Kennedy's 12-Page Proposal: Why the Devil Is In the Details

Note: This is a cross-post from my group blog The Realignment Project and DailyKos.

So, if you've been following the day-to-day drama over the health care bill - Baucus says he'll fight for public option! Ben Nelson backs off opposition! Schumer tries for some weird single-payer/trigger double play! - then you've probably heard about Senator Kennedy's attempt to push the emerging bill to the lift by getting his HELP Committee's version of the bill out first and pushing Baucus to the left.

Well people have been asking about the details of what this 12 page proposal that's been circulating are.

Well, look no further!

Background:

So for people who haven't maybe been following the back and forth over the health care bill, the basic elements of the legislation being covered are these:

• Insurance Reforms - guaranteed issue, community rating, and banning pre-existing conditions exclusions have been mentioned here, along with some sort of minimum standards as to coverage and services.
  
• Mandates - both individual and employer (so-called "pay or play") mandates have been central elements of the deal, in order to achieve universal coverage, and in the case of employers, additional funding.
  
• Health Exchanges - state-level purchasing pools where insurance plans would have to compete for clients, overseen by some kind of board that would set minimum standards, and the like.
  
• Sliding Subsidies - probably using some sort of refundable credit, the idea is to construct a subsidy to pay for premiums that "slides" up or down depending on income, to deal with the "affordability" question.
  
• A Public Plan - details unknown as to how Medicare like this would be, but some form of public plan available for individual and group purchase has been a central part of the debate.

The Kennedy Memo:

The key purpose of the Kennedy memo (which you can find here) seems to be an effort to shift the terms of the debate, and the eventual legislation left-wards. Not quite in the same way that single-payer advocates are hoping to do, but in a more traditionally moderate liberal fashion, focusing on the expansion of public programs.

Kennedy accomplishes his aims in a number of ways.

Private Insurance Reforms:

1. Guaranteed Issue and renewal - this is quite clever, because not only does it include the basic concession that insurance firms have made in return for individual mandates, but it also closes a potential loophole by making sure that you couldn't later get dropped.

2. Banning Pre-Existing Conditions Denial and Underwriting - this is also quite clever, because it tackles both the denial of care, but also the increasing of premiums due to an existing medical conditions, which often creates cost-related uninsurability.

3. Community Rating - "Premiums charged by health insurers should vary only by family composition, geography, and age, within clear and reasonable limits," a little bit vague here, but it seems to be pointing to allowing some regional variation.

4. Mandatory % Spent On Care - called rather sneakily "ensuring value in health insurance purchasing," this would require a certain percentage of every premium dollar to go to care as opposed to administration.

Sliding-Scale Subsidy:

Here's the big one, and it's snuck in via a short paragraph. The Baucus bill being drafted assumes some kind of sliding-scale subsidy to help pay for premiums, but a rather limited one. Kennedy's memo calls for "sliding scale premium assistance for individuals and families with income up to four times the federal poverty level to help them purchase quality health insurance policies."

This is crucial, both in the policy and the politics. Policy-wise, this means that the money involved is likely to be substantial, bringing people's medical costs down substantially (which would have beneficial ripple effects on living standards and consumer spending), and ensuring that people lower down on the income scale really can afford the premiums. However, politically, it's very important that a family of 4 making $88,000 a year would be eligible for subsidies. That means that the subsidy provision would be a relatively universal benefit that the middle class would enjoy. This builds a huge potential coalition for this benefit, which is crucial for turning it into the future equivalent of Social Security or Medicare, rather than the future equivalent of AFDC. It also makes the overall bill more of a political winner for politicians - who doesn't want to pass a bill giving millions of middle-class voters unsubstantial checks?

Health Exchange:

Nothing particularly new here, although it's very explicit that "To ensure that fiscal discipline and full accountability are built into this new structure, one health insurance option available to participants will be a publicly sponsored and guaranteed plan." I think the guaranteed is quite important - it means that the public plan in question could not be a spun-off Amtrak like affair, but something that had the financial support of the U.S government, and thus would be as sound as the rock of Gibraltar.

Individual Mandate:

Boilerplate here, although the phrasing "national health reform requires that everyone who can afford to must sign up for coverage," is important, putting emphasis on ensuring affordability front-and-center.

Not Included in the Memo:

Although this was in a separate email, according to Politico, two important key elements of the Kennedy plan should be included in this discussion: "in an e-mail summary that began circulating this week, Kennedy was described as considering a public insurance option that would pay providers slightly more than Medicare rates...He would also expand the Children’s Health Insurance Program to cover individuals up to 26-years old – up from 18."

These two details are crucially important. First, the payment rates - this is important for several reasons. It means that doctors and the AMA will have more of an incentive to back Kennedy's version than Baucus' version; it also means that the resulting public insurance plan would actually be widely accepted and usable, and hence worth purchasing, as opposed to something like Medicaid where it's very hard to find doctors who accept it; it also means that costs should be closer to the Medicare model than the private insurance model. Second, the CHIP expansion - if, as I suspect, this is paired with an expansion of Medicare down to 60 or maybe 55, this is an important step in gradually moving us in the direction of single-payer. People like Medicare a lot, they like CHIP a lot as well, and moving people away from insurance-based-on-employment to insurance-based-on-citizenship is a crucial intermediary step.

So there you have it. Now, Baucus' plan is significantly to the right of this, and Schumer's weird thing is to the right of that. However, by putting this plan out there as the HELP committee's bill and the bill that's on the table, it changes the terms of the debate by establishing a positional bargaining point that's significantly in the direction of more leftward alternatives, which in turn shifts the middle ground away from industry's preferences.

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Why the Law Matters: Santa Clara County v. Southern Pacific Railroad

In light of Obama’s recent Supreme Court nomination and the likely fight over the liberal vs. conservative direction of the Supreme Court, I’d like to reflect on how recent and unusual it is that the major political conflicts around the Court have revolved around questions of abortion and the rights of the accused, as well as other so-called “personal freedoms.” Don’t get me wrong, however – I’m not arguing that there has been a recent politicization of an otherwise neutral Court. I find that to be a ridiculous assertion. In a democracy, law and its interpretation is inherently political, an expression of our most deeply-held beliefs about the extent and expression of our rights, the meaning and reality of justice, the nature and scope of the state and the market, our very definition of what freedom, equality, democracy, privacy, independence, speech, mean.

Historically, however, the conflicts over the Court have gone through phases: before the post-1973 struggle over abortion, Court politics largely revolved around questions of civil rights (especially questions around affirmative action and de-segregation) which exploded onto the national consciousness in 1954, but had obviously been brewing for at least ten years before that. However, the longest-lasting political fight over the Court has been the fight over the nature of the state and the economy, and the competing claims of democracy and property rights, that arguably lasted from the end of the Civil War (many of the Civil Rights Cases that emasculated Reconstruction and its 13th, 14th, and 15th Amendments revolved around questions of economic regulation) through to the 1940s.

I’d like to consider this particular political struggle, because I think it illuminates the critical importance of the law and the Supreme Court in shaping the most fundamental political decisions in our country’s history (which raises the question of how democratic our decision-making process really is), and because it shows that the true fight being carried on is not actually a fight over the law (because neither side has even been consistent regarding separation of powers, judicial independence or activism, strict constructionism versus more expansive legal philosophies, etc.), but rather a broader fight over the direction of national policy. In that sense, both sides believe that the court “is where policy is made” in our peculiar system of checks and balances, but not everyone’s honest about it.


Before I start, let me just say that there’s so much to learn about the relationship between the law and policy that this post is really inadequate. I would recommend the following books. William Novak’s The People’s Welfare, Michael Curtis’ No State Shall Abridge, Ned Beatty’s Age of Betrayal, William Forbath’s Law and the Shaping of the Labor Movement, Morton Horwitz’s Transformation of American Law, and Martin Sklar’s Corporate Reconstruction of American Capitalism, just for starters. They’re books every citizen should read, and they make great summer reading (for amnesiacs and political/legal junkies).

The reason I’ve singled out Santa Clara is that it’s a great example of how a small, almost unnoticed change in the law can have huge political ramifications, and also a good example of how law, even Supreme Court super-schmancy Constitutional law, is really politics with fancier words.

First, the background - in the 19th century, the railroad was the economic thoroughfare of life, especially in rural farming districts and anywhere out West; agricultural products traveled from country to town, and from the rural West to the urban East via rail, industrial goods went from the cities to the countryside, and from the developed East to the developing West via the same routes. As a result, railroads were perfectly placed to extract massive monopoly rents from their unique position, and did – there’s a reason why the first big corporations were railroad corporations, why they invested massively in political lobbying, and why they received such political largess in the form of Federal aid and land-grants to finance railroad construction. At the same time, the railroads began diversifying their interests – they used their position as carriers and huge landowners to exert a huge influence over the agricultural market, often buying up large percentages of the yearly crop through their carrier fees, they were bought out or merged with coal and steel companies to vertically integrate the product from the mine to the mill to the shop, and so forth. This naturally touched off a huge reaction across the country – in the East, the American labor movement rose against industrial corporations starting in the 1870s and in the railroad industry first; on the Great Plains and out West, the Populist movement began to rise; but throughout the country, even your garden variety republicans turned against the railroads and embraced education.

