But the American Dream is about upward mobility. Ultimately “The economy, Stupid” trumps identity politics. If the Democrats are not the champions of expanding jobs and incomes for the majority of voters who work for a living—whatever their gender, color, or sexual orientation—their claim to being the natural majority party will amount to little.

So it made political sense that Barack Obama began his 2013 State of the Union with this economic challenge:

“Corporate profits have skyrocketed to all-time highs, but for more than a decade, wages and incomes have barely budged. It is our generation’s task, then, to reignite the true engine of America’s economic growth: a rising, thriving middle-class.”

He went on to outline a second-term agenda that most liberals welcomed as finally revealing the true, audacious Barack Obama. “Incredibly ambitious,” enthused Ezra Klein in The Washington Post. If Obama’s plans were enacted, Klein wrote, “America would be a markedly different country.”

Would it?  Even if Congress were to whisk the president’s entire economic agenda into law, the impact such an improbable feat would have on “our generation’s task” of reversing the decline of real wages and incomes is nearly nil.

The root causes of the long term slide in real wages and incomes are: 1) inadequate demand both here and abroad for what American workers produce; 2) financial deregulation, which has diverted American capital away from domestic production and toward short-term speculation; 3) the 30-year corporate war against trade unions.

Barack Obama’s agenda will not change any of these conditions.

Presidents’ rhetorical reach often exceeds their realistic grasp. But the issue here is not that Washington politics might prevent this president from delivering on his agenda. It is that the agenda is not designed to deliver.

Obama’s number one priority is to reach a ten-year deal with Republicans to reduce the federal deficit. Imagine that the president prevails completely; i.e., that by the end of this year Congress accepts his proposal for a deficit reduction of roughly $4 trillion (some of which has already been agreed to) with a roughly 55-45 percent split between spending cuts and taxes. Because the economy is operating below capacity, the net effect of the president’s proposal would be to reduce the domestic demand for jobs, certainly between now and the election of 2016 and probably throughout the next decade.

In February, the Congressional Budget Office forecast that on its current path the U.S. economy would reach full recovery, i.e., 5 percent unemployment, by 2017. It was, to say the least, optimistic, given that it assumed no budget sequestration and no further bipartisan deal cut budget deficits. Assuming the average rate of job growth since the recovery began, we will not reach 5-percent unemployment until 2022. The CBO’s projections rely on a leap of faith that somehow, from somewhere, the private sector will deliver a burst of new growth.

In fact, the CBO’s model has been forecasting a return to 5-percent unemployment in four years ever year since 2009. But let’s say this time they luck out. Recovery by 2017 would still mean at least another four years of joblessness and lost income for millions of Americans. Moreover, even reaching and sustaining 5-percent unemployment would not be enough to reignite middle class prosperity. We averaged 5 percent for the seven years prior to the financial crash of 2008, but globalization, deregulation, and the erosion of unions continued to drag down wages.

The President has no intention of changing the trade policies that have been undercutting U.S. jobs and wages for more than 30 years. In fact, with the support of congressional Republicans, he wants yet another trade deal—this one with 11 Pacific Rim countries—that will once again bargain away the interests of American workers in favor of the interests of American corporate investors.

To make Americans more competitive, Obama says we need more investment in infrastructure, education, and technology. He’s clearly right; such spending is an essential—although not sufficient—part of any competitiveness strategy. But just as clearly, the President’s actual intentions do not rise to the level needed. In fact, they do not rise at all.

His prior commitment to deficit reduction would shrink the domestic discretionary budget, 50 percent of which is investment, from 3.1 to 1.7 percent of GDP. There is no conceivable reordering of priorities within that category that would keep the share of public investment untouched, much less increase it.

On the continued addiction of the country’s capital markets to the destructive speculation that led us to the crash of 2008, Obama’s agenda is silent. Meanwhile, the largest financial companies now have a bigger share of the markets than they had in 2008 and the administration’s lax post-Dodd-Frank financial regulation is a national scandal. The Wall Street casinos are again open for business.

The president’s proposal to increase the minimum wage would directly help many of the working poor put bread on the table and pay the rent. But history tells us that the major institutional support—both at the workplace and the ballot box—for assuring that all workers’ wages rise with their productivity has been the labor movement, whose impact on the job market goes way beyond its members. Although he could not have been elected or re-elected without organized labor, Obama has no plan to resist the relentless gutting of collective bargaining by corporations and state legislatures alike.

Barack Obama is not stupid. Neither are his economic advisers. They understand how a modern economy functions. They know that reducing government deficits in an anemic economy will increase unemployment. They know globalization, financial deregulation, and the corporate war on workers is eroding American living standards.

They also know that there are alternatives. There is by now wide agreement among independent, Democratic-leaning economists on the elements of a serious national recovery program of short-term stimulus, long-term investment, and other policies to increase the demand for and the wages of working Americans. (See, for starters, the “Back-to-work” budget of the House Progressive Caucus, the Prosperity Economics plan endorsed by the AFL-CIO and a wide variety of groups, and the writings of Nobel Laureates Joe Stiglitz and Paul Krugman.) There is no dearth of ideas.

So what explains the unwillingness of this administration to present a plan that might actually “reignite” the middle-class prosperity the president needs for his legacy and his party needs for its future?

The most obvious answer is that Democratic leaders are afraid to threaten the economic power and ideological comfort of the country’s corporate rich, who finance the Democrats’ campaigns and careers, and whose hired help populates the upper reaches of the party’s policymaking. To take them on, the president would have to launch and sustain a populist educational campaign to undo the myths about big government and deficit spending that have so confused the electorate. But that is too much heavy political lifting for a White House whose economic advisers will go back to Citigroup, Goldman-Sachs, and other financial firms, as well as the Washington lobbying groups that serve their interests. Easier to put his faith in the perennial happy-face projections of the CBO than tackle that crowd. Hope, it turns out, is a strategy—of sorts.

But do the decision-makers of the Democratic Party think that they can sustain a political majority with no serious strategy for dealing with the eroding living standards of a majority of the electorate?

Judging by their behavior, that is exactly what they think—and it’s not irrational. If you assume their demographic advantage and that Republicans will remain deeply fractured by their lunatic fringe for some time, Democrats do not actually have to deliver on their promise to “reignite” middle-class living standards. They can win national elections just by being the socially liberal and economically conservative option.

The party’s leaders have plenty of reason to think they have the loyalty of their activist base in their pocket. Yes, there is grumbling among unions, environmentalists, and the liberal bloggers about Obama’s centrist instincts, his Wall Street advisors and his political judgment. But it is just grumbling. After the election, progressives vowed to hold the party’s “feet to the fire.” But on the very first test—the opportunity for the Senate Democrats to end the conservative abuses of the filibuster abuses—they let the party leadership slip comfortably off the hook.

For a variety of reasons, the Democratic left lacks the independence, strength and hard edge of the Republican right. There is nothing on the progressive side of our politics like the Tea Party—which now even gets its own network slot, separate from the GOP, to respond to the President’s State of the Union. The Republican establishment is afraid of their right. Neither the White House nor the Democratic Congressional Campaign Committees are afraid of their left.

