The future not only of Barack Obama and the Democratic Party but also of American capitalism may hinge on the emergence of coalitions, however shifting, that can increase or at least retain white working-class support while still addressing the social and economic concerns emerging among young, women and minority voters.
In the aftermath of Obama’s election, many pundits suggested that the extreme insecurity and volatility of the economy in the weeks leading up to the election allowed economics to trump racism and terrorism.
Economic insecurity, however, often occasions more strident reversions to racial thinking and more of an urge to scapegoat. Obama’s success, as Princeton professor Melissa Harris-Lacewell suggests, may have hinged not merely on immediate economic insecurity but also on his ability to convey a powerful life story that crossed usual racial boundaries and categories.
Based on the exit polls and results in key swing industrial states, it seems clear that Obama held or even modestly increased Democrats’ recent levels of support among non-college-educated whites while gaining greater pluralities among the young and minorities. In the long run, economic reform and powerful and compelling intercultural and interracial narratives need to co-evolve if a more just social and economic order based on broad popular support is to emerge. In my view, this is a complex and inherently unpredictable process, one that is best advanced by acknowledging these random and unpredictable elements in social change.
To Americans of the 1950s, someone like George W. Bush would have seemed impossible. Even many Republicans celebrated a “mixed economy.” They acknowledged need for a safety net, government deficits to prevent recessions, modestly redistributive taxes, and even unions.
This post-World War II consensus, however, was never a golden age. Providing sporadic boosts to an economy whenever trouble emerged — and the very success of that policy — allowed the public to assume the perfection of the order as well as a substantial degree of predictability and control over events.
Nonetheless, under this conceit, subsurface tensions were growing and erupted in the late ’60s. The consensus tacitly accepted traditional racial and gender boundaries. In addition, its version of worker rights stopped both at the water’s edge and outside the company boardroom. Portraying their corporation’s profits as the route to increasing wages, union leaders often supported US government repression of social democratic unions abroad. They also viewed workers as junior partners, entitled to a share in the growing pie but no role in planning the jobs, products, and finances that increase productivity. Workers in the ’60s, protected by more safety nets than their parents had enjoyed, asked for both wage gains and satisfying work. Productivity gains slowed even as unions pushed wages and prices higher in some industries. A newly emerging OPEC, perhaps inspired by US humiliation in Vietnam, demanded high oil prices. Racial tensions mounted as African American workers felt left out of post-WWII prosperity.
Racial animosities have a long history in the US, but Democrats have inadvertently contributed to its evolution. Though properly attacking historic racial and gender injustices, from Jimmy Carter on they increasingly neglected weakening unions and workers’ concerns about diminishing security. When inflation got out of hand, as it did during Carter’s administration, the government engineered a deep recession, driving unemployment very high.
Many working-class males came to view government as not working for them. In addition, lacking collegial and stimulating workplaces, many found in personal consumption some chance for satisfaction and self-respect.
These mutually intertwined crises set the stage for Reagan’s polished rhetorical contempt for government, taxes, eggheads, “welfare queens,” peacenicks and affirmative-action hires. He combined such scorn with the positive assurance that tax cuts would pay for themselves, thereby sparing himself any embarrassing discussion of the popular government programs that might need to be cut.
In the process, Reagan forged a movement that in its intensity and policy thrusts was more than the sum of the parts. The seizure of US embassy personnel in Iran late in Carter’s term then proved the perfect symbol of weak, effeminate US policy for Reagan’s campaign.
George W. Bush subtly but tellingly extended the Reagan revolution. In Disaster Capitalism, Naomi Klein suggests that crisis or “perception of a crisis” can become an occasion for elites to impose dangerous and unjust forms of capitalism. I agree with her but would like to emphasize perceptions of crisis. Human beings always evaluate the world through some frame of reference.
Klein overplays the impact of the mere fact of 9/11 deaths. Just as under Reagan divergent underlying currents helped sharpen popular focus on the Iran hostages and frame it into a surprisingly broad and intense response, the collapse of the World Trade Tower took on intense symbolic significance because of several interrelated cultural threads:
1) the growing role of Manichean theologies and moral perspectives anticipating Armageddon and dividing the world into good vs. evil;
2) a US society that has always seen both its government and its economic system as a city upon a hill;
3) part and parcel of these other two beliefs is the conviction that the US is a uniquely open society, where anyone may become rich if they are really virtuous or so fated.
Nonetheless, Klein is on to something. 9/11—and the lurid and repeated televised replays of the chaos, panic, and human suffering—served as a tipping point or catalyst that mobilized and intensified a more secretive, internationally muscular, and undemocratic form of capitalism.