Out in California, the major struggle was between the state and the railroads. The major California railroads, especially the Southern Pacific, not only dominated the agricultural market through their monopoly on commerce, but also through their massive land holdings, and their whole-sale purchase of the state legislature. As a result, the major impulse behind California Populism was the fight against the railroads, the drive to regulate railroad rates, to tax railroad property, and to reform the political system.

And Santa Clara was fundamentally a fight over whether the state could tax railroad property, in this case, the fencing along the right of way. Ultimately, a minor, almost piddling issue. The true consequences of the case was the obiter dicta that “The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution which forbids a state to deny to any person within its jurisdiction the equal protection of the laws applies to these corporations. We are all of opinion that it does.” With those two sentences, not even decided by the Court but rather added in a headnote by John Chandler Bancroft Davis, the Court’s Reporter (and coincidentally the former president of the Newburgh & New York Railroad Co.), a massive change in American law was made. Where previously corporations had been viewed with suspicion as artificial creations of the state that should be carefully regulated to protect the “salus populi” (the people’s welfare), now they were legal persons with all of the rights that had been judicially stripped away from the freedmen. As a result, any regulation, any tax, any government action that could be construed as damaging to the rights of a corporation could be challenged under law as a violation of equal protection, or substantive due process, or any other right under the 14th amendment.

This one decision massively upended the political balance between corporations and their adversaries, bringing the courts (and thus the law-enforcement powers of the state) into the fray against them. Railroad rate regulations to stop railroads from robbing farmers blnd or rigging markets in favor of particular trusts? Violations of due process. Health and safety regulations? Violations of equal protection if they weren’t the same for all industries. Unions and strikes? Out of the question. And so it went.

Part of the tragedy of the decline of a genuine liberalism in the legal profession, a shrinking away from the boldness of the Warren Court years, has been a hesitancy to challenge the assumptions about the free market and the nature of property that are at the very basis of the corporation’s advantage in the courts. This is especially problematic because the conservative legal movement has not been so hesitant. One of their major goals, along with eviscerating a woman’s right to choose or the right to privacy, is a full-blown assault on the modern reading of the Commerce Clause. As Clarence Thomas has written, “our case law has drifted far from the original understanding of the Commerce Clause. In a future case, we ought to temper our Commerce Clause jurisprudence in a manner that both makes sense of our more recent case law and is more faithful to the original understanding of that Clause.” This is the ball game right here. If the Commerce Clause goes, so does all economic regulation, so does any environmental or labor regulations, and so does anti-discrimination legislation in the field of employment or housing.

So when we gear up for Sotomayor, or for whoever Obama picks next, there is a much bigger fight we need to be ready for, and there is no reason why we should think defensively about what’s possible in the realm of the law.

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Like Water Dripping on a Stone: Rethinking the Politics of Single-Payer

In the run-up to the universal health-care bill being debated in Congress, one of the more contentious issues on the political left has been the question of single-payer and its’ inclusion or exclusion from the debate. Recently, we’ve seen single-payer advocates getting themselves arrested to draw media attention, a huge amount of back-and-forth within the progressive blogosphere (of which the links here are just a small sampling), and a good deal of fear about the public option getting watered down or eliminated.

I feel somewhat ambivalent in this debate, in part because I agree with the policy of single-payer advocates, but I find myself turned off by their political style. And I think a lot of it has to do with a particular theory of activism and an ahistorical understanding of how social policy happens that I really disagree with.

Especially as we draw closer to the crucial mark-up and voting phases, and ever closer to passage of the Baucus/Kennedy/Dingell/Obama health care legislation, it’s imperative that the progressive movement think very carefully about what we want to accomplish.

Background:

One of the ironies about the debate over the current health care reform versus single-payer is that the basis for the current plan (and indeed, the rough consensus between the Clinton, Edwards, and Obama plans during the 2008 primaries), the “Hacker Plan” – was designed as a compromise measure between gradualists who favored things like the exension of SCHIP in the wake of the Clinton health reform disasters and single-payer advocates.

For those of you not familiar with the Hacker Plan (available here), it basically consists of three key elements:

1. Employer Pay-Or-Play Mandate – Employers are required either to provide health care for their employees or to pay a payroll tax that goes into a fund for covering the uninsured.
2. Individual Mandate Plus Sliding Subsidy – Individuals not already covered by their employer would be required to purchase health insurance, either from a public or private insurer; income-based subsidies would ensure that the cost of insurance would be reasonable.
3. A New Public Insurer – A new, Medicare-like public insurer would be created to act as a competitor/yardstick to private health insurers and to ensure that there is an “insurer of last resort.”

With some alterations (a health care purchasing pool, new emphasis on reforming private insurance, new emphasis on reducing the growth of health care costs, new emphasis on cutting premiums and out-of-pocket costs for the insured, new emphasis on extending SCHIP/Medicare/Medicaid as part of the solution), this is essentially the plan that is being debated.

Single-payer advocates are upset that they are basically being shut out of the debate, and they have a right to be. However, I believe that a certain amount of the anger directed at advocates for “public option” reform is due to the fact that the Hacker Plan has become more or less consensus within a broad segment of the Democratic Party, from as far left as Ted Kennedy/EPI/labor to as far right as Max Baucus and Hillary Clinton, although there remains to be seen how extensive the Blue Dog/Evan Bayh contingent is, and how much they’re actually going to remain outside the consensus on this issue. This has meant that while the single-payer advocates have some base – especially with CTA/NNA (the nurses’ unions) and various health care grassroots groups (HCAN, etc.) – a lot of its natural supporters are now in the “public option” camp, which reduces the constituency for single-payer at the legislator and lobbyist levels. Even if single-payer was to “get a seat at the table,” they’d find that the other chairs – those not reserved for industry – are already taken up by “public option” advocates, and would find themselves on the losing side of a number of internal debates, and we’d probably end up exactly where we are today.

Like I said earlier, I feel very ambivalent about this, because I am ideologically and emotionally sympathetic to single-payer as a policy goal, but I feel really turned off when I see the tactics and strategies being carried out by single-payer advocates as they try to push their ideas back into the debate. For me, this isn’t a theoretical issue, it’s quite personal.

Humphrey Cooper Attewell, my great-grandfather. was elected to the British Parliament in 1945 as the Labor M.P for Harborough. As such, he cast his vote for the establishment of the National Health Service in 1946. The NHS was at the time and remains to this day the one of the most progressive health care systems in the world – a system in which the hospitals belong to the state, where the doctors, nursers, and other medical workers are public employees, and where health care is provided to all for free as a right. In a sense, therefore, the story of single-payer health care is the story of where I come from and who I am.

Yet I find myself oddly turned off when I listen to single-payer advocates, in part because I really disagree with the manner in which they are attempting to push their agenda, both in terms of their tactics and their larger strategy. I don’t find the tactics of single-payer advocates compelling in the slightest; I think direct actions and civil disobedience directed at the chairman of the committee who’s going to decide what health care bill will ever emerge on the floor of the Senate to be totally without merit. Simply put, it does not advance the cause of single-payer at all to piss off Senator Max Baucus, especially since single-payer advocates do not have the resources or the political strength necessary to seriously challenge him either in Montana or in the Senate Democratic Caucus. Strategically, I find the insistence on an all-or-nothing single-payer system to be utterly misguided and contrary to all the lessons that history can teach us about how advances in social policy actually happen.

Take a look at two of the most single-payer nations out there – Canada and the U.K. The Canadian health care system emerged, not in a single all-or-nothing burst, but rather in a gradual process of expansion. In 1944, Tommy Douglas of the CCF (Canada’s socialist part at the time) was elected premier of Saskatchewan on a platform that included free hospital care to all citizens. In 1946, his government passed the Saskatchewan Hospitalization Bill, which provided hospital care (not including physicians’ bills, prescriptions, etc.) to most, but not all residents. It took time to build up enough finances to cover all residents, and to extend coverage to all servcices; full Medicare for the province didn’t come in until 1959. Other provinces began experimenting with universal health coverage; Alberta establishing a pre-paid system that covered 90% of their residents in 1950. It took longer for the system to spread across the country: the first Hospital Insurance and Diagnostic Act in 1957 merely provided 50% of the costs of running health care programs; in 1962, the national government passed legislatuion to include phsyicians costs in the federal susbsidy; in 1966, the national government passed the Medical Care (Medicare) Act, which enabled provinces to establish full Medicare systems based ont he Saskatchewan model; and in 1984, the Canada Health Act established the modern system that Canadians know today.

In the U.K, the move towards single-payer began in 1911, with the introduction of the National Insurance Act by Lloyd George’s Liberal government. This legislation established a national system of health insurance, funded by payroll contributions from workers, employers, and contributions from general taxation – quite different than the current system. However, this system only covered certain trades and occupations of workers paid into the system, and the relatively low government contribution meant that coverage could often be quite expensive. During WWII, the pressures of the mass bombing of civilian populations led to the creation of the Emergency Health Service, which put all medical professionals into government service, created a coordinated national hospital system, and so forth. And finally in 1946, the new Labor government passed the National Health Services Act, establishing the modern National Health Service (NHS) on the basis of three central principles, that services should be free at the point of use, that general taxation should be the source of financing for the system, and that everyone would be eligible for care.