The message from the Democratic establishment to its base is: “Chill out—your turn will come.” If you accept their rosy scenario, they make a plausible, if cynical, case to liberals for patience: Since time is now on the Democratic side, Obama’s compromised improvements in government programs can be built on later. How much later? Who knows?

So far American voters certainly have been willing to wait—and in the meantime, suck it up. A few short years ago, it was unimaginable that a president could be re-elected after four years in which the unemployment rate averaged almost 9 percent. So if the people are OK with four years of rough times, why not six, or eight?

Disappointed and debt-ridden 20- and 30-somethings did not rally around Occupy Wall Street’s call for active dissent; they have adjusted to hard times by working more hours, delaying marriage, and milking each other’s networks in a desperate effort to find a career. Nor have the middle-aged breadwinners whose lives have been shattered by corporate brutality taken to the streets. Their elders, whose hopes for retirement have evaporated, seem resigned to working until they drop.

There are a few clouds in the Democratic leadership’s happy, self-justifying scenario of how they capture the future. One is that in the absence of more stimulus, the economy might tank, with the Democrats taking the blame. Another is that, the electorate’s seeming passivity might mask a seething and volatile anger, which when finally explodes will demand truly radical change. At that point, the Democratic Party, with an atrophied and co-opted left wing, could find itself unable to respond, while the far more organized right wing of the Republican Party, having developed a more sophisticated outreach to economic frustrated minorities, single women and immigrants, could fill the populist vacuum.

Democrats who dismiss these possibilities should keep in mind how quickly the political odds can change. Just two short years ago, the conventional wisdom was that it was the Republicans, triumphant from their Tea Party driven victory in the 2010 election, who represented the majoritarian politics of tomorrow.

It’s conceivable that the mainstream Democratic left could strike out on its own—building a political movement that is willing to take on centrists in primary fights, to refuse to support the party’s grand bargains that undercut working people and to take the risk of sitting out elections where there is little distinction between the candidates of different parties. In short, a strategy that forces the party to act in the interests of the majority it claims to represent.

But that requires that progressives abandon the hope that the future will fall into their laps if they are just patient and follow their leaders. If you believe that, you would have believed the sign that hung for years in the window of a tavern in the neighborhood where I grew up: “Free Beer, Tomorrow.”

American Prospect April 9, 2013

The pundits tell us that this theater of the absurd reflects a dysfunctional democracy; our politicians are incapable of making the “hard” choices needed to return to prosperity.

Not so. In fact, the choices have already been made.
Both Barack Obama and the Republican leadership agree that for the next decade at least, the Federal government will do little or nothing to reverse the slide in living standards for the majority its citizens. Although not deliberately scripted, the theatrics around narrow budget issues blown far out of proportion to their importance allow them to avoid having to deliver the bad news.

For three decades now, they have collaborated in undermining the competitiveness of goods and services produced in America and the bargaining power of those who produce them. As a result, the US economy can no longer support all of the three most politically important American Dreams: Wall Street’s dreams of unlimited subsidized profits; the military-industrial complex’s dream of global domination; and the middle-class dream of perpetually rising living standards.

One out of three? Certainly. Two out of three? Maybe. All three? No way.

Wall Street’s dream is the most secure. The financial crash of 2008-9 showed that a de-regulated financial system had been systematically draining the nations capital from long-term investment in US production to short term global speculation. The crash provided the political opportunity to re-regulate bankers and brokers in order to channel investment into rebuilding America’s productive capacity. The opportunity was lost . Now, neither party has any intention of loosening Wall Street’s grip on America’s future. And both support an even greater expansion of the globalization policies that favor the interests of multinational corporate investors over American workers

The Pentagon and its contractors are a bit more vulnerable. But, despite assertions that “everything” is on the budget-cutting table, Democratic as well as Republican leaders are committed to high levels of military spending to maintain US military supremacy in every important part of the world. After a decade in which the military budget – excluding the costs of our wars — doubled, the appropriations for 2013 was cut slightly. But over the next ten years, the Obama Administration’s proposes a steady expansion of military spending over the next ten years. The Republicans of course are demanding even more. The bi-partisan war on terror requires a permanent and growing capacity to intervene anywhere in the world. There is now a Washington Consensus that the United States must add more missiles, ships and troops to stop China from exerting its influence in places like the South China Sea.

The middle class dream is already on the block. Real incomes for the typical American worker were already stagnant for two decades prior to the crash, and have been falling since. Reversing that trend would require accelerating the demand for US labor, strengthening of the bargaining position of US workers and a substantial sustained investment in our depleted infrastructure and education and training systems.

Despite the bi-partisan rhetoric of “jobs, jobs, jobs” there is no plan for any of this. With consumers not spending, business not investing and a large chronic trade deficit, the common sense path to a rejuvenated labor market is more government investment in programs and projects that will create good jobs and make us more competitive in the future. The fact that interest rates are at rock bottom makes this the ideal time for government to borrow and invest. But this is not to be. In fact, the president and Congressional Republicans’ ten year budgets call for a reduction in non-military discretionary spending – the source of virtually all domestic public investment — of 45 and 52 percent, respectively.

As for strengthening the bargain position of workers, forget about it. Once again, the battered US labor movement worked its heart out for the Democratic cause, and once again, legislation to help even up the playing field between corporate employers and their employees will be absent from the Democratic Party’s congressional agenda. With the decades long budget squeeze at all levels of government, liberals and labor will be hard put just to keep workplace protections, social security, health programs and other parts of the social wage from falling further.

The actual economic policy of the US government – by design or default -is to make labor so cheap that business will decide to invest again. Even under the best of assumptions, we have a long way to go. At current growth rates – assuming that there is no new downturn or bank crisis, Europe recovers and China continues to finance or trade deficit – it will take more than ten more years to get back to the pre-recession (2007) unemployment levels. Those numbers represent millions of Americans who will be chronically unemployed, burdened with school debt they cannot pay off with low-wage, dead-end jobs and whose dream of retirement becomes a nightmare of having to work until they die.

President Obama, the Republican leaders and the people who advise them are not stupid. They understand where the economy’s trajectory is taking the middle class. But changing that path requires them to challenge the basic interests of the rich and powerful. That is too heavy a political lift.

But who among them wants to admit — even perhaps to themselves — that they have colluded to preside over another decade of the grinding away of the American dream? So even if they haven’t consciously planned it, the periodic, self-perpetuating budget showdown is a godsend for our governing elites. It allows them to shift the public debate from the question of what should be our national priorities to the question of, given those priorities, how should to pain to the middle class be allocated. The president wants the rich to share some of the burden. The Republicans wants to spare them any discomfort at all.

Each iteration of the white-knuckle budget stare down gives us an engrossing tension-filled drama of powerful stubborn men (mostly) locked in bitter conflict under a clock ticking toward an impending doom. But how long can this show run? There’s a limit to the number of versions of Lincoln even Stephen Spielberg could make exciting. Eventually, the plot gets old, the actors go stale and the dreaming audience wakes up to the real world.

