Month: January 2011

Most Worrisome

Mike Konczal:

And the most worrisome thing is that the obvious solutions for where we are at – a short period of higher inflation, massive credit writedowns, and a larger government deficit paid for with higher taxes on the rich and the largest banks – are all things this new financial elite hate. And the current debates about “structural unemployment” or a lack of interest in jobs provide cover for an obvious priority with this elite – the American middle-class was an anomaly of history, an artifact of the Cold War and the post WWII era. Regular Americans are going to have to take a massive cut in wages and lifestyle in order to recover. This was the argument in the age of Keynes and the Great Depression, and it is the argument now. No wonder the Democratic party looks paralyzed from the outside.

This is a straight-up terrifying analysis of our current economic situation.  Of course what makes it terrifying isn’t what Konczal is saying, but the reality that he is describing.

That said, I am not willing to accept that “the American middle-class was an anomaly of history, an artifact of the Cold War and the post WWII era.” Organizing can still happen to stop this. Leaders can step forward to fight for the middle class. Regulators can regulate. Legislatures can legislate. Judges can judge. Government can function. Or, if not, things get really ugly.

Losing Well

Mike Konczal makes a great point about the value of losing well in the financial regulatory reform fight and setting the table for future fights and wins. The whole post is worth a read, especially in contrast to his critique of how the administration has lost some fights poorly. But this conclusion stands out in its inspirational qualities:

Is the final financial reform bill perfect? No. Is it stronger because of these items? Yes. And what I value the most is that the coalition of financial experts who have a stronger vision of how regulation should work in the financial sector is much more organized that before this crisis hit. We’ll continue to build them for the future, and I hope you’ll help us any way you can.

Attacking Unions Through Budget Fights

In yesterday’s Steven Greenhouse article on attacks on unions at the state level in the New York Times, there’s a great passage about how the right is trying to undercut unions through budget crises.

Some union leaders say that proposals like right-to-work laws, which have little effect on state budgets, show that Republicans are using budget woes as a pretext to undercut unions.

“They’re throwing the kitchen sink at us,” said Randi Weingarten, president of the American Federation of Teachers. “We’re seeing people use the budget crisis to make every attempt to roll back workers’ voices and any ability of workers to join collectively in any way whatsoever.”

Yves Smith makes the point very succinctly:

Notice the effort to use the push against public unions to break the remaining private sector ones.

Attacks on public workers through public budgets pave the way towards not only cuts in worker benefits whose maintenance is crucial to job growth and economic growth – pensions, healthcare, job security, wages – but also paves the way for austerity measures inflicted on unorganized workers. Additionally, the move towards right to work for less laws ensures that, again, it will be harder for workers to lift themselves up and make more money. Wealth will stay with the wealthy and large corporations and will not be flowing into state and federal government coffers. On the flip side, if private sector workers have higher wages, they will be paying more in taxes and help fix budget shortfalls at the state levels.

There is a squeeze being put on by conservatives, for the benefit of the wealthy and corporations, at the expensive of unionized and non-unionized workers alike. The result is likely going to be a loss of public services, a reduction in the size and strength of the social safety net, and the further destruction of the labor movement. Recognizing that this is what is happening in the context of public worker collective bargaining fights and right to work fights is critical to understanding how to stop it from happening. Even if you don’t support the revitalization of the labor movement, understanding the goals of what corporations and conservatives are fighting for now should make clear that the economy cannot and will not recover if austerity and union-busting win out.

The other key piece that needs to be responded to is the core use of jealousy as a motivating factor for drumming up public discontent towards public workers specifically and unionized workers broadly. I don’t know the answer to stopping non-unionized working class people from being jealous of the successes their neighbors have earned through joining a union. At the most basic level, wouldn’t we all be better served to share each others aspirations rather than pull each other down to our lowest possible level? How this is conveyed will be a challenge for labor and pro-labor progressives…and it must be done in the face of a massive PR campaign by the right to drive people to hate their neighbors.

The Deep Hole

Paul Krugman’s column today is a sober reminder that even in places where some economic indicators are improving, we are still in a deep economic hole and are years away from getting out of it. The only place where I think Krugman goes wrong is his assertion that we aren’t done digging in our hole. First, we still have a foreclosure crisis which is likely going to continue for another couple of years and affect millions more homeowners. This will continue to crush working families, drive down property values (tying people to their current location), and keeping new construction down. Second, Krugman fails to specifically mention how Republican attacks on public servants are going to lead to further job losses at the federal, state, and local levels. Government is one of the few areas which can be reliably creating job now. But instead of stimulus projects being used as job engines, we’re more likely to see cuts in public jobs. Workers are already being forced to take furloughs, collective bargaining agreements that are up this year will be met by hard bargaining and union busting efforts by governors of both parties, and those workers who don’t have the protection of unions can expect even worse results. Oh and for workers who are retiring soon, their pensions are already shells of what they should be – both because of the economic collapse and deliberate choices by Republican politicians to not meet contractually obligated funding line items.

All of this is to say that while things may well be on a real uptick, the climb is going to be steep and it’s likely that we fall back before we get out of this economic hole.