The point of this history lesson is that single-payer has historically developed in a gradual fashion – the Canadian system took forty years to develop into the modern Medicare system, and the British system took more than thirty years. In both cases, it wasn’t a single piece of legislation that made single-payer a reality, but the gradual achievement of partial steps that, like water dripping on a stone, wore down institutional resistance to single-payer.

Which leads us back to the current debate. I think that single-payer advocates should rethink their attachment to immediacy and to all-or-nothing when it comes to achieving their goal of a single-payer system; moreover, I think this will lead towards a re-evaluation of tactics, and the embrace of a strategy that emphasizes allying with public-option advocates to gain entrance into the coalition, so that they can begin pushing for those elements that would make the current proposal a true stepping-stone to single-payer. Here, I’m primarily thinking about ensuring the inclusion of a public option, making that public option as Medicare-like as possible, pushing for more generous income subsidies and more comprehensive minimum stnadards for healthcare plans, and support for states to experiment with single-payer. The passage of any major health care reform would in itself be a major step forward, in that it would break the now forty year gap in major social policy achievements, it would de-stabilize and de-motivate opponents ot health care reform, it would create a political atmosphere more open to single-payer by making universal health care a new “third rail,” and it would create pressures and interest groups to reform and improve and expand the new system.

Furthermore, in policy, passing the bill is only half the battle – implementation is the longer and more crucial phase. Here, I think one way that single-payer advocates can begin to broaden their base while pushing for their objectives is to begin a national campaign to sign people up for the public option, pushing the system closer to single-payer with every person signed up, and concretely solving the crisis of the uninsured. Here, single-payer advocates could usefully work with allies within the labor movement to push all 12.4% of the workforce that’s currently unionized into the public plan, and other social justice groups (union organizing campaigns, civil rights groups, GLBT groups, feminist groups) could plug into the campaign by folding signing people up for public health care as part of their ongoing missions. Moreover, single-payer advocates, by being slightly outside the coalition of public-option advocates, would then be free to begein “raiding” the private insurance market, taking the fight to the private insurance companies by mobilizing their friends, families, neighbors, and co-workers into switching from private to public insurance; you could target major employers with public insurance drives, especially focusing on corporations like GM, Ford, and Chrystler, where the argument for a single-payer (as opposed to employer-based) health care system might resonate.

In my mind, that’s the winning strategy for single-payer.

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Strange Fruits of Victory: A Vision of the Democratic Party in 2040

Note: This is a cross-post from my new group blog, The Realignment Project.

One of the side-effects (collateral damage if you want to be ironic) of the 2008 election, and the broader public reaction against the Bush Administration, has been a massive shift in partisan identification away from the Republican Party and toward the Democratic Party.

One example of this trend is the most recent Pew Poll on partisan identification that shows a shift from a tie of 43% to 43% in 2002 to a 53% Democratic and 36% Republican split. This follows several other polls that suggest a massive decline in Republican identification and a smaller, but still significant increase in Democratic identification.

All of which has caused a bit of speculation over whether the Republican Party will survive as an institution, and what this will mean for the future of American politics. Will the Republican Party collapse, and what will fill its place? Will there be a new second party, and what will it look like? Will the Democratic Party become the lone major party, and how long would their sole dominance last?

For the purposes of a thought experiment, I’d like follow one particular line of speculation in order to tease out some major questions about the current nature and future direction of the Democratic Party.

One of the advantages of taking a historical approach to a question like this is that American history luckily gives us examples of how this kind of political realignment has happened in the past. Unusually, the United States seems to experience major political realignment on a fairly regular basis, so we have several models that could tell us what the collapse of a political party might look like:

• A New Second Party – in this model, the fall of one of the two major political parties results in its place being taken by a new second party that assembles a new coalition, often borrowing from elements of the fallen political party’s coalition and adding new groups in order to forge a new and more durable coalition. The best example of this from American history is the rise of the Republican Party from the wreckage of the Whig Party. The Whig Party’s Northern and Southern coalition, previously formed on the basis of economic policy, was destabilized by the introduction of a new issue – slavery – into the political debate. The new Republican Party brought Northern Whigs, anti-slavery Democrats, Free Soilers, Nativists, and abolitionists into a new anti-slavery coalition. It’s interesting to note, however, that the Republican Party’s economic policy largely followed Whig lines: support for a national banking policy, a protective tariff for industrial goods, internal improvements (public works, usually in the field of transportation infrastructure), and nationalism over regionalism.
• The Dominant Party Breaks Into Two New Parties – in this model, the fall of one of the two major parties results in the remaining period experiencing a long period of dominance. Ultimately, underlying tensions within the ruling party’s coalition built to the point of fracture, resulting in two new parties. Here, the best example is the emergence of the Whig Party in 1828-1832 out of the National Republicans (who themselves had emerged from the ex-Federalist New England wing of the Democratic-Republican Party). The divisions between the Whigs and Jacksonian Democrats had many causes, including personality conflicts and divisions over separation of powers issues, but chief among them were the expression of economic policy divisions that had persisted for some time, with Whigs following the more Federalist lines of John Quincy Adams and Andrew Gallatin, and Jacksonian Democrats cleaving more towards the Jeffersonian economic philosophy.
  
• The Second Party Gets Its Act Together, But Changes Dramatically – in this model, one of the two parties comes close to political oblivion and spends some time in “the wilderness,” before adapting itself to suit a new coalition, new ideological position, and/or geographic or demographic changes. In some ways, this is the most frequent case – one can look to the transformation of the Democratic Party in 1932 into the New Deal Coalition after spending 10 years in the minority, the re-emergence of the Republican Party as the party o anti-communism in the 1950s following nearly 20 years of political isolation, the Cold War Liberal dominance of the Democratic Party in the 1960s, the re-constitution of the Republican Party into the party of the New Right from 1964 to the 1980s, the emergence of New Democrats in the 1980s and 1990s, and so forth. In each case, the party takes on new constituents (urban workers and African Americans in the New Deal coalition, Southern Whites in the Reagan coalition, and so forth) or new issues (anti-Communism in the 1950s, civil rights int he 1960s).
  

Ultimately, I’m persuaded by polling data that shows a continuing trend of declining Republican identification, which suggests that the failures of the Bush Administration have not merely damaged the reputation of George W. Bush, but have also damaged the long-term reputation of the Republican Party as well. In addition to the partisan damage, I think economic conservatism has been badly damaged by the Bush recessions, and it will take some time before the public is willing to support more pro-market policies. Furthermore, I think that surveys of political ideology – as can be found here and here - suggest that the political environment is likely to shift leftwards for some time to come, making it more difficult to establish a new second party. This evidence is especially persuasive on social issues, suggesting that cultural conservatism may be in for a more long-lasting decline, as younger generations turn against cultural conservative issues across the political spectrum.

What I think will happen, therefore, is a period of Democratic Party dominance for the next 10 to 20 years. However, I think tensions will gradually emerge between its left and right flanks over economic and social policy that may very well lead to the establishment of two new parties. What we may have in 2040 is one party that is socially liberal and economically liberal – a genuine Progressive party, although probably partaking less of the class politics of a Social Democratic Party than the “social organism” politics of Progressivism – and another party that is socially liberal and economically laissez-faire – what Europeans would recognize as a Liberal Party. The reason for this is that as moderate and liberal Republicans desert the Republican Party for the Democrats, there will be a wider base for this kind of politics – at least after expansions of the welfare state (especially in the area of universal health care) and the return of economic prosperity have given middle class and affluent Democrats the sense of economic security necessary for the return to a more New Democratic attitude towards markets, especially given the availability of corporate financing for such a political shift.

However, it’s hard to tell what will happen. It may well be that the Republican Party will jettison cultural conservatism and become a European-style Liberal Party – if that does happen, I don’t think it will happen any time soon. At the very least I would think it would take a period of sustained losses in 2010, 2012, and probably 2014 and 2016 to really produce enough of a scare to make that happen. It would also be wrong to suggest that any of this could happen on its own – any political shifts we might see over the next 10 or 20 years will require huge amounts of political work. At the very least, we will need to see key policy victories in the Obama administration – with universal health care being the most important among them – in order to create the political climate for an enduring left shift.

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Re-Post Number 11: "Stimulus Is Not Enough: Job Creation Now!" (Jan 09, 2009)

Note: and that's the last of the re-posts. The context for this post was the political fight over the Obama stimulus package.
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In the last few months, the U.S economy has seen one of the fastest slides into one of the most terrifying employment declines in American history - we are now losing jobs at the rate of 500,000 a month.

Given this reality, the current stimulus proposal is no longer sufficient. We must move beyond a debate that tries to balance a couple hundred billion in tax cuts with four hundred billion in public works, aid to the states, and traditional stabilizers (UI, food stamps, etc).