We’ve now dodged the bullet of a Romney White House, so let’s get back to reality. Despite his campaign-trail populism, the president will continue the politics of accommodation to conservatives. Two of the three priorities he has set out for his next term are at the top of the GOP agenda: a “grand bargain” to cut government spending over the next 10 years and corporate tax reform that would cut rates — don’t hold your breath — close loopholes. The third priority, rationalizing immigration law, is one of the few progressive ideas that also has the support of the Chamber of Commerce and the Business Roundtable.

Moreover, his next term’s policy advisers will be the same — or come from the same Washington/Wall Street executive personnel pool — as his last term’s advisers. Indeed, from the White House perspective, the election vindicated their first term performance.

The core organizations of the Democratic base have vowed that after the election they will hold Obama’s “feet to the fire” with a Tea Party-style mobilization from the left — forcing votes on progressive proposals, organizing mass rallies and grooming their own candidates for the next congressional elections. They’ve sworn these oaths before, but after each election they persuade themselves to give the leadership another chance. Soon the next election is upon them, and they line up for their marching orders.

If this time is to be different, progressive Democrats must start mobilizing their own agenda now. And the first step is to face the truth about the record of the president we have just re-elected. Here’s an initial reality check:

1. The Economy Still Sucks
Three years into the recovery, we have an official unemployment rate of just under 8 percent and anunderemployment rate of almost 15 percent. Incomes are declining and at least 12 million homeownershave mortgages that exceed the value of their houses. Consumers aren’t spending and therefore business is not investing. And we are still running a huge trade deficit with a sluggish global economy. This leaves government as the only possible source of substantial new spending to create jobs.

Yet there is no jobs program. President Obama says his top priority is a deal with House Republicans to reduce the deficit by $4 trillion over the next 10 years. His “liberal” position starts with a ratio of spending cuts to tax increases of two-point-five to one. The only real dispute between the president and Republicans is whether the rich will have to give back the tax breaks George W. Bush gave them. So when the eventual deal is struck, the Federal government will be taking more out of the economy over the next decade than it is putting in. This virtually guarantees that — even if we escape another recession or financial meltdown — we will not reach anywhere near full employment in the next four years.

2. The Low-Wage Future
With no new substantial source of stimulus, our trajectory is toward a further erosion of living standards for the majority of Americans. Off-shoring and automation will continue to shed jobs with no offsetting increase in the demand for labor. Budget cuts — including cuts to Medicare and Medicaid — will widen the holes in the social safety net and further limit investments in education, infrastructure and technology upon which any chance at future prosperity depends. And the White House’s indifference to the dramatic erosion of organized labor (e.g., its reneging on promises to reduce the barriers to organizing) will continue to undercut the bargaining power of all workers — union and non-union alike.

The president’s Council of Economic Advisers will not admit it, but their default strategy for growth is to let American wages drop far enough to undercut foreign competition. That is the only possible policy rationale for Obama’s enthusiasm for the Trans Pacific Partnership, a further de-regulation of trade that will strip away the last protections for American workers against a brutal global marketplace of dog-eat-dog.

3. Obamacare: Health Care Dead-end 
The Patient Protection and Affordable Care Act was a victory for corporate America. In exchange for giving up their rules against covering pre-existing conditions and agreeing to raise the age limit in which children could be covered under their parents policy, the health insurance corporations got the Federal government to require every citizen to buy their product and commit to subsidizing those that can’t afford the price. The pharmaceutical industry received even stronger government protection of their price-gouging monopolies. The Congressional Budget Office estimates that there will still be 30 million uninsured Americans by the end of the decade. Tens of millions more will be underinsured as the companies are free to raise their premiums and deductibles.

Although it abandoned the public option, the White House whispers to Democrats that Obamacare will pave the way for single-payer. Fat chance. The bill was inspired by the right-wing Heritage Foundation and largely drafted by a former insurance company executive precisely to stop single payer from ever happening. Meanwhile, corporate dominated health care system will continue to be huge drag on our global competitiveness and long-term fiscal health.

4. The Dodd-Frank Fig Leaf 
The Wall Street Reform Act required more transparency in the securities markets and marginally expanded the regulatory bureaucracy. But it did little to prevent a future return to the reckless speculation that exploded the economy four years ago. The largest companies now have a bigger share of the financial markets than they had in 2008 and their “too-big-to-fail safety net” is even more explicit.

Perhaps most important, nothing has been done to lengthen the horizons of U.S. investors from short-term get-rich-quick financial speculation to the long-term investment in producing things and high-value services in America.

5. Big Money and the Democrats
The last four years have proven conclusively that corporations — especially from Wall Street — now dominate the most important economic policy decisions of the Democratic Party. With the Supreme Court decision on Citizens United, the transformation from democracy to plutocracy is virtually complete. The corruption of our governing class goes beyond just campaign contributions. It can include the hint of a future job or lobbyist contract when you leave office, a hedge fund internship for your daughter, a stock market tip. But all this depends on your remaining in power, so nothing matches the importance of raising enough money to get yourself reelected.

Democratic leaders’ primary response to Citizens United has been a tepid proposal to require more transparency in campaign contributions. Even that, of course, could not succeed against Republican, and some Democratic, opposition. But even areas where the president could act alone — as with an executive order requiring government contractors to disclose political contributions or even filling vacant seats on the Federal Election Commission — Obama took a pass. In response to an interviewer’s question in August he said that “in the longer term” we may need a constitutional amendment to undo Citizens United. He is right. But the “longer run” certainly means sometime after he leaves office.

According to the White House, discontent on the left with these and other issues (e.g., climate change, civil liberties, military spending) represents little more than the carping of left-wing purists who don’t understand the need for compromise. But in fact, it reflects the harsh reality that the president’s intentions do not nearly reach to the level of the country’s serious problems. So the stakes for the nation are enormous. Without a radical shift away from the policies of the last four years, living standards of most people in the United States will continue to drop, with potentially ugly social and political consequences.

The stakes for Democrats are also high. Obama’s victory has reinforced the widespread notion among pundits that the projected future increase in the non-white voting population and the Party’s advantage with women already makes it the favorite for 2016 and beyond. But it is precisely these constituencies that economic stagnation has hit the hardest. Whatever the demographic changes, if the Democratic Party produces another four years like the last four, it can kiss goodbye to the next election and probably several after that.

Huffington Post.

Posted: 11/09/2012 6:12 pm

It is more than just another mega-company. Apple is the poster-child for the claim that, despite its present troubles, America is destined to prosper in this de-regulated global economy. With our inventive genius and entrepreneurial culture, goes the argument, we Americans will climb up the global job ladder, designing and making tomorrow’s products while those less endowed will occupy the lower rungs, doing the routine manufacturing of yesterday’s innovations. Apple’s founder, the late Steve Jobs, is a hero to both Barack Obama and Mitt Romney. When he died last fall, there were tearful nighttime vigils in the iPhone connected camps of Occupy Wall Street. If there is anything that left and right can agreed it is that Apple is the wave of the future.

