And I find myself receiving with some anger, even though I understand, those—especially on the top of the party—who are so blithely declaring the end of things. Do they understand what they’re ending?...There's a chance to put together a party that respects the Reagan Democrats, and pursues blue collar interests that unite poorer white and black voters. It would have to break with the Chamber of Commerce to do that, but it would be a formidable party if it could do it. If you cut into black support so that you were winning a third of the black vote, the Democratic party would not win another national election until they found a new coalition. Unite that black vote with the ~40% of Americans who are blue collar whites, and you wouldn't have to win many other voters -- Evangelicals might do it alone. If you could hold most conservatives, you'd have a dominant coalition. If you lost the conservatives who were most attached to Chamber of Commerce issues, you'd still win.
It’s no longer clear what shared principles endure. Everything got stretched to the breaking point the past 15 years.
Party leaders and thinkers should take note: It’s easier for a base to hire or develop a flashy new establishment than it is for an establishment to find itself a new base.
Even if the party stays together with a Trump win, what will it be? It will have been reconstituted.
It's not the end of the world. There's a chance it could be the beginning of something good, if the "new thing" has principles that accord with the principles of these most ordinary American people. It does need some thought, but there's an opportunity for the thoughts of ordinary Americans to matter.
The window won't last. It never does. Think now, and think carefully, and make sure you make your best thinking known.
The political parties missed the memo that the Industrial Revolution is over and the “New Economy” is pretty unappealing from a middle class perspective. What the parties, all of them, have in common is NO SOLUTION and an unwillingness to step up to the plate and engage in a forthright honest dialogue. The problem is NOT that mid level skilled jobs aren’t being created but that they aren’t being created as fast as they are disappearing. Nor are they as stable and long term as they used to be BUT just as importantly neither are the businesses that were once the employers.
ReplyDeleteThe other choice is to engage in a race to the bottom and that may take 20 or more years to establish equilibrium or longer given our capacity to leverage ourselves.
http://www.realclearpolitics.com/articles/2014/03/15/republicans_hammer_away_on_the_growth_theme_121942.html
Stratfor’s George Freidman has a good overview article of the middle class dilemma:
The right will argue that allowing the free market to function will fix the problem. The free market doesn't guarantee social outcomes, merely economic ones. In other words, it may give more efficiency on the whole and grow the economy as a whole, but by itself it doesn't guarantee how wealth is distributed. The left cannot be indifferent to the historical consequences of extreme redistribution of wealth. The right cannot be indifferent to the political consequences of a middle-class life undermined, nor can it be indifferent to half the population's inability to buy the products and services that businesses sell.
http://directorblue.blogspot.com/2013/12/the-crisis-of-middle-class-and-american.html#!
First they came for the Proles, then they came for the Bourgeois.
ReplyDelete"Only Manufacturing workers were supposed to suffer from the competition of cheap foreign labor, everyone else was supposed to enjoy the cheap foreign goods.
I think we were all supposed to have highly paid hi-tech or service jobs by now and simultaneously cultivating our inner artiste. Is your job an endangered species? To the extent that they even grasp these dynamics, pols don’t address these issues because they don’t have any solutions.
This is also climbing the food chain. I am not a Luddite nor do I want to turn back the clock; I am fully aware that the train of the 21st century is going to plow on whether I’m on board or the country is on board. I am interested in figuring out ways to avoid a future of Hi-Tech Fuedalism with millions made redundant by technology and even more who will have no.... meaningful..... work. Increasingly, it looks to me as if chunks of the upper middle class will get whacked, per the Wall St Journal (Is Your Job an Endangered Species?) Many of the learned professions are going to see their incomes cut and the private sector is going to seek much greater productivity improvements by replacing expensive US-based executives, and other functions, with cheaper foreign ones, (thanks to instant global communication) — and even cheaper computer technology ( any image, scan, spreadsheet, schematic, XRAY, can be transmitted anywhere in a matter of seconds, in real time). Many of the professional entry level jobs have disappeared down the rabbit hole. Lawyers, accountants, business managers and executives, university professors and administrators, architects, designers, upper level civil servants, NGO managers: this means you.