In the last few months, the U.S economy has seen one of the fastest slides into one of the most terrifying employment declines in American history - we are now losing jobs at the rate of 500,000 a month. Given this reality, the current stimulus proposal is no longer sufficient. We must move beyond a debate that tries to balance a couple hundred billion in tax cuts with four hundred billion in public works, aid to the states, and traditional stabilizers (UI, food stamps, etc).

What we need are jobs, and jobs now.


Background:

For about two years now, I've been diarying about public employment programs, which I'm studying for a dissertation in U.S Public Policy History. If you're interested in reading more on job creation programs, you can check out any of these diaries:

[edit: see here]

The Current Crisis:

Given the stunning rate of job loss, I believe that traditional stimulus measures will not be adequate to offset the damage being done to the economy. On the jobs front, if we create three million jobs as President-Elect Obama hopes, we may well have only bought ourselves six months of breathing room rather than a lasting improvement. On the consumption side, even if we shovel $1 trillion into the economy, if people are seeing jobs disappear at the rate that they have, their propensity to consume will decrease and their propensity to save will increase as people batten down the hatches against the bad times and save money for when the jobs go. Not to say that it won't have any effect, but it's going to be much much weaker than one would hope.

Given the seriousness of this situation, I think we need to radically re-think the stimulus package. To begin with, the tax cuts need to come out - they're not going to have nearly enough of an effect on people's spending habits if people's psychological posture is determined by an omnipresent fear of layoffs and unemployment. Next, we need to understand that the current commitment to public works is inadequate to the task. While many of the existing public works plans - from greening buildings to building high-speed rail - are quite worthy, the nature of the process of letting out contracts, vetting proposals, and getting the site operational takes too damn long, and will not generate enough jobs fast enough.

What We Need:

As I have argued before (see here), public works are not the policy tool we should be looking to, at least not in the traditional contractor model.

Instead, I believe that the Federal government needs to hire unemployed workers directly and immediately. We should begin by hiring 5.5 million workers right now, to bring the unemployment rate down from 7.2% to 3.6%, and to increase that number at any time to keep the overall unemployment rate at 4% or below if/when additional private sector jobs are lost.

Why? First, we need to dramatically reverse our current downtrend. Creating these jobs would send a dramatic signal to every consumer and producer that mass unemployment is not going to happen, that it is not necessary to cut back in the face of crisis. Second, we need a policy big enough for our economy. Given the sheer scale of the American labor market, in order to send a signal that really resonates, you need to do something at a large enough level that it actually changes the economic reality - cutting unemployment in half is exactly the right kind of signal. Third, every month we wait to create jobs is less income going into the economy and more people falling into poverty - in order to start spending fast enough to get ahead of the deflationary effects of this recession, we need to create jobs faster.

Precedent:

Luckily, we do have precedent for how to do this, in the Civil Works Administration. In the fall of 1933, with unemployment still hovering in the 20% range, Harry Hopkins (the head of FDR's Federal Emergency Relief Administration) went to President Roosevelt with a plan to create 4 million jobs to reduce unemployment and keep people alive during the normal seasonal downturn in unemployment in the winter. To his surprise, Roosevelt agreed, and the CWA was born in October 1933, with a grant of $400 million dollars "borrowed" from FDR's public works program.

In three months, the CWA had created 4.26 million jobs. At a time when the most advanced administrative technology was the carbon copy and the rotary phone, all 4.26 million workers were hired and put to work that quickly. Surely, today we can do better.

The Cost:

Assuming a base salary of $24k/year and a non-salary overhead of 30% (a rather generous assumption, given that New Deal era programs managed to limit non-salary costs to 20%), it should cost roughly $31 billion to put one million people to work for a year. Five and a half million people makes $170.5 billion dollars - well within the current framework of President Elect Obama's $750 billion plus package.

In the end, this is not a question of whether we can find $170 billion to spend; the sheer size of the bailouts and the proposed stimulus package shows that the American government's fiscal powers are much greater than we've been led to believe on social welfare issues. It's more a question of how we spend money, and the ideology contained therein.

Republicans want to give tax breaks because they don't believe in government, and they want to benefit the rich who they believe are best suited to spend the money. Congressional Democrats want to spend the money traditionally, because they're used to spending on traditional areas and constituents (not that their proposed spendings are a bad idea, far from it), and because it's been 70 years since we've done anything like this. Creating millions of jobs directly is a radical departure from standard practice, and Democrats may well be nervous about doing something so drastic.

However, we simply cannot afford to wait.

Please read this, promote this if you can, pass the word on. There is a way out of this crisis, but we just have to remember how we did it last time.

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California Budget: Where Do Progressives Go From Here?

Given that the current ballot propositions have gone down in flames, then the state of California faces a brand-new budget crisis of some $21.3 billion. While obviously the Democratic leadership has focused their attention on trying to pass the ballot measures they thought represented the best possible compromise, I do hope that some thought has been given to what the new strategy will be on 5/20. Granted, the imperatives of political strategy mean that it's more than likely that there is a Plan B that's being kept under wraps at the Legislature, At the same time, however, it is vital that California Progressives come together to construct a stronger coalition and a winning strategy for the future of our state.


One potentially hopeful sign is that it appears that California may seek some sort of Federal bailout, either in the form of Federal fiscal aid or in Federal guarantees for California's bonds. The danger that progressives have pointed to is the possibility that Gov. Schwarzenegger will use this crisis to push for additional spending cuts, deregulation of environmental and labor protections, and other regressive pet projects.

Obviously, this would be catastrophic, both for California and for the nation. The Obama Administration must resist the Governor's request for "the right to make the cuts we need" - if for no other reason than pure self-interest. There is nothing to be gained from placating a Governor who has no political future in his or any other party, whose approval ratings are through the floor, whose administration has become a byword for failure, and who has nothing to offer the administration. Obama's political and policy interests converge in a successful economic recovery achieved through Keynesian stimulus; his interests in a California bailout would be to ensure that the Largest state in the Union and the world's 10th largest economy does not become a massive deflationary weight on the American economy. Acceding to further spending cuts, further job losses and furloughs, and especially to programs like Medi-Cal that benefit the poorest Californians (who as Keynesian theory reminds us have the greatest "marginal propensity to consume") would only serve to damage his own stimulus plan and slow the pace of recovery.

California Progressives at every level, from Senator Boxer on down to the Party Central Committees, local grassroots groups, and veterans of his 2008 campaign should absolutely lobby the President to ensure that any bailout is conditional on A. a reversal of prior cuts and firings and a commitment to pro-stimulatory policy, and B. Schwarzenegger's commitment to signing a new majority-vote budget written up solely by Democrats using the "Steinberg maneuver."

However, even this victory would be a mere cauterizing of the wound. If nothing else, the defeat of the May 19th propositions must show all members of the Progressive coalition that we cannot continue on the current path of division and drift - we must unify around a comprehensive strategy for confronting the crisis of governance once and for all in 2010, a new way forward.

To begin this process, we should start with a few fundamental strategic principles:

1. Aggressive Partisan Use of Majority-Vote
Progressives tried and failed to abolish the 2/3rds rule before. While we must absolutely put every resource we can into its abolition in 2010 (including putting abolition front-and-center in the 2010 Democratic Platform, making it a litmus test in the gubernatorial primary, and creating a narrative of constitutional reconstruction around it), our commitment to functioning democratic government must come first. Which means no matter what happens in the future - whether we pass an initiative or don't, whether we get to 2/3rds control of the legislature or don't, whether we get control of the governor's mansion or don't - that Democrats aggressively use the "Steinberg maneuver" to right the fiscal ship and get California voters accustomed to seeing majority budgets. This may very well mean strong-arming the governor, and potentially using our allies in the Federal government to provide additional leverage, but I see this as a crisis of democracy. Either the people rule in the state of California, or they don't, and we cannot allow a minority bent on the bankruptcy of the government to succeed.

At the very least, let's try - even failure would be better than doing nothing.

2. Creating a Progressive Foundation For the State's Finances
There's been a tendency in recent years for Democrats in the state legislature to nibble around the edges when it comes to raising revenue rather than going for comprehensive solutions. We can't afford to delay any longer. Democrats need to think more creatively about revenue generation, and about how to create progressive narratives around revenue and spending - even if it means going after corporate taxation and tax breaks in a major way. A good first step would be something like establishing an oil excise tax and putting the revenue into a higher education fund (simultanteously opening up more space in the General Fund) - thereby tying a tax on companies people don't like to a cause that people do like. Similarly, I think tying a cut in residential property tax rates to an increase in commercial property tax rates - and tying that revenue towards California's various green-housing ventures would also create a positive narrative that frames progressivization of the tax code in a personal and approachable way - do you favor cutting your taxes and raising more money for green housing, or protecting rich corporations?

Above all, we cannot let the debate over government taxing and spending be conducted at an abstract level that allows conservatives to milk voters' mixed feelings of resentment of taxes and apathy towards paying for services they want. At all times, the means (taxes on X) must be connected visibly to the end (spending on this program). We must learn to do that, not just for budgeting-by-ballot initiatives, but for the entire General Fund.