And so it is. Walk into any Apple store today and you can see what’s coming tomorrow. I don’t mean the array of electronic gadgets laid out on the countertops; I mean the army of bright, ambitious, heavily indebted college graduates working for roughly $12 an hour as retail clerks selling Chinese goods on credit.

Over ninety percent of Apple’s iPhones are assembled in China. Its hi-tech components come from Taiwan, Japan, Korea and Germany. Along with some 700,000 Chinese workers, Apple hires another 30,000 Chinese engineers — who also come cheap. Engineers cost $41 an hour in the US, $6 in China and $4 in India.

Moreover, it turns out that the best place to design and innovate the next “new thing” is where the last new thing is being produced. As Venkatesh Narayanamurti, founding dean of Harvard’s School of Engineering and Applied Sciences, recently pointed out in the Los Angeles Times:

With manufacturing gone to China…R&D followed Apple to Foxconn. Applied Materials set up a major R&D shop in China, where solar cells are being manufactured. GE, Texas Instruments, Cisco and others established major R&D and design centers in Bangalore, India…Proximity to manufacturing is the key to other higher-value activities — design, engineering and R&D. And with that, jobs.

So, it’s no surprise that for more than a decade the United States has been running a trade deficit in the advanced technology sector that is supposed to be our international comparative advantage. Heavily subsidized aerospace and weaponry are the only major US high-tech sectors not in red ink, and even those surpluses are shrinking.

Not to worry, now counsel our governing class’s leading economists. Americans can leave all that manufacturing behind and prosper by producing high-value services, such as finance, law, entertainment, artistic design and marketing. But in a globalizing labor market, almost anything that can be done with a computer can be off-shored. So over the past decade these jobs also have been steadily migrating overseas.

The result is a widening wage depression in the United States. Two-tier salary structures — in which entry-level jobs now pay 30-50 percent less than they did for the older generation — have spread to the service and retail industries. Among entry-level jobs for college graduates, real wages are down almost 10 percent from a decade ago.

Rather than a ladder up, jobs being created in high tech America represent a bridge to nowhere. Young Americans are increasingly trapped in an economic Catch-22. On the one hand, the returns on investment in college are declining. The Bureau of Labor Statistics projects that between 2010 and 2020, nine of the ten occupational categories expected to generate the most jobs do not require a college education. Five do not even require a high school degree. Apple stores are not hiring people for their academic skills; they are looking for personalities who are smart, ingratiating and trustworthy. The technical stuff can be quickly taught.

On the other hand, being a college graduate gives you leg up in the increasingly brutal competition for a career that will sustain a middle-class life. Paying for college, which leaves most graduates in debt, has become like borrowing to enter a very expensive lottery. The chances of winning are shrinking, but they are nonexistent if you don’t buy a ticket.

The basics of a national strategy to regain a high-wage path to the future are reasonably clear. First, a shift in trade and tax policies aimed at redirecting investment back to the United States both in manufacturing and the high-value services that follow. Second, expanded public investment in infrastructure, training and research to make us more competitive and to generate sustained demand for labor in order to raise its price. Third, strengthening the bargaining position of workers, primarily by ending the legal obstacles to organizing unions.

But none of these are in the cards. The leaders of both parties are committed to continuing the trade policies that have led to the offshoring of technical and professional jobs, and President Obama’s proposals for modest support for new energy and transportation technologies have already been shredded by Washington’s obsession with budget cuts. That same commitment to austerity tells us to expect, at best, slow job growth over the next four years, even if we escape another recession. As for collective bargaining, the choice is between Obama, who has been indifferent to unions, and Romney, who is hostile to them.

The cynical folly of driving young people into debt in order to get a college degree whose value is declining may at some point drive the young to revolt. But so far it hasn’t. The spark of Occupy Wall Street did not fire up the campuses this spring, and the maneuvering between Obama and the Republicans on how to subsidize college loan interest rates seems to have sucked up most of the political oxygen on the issue of spiraling college costs. However smoldering, young people’s anger at the betrayal of their dreams has not flared up here the way it has in some parts of Europe and Latin America.

Until they do, Apple will continue to represent the future — although not quite in the way Steve Jobs led us to expect.

Huffington Post         10/16/2012 3:28 pm

The familiar media narrative tells us that this is a fight over how to improve our schools. On the one side are the self-styled reformers, who argue that the central problem with American K-12 education is low-quality teachers protected by their unions. Their solution is privatization, with its most common form being the privately run but publicly financed charter school. Because charter schools are mostly unregulated, nonunion and compete for students, their promoters claim they will, ipso facto, perform better than public schools.

On the other side are teachers and their unions who are cast as villains. The conventional plot line is that they resist change, blame poverty for their schools’ failings and protect their jobs and turf.

It is well known, although rarely acknowledged in the press, that the reform movement has been financed and led by the corporate class. For over twenty years large business oriented foundations, such as Gates (Microsoft), Walton (Wal-Mart) and Broad (Sun Life) have poured billions into charter school start-ups, sympathetic academics and pundits, media campaigns (including Hollywood movies) and sophisticated nurturing of the careers of privatization promoters who now dominate the education policy debate from local school boards to the US Department of Education.

In recent years, hedge fund operators, leverage-buy-out artists and investment bankers have joined the crusade. They finance schools, sit on the boards of their associations and the management companies that run them, and — most important — have made support of charter schools one of the criteria for campaign giving in the post-Citizens United era. Since most Republicans are already on board for privatization, the political pressure has been mostly directed at Democrats.

Thus, for example, when Andrew Cuomo wanted to get the support of hedge fund managers for his run for governor of New York, he was told to talk to Joe Williams, director of Democrats for Education Reform, a group set up to lobby liberals on privatization. Cuomo is now a champion of charter schools. As Joanne Barkan noted in a Dissent Magazine report, privatizers are even targeting school board elections, in one case spending over $630,000 to elect two members in a local school board race last year in Colorado.

Wall Street’s involvement in the charter school movement — when the media acknowledges it — is presented as an act of philanthropy. Perhaps, as critics claim, hedge funders are meddling in an area they know nothing about. But their motives are worthy. Indeed, since they send their own children to the best private schools, their concern for other people’s children seems remarkably altruistic. “Wall Street has always put its money where its interests of beliefs lie,” observed this New York Times article, “But it is far less common that so many financial heavyweights would adopt a social cause like charter schools and advance it with a laser like focus in the political realm.”

Yet, with the wide variety of social causes and charitable needs — poverty, health, housing, global warming, the arts, etc. — why would so many Wall Streeters focus laser-like on this particular issue? The Times suggest two answers. One is that the money managers are hard-nosed, data-driven investors “drawn to the business-like way in which many charter schools are run; their focus on results primarily measured by test scores.”

Twenty years ago, one might have reasonably believed that the private charter schools, which are managed to produce the numbers, would produce better outcomes — as measured by the numbers. But the overwhelming evidence is that they do not. The single most comprehensive study, by researchers at Stanford University, found that 17 percent of charter school students performed better than their public school counterparts, 46 percent no better and 37 percent worse. Stanford’s conclusions have been reinforced by virtually all of the serious research, including those at the University of California, the Economic Policy Institute and the policy research firm Mathematica.