It is a similar paradigm to the pattern of automation on the industrial shop floor reducing the need for routine functions, even brainy ones. At the same time the cost structure of the learned professions is moving toward unsustainability, given the pressures of today’s business climate.
One of the problems of looking at things purely through economic lenses is that political and social factors play significant roles as well.
ReplyDeleteFor example, the free market's ability to adjust to a change from, e.g., an industrial to a service or information economy, comes from widespread entrepreneurial efforts. Current federal and state regulations make it much harder to be an entrepreneur than it should be, and so our economy has problems adjusting.
Our current crop of politicians refuses to do anything about illegal immigration, which certainly has an economic impact. Tax rates: more politics with an economic impact. International trade agreements. And politics is influenced by social factors.
Speaking of which, I've become convinced that the biggest problem with education in America is social. Education departments care much more about furthering the cause of social justice than they do educating resilient, capable individuals. They have no economic incentive for that; it's pretty purely political ideology. But, it's created a couple of generations who have a hard time surviving in a capitalist market economy.
When you add tons of political roadblocks to anti-capitalist education, you get a society that cannot adjust to economic realities.
However, none of that discussion seems to move us forward in the discussion Grim wanted to have, unless WE are the ones proposing solutions that will help build this new coalition. I'll be thinking about that today.
You know, this would all be much easier if I had 10-20 years to come up with good solutions.
ReplyDelete"[The free maarket] may give more efficiency on the whole and grow the economy as a whole, but by itself it doesn't guarantee how wealth is distributed."
ReplyDeleteGood grief, I should hope not.
I don't disagree with what you say and there is even a flip side to technology that has the potential of promoting individual entrepreneurship. I even recognize that there is a kernel of truth in the rising tide lifts all ships. I am unconvinced that addressing the conditions you mentioned will promote the growth that is required, in the long term.
ReplyDeleteUnfortunately, today’s mind boggling efficiencies and staggering economies of scale squeeze out the labor, up and down the supply chain, eliminating many jobs, concentrating the wealth in the hands of the few or sending the wealth out of America. But, it is technology that drives Free Trade, makes it fast, easy, and cost effective. And, it requires a lot of capital investment. Together they facilitate the way too powerful global megacorporations. These multinational megacorporations with their worldwide supply chains and worldwide customer base have an entirely different agenda, which are not necessarily compatible with America.
Think about the big box stores. Today there is more choice and variety in one or two aisles than there used to be in an entire store, a good thing. The competitive significant price savings afforded by these technologies sucks the business away from the Mom and Pops, and the REAL Economic Game Changers (information technology, automation, instant global communication, navigation technology, logistics technology, RFID) make offshoring efficient and advantageous; the global mercantilist mega corporations couldn’t exist without it. Much of this is good to be sure. Did you know that the technology exists for… crewless 13,000,000 cu ft ….container cargo ships. Offshoring just compounds the problem and hobbles the effort to generate jobs that create real wealth in America. The source of this thanks to human ingenuity: Bill Gates, Larry Ellison, Norman McLean, Roger Easton, George Laurer.
In addition, I acknowledge that we as a country have been through this before, after the spike was driven at Promontory Point. People had to adapt when the railroad tied America together into one enormous domestic market place, and when the interstate highway system lured corporations to the Sunbelt. This is the same thing but writ large, and resulted in winners and losers, Now, for a lot of us, it feels like losing.
Full disclosure, I have a bias in favor of manufacturing. I don't think you can be a first world economy without it. And, I do not mean to suggest that American manufacturing is on the skids. I would just like to point out that the manufacturing that used to exist throughout the domestic US, drove the need for and subsidized infrastructure.
ReplyDeleteIt’s not just the loss of jobs, it’s the loss of companies, dividends, hard won knowledge and proprietary information, loss of innovation, competition, and creative destruction, the loss of corporate, individual income, state income, payroll, and local property taxes. Local property taxes support local infrastructure (stoplights, sewers) and teachers and police etc. Once the downward spiral begins,it is self perpetuating, self amplifying, and harder to stop. Ask the folks in the old rust bucket states or ride an Amtrak train. I didn’t even mention the social costs, especially for men or the impact on national security.
but by itself it doesn't guarantee how wealth is distributed."
ReplyDeleteGood grief, I should hope not.
