -- and they leveled strong criticism of the massive bailout of the banks. But in the wake of the worst recession since the great depression, the campaign message that really worked for conservatives -- and won them the House -- was a simple question: "Where are the jobs?"
Having labored to pass the economic stimulus bill, President Obama and most Democrats on the ballot in 2010 acted as though they had solved the problem. Instead of explaining the serious nature of the economic crisis -- and the need to do more to revive employment and growth -- their message to the voters was unconvincing: "Have patience. The jobs are coming back. The recovery we promised in on its way."
Too many voters didn't buy it. Rather than patiently wait for the Obama jobs to appear, they supported conservative populists whose winning message was simple: "The Democrats have failed to bring back the jobs. Vote for us, and we will revive prosperity." It was a bogus argument by conservative politicians who had no real plan for jobs, except austerity. But in the absence of an alternative, voters went with the candidates who were at least promising to do something about jobs. And so Republicans took the House.
And what is the Democratic message on jobs for 2014? It is basically, "Have patience. More jobs are coming."
On the cable news shows, you can already see the Republicans setting up their attack lines:"Most Americans want a growing economy and good jobs," they declare."Rather than strangling business by raising the minimum wage -- or giving people unemployment benefits -- we should be creating jobs and new opportunities. And the Democrats, despite their promises, have failed to create jobs."
Don't get me wrong: I believe Democrats should crusade vigorously for extending unemployment benefits and for raising the minimum wage -- policies that do help address inequality and are also popular with a wide swath of voters. But even though we can and should make the case that they stimulate the economy, they are only part of a real plan for robust growth and job creation.
Only the Congressional Progressive Caucus (with help from the Economic Policy Institute) has put out a comprehensive proposal -- the Back to Work Budget -- to achieve the kind of job growth this economy really needs. Some House and Senate candidates will win election by making it part of their campaigns, calling themselves "Economic Growth and Jobs Democrats," -- a label that used to be redundant. But some cautious political consultants warn candidates to stay away from embracing bold spending proposals to create jobs. Instead, they ask their clients, why not just brag improving job and growth numbers?
The answer is simple: middle class voters don't judge the economy by numbers from Washington. What matters are answers to questions like, "Can my kid get a job and start paying off those student loans?" or "Has my cousin, who's been out of work for two years, found anything yet?" or "Can I take the chance of quitting the job I hate and starting that small business I've been thinking about?" If Democrats just brag on improving numbers, they run the risk of sounding out to lunch to voters who still don't see the recovery as real. Economists remind us that one reason unemployment is going down is because many people have given up looking for work and are now not even counted as unemployed. And remember, a month or two of good growth numbers can easily turn to bad numbers -- and America still needs new investment to drive long-term employment growth.
The other reason for caution is a circular one: some Democrats are reluctant to talk about the kind of investment we need to kick-start the economy because measures like that can't pass the Congress, which is dominated by a conservative majority in the House. The way to break that conservative majority is by talking about Democratic ideas of for job creation - from infrastructure spending to universal pre-k education. And then you campaign, like Harry Truman, against the "Do-Nothing Republicans" who refuse to do what America needs to revive growth and create jobs.
At minimum, Democrats should cast their opponents as enemies of growth by showing voters how Republicans have been doing genuine harm to the economy by imposing harsh spending cuts and economic austerity on America. Economist Thomas Hungerford at the Economic Policy Institute looked at the economic impact of the budget deal just negotiated by Paul Ryan and Patty Murray and found it is still a major job killer. Hungerford just compared the deal to the budget the Obama administration originally proposed for the coming years, which, by contrast "would have increased the number of jobs in the economy by almost 1.2 million and brought the unemployment rate down to less than 6.5 percent (from its current level of 7 percent)."
Democrats would have done better if they had told voters the truth about the Ryan-Murray budget deal: this kind of job-killing budget is bad for America -- not only because if failed to extend unemployment insurance - but because it continues the Republican policy of economic austerity and deficit fixation when we should be investing in jobs. They could still have voted for it while holding their noses, while making clear that conservative extremism was forcing them into a bad deal. But, after years of Democratic complicity in prioritizing deficit reduction over job creation, it was hard for them to say anything except that the deal was better than full sequestration and that it proves Democrats and Republicans could get "something -- anything" passed. But more such deals are ahead for the Congress, and it is time for Democrats to start telling voters the truth: that job-killing austerity is what you get when Republicans are in control of one house of the Congress. Democratic candidates don't even necessarily have to campaign on a plan for public spending to create more jobs -- although that would be popular with voters -- but they do have to attack their opponents as dangerous ideologues whose votes have killed jobs and sabotaged our weak recovery.
Winning Populism: Attack Inequality and Fight for Jobs.
It is a terrific victory for progressives that politicians are now taking on inequality in a populist way. After decades of declining wages and years of organizing to demand better wages for full-time workers still stuck in poverty, politicians are learning from progressive activists. Our campaigns for a higher minimum wage -- and for better pay and union representation for fast food workers -- and for unemployment benefits for people trapped in a bad economy -- are showing politicians how fighting for economic justice can help win votes from a broad spectrum of Americans worried about how the economy and the government are failing their families.
Activists have also reminded politicians that, in an age of growing inequality, proposals to expand Social Security are more popular than conservative calls to cut benefits. It shouldn't have taken a huge organizing effort to remind Democrats of this reality. But we've got to keep pushing on other organizing fronts -- showing Democrats that the bankers who crashed the economy and trade deals that erode American wages and destroy jobs are wildlyUN-popular with the voters, for example.
But we must also expand our crusade for JOBS. If we want electoral victory for our new populist movement, we must be the advocates of the kind of robust job creation Americans have been waiting to see for years. And if we are serious about addressing inequality, we must fight for jobs for all. In their new book, Getting Back to Full Employment, economists Jared Bernstein and Dean Baker forcefully remind us that the fastest and most effective way to reduce inequality is to revive economic growth to the point where everyone who wants a job can find one -- and employers have to bid up wages and raise benefits in order to find the workers they need in a growing economy. Just as we have educated and pushed politicians to fight to defend Social Security, protect the unemployed, and increase basic wages, we now have to teach them that a populist movement to fix inequality must attack conservative austerity -- and champion full-employment.
Note: Since President Obama's December 4 speech on inequality, bloggers and economists, provoked by a post by Ezra Klein, have been debating whether inequality or full employment should be the priority for the progressive movement. Larry Mishel collects the arguments and the links at this post at the EPI blog. Obviously, the correct answer is that there should be no choice between addressing inequality and job growth. But the debate has been useful in re-enforcing the importance of job creation and economic growth. If you care about inequality, you have to fight for full employment.

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