3. A Universal and Comprehensive Approach to Social Spending
Which brings me on to our next issue - the tangled nature of our state's social spending, a mixture of regular General Fund spending and special initiative funds. It's incredibly opaque, and makes it very difficult to understand what's going on, plan or coordinate, or to mobilize people around an ultimate goal for social spending. My current vision is that we should create unified social Services to centralize our competing and divided programs, and to create the administrative capacity for future progressive efforts. For example, a California Health Service to combine Medi-Cal, Prop 10's funds, and other programs, not only to improve coordination of current efforts, but also to create the state capacity for single-payer health care in the future. (After all, the British NHS required the prior establishment of the war-time Health Services who developed the expertise in nation-wide public health delivery). Moreover, a Health Service would allow taxation to be linked closely to spending, which would in turn be linked to public policy goals: "support bill/proposition X to increase revenue for the Health Service, to help move California towards universal health care," or "support bill/proposition Y to increase revenue for the Education Service, to reduce drop-out rates in half in five years."

Thus, the narrative of government is complete, from the tax, to the program, to the program's intended results. That way, debates over government shift from the conservatives' favorite territory of how big or how small or how efficient or wasteful to questions of which social goals we want to achieve.

4. A Unified, Party-Driven 2010 Campaign
In order to achieve all of this, we need to avoid the kind of factionalized intrigue and infighting that has sapped and dispersed the strength of the California Progressive movement - this means getting every group on board, including all of organized labor, all of the Latino groups, all of the African-American groups, all of the Asian-American groups, all of the progressive groups, all of the women's groups, all of the GLBT groups, and all of the electeds in the same coalition.

And just as importantly, it has to be centralized within the party. Every election cycle, we run into the same program of groups trying to re-invent the wheel by forming new coalitions, building up their own voter and donor databasers, running their own ads, doing their own GOTV. It's a massively wasteful duplication of effort, and it often means that politics becomes less democratic, as power is pushed upwards into the executive boards of temporary organizations that are unelected and not responsible to their constituency; it also means that official Democratic Party politics is diminished by the inattention of the progressive forces within the party, leading to capture by electeds and candidates and the devolution of what should be principle and policy-based politics into personality-driven politics. Hence the need for all groups to stake a common claim to a party organization that is, for all of its faults, visible, elected, and responsible to local Democrats.

This is not an easy thing to ask - it means giving up autonomy in favor of collaboration and compromise; it also means a genuine embrace of solidarity. Solidarity is a word that gets tossed around a lot in labor circles, sometimes genuinely, sometimes as a genuflection to a timeworn idol, and sometimes as cover for more complex politics. It's also something so deep in the bones and blood of the labor movement that it becomes almost an inexplicable article of faith - a shibboleth that separates those of the House of Labor from our uncomprehending allies. But what it ultimately means is a commitment to an other-directed politics, to the recognition of a wider moral commonwealth, an almost-spiritual oneness of need and humanity and frailty between disparate and remote groups of workers. It means being willing to march in a picket line and get your head beaten on for a different union's drive, for workers you may never have met before - because you recognize your struggle in theirs, and know implicitly that they'd do the same for you. It means refusing to cross a picket line even when it might hurt your pocketbook because crossing that picket line would be a betrayal of that part of yourself you see in other people.

It's a tough concept to live up to, a sort of discipline. And it's something that various factions of the Democratic Party need to understand and make a part of your life. It meets that Progressives - who are often whiter, richer, and maler than other members of our coalition - have to instinctively recoil from anyone who calls labor a special interest, because labor would do the same for them when conservatives attack them as anti-American. It means that African-American groups need to instinctively support GLBT groups on issues like Prop 8, not because the African-American community is morally obliged to be the conscience of the nation, or because they're required to accept any group's claim to similarity to the civil rights movement, but because they recognize GLBT Californians as part of a coalition for a broader conception of civil rights for all. And on and on, each group must be willing to put the interests of their peers at a level with their own, and the interests of the coalition above all else.

And this won't happen unless the center of a unified, party-driven campaign is a progressive platform that fully incorporates the major drivers of all constitutive elements of the party. That means not just Abolition of 2/3rrds, but also Repeal of Prop 8, and so on, so that each group feels that its political objectives can best be met by the enactment of the party platform, creating the level of trust and confidence necessary for concerted action and true solidarity.

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Re-Post Number 10: "Going Beyond Obama's Two-And-A-Half: A Case for More Jobs Now" (Dec 06, 2008)

Note: This post refers to the above YouTube Address, and is the last but one of this re-post series.
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Today, President-Elect Barack Obama went on YouTube to discuss the issue of unemployment, and how to "put people back to work." His proposal was a for public works and government investment in infrastructure and alternative energy, creating two and a half million jobs. At first glance, this is a major transformation in American public policy, since it was the first time that a president has advocated that the government should directly create jobs on a mass scale since 1944, when President Franklin Delano Roosevelt proclaimed that "true individual freedom cannot exist without economic security and independence," and argued that "the right to a useful and remunerative job" should belong to all Americans. His vision was first proposed in law a year later as the Full Employment Bill of 1945, the high water mark of American liberal economic policy never again reached.

To that extent, Obama’s YouTube address constitutes a quiet revolution, a small yet telling sign that change comes to Washington in many way.

But it’s not enough.


(Disclaimer: I'm a PhD student in policy history, writing my dissertation on direct job creation policy, so I'm unreasonably obsessed about this topic.

Studying the job creation proposals that Obama’s campaign and his transition team has put forward (see here), we see a certain amount of caution and division as to how to achieve his goal of 2.5 million new jobs in two years: Obama has proposed $50 billion to the states to prevent cutbacks in spending and stimulate construction, a National Infrastructure Reinvestment Bank to invest $60 billion over 10 years; an Advanced Manufacturing Fund and a Manufacturing Extensive Partnership to push private-sector job creation; $150 billion over 10 years to create a Green Energy Economy; a Green Jobs Corps which appears to be a mix of jobs and jobs-training; and $1 billion over five years in transitional jobs. Some common themes emerge: first, a preference for indirect creation, either through the states or through private industry; second, an emphasis on long-term rather than short term; and third, a general tendency to small-bore approaches. The policy history literature on these approaches suggests that these are not the most effective way to create jobs.

Even if every item on this list passes into law, and creates the 2.5 million jobs that are hoped for, it would still only bring unemployment down from its projected peak of 8.5% to 7.25%, still far above normal levels and far away from FDR’s call for a job for all who wanted it. If we really do want to change national economic policy and get our country moving again, we need to think bigger and bolder.

Luckily, we have a model for how to create jobs immediately. In October 1933, in the depths of the Great Depression, Federal Relief Administrator Harry Hopkins pitched an audacious plan to President Roosevelt: create four million jobs directly by the Federal government, and then put people to work building necessary public goods, and do it all by Christmas. FDR signed off on the idea and the Civil Works Administration was born in November, with a month to go. Through Herculean efforts, Hopkins and his staff hit their goal and then some – by January, 4, 263,644 people reported for work. Though the CWA was a brief prelude to the later Works Progress Administration, its results were staggering. In six months, the workers of the CWA built nearly a half million miles of road; 7,000 bridges and 4,000 schools and 1,000 airports; the murals at Coit Tower in San Francisco and the Zoo at Central Park in New York stand as silent witnesses to their labor.

My advice to President-Elect Obama is that, yes he can do more. In the words of his Chief of Staff-designate Rahm Emanuel, the new administration will need to "throw deep and long" to deal with the crisis of unemployment. To accomplish this task, I recommend the following principles:

Think Big: the American economy and the American labor force is leviathan in scope, so a small-bore strategy, such as $1 billion for transitional jobs would have little macroeconomic impact and would serve only a small fraction of the unemployed. Four and a half million jobs, on the other hand, would immediately reduce unemployment from a hypothetical 8.5% to 6.25%, getting us half-way out of our current slump in one move (even before any Keynesian effect on the private sector). Not only would this have an enormous stimulatory effect on the economy, but it would also embrace almost a third of those in need of a job – a true down-payment on reform.

Focus on the People First, the Works Second: one of the reasons why public works programs are often less effective than their creators hope is that they focus on the works more than the public being helped – the money appropriated goes mostly towards land, equipment, materials, the jobs go to private contractors who are more likely to be employed already, and the impact of the program on unemployment is lessened. Focus first on putting four and a half million people to work, then focus on how you can use the sheer labor power of four and a half million people to accomplish your goals of renewing infrastructure and creating a new green energy economy. The results will flow – nine million hands working together can build as many schools as you like, install as many solar panels as you like, or throw up as many free wireless towers as you like.

Do It Now, Not Over Two Years: the longer we wait for these jobs to create, the harder a time you’re going to have getting the economy going again, even with a big stimulus package. But with four and a half million workers drawing paychecks (I would suggest paying $24,000 a year, so that these newly created jobs can fight not just unemployment, but poverty as well) every month, you would be able to create a steady stream of stimulus to the tune of $9 billion a month, flowing into the economy from the bottom up, exactly in the fashion most likely to cause the most re-spendings, and the greatest economic impact. Moreover, if FDR and Harry Hopkins could, at a time when carbon copy and the rotary phone were the heights in administrative technology, do all this in three months, you might be able to head off unemployment before it gets to 8.5%, and reducing unemployment from 6.5% to 4.25% would drastically cut short our current recession.