Nor do charter schools seem more efficient. Those promoted as the most successful examples have been heavily subsidized by foundations and Wall Street donors. The film, Waiting for Superman that portrays a heroic charter school organizer fighting a selfish teachers union was widely hyped in the media — including popular TV shows like Oprah Winfrey’s. Yet, as Diane Ravitch, an assistant secretary of education under George H.W. Bush and a former charter school supporter turned critic, noted, the film neglected to report that the hero educator kicked out the entire first class of the school because their test scores were too low, that the school was heavily subsidized by the pro-reform foundations and that the hero took an annual salary of four hundred thousand dollars.

Neither do the data on international comparisons support either privatization in general or charter schools in particular. The foreign education systems that out score America’s are government-run, unionized, monopolies. Ravitch asks: “I look around the world and I don’t see any country doing this but us. Why is that?”

Good question. Although the data do not support the supposedly data-driven privatizers’ claims, their enthusiasm is undiminished. In response to an op-ed by Bill Gates that crudely misrepresented the statistics on school performance, education policy analyst Richard Rothstein observed: “It is remarkable that someone associated with technology and progress should have such a careless disregard for accuracy when it comes to the education policy in which he is now so deeply involved.”

The Times‘ other guess about Wall Street’s motives was that hedge funders are attracted to the anti-union character of the charter schools. This is undoubtedly true; the attack on the pubic schools is clearly a part of the broad conservative campaign to discredit government.

Wall Street has always loathed the labor movement. And in the last decade it has had even more of a reason since corporate profits now depend more on cost cutting and less on the creation of new products. The Chief Finance Officer of JP Morgan reports that some 75% of the net increase in corporate profits between 2000 and 2007 — before the financial crash — was a result of cuts in workers’ wages and benefits. Given that unions are the only serious vehicles for resistance to the corporate low-wage strategy, Wall Street’s antipathy has become even stronger.

But today unions represent less than seven percent of private sector workers. And the influence of public sector unions on the bargaining position of workers in profit-making corporations is, certainly in the short run, negligible. So while hostility to unions plays a role, is it is not quite credible to believe that Wall Street profit maximizers would be spending so much of their time and money simply to beat up on a proxy for the private sector unions that they have already so beaten back.

As usual, when looking for what motivates capitalists in a market system, the answer is likely to have something to do with making money.

Having been rescued from the consequences of its own folly by the Bush/Obama bailouts with its de-regulated privileges intact, Wall Street is once more on the prowl for the new “big thing” — a new source of potential profits upon which to build the next lucrative asset bubble.

The landscape of the coming decade is not promising. Most forecasters see a near term future of slow growth, sluggish consumer spending and government retrenchment. Despite the Federal Reserve’s commitment to low interest rates there is little demand for equities, indicating widespread investor pessimism about the future. As Bill Gross, the founder of global investment giant Pimco, wrote in August, “Boomers can’t take risk. Gen X and Y believe in Facebook but not its stock. Gen Z has no money.”

The financial bubble of the 1990s was driven by new business start-ups exploiting technologies whose development had been subsidized by the taxpayers. The bubble of the 2000′s was built on the boom in subprime mortgages organized and subsidized by Federal housing programs. But with a virtual Washington consensus on cutting back public spending, investors have little expectation of new government money being poured into some dormant economic sector on a scale sufficient to generate widespread speculative excitement.

Education privatization would not, per se, create a net new stimulus for the economy. But by diverting large existing flows of money from the public to the private sector it would create new profit-making ventures that could be capitalized and transformed into stocks, derivatives and leveraged securities. The pot has been sweetened by a 39 percent federal tax credit for financing charter school construction that can double an investor’s return in seven years. The prospect of new speculative opportunities could well recharge the animal spirits upon which Wall Street depends.

Some “liberal” privatization promoters claim that charter schools should not be considered private. But that’s an argument the management companies that run the schools only use when they are asking for more government funding. At the same time they argue in courts and to legislatures that as private enterprises they should not be subject to government audits, labor laws and other restrictions.

These companies rent, buy, and sell buildings; make contracts for consulting, accounting and legal services, food concessions, and transportation; and pay their managers far more than public school principals earn. In cases where city governments have given land to charter schools, for profit real estate companies have ended up owning the subsidized land and buildings. In states where charter schools are required to be nonprofit, profit-making companies can still set them up and then organize a board of neighborhood residents who will give them the right to manage the school with little or no interference.

In 2008 Dennis Bakke, CEO of Imagine Schools, a private company that managed 71 schools in eleven states, sent an email to the firm’s senior staff. It reminded his managers not to give school boards the “misconception” that they were “responsible for making decisions about budget matters, school policies, hiring of the principal, and dozens of other matters.” The memo suggested that the community board members be required to sign undated letters of resignation. “It is our school, our money, and our risk,” he wrote, “not theirs.”

The potential for private profits from publicly funded education is not limited to K-12. Profit-making universities and vocational schools — increasingly substituting remote internet learning for classroom teachers — are among the fastest growing businesses in the country. The sector is rife with high-pressure sales tactics and shoddy training, which leaves students – many of them low-income — deeply in debt and no further up the job ladder. Most of their growth is financed by Federal aid and Federally guaranteed student loans.

“You start to see entire ecosystems of investment opportunity lining up,” Rob Lytle, an business consultant earlier this year told a meeting of private equity investors interested in for-profit education companies. According to Stephanie Simon of Reuters, who reported on the event, investment in for profit education has already jumped from $13 million in 2005 to $389 million in 2011. Among others, Goldman Sachs and JP Morgan Chase have created multimillion-dollar funds for education investments.

These “data-driven” investors are not so much interested in students’ scores, as in the opportunities to cut costs by using online technology. Ironically, while reformers insist their goal is to develop more skilled teachers, a goal of their financier allies is to get rid of them. The central question, says education entrepreneur John Katzman is “How do we use technology so that we require fewer qualified teachers?”

According to none other that Rupert Murdoch, the U.S. education industry represents a five hundred billion dollar opportunity for investors. In 2010, he hired prominent reformer Joel Klein from his post as chancellor of the New York City Department of Education to run Murdoch’s education technology company. A few months later the firm received a $2.7 million contract from the city.

Charter schools, for profit on-line universities and other forms of privatization may not in the end fulfill all the dreams of its Wall Street promoters. But there is clearly money to be made here. And where there is money to be made, we can be sure that there will be money to finance political campaigns, to support career ladders that move between government and business and to bribe the media into ignoring the data. So the war on public education will continue. All of course “for the sake of the children.”

Huffington Post – 9/28/12

He also ran for president in 1980 on the ticket of the now-defunct Citizens Party, an episode few on the left remember and the obituaries dismissed as a quirky personal misadventure. It was more than that. The Citizens Party was an effort to respond to the early signals that the Democratic Party was on the way to becoming morally and intellectually bankrupt. Three decades later, that ugly process is almost complete.