Under Bush, capitalism has been characterized by more tax cuts for the wealthy, further attacks on unions and minimum wage standards, subtle demonization of Arabs and Islam under the inflammatory rubric of “Islamic Fascism” coupled with an indefinite foreign occupation. A climate marked by increasing militarization and secrecy has in turn helped reinforce a welfare culture—for the wealthy and well positioned. Along with the demonization of the poor and select minorities has gone a glorification and celebration of the rich, both in politics and culture. Government, rather than being hollowed out, has been outsourced to private corporations. Deals “would take the form of contracts, many offered secretively, with no competition and scarcely any oversight, to a sprawling network of industries.” The recent bailout has only intensified these trends, with not only vast sums going to banking elites but even the administration of the program delegated to private interests largely free of accountability.
Unlike previous business cycle expansions, working class wages failed to grow even during Bush’s best years. The survival of that political economy provides one more illustration of how processes of change in different but related areas of life merge and interact in not fully predictable ways.
Historically, decreasing incomes can be an occasion for an electorate to move leftward. In recent US experience, however, at least two compensatory mechanisms besides racial scapegoating were in play. Though median wages have been essentially stagnant for a generation, workers labored longer hours. Workers were also encouraged to go into debt to purchase houses, which were portrayed as keys to future wealth. This process was itself enabled not only by deceptive teaser practices but also by low interest rates sponsored by the Fed. That body’s cheap credit and real estate hype created an asset bubble, which in turn enabled consumers to borrow more for other purchases.
The whole corporate order benefited (temporarily) from a debt economy. Low wages occasion recessions when the wealthy don’t spend most of their income and workers don’t have enough to spend. Increasing levels of debt, however, cushion the effect of low wages, allowing workers to participate in the American dream. For the wealthy, shadow banking and leveraged finance, also enabled by Reagan/Clinton/ Bush era deregulation, create extraordinary investment opportunities.
Debt has another subtle function. It is the modern indentured servitude. Individuals in debt can’t cut back on work. They are locked into long working hours—often at lousy jobs. Private consumption outlets become more entrenched. Having sacrificed family and leisure time for work and consumption, other interests cannot develop. Many workers also become bitter toward those “elitists” who challenge one of their main pleasures in life, especially one for which they have given so much.
Of course overwhelming debt is now the 800-pound guerilla in the living room. Our deregulated financial institutions are awash in debt instruments tied to unsustainable debt..
Our political economy faces a possible avalanche. By this I do not imply that the sky will necessarily fall. I choose the term advisedly, with reference to some current understandings of causality and predictability in the natural sciences.
In Ubiquity: Why Catastrophes Happen, Mark Buchaanan describes the work of scientists at the Brookhaven National Lab in Upton, N.Y. whose initial attempts to explain difficulties in predicting avalanches and earthquakes led them to computer simulations of kids dropping grains of sand on a beach as they build sand castles. They learned that there is no typical size of an avalanche: “To find out why [Danish theoretical physicist Per] Bak and colleagues next played a trick with their computer. Imagine peering down on the pile from above, and coloring it in according to its steepness. Where it is relatively flat and stable, color it green; where steep and, in avalanche terms, ‘ready to go,’ color it red. What do you see? They found that at the outset the pile looked mostly green, but that, as the pile grew, the green became infiltrated with ever more red. With more grains, the scattering of red danger spots grew until a dense skeleton of instability ran through the pile. Here then was a clue to its peculiar behavior: a grain falling on a red spot can, by domino-like action, cause sliding at other nearby red spots. If the red network was sparse, and all trouble spots were well isolated one from the other, then a single grain could have only limited repercussions. But when the red spots came to riddle the pile, the consequences of the next grain became fiendishly unpredictable. It might trigger only a few tumblings, or it might instead set off a cataclysmic chain reaction involving millions. The sand pile seemed to have configured itself into a hypersensitive and peculiarly unstable condition in which the next falling grain could trigger a response of any size whatsoever.”
These scientists identify conditions that predispose systems toward such dramatic and unpredictable occurrences. They can specify at least in rough terms a range of intensities and the probabilities of different degrees of intensity, but they cannot foretell exactly when such will occur, their specific intensity or the exact course they will take.
Unlike literal avalanches, the unfolding of the current crisis does offer some time and opportunity for political intervention.
We must start by alleviating the largest finger of instability, by enacting a stimulus package that reduces debt burden for ordinary citizens talked into inflated housing prices and creates jobs. Toward this end, Democrats must resist business and Republican demands for capital gains tax reduction, which might better be termed a speculative activity tax.
Stock markets no longer provide most of the capital for business expansion. Business grows when workers and consumers have jobs and income to spend. These purposes are best served by increased revenue sharing with the states and the sort of green infrastructure spending now being discussed in many circles. But if our political economy is to be transformed, we will need more than a green New Deal. Progressive activists need to acknowledge not only the social and workplace limits of the first New Deal but also elements of unpredictability in the world. What is true of sand castles is even more true of human beings, with the complicated relays and variable feedback mechanisms both among human brains and between the active human brain and its neurological and biochemical foundations. Reformers may have the most enduring influence if they engage current challenges with more sensitivity to the limits of our best-intentioned efforts. I will address these themes further in my next column.
John Buell lives in Southwest Harbor, Maine. Email jbuell@prexar.com.
From The Progressive Populist, December 15, 2008
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