Why Does This Matter?

A reasonable person might ask, why quibble over the difference between two and four million? Isn't Obama already doing what you're asking him to do? Why does this matter?

Ultimately, it matters because of scale - the American economy is a leviathan, even if it's sick, and the scale of the jobs crisis is huge when we're losing a half-million jobs a month. In order to reverse the crisis, you need to send a signal to the system that's big enough to make every part of the economy sit up and take notice, that can actually move the macro-level of the economy in a significant way.

However, there's another issue - I want the U.S government, our political parties, and the American electorate to start thinking not just in terms of millions of jobs but in terms of percentage of current unemployment. The ultimate promise of public employment, the thread that runs from the CWA to the Full Employment Bill, is that the unemployment rate can be determined through collective democratic action, that we can establish full employment if we recognize the right of all citizens who want to work to a job. If we can restore that belief, that policy knowledge, then we can not just end this recession, but prevent the next one as it happens.

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"Democrat Socialist:" Would a Party By Any Other Name Smell As Sweet?

In one further step toward political oblivion it seems likely that, when the Republican National Committee meets next week, they will approve a resolution to refer to the Democratic Party as the "Democrat Socialist Party" in all formal communications. Thus, Republicans have managed to combine their 5th-grader's taunt of refusing to use the proper suffix for our party and their ridiculous habit of labeling anything other than massive regressive tax cuts as socialist.

In even more amusing turn of events, Frank Llewellyn, the national director of the actual Democratic Socialists of America, is apparently offended by the change. According to Dave Weigel of the Washington Independent, Llewellyn said "“It’s objectionable..because they’re giving socialism a bad name by associating it with the Democrats, who are the second-most capitalist party in the world."

But rather than simply labeling this event as comedy and moving on, I think we should rather treat this as an opportunity to reflect on the meaning of our party and the future of American political thought.


What Does it Mean to Be a Democrat?

Part of what makes this event so ironic is that conservative elements in the Republican Party clearly believe that the Democratic Party has a much more coherent ideological posture, and a much more left-leaning ideological posture than we actually have. This isn't anything new: Republicans called the Democratic Party an agent of "creeping socialism" in the 1930s when the Party consisted of a tenuous alliance between urban liberals and southern reactionaries; Republicans considered Bill Clinton - who was, before, during, and after his presidency a moderate right-of-center Democrat - a dangerous radical, an unreconstructed McGovernite.

In reality, the Democratic Party is still an extremely ideologically diverse party, running from socialists (Bernie Sanders isn't in the party formally, but you could certainly find his ideological kin in parts of the Democratic Party) to conservatives like Ben Nelson. In some ways, we're more left-leaning than we were during the Clinton years - on the use of economic stimulus, the importance of public investments versus deficit spending, the public plan in health insurance reform, some elements of foreign policy and trade. In other ways, we've become more conservative - we don't talk about gun control much any more, I would argue we haven't significantly shifted on financial regulations yet, and so on.

And that's something I've always considered to be somewhat problematic. An open tent is a wonderful thing, but it does present certain problems. One of the largest is what overall direction we want to have as a party on the country. As one of my old mentors once said, one's politics should always begin with a vision of how you would want the world to look like if you were in charge, and then working how to get from where you are to where you want to go. Historically, political parties at their core are those visions. Communist parties had a vision of the end of capitalism and a new world to follow; in a different way, so socialist and social-democratic parties have a vision of a better world. Even conservative parties, like our own Republican parties, have a vision of an imagined past, a golden age they seek to return to, a sense of tradition they want to preserve.

At various times, the Democratic Party has had strong visions, although never uncontested. The New Deal vision was dominant, although challenged by the Southern Democrats, from 1932-1948; what has often been referred to as "Cold War Liberalism" was quite strong from '48 through to the collapse of the "Cold War consensus"; we've had "civil rights" Democrats and "New Left" Democrats, and so on. Yet for all the strum and drang that we hear about Progressive Democrats versus Establishment/DLC/DINO/whatever else you want to call them, it's more often been a conflict over policy or strategy, as opposed to ideology. Even within DailyKos, for example, there's a good amount of ideological diversity and fluidity, and a certain disagreement over what ideological terms even mean. Witness for example the lively debate in this thread over the difference between "progressive" and "liberal."

What Does "Socialist" Mean in 2009?

Of course, the irony of the Republican's newest rebranding exercise is compounded by the fact that it appears that socialism is becoming less and less of a negative label. While I take Rasmussen's results with a degree of skepticism, I'm less surprised that "adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided."

After all, you would have to be older than 20 years old to have even been born at a time when the Cold War had any real meaning. I'm 25, and I only vaguely recall the feeling of a world divided between the Soviet Union and the United States. I was woken up as a child to witness the fall of the Berlin Wall - none of my undergraduate students were even born in 1989. For them, socialism (if it means anything) is something they associate with campus radicals (who are essentially harmless), Europe (which they tend to like), and attacks on Barack Obama. And while I'm not the first to say this, the relentless Republican association of any progressive policy or politics with socialism I think will have the long-term effect of eroding public fear of socialism, at least in so far as socialism is understood to mean broadly progressive public policy like progressive tax cuts and increases, universal health care, Keynesian fiscal policy, and so forth.

But the interesting thing is that even the Republicans seem to have given up the ghost when it comes to the Evil Empire. When Republicans accuse Democrats of being socialists, they tend to refer to the social democratic parties of Europe - Mitt Romney accuses the Democrats of trying to make the U.S look like Sweden, and Michael Steel believes that Democratic rule is "marching America toward European-style socialism." The problem is that "European-style socialism" isn't very scary - no secret police, no show trials, no one-party state, no gulags. It means higher taxes, more regulation, universal health care, more social spending, a bigger public sector, but that's not something that bothers most people.

What Would It Mean For the Democratic Party to Become a Social Democratic (or Democratic Socialist) Party?

All of this makes the idea that the Democratic Party is a Social Democratic Party or a Democratic Socialist Party rather ironic, because those would be two very strong visions of the future to base a party around.

Democratic socialism broadly refers to an political philosophy that, unlike social democrats, does not accept the existence and continuation of capitalism as necessary but unlike Leninist communists abjures the idea of violent revolution as the means of achieving its end. You can think of Eugene V. Debs as an archetypal democratic socialist - someone who viewed capitalism as an inherently immoral and exploitative institution, but who sought to abolish poverty through the electoral victory of the Socialist Party and the passage of legislation. The modern Democratic Socialists of America - who might well have a trademark infringement case on their hands- are a group that emerged out of several factional disputes in the 1970s and 1980s, and have been closely associated with the American democratic socialist Michael Harrington. As their manifesto states, "we are socialists because we reject an international economic order sustained by private profit," which fulfills the first point of the description, while their statement that "our vision of socialism is a profoundly democratic one, rooted in the belief that individuals can only reach their full potential in a society that embodies the values of liberty, equality, and solidarity" fulfills the second.

Social Democrats historically diverged from their socialist colleagues over the question of the question both of political change versus violent revolution, but also over the question of whether socialism would be achieved in a sudden revolution or a gradual evolution,

The point of all of this is that if the Democratic Party would actually become a social-democratic party, it would be a massive ideological shift comparable to nothing since the dramatic transformation of the Democratic Party from the party of laissez-faire into the party of the New Deal in the 1930s, or the transformation of the Democratic Party from the party of the Segregated South to the party of Civil Rights in the 1960s.

Ultimately, it would involve the Democratic Party grappling with two issues we don't really deal with - first, our relation to capitalism, and second, our conception of class.

On the issue of capitalism, our party is badly divided between those who are pro-market (especially in regards to major questions about regulation, especially financial regulation, taxation of corporations, estates, and high-income earners, impact of climate change on corporate behavior, copyright, patents and other forms of intellectual property, and the nature of free trade) and those who are more pro-worker, or pro-consumer, or pro-environment. If the Democratic Party would become a social democratic party, we would have a single vision: that unregulated capitalism is an inhumane socio-economic system, that the economy should be reformed and regulated to gradually move towards a different economic order where basic necessities are a matter of human rights rather than ability to pay and where workers have a voice in their working conditions. .

On the issue of class, our party and indeed many if not most Americans have an extremely fuzzy conception of what class means. You can see this in Democratic messaging which frequently conflates "working families" with "middle class families" or "working poor" with "working families," which uses the term "middle class" to include people making $30k a year and people making $225k a year. If we were a Social Democratic Party, we would have a very clear idea, based on hundreds of years of thinking about what it means to be a worker, and a solid sense that we are on the side of the working class when it comes down to a clash between their interests and the interests of corporations or employers.

What Might We Become?