No matter who wins this coming election, unless there is a fundamental rethinking of what it means to be progressive in today’s America, the relentless drift toward right-wing plutocracy will continue. Slower if Barack Obama is re-elected, faster if Mitt Romney wins. In any serious rethinking of how to reverse this course, we’d be wise to learn from the experience of our collective past.

The Commoner campaign was a reaction to Jimmy Carter’s weak and conservative responses to the first cracks in the foundations of America’s post-World War II prosperity: the oil price crisis, the initial stages of wage stagnation and rising inequality and the recognition of environmental constraints on growth. As I have written elsewhere, [“Industrial Policy; The Road Not Taken,” The American Prospect, December 2009] by the late 1970s many people saw the warning signs of what was to come. Some business, labor, and congressional leaders proposed a form of national economic planning to try to shape the increasingly uncertain future, rather than be shaped by it.

Carter himself understood that the age of cheap oil was over. But he was an economic conservative. He believed that the problems of rising unemployment and oil-price driven inflation were best left to a combination of voluntary self-sacrifice and the free market. On energy, he lectured the public to reduce its use of heating in the winter and air-conditioning in the summer and pursued a fox-in-the-chicken coop strategy of giving fat contracts to multinational oil companies to find substitutes for their own product. As it turned out, Carter—although he has been our most liberal ex-president—was the transitional figure in our movement from the age of Roosevelt to the Age of Reagan.

Barry Commoner understood that the country’s troubles were systemic, and that the broken system was capitalism.

The ecological principle that everything is connected to everything else did not just apply to the natural world, but to everything—including poverty, war, and social injustice. Standalone piecemeal answers did not address the question we faced. He insisted it was far more efficient for government to prevent environmental destruction than to clean it up afterwards—a central rationale for planning ahead.

Commoner’s integrated analysis had parallels in the thinking of the most far-sighted economists of the time. Robert Theobold’s holistic economics questioned the simplistic worship of material growth. John Kenneth Galbraith viewed economics as embedded in social institutions whose values extended beyond the market.

Wassily Leontieff’s work on input-output models offered a tool for understanding and shaping the market for social ends. These and other progressive thinkers of the time were looking to what would have been the next stage of the New Deal/Great Society progression towards a more rational and democratic society.

But there was no political instrument for expressing this integrated view of the world. The Republican Party was on its way to being captured by the radical right, and the Democratic Party was rejecting the New Deal in favor of a mushy pro-business neo-liberalism.

The Citizens party was conceived in a hotel room at O’Hare airport in January 1979. No one of the small group of us present thought that we ourselves could build a national political institution from the top down. The idea was to use the next election (which at that time most people assumed would be between Gerry Ford and Jimmy Carter) to run a well-known a figure on the mainstream left to get attention and plant a political flag to the left of the Democratic Party around which people could mobilize. After the election the activists would have a national framework for building a sustainable, grass-roots electoral base.

Commoner’s own first choice of candidate was Ralph Nader. But Nader turned us down on the grounds—ironic, given his later presidential candidacy—that he was more effective staying out of electoral politics.

So Commoner it was. I co-chaired the committee that organized the Citizens Party and got him on the ballot in 30 states—no mean feat considering how high the legal cards are stacked against third parties in America. I also chaired much of the party’s raucous organizing and nominating convention in Cleveland, in which 250 delegates from around the country fell into the factional infighting that often seems endemic on the left. One delegate, a journalist from California who then went to Poland to report for The New Yorker on the Solidarity movement that toppled the communist dictatorship, later said that he could not have understood what was going on at a Solidarity national congress meeting had be not witnessed the politics of the Citizen’s Party convention: “Beat up on the leadership for three days and then re-elect them.”

We survived the convention and Commoner dove into the campaign. He was tireless, patient and eager to explain the connections between science and politics to whatever audiences we could organize. He was professorial and intense, with thick imposing glasses that seemed to have an intellectual life of their own. He didn’t have a stump speech. At each event he brought out his thick notebooks in which he’d been accumulating notes from the question-and-answer sessions of his last talk. It was perhaps the only time I have ever seen a candidate truly take seriously the idea that a campaign was an ongoing dialogue with his audience.

Along the way, Commoner inspired and was inspired by the energy and idealism of his audiences, especially those in small towns and rural areas where there were always people—no matter how conservative a political climate they lived in—who were willing to come out and support a radical alternative that made sense.

Some figures who were in those days well known on the left—Maggie Kuhn of the Grey Panthers, writer Studs Terkel, dissident Steelworker Union leader Ed Sadlowski—supported us. The established environmental movement turned its back; Commoner’s integration of ecology and social justice had little appeal for its upper-class leadership. The labor movement—committed to the Democratic Party—stayed away.

The mainstream media generally ignored the campaign. John Anderson, a moderate Republican congressman running as an independent, took up the space that might have gone to our third party. The New York Times gave us a couple of small stories and there was a short flurry of publicity when we raised enough money for a national radio ad in which Commoners described the agenda of the two mainstream parties as “bullshit.”

We received 234,294 votes—less than one percent. Not enough, thank God, to have been the cause of Carter’s loss to Reagan. But also not enough to make the Citizens Party a political magnet for more-experienced and mainstream progressive activists to take it to the next stage. The people initially involved, including me, went back to their day jobs. The few donors we had lost interest.

According to Dan Lieberman, who wrote a history of the Citizens Party, 40 percent of third-party efforts never make it past the first election. The Citizens Party did run a ticket in 1984 on a budget of $500,000 plus matching Federal funds of $140,000. But the two obscure nominees won only 72,200 votes. One year later, the party was gone.

Still, there was a legacy—some who had been touched by Commoner’s campaign moved on to successful political careers. A Vermont supporter named Bernie Sanders was elected mayor of Burlington, Vermont a year later, and is now the most progressive voice in the U.S. Senate. Tom Andrews, a delegate from Maine to the Cleveland convention, went on to become a congressman. Another Citizens Party activist, Mark Ritchie, has been the elected Secretary of State of Minnesota since 2006. And scratch one of the older activists in the Green Party that was begun in 1991 and you’ll likely find a political past includes the Commoner campaign.

The Citizens Party clearly failed as a viable alternative. But our assumption about where the country was headed and the improbability of a Democratic Party dominated by big money to alter that direction turned out to be correct. Commoner’s insights on the way the world—natural and human—works were right on the money, too. The Blue-Green alliance is a reflection of his insistence that the labor and environmental movements have a common cause.

Today, with our socio-economic and environmental problems so much more visible, and the failure of our politics to cope with them so much more apparent, many people—almost all outside the Beltway—ask me whether we need a third party on the left. I’m skeptical. It’s not just the formidable legal barriers to ballot access erected by the Democratic/Republican duopoly. The more serious problems are political, including progressives’ fear of repeating the 2000 election, in which the Nader candidacy triggered the events that allowed the Supreme Court to hand the presidency to George W. Bush. Whether or not one believes the debacle was Nader’s fault, the nightmare haunts progressives as the Republican Party continues its relentless move to the extreme right.