Sorry, this is a bit out of context, he is referring to the existence of a thriving, robust Middle Class.
Of course the Dems offer cargo cult solutions. If we give you the accouterments of a Middle Class person, you will be Middle Class. I hope we know that's not true.
In any case, the talking heads of the 80s were more attuned and concerned about the long term social consequences than the political class is today.
Edith, all the things you are talking about drive and are driven by social and political factors. We can't stop a lot of those changes, and don't want to, but we can choose social and political options that make the results better for the middle and lower classes. As I see it, a platform that actually does that could build the coalition Grim is talking about.
ReplyDeleteTom, count me in, but it is a hard sell that does not lend itself to soundbites.
ReplyDeleteThe following is from the NYT. It suggests a different breakdown.
ReplyDeletehttp://www.nytimes.com/2012/04/10/opinion/brooks-the-two-economies.html?_r=0
“One way of looking at our economy is that are two interrelated American economies. On the one hand, there is the globalized tradable sector — companies that have to compete with everybody everywhere. These companies, with the sword of foreign competition hanging over them, have become relentlessly dynamic and very (sometimes brutally) efficient.
On the other hand, there is a large sector of the economy that does not face this global competition — health care, education and government. Leaders in this economy try to improve productivity and use new technologies, but they are not compelled by do-or-die pressure, and their pace of change is slower.
A rift is opening up. The first, globalized sector is producing a lot of the productivity gains, …….but it is not producing a lot of the jobs………… The second more protected sector is producing more jobs, but not as many productivity gains. The hypercompetitive globalized economy generates enormous profits, while the second, less tradable economy is where more Americans actually live.
In politics, we are beginning to see conflicts between those who live in Economy I and those who live in Economy II. Republicans often live in and love the efficient globalized sector and believe it should be a model for the entire society. They want to use private health care markets and choice-oriented education reforms to make society as dynamic, creative and efficient as Economy I.
Democrats are more likely to live in and respect the values of the second sector. They emphasize the destructive side of Economy I streamlining — the huge profits at the top and the stagnant wages at the middle. They want to tamp down some of the streamlining in the global economy sector and protect health care, education and government from its remorseless logic. “
"Health care, education and government" are now largely "government." There are private colleges and schools, of course, but the state-run schools and universities are the bulk of the work. There are private hospitals, but between Medicare, Medicaid, and the various Obamacare schemes, it's increasingly looking like government contracting.
ReplyDeleteSo, to rephrase the NYT, 'This conflict is between people who live in the economy that is being crushed by globalized trade, and those who have taxpayer-funded protectorates.' The NYT fails to mention that the first economy wholly pays for the second one.
ReplyDeleteThe NYT fails to mention that the first economy wholly pays for the second one.
ReplyDeleteThere is some truth to that.
I think about it from a different slant. I wonder if there is also another way of dividing the economy into two sectors: the one where small, midsize, and regional businesses engage in real free enterprise and competition, and the one that is corporatist, sectors that are subsidized and or protected by government (bailouts, the revolving door between regulators and corporations) or who benefit from government imposed high fixed costs that undermine smaller competitors.
What you are describing is real enough, except it is pushing downward into local markets too -- especially in agriculture, where government policies raise entry and competition barriers that are driving small farms out of business. Economies of scale were a problem for family farms to begin with, but the increased regulation (always in the name of "food safety," but really well beyond the point of diminishing returns) is making workable family farming unsustainable or actually illegal.
ReplyDeleteThe alignment of the corporate structures with the nation state used to be called fascism, which would make Clinton the real fascist in the race. Trump might be one too, though: that's unclear.
Yes, think when "K Street" sells us out to the regulatory technocracies that are even further removed and internationalized.
ReplyDeleteJust as in the past, transnational corporations push for policies that promote globalization because it is in their interest to do so, not because they care about controlling the rest of us. It doesn’t come out of malevolence, but rather indifference; the undermining of the middle class ethos is just collateral damage.
Alignment of corporate structures and the State
ReplyDeleteI suppose it is a continuum from the "tilting the playing field (incl subsidies)" to a command economy.
Noonan should have mourned voting for Hussein. But the guilty often never reflect on their own sins.
ReplyDelete