Ultimately, I don't think the Democratic Party will become a social democratic or democratic socialist party, even in the event that the country as a whole shifts substantially to the left. To be frank, I don't think the ideological foundations for a capitalism-and-class based political party. If I'm wrong, I'd love to hear it.

What I do think could happen is for the Democratic Party to become a genuine Progressive Party, in the sense of the Progressive Party of 1912 and 1924 (interesting historical note: in 1912, Theodore Roosevelt won 27% of the vote and 88 electoral votes as a Progressive; in 1924, Robert LaFollette won 17% of the vote and 13 electoral votes as a Progressive).

The major difference between socialist or even social-democratic parties and progressive parties is that while the former are focused on class conflict, the latter tend to believe in social organic-ism, a belief that society is organized around functional groups rather than individuals, that all groups play an important roll in contributing to the whole, and that all groups are part of a single "industrial commonwealth." As members of a commonwealth, all citizens are entitled to social and economic rights and protections against the "hazards of modern life," and are entitled to a seat at the table in the governance of industry. Rather than seeing class conflict as between the working class and the bourgeoisie, progressives see conflict in populist terms between "the people" and "the powerful" or "special interests" or the "trusts," or between the "producing classes" and the "parasites."

In my opinion, I think if universal health care, EFCA, and climate change pass, and if the broad turn from deficit reduction and balanced budgets to Keynesian stimulus and public investments continues, then we may, in time move to a political environment in which the Democratic Party can be a Progressive Party, while democratic socialists and social democrats can exist as a legitimate part of the political culture, the left-most edge of "mainstream" politics.

But in order to get there, we will have to do a lot of political work to push our party to be more progressive, and eventually confront the more pro-corporate members of our party. As Frederick Douglass once said:

"If there is no struggle there is no progress. Those who profess to favor freedom, and yet depreciate agitation, are men who want crops without plowing up the ground. They want rain without thunder and lightning. They want the ocean without the awful roar of its many waters. This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle. Power concedes nothing without demand. It never did and it never will."

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Re-Post Number 9: "Obama's Choice on Jobs Policy - Job Training or Job Creation?" (Oct 16, 2008)

Note: this repost, one of the last three to go, focuses on the difference between job training and job creation, and why the former is a weak policy option that doesn't begin to address serious structural problems in the American economic system.

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This diary is a follow-up from yesterday's diary here on Obama's proposals on jobs policy, in which I discussed how Obama's proposals are a vast improvement on previous Democratic nominees, but show a shot-gun approach that combines a number of different approaches to doing the same thing.

Today, I'm going to be talking about one choice, the choice between providing job-training programs (with the ultimate view being to get the currently unemployed back into the private-sector workforce) and providing direct job creation programs (with the ultimate view being to create new public-sector jobs to make up for the lack of private-sector jobs).

Background:

The debate over job-training and job-creation stretches back to debates within post-WWII liberal policy circles, starting with the fight between Fiscal Keynesians and Social Keynesians in the immediate post-war years. Just to summarize an earlier diary on the difference between the two here:

• Fiscal Keynesians believed that you could achieve Keynesian goals (such as full employment, economic growth, consumer purchasing power, increasing investment, and the like) through the use of the "fisc and the Fed" - i.e, increasing or decreasing aggregate Federal spending on existing programs and increasing or decreasing interest rates.
• Social Keynesians believed that such measures were inadequate, that the form of government spending was crucial to its effectiveness, and that the government would especially have to take a more interventionist role in ensuring that a high enough volume investment flowed in productive directions.

I don't want to get bogged down on this, but the parallels to recent economic policy is rather striking. In regards to the form of government spending, Social Keynesians pointed out that spending on poor and working class people would produce a higher multiplier effect than spending on middle class and rich people because poor people have a higher marginal propensity to consume and, because they tended to purchase mass-produced goods in a variety of industries instead of a few luxury goods, would lead to more respendings, as the people they bought goods from went out and bought goods of their own. Ironically, this insight has completely been ignored in the last eight years of tax cutting, especially during the last stimulus package debate over income rebates vs. unemployment insurance and food stamps. In regards to both form and investment, Social Keynesians argued that government spending on public works would be better than just handing out money, because the public works would add to productive infrastructure; moreover, they argued that since the stock market and financial industry tended to focus too much money and effort in beating the market or unproductive financial instruments, that public investment was needed to keep technological innovation, productivity, transportation, etc. all running at peak efficiency. Very different from solving our economic crisis through buying toxic financial instruments.

Job Training:
But to get back on topic, this division between the two camps was instrumental in shaping post-war liberal economic policy. During the 1940's, the defeat of the Full Employment Bill was due as much to the lukewarm feelings of Fiscal Keynesians and those politicians who followed their teachings as it did to conservative opposition.

The next crucial episode was a largely invisible fight within the Kennedy Administration in 1963 between the Fiscal Keynesians of the Council of Economic Advisors, led by Alvin Hansen, and the Social Keynesians of the Labor Department, led by Secretary Willard Wirtz over which direction the proposed War on Poverty would take. In Economics, Bureaucracy, and Race, Judith Russell describes the clash vividly. Alvin Hansen and his group, all of them staunch Great Society liberals, believed that fiscal and Fed policy could produce full employment and that a combination of anti-discrimination, compensatory education, and job-training programs would allow poor African-Americans and rural whites to escape their economic ghettos, reducing poverty without the need for messy, political controversial, expensive, and inefficient government intervention in the labor market. In this view, the poverty and unemployment of poor blacks and whites stemmed from the lack of job skills and education resulting from a "culture of poverty" within the ghetto. Willard Wirtz and his supporters, who came out of a more laborite sort of liberalism, argued that structural racial discrimination and the inherent weaknesses of the private labor market required the government to directly provide jobs and make investments in depressed areas, since the private sector wouldn't yet invest in ghettos or their residents. In their view, poverty and unemployment were caused by structural failures in American capitalism, not individual failings.

Ultimately, Hansen won. The results of the War on Poverty are instructive: great strides were made, especially in elderly poverty. But the major jobs crisis of the ghettos was not addressed. Compensatory programs in education and job training were helpless in the face of overwhelming economic forces and structures. As Gorden Lafer points out in The Job Training Charade, these programs often provided few actual real skills - what are called "hard skills," like training to become a carpenter, plumber, bricklayer, or electrician (or programmer, hospital tech, solar-panel installer, etc.) - but rather focused on "soft" skills like resume writing, interview training, and "job habits." When the graduates of these programs, provided with few marketable skills, were thrown onto a job market that had virtually no jobs for ghetto residents, they failed to find any work, and were shuttled back into the program to undergo another round of "training," trying to make ends meet on skimpy cost-of-living grants.

Despite this failure, job-training has become the hegemonic jobs policy, especially in the 20 years since the rise of Reagan eliminated the last gasp of direct job creation efforts of the 1970's. Ultimately, the question of jobs became inextricably linked to the politics of trade and welfare: the question of what should be done with former steelworkers or former welfare moms became inextricably linked to the question of whether "free trade is working" or "welfare reform is working," and the knottier political question of what the relationship between the state and the market, and between the state and its citizens should be.

What Does This Mean for Obama?

Throughout debates over NAFTA or welfare reform or economic policy, Democrats since the 1980's have continued the fight over how to deal with the major economic change in post-1970s America: increasing job insecurity, flatlining wages, and the decline in good, union, blue collar jobs that high-school graduates could use to support a family. The solution promoted by New Democrats like Bill Clinton was to provide Transition Assistance (read: extra unemployment insurance for people whose jobs have left for China), and more job training, to prepare us for the job market of the new high-tech future. On the other side, a scattering of progressives, from Congressional liberals to unions to academics, argued instead for what was variously termed "infrastructure investment," "public investment," or public works. There wasn't and hasn't been a whole lot of coherence or political influence behind this counter-argument, and certainly during the Clinton years, talk of public works dropped from the agenda.

For a while, the Clinton approach seemed to work: the good times of the 1990's seemed to suggest a kind of neo-Fiscal Keynesianism, where low interest rates and balanced budgets and deficit reduction would produce economic growth, low unemployment, and public surpluses that could be used to provide for programs to compensate the economic losers, and help them move into the economic mainstream.

However, the past eight years have begun, ever so slowly, to change the dynamic. First, there was Katrina; then, the Minneapolis bridge collapse. At the same time, many major thinkers who had previously been on what could be called the neoliberal side began to shift quite dramatically, driven by concerns about rising inequality and other indicators that their belief in the rising tide lifting all boats had been misplaced: Larry Summers, Bob Rubin, Joe Stiglitz, Jeffrey Sachs, and Paul Krugman (yes, even Krugman) are all former pro-neoliberal thinkers who've seen the light over the last ten years. Especially in the wake of the financial collapse and the nationalization of the banking system, the mood on Capital Hill has swung much more in the direction of government intervention, considered more broadly.

Despite this shift, the status quo is very much uncertain, balancing between the idea that "transition assistance" and job-training is all that is needed to reverse increasing inequality and poverty and unemployment, and the idea that we have to do more.