For a third party of the left to move beyond the political margins, it will have to attract experienced people who for whatever reason are personally motivated to participate in politics. Most are already Democrats.

Those in the national leadership are hopeless. They primarily run a money machine. Before the election, it raises campaign contributions. After the election, it is a gathering place where the big donors can signal to those they have elected exactly what kind of return they expect on their investments.

But at the level of the precinct and neighborhood and union hall, the Democratic Party is not so much a formal institution as a volunteer social network. The reward for participation is membership in a politically compatible community that grows over time with the common experience of stuffing envelopes, knocking on doors, working in telephone banks. Win or lose, you know that there will be another election and another campaign when you get to be engaged again with old friends and make new ones.

Many Democrats in 1980 told us that Commoner made more sense than Jimmy Carter, or even Ted Kennedy, who challenged Carter for the nomination that year. But could they rely on the Citizens Party to take the place of their local Democratic community, to form a viable alternative year after year? Most people did not think so. And they were right. It takes time to grow political roots, and we didn’t have it.

A better way out of our political cul-de-sac would be through a national mobilization to drive out the big money in politics, which has now grown so monstrous since the Supreme Courts’ Citizens United decision that there is no hope of serious progress for any of our progressive causes unless we do. Large majorities of Democratic and Republican voters already believe the system is corrupt, and such a campaign would be a way to expose the reality that the crucial political divide is not between Democrats and Republicans today so much as it is between the moneyed classes that dominate both parties, and the rest of us. Whether that will lead to a new party or a transformed Democratic party is a question to be answered further down the road.

At any rate, after this dismal election, should progressives ponder a future outside the Democratic Party, they should certainly draw lessons from our collective history, like the Commoner Campaign of 1980.

In addition to the Citizens Party experience, I personally learned a lot from Barry Commoner. He taught me why the poor suffer most from pollution, why you should heat water with gas and drive motors with electricity, and why vodka gives you less of a hangover than scotch or bourbon. The last point being especially useful in times like these.

The American Prospect On-line. October 9, 2012

Money talks.. It is also a conversation stopper. Almost any discussion among progressives 
of what is really needed to solve the nation’s multiple crises typically ends in despair when someone says, “But they will not accept that,” they being the corporate rich and powerful, what a Texas friend of mine used to call Big Dollar.

Wall Street will not accept re-regulation. Health insurance corporations will not accept a public option, much less single payer. Energy companies will not accept a serious effort to reduce global warming. And so it goes. With the exception of social move- ments about which Big Dollar is indifferent (same-sex marriage) or mildly supportive (liberalizing immigration), progressive politics is on the defensive.

Money corrupts politicians through many channels: the hint of a future job or lobbyist contract when you leave office, invita-
tions to exclusive dinner parties where you can network with the rich, a hedge fund internship for your daughter, a stock market tip. But, as Lawrence Lessig points out in this important book, all of this depends on your remaining in power, so nothing matches the importance of raising enough money to get yourself reelected. And nothing makes you more responsive to a lobbyist than the knowledge that he or she speaks for a poten- tially large donor to your next campaign.

Nowhere is the enfeeblement of the liberal vision more striking than in the issue of money in politics itself. The January 2010 Supreme Court’s Citizens United decision has

set off a tsunami of “super PAC” election spending protected by a fig leaf rationale that it be formally independent of a candidate’s campaign.

The decision is a dagger at the throat of what is left of the Democratic Party’s function as the progressive alternative in our two-party system. Yet the party leadership’s response has been pathetic—a tepid and unsuccessful proposal by Senator Charles Schumer of New York, himself a huge beneficiary of Wall Street

Democrats quickly developed an addiction to campaign money from Big Business, whose pockets under Reaganomics were far deeper than Big Labor’s.

contributions, to require that super PACs disclose the identity of their contributors.

Lessig, who teaches at Harvard Law School, is justifiably alarmed that campaign spending is destroying democracy, and he has written a sharp and accessible brief for radical reform. Although he falls just short of a credible solution, he moves us far enough along so that we can take the final steps on our own.

Money has always been important in American elections. Among its many mani- festations, vote-buying at the polls and in the Congress and state legislatures was common in the nineteenth century, and, in some places, well into the twentieth. The result was a government that openly and shamelessly sided with capital against labor, until Franklin Roosevelt’s election.

The New Deal did not end Big Dollar’s influence. Money remained, as Jesse Unruh, the Democratic speaker of the California Assembly during the glory days of that state’s liberalism, famously quipped, “the mother’s milk of politics.” But with the rise of labor and other liberal sources of campaign funds, the nourishment was more evenly divided, and therefore less decisive in the conflicts over government policy.

Then something changed. Lessig dates the change to Newt Gingrich’s becoming speaker of the U.S. House after the 1994 election. Gingrich made fundraising a central part of the management of the Congress. He abolished seniority and established what political scientist Tom Ferguson has called the “posted price” system of selling subcommittee and committee chairs to members able to meet certain fundraising goals for the party.

But the Republican Party was traditionally the instrument of big business. The more important story is what happened to the Democrats a decade earlier. After Ronald Reagan’s election in 1980, Tony Coelho, a Democratic congressman from California with Wall Street connections, convinced the party leaders that they should become more proactive in raising money from big business. Big Dollar will court us, argued Coelho, because, as everyone “knew,” the Democrats had a lock on the House (which they had controlled for all but four years since 1933), where the tax and spending bills originated. So, liberals could take the money without selling out their principles.

An early test of this proposition on the national stage came in the presidential election campaign of 1984. Former vice- president Walter Mondale, the Democratic nominee, originally wanted to run on a plan to save American manufacturing jobs. But after a few dinners with Wall Street contributors (organized by Robert Rubin of Goldman Sachs, later Bill Clinton’s Treasury secretary), who were more worried about keeping bond prices up than the unemployment rate down, he switched to a pledge to reduce the federal deficit, even if it meant raising taxes.

Mondale went down in a landslide defeat to Ronald Reagan. Nevertheless, Democrats quickly developed an addiction to campaign money from Big Business, whose pockets under Reaganomics were far deeper than Big

Labor’s. When the Democrats lost the House in 1994, their bargaining power with business shrunk considerably, and Coelho’s promise that they could sup with the corporate devil and keep their political virtue went up in smoke.

One result was Wall Street’s by now well- documented dominance of the economic policies of Bill Clinton and Barack Obama.
As corporate influence rose, labor’s declined. Both Clinton and Obama reneged on their pledges to reform labor laws that have become an obstacle to organizing. When Obama’s chief of staff, Rahm Emanuel, was quoted as having said, “Fuck the UAW” [United Auto Workers] during the rescue of General Motors, there was not even a mild rebuke from his boss.

That America has become a plutocracy is by now widely accepted by most of the electorate. Lessig reports that 75 percent of Americans (Republicans, 71 percent; Democrats, 81 percent) believe that “campaign contributions buy results in Congress.”