One hopeful sign that suggests that the choice might come down on the side of jobs programs that have proven to work is the subtle, but remarkable shifts that we have seen since 2004. In 2004, all of the Democratic candidates proposed policies to "grow jobs, make jobs, build jobs, create jobs," and so on - but the ultimate policies came down to throwing money at the economy and making it stick. Such policies that actually directed themselves at workers tended to be of the job-training kind. 2008 saw an important shift, and if there is anything that Senator John Edwards can still be proud of, it's that he put the idea of "1 million public jobs" on the political agenda, and made Obama respond to that.

As we saw last time, Obama's response shows influences from many different approaches, which makes it hard to predict what would happen should he win, and propose a jobs program, what he would choose to do. Partly the confusion comes from the very broad strokes that his campaign has drawn (which is tactically shrewd and properly cautious), it's hard to tell how much money would go into the Green Jobs Corps (and whether it's a job-training program or a jobs program) or what exact form the Jobs and Growth Fund, National Infrastructure Reinvestment Bank, and "invest $150 billion" to create "Create 5 Million New Green Jobs" will take.

Conclusion:

Very simply, I would call upon Obama, congressional Democrats, and the progressive community more broadly, to eschew job-training proposals and similar hands-off approaches. They do not work, never have worked, and stem from a fundamentally wrong-headed view that unemployment stems from shortcomings of the unemployed, and that public policy should focus on making the unemployed better workers, not on economic structure.

Jobs creation, by contrast, has a proven record of success. When FDR and Harry Hopkins announced the creation of the Civil Works Administration in 1933, they created 4.2 million jobs in 3 months. When the WPA was in effect between 1935-1942, the Roosevelt Administration knew that anywhere from 2-3.5 million jobs at least had been created, not even counting jobs created in the private sector.

Starting January 2009, the next president will inherit an economy in steep recession, with an unemployment rate of anywhere from 6.1% (our current rate) to 8% (Obama's estimate) or possibly more. Economic recovery in the private sector is something that the next president and the next Congress should push for. However, private-sector recovery (as we have seen during the Bush Administration) does not necessarily mean that you assume large-scale job growth. Public-sector job creation policy, by contrast, will provide the next administration with a backstop or floor - that no matter what happens on Wall Street, they can count on X number of jobs being created.

In a nutshell: down with job-training, up with job creation!

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Industrial Democracy: The True Meaning of EFCA

The back-and-forth over the Employee Free Choice Act is often hard to decipher; like negotiations over health care or climate change, the real work is happening quietly behind the closed doors of committees and Congressional offices while the propaganda wars rage above them. Occasionally, there's a sudden announcement as a senator picks sides, but that's it.

It's a bit like a classic medieval siege - all the visible action is the catapults flinging giant rocks through the air, but beneath the ground, there are teams of miners burrowing under the walls.

But for all the confusion, it's important to take a step back and ask ourselves what the true importance of EFCA really is.

Where We Stand:

At the moment, the picture for EFCA is rather blurred. Most Democrats are on board, virtually every Republican is against, and significant numbers of moderate-to-conservative Democrats are walking sideways (Bayh, Lincoln, even our own Senator Feinstein). Arlen's Specter's switch to the Democratic party and non-switch on EFCA is a good sort of symbol of the ambiguity - neither here nor there.

Ezra Klein points out an interesting piece in the Washington Post:

That approach is being floated in Congress by, among others, Sen. Arlen Specter (D-Pa.), who suggested that an election be held within three weeks of the union filing such a request with the National Labor Relations Board and that union organizers be allowed "equal time under identical circumstances" to make their pitch to employees if management has held "captive audience" speeches making the anti-union case.

Floated "compromises" like this are difficult to suss out. Specter's compromise, that's being backed by Costco, Starbucks, and Whole Foods (and Lanny Davis), basically chops out card check and arbitration, but adds in a shorter, 15-day election campaign, guarantees "equal access" (organizers would have access to the workplace during the workday, on equal terms so that if management holds a captive audience meeting, labor gets one too), and increased unfair labor practices penalties. There's also another proposal being backed by Jay Krupin, called the 70/50/30 plan, that allows for card-check if you bring in 70% in cards, that chops the election campaign to 15 days if you bring in 50% in cards, and that guarantees "equal access" if you bring in 30% of cards.

These compromises leave me feeling rather ambivalent. On the one hand, passing EFCA straight-up would be best, and I still think there's a reasonable shot at getting it if Specter and the sideways Dems are willing to vote for cloture and then against the bill so that it passes with less than 60. On the other, I think these compromises are positive indications - first, because they indicate that the waverers and at least part of the business community doesn't think they can actually defeat the bill without paying a big price, and second, because it's focusing real attention on the unfairness of our labor elections system and forcing opponents to justify captive-audience meetings and barring labor organizers from campaigning on company property.

As Ezra points out, "The corporate community opposes this, too. But having predicated their assault on a principled belief in "workplace democracy," it's extremely hard for them to credibly oppose reforms that would help bring democracy to the workplace...the business community has made a bad decision centering their counterattack around workplace democracy."

These days, I am feeling more confident about the prospects of passing something - and that's what really matters. Especially when we're caught up in the passion of the moment, trying to push this bill through, it's important to remember our history and why laws are really important.

On June 16, 1933, President Franklin Delano Roosevelt signed the National Industrial Recovery Act (NIRA) into law. Among other things, the law established a system of industrial codes by which corporations could set price floors, production agreements, market share agreements, and so on. The sop to labor was Section 7a, which read:

Employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other activities for the purpose of collective bargaining or other mutual aid or protection

This provision was almost entirely ignored by employers, who continued to establish company unions and enforce the open shop, and the law itself would be declared unconstitutional two years later. Yet 7a lead to a huge upsurge in labor organizing, as millions of workers surged into the AFL. Why such a change, even when the law hadn't actually changed?

Because after June 16, 1933, labor organizers could go into any workplace in America and say "the president wants you to join the union," could point to 7a and reframe the entire conversation about joining a union as being the exercise of your rights as an American, and cast the conflict between workers and bosses as a conflict between patriotic citizens upholding the rule of law, and greedy, lawbreaking fat cats. In Fabric of Defeat, Bryant Simon writes about textile mill strikes where workers marched on mills defended with machine-gun nests and private armies, waving the American flag and led by preachers who declared that the union crusade was a fulfillment of Christ's Sermon on the Mount. Symbols matter, and in the United States, the presidency and the law are still important symbols.

Labor historians talk about the impulse behind this phase of the 1930s union upsurge as "industrial democracy." Industrial democracy is a remarkably fluid term that at its most expansive form imagines workers owning the factory and organized through an internal democracy with management elected by the workers; or a system in which workers and unions have a say not just in bargaining for wages and benefits, but also deciding questions of pricing and design and organization and production;or a tripartite collaboration between labor, business, and government. But another form that labor historians talk about is instilling the "rule of law" inside the factory. If we think about it, the workspace is one of the least American places we live in - somewhere where the concepts of free speech or the rights of the individual or equality before the law, things we automatically assume are functioning everywhere we go in America- do not operate.

The idea of industrial democracy in the wake of 1933 was that 7a had extended the rule of law into the factory, that you had the fundamental right to tell your foreman that he was a son-of-a-bitch, the right to be treated with dignity when you needed to use the bathroom or eat lunch or even talk, or the fundamental right to not be fired without a good reason. And it was the belief in those rights that brought so many people under the union banner, even when the rights in question existed only in their minds.

So if we can pass a law, even if it gets us part of the way, if we can get a picture of Barack Obama signing a piece of paper and telling the tv audience that they have a legal right to join a union, that might be all the opening the labor movement needs to begin the hard work of changing this country.

Note bene, though. This does not mean that any compromise is legitimate, or desirable. To me, there are some "bright lines" that have to be honored:

1. Either Card Check or Fair Elections - in negotiations, it's always a good idea to go in asking 200% of what you want so you end up closer to 100% rather than 50%. Thus, while it's tempting for Democrats who are walking sideways on EFCA to look for a compromise that ditches the "controversial" card check provisions, there has to be some serious returns in exchange. Equal access and 15-days is a bare minimum; negotiators should ask for the abolition of one-on-one meetings without a union rep present, the abolition of the prophecy doctrine, campaign finance for union elections, and anything else necessary for truly fair elections.
   
2. Binding Arbitration - according to the Federal Mediation and Conciliation Service, 33-46% of successfully-recognized bargaining units fail to reach a first contract, because employers can easily and painlessly extend bargaining, appeal, stretch things out until workers get frustrated and give up. If you look at the compromises being offered by retailers, arbitration is the one thing they don't mention, because it's hard to defend dragging your feet, but it's also a key fulcrum of labor relations. I think labor should fight hardest here, and demand some form of binding arbitration for first contracts as the "drop dead" line on EFCA.
   
3. Labor Penalties - sadly, this is one area where employers don't care and cheerfully throw in expanded unfair labor practices penalties, because even tripling the costs makes the accounting come out in favor of firing and paying the penalty down the road. Labor should not "weight" compromises here very heavily; even if senators start larding up penalties, it's unlikely to make a difference unless punitive damages come on the table.
   

So there you have it.

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