Yet the influence of money on policy goes largely unacknowledged in the electronic
and print chatter of our national political discourse. Mainstream journalists will note that campaign funds are a measure of a candidate’s credibility. But they treat the raising of those funds as if it were a function of a candidate’s charm, rather than an investment on which donors expect a return.

Given that political advertising is a source of their revenue, it’s no wonder that corporate- owned television stations and newspapers prefer that their talking heads not delve too deeply into the connection between campaign contributions and policy. Indeed, many conservative and centrist pundits and politicians claim that, despite what the unsophisti- cated public might think, political science has found little evidence that campaign contributions influence policy.

One of Lessig’s contributions is that he savages these claims in a way that readers who are neither lawyers nor political scientists can easily understand.

By and large, studies that downplay the influence of money on policy attempt to connect two variables—recorded campaign contributions and recorded roll call votes in the Congress. Lessig calls this the quid pro quo model of political corruption—my check for your vote.

But that’s not the way it usually works. Most political corruption occurs in the context of what Lessig calls the “gift” relationship, in which campaign contributions are made with no specific strings attached, but rather to establish the politician’s dependence on the donor.

Identifying the donor side of the gift equation is difficult: the money is filtered through PACs and super PACs, bundled to hide individual contributions, written on the accounts of employees rather than the boss, and so on. Moreover, Big Dollar gets leverage just by, well, being big and having a lot of dollars. Thus, for example, the mere threat that big donors might spend against you in the next election is often enough to keep
you in their corner at the next subcommittee mark-up.

On the receiving side, the gift is reciprocated in ways that are also not easily researchable. For example, the key decisions on a significant piece of legislation are often made in informal conversation or by the well-timed raising of an eyebrow before it gets written up as a bill and further shaped along the way by subcommittees, committees, and in complicated procedural votes. Indeed, it is not uncommon for a member to cast a recorded vote in favor of a bill that he or she has diligently worked to make ineffective.

Dependency corruption starts early on
the way up the career ladder. Gloria Totten
of Progressive Majority, a group that helps develop liberal candidates for local and
state offices, tells me that the first question Democratic Party leaders ask about a potential candidate is “almost always about money; whether they can write their own checks or can raise it from business.”

As politicians who are not rich them- selves move through the system, they become adept at anticipating—and internalizing—the interests of those who write the checks. So when members of Congress bristle at the suggestion that their votes have been influenced by certain campaign contributions, the reaction is often genuine. They did not have to sell their vote; they vote the way they do because they think like their contributors.

Moreover, members of Congress who spend three-quarters of their day raising money don’t have time for independent thought. They don’t read most of the bills they vote on, they don’t attend their committee meetings, and they spend less and less time on the job. Lessig reports that between the 1970s and the decade of the 2000s the annual number of days in which the House of Representatives was in session dropped by about seventy.

So, what to do?

“Transparency” in campaign financing— requiring public disclosure of donors—is marginally useful, but hardly enough. Lessig gives the reader a clever demonstration of why: a mind-numbing four pages listing 240 separate donors to the campaign of a liberal Democrat from Massachusetts that tell the reader next to nothing.

He is also skeptical of some ingenious proposals requiring that campaign contributions be anonymous to the recipient. Lessig is intrigued, but thinks it is too complex for the public to trust.

Although he is sympathetic, he also rejects the public financing of elections that three states—Arizona, Connecticut and Maine— have adopted. The basic model is for candi- dates to raise a certain threshold sum from small donors, which qualifies their campaign for public support if they don’t take any other money. Since 1976, public financing has been available for presidential candidates who agree to forswear private donations.

Public financing has a number of problems. It cannot match what candidates blessed by Big Dollar can raise by themselves. Candidate Barack Obama rejected it in 2008 and outspent John McCain, who accepted it. This time around, both Obama and Mitt Romney are raising money on their own. Moreover, the idea that taxpayers should finance political campaigns of corruptible politicians is a hard sell to the public in the best of times, much less in an age of austerity; more than 90 percent of taxpayers decline to check the box that would allocate just $3 of their income taxes to public financing of presidential campaigns, at no additional costs to them- selves. Nor does public financing deal with the super PACs.

But curiously, these are not the reasons
for Lessig’s disapproval. Rather, he believes “bureaucrats” should not decide how much money should be spent on elections, and that taxpayer money should not go to candidates with whom they might disagree.

As Lessig reminds us, he is an ex-conservative—former chair of Pennsylvania’s Teenage Republicans and clerk for Antonin Scalia. His political hero is Louisiana Republican (and former Democrat) Buddy Roemer, who made an aborted bid for the 2012 Republican nomination.

So, in what has now become a tradition among centrists struggling to convince conservatives that they too are against Big Government (“We know who the enemy is,” he writes. “They live within the Beltway”), Lessig offers us vouchers. He proposes that all taxpayers get a $50 Treasury chit that they can donate to the candidate of their choice.

If they don’t use it, the money goes to the party in which they are registered. If they are independents, it goes to support programs such as voter education (presumably run by the disdained “bureaucrats”). Candidates
who choose to receive voucher money (plus
a limit of $100 per donor in supplementary individual contributions) agree not to take any other monies.

Lessig dismisses the estimated price tag— six billion dollars for congressional campaigns alone—as peanuts. Maybe. But in any event, the government’s subsidy would have to keep up to match the rising costs of campaigning and Big Dollar’s willingness to pay it. Even if the value of the vouchers were raised enough to attract candidates, it would surely generate another campaign—on top of our already agonizingly long election season—to compete for the vouchers.

Like public financing, Lessig’s proposal also fails to address the issue of “independent” expenditures, which will only get worse. As Obama—a former professor of constitutional law—pointed out, the logic of the Citizens United decision suggests that foreign corpo- rations also be allowed to make unlimited contributions to American political campaigns.

Because foreigners already have the right
to free speech, it would follow that foreign corporations also have that right. (Those that have American subsidiaries already do.)

To this reviewer it seems clear that no
 solution is possible unless we can amend the Constitution to declare once and for all that money does not equal speech and corporations are not persons.

Consistent with their diminished horizons, the conventional wisdom among liberal activists is that the amendment route is impractical; it can’t be done, and if it can it will take too long. It requires approval by a two-thirds vote in each house of Congress and ratification by three-fourths of the states. An alternative is for two-thirds of the states to establish a constitutional convention to decide on an amendment.

For many progressives, just the thought of a constitutional conventional makes them weak in the knees. And here, Lessig makes another contribution to this debate. In speculating that a constitutional convention might be necessary

to achieve his voucher plan, he argues effectively that this fear is wildly excessive and reflects a lack of faith in democracy itself.

In addition to the not unimportant fact that it is the only way in which the Big Dollar problem can be solved, there are good practical arguments for giving an amendment high priority now, starting with the fact that the overwhelming majority of Americans— from Wall Street Occupiers to the Tea Party rank-and-file—disagrees with Citizens United decision and thinks that money is corrupting our democracy. Moreover, unlike the amendments proposed by the Right (against abortion, flag burning, same-sex marriage,

or for prayer in the schools) regulating the money in politics is truly a constitutional question. It is exactly why the founders provided for amendments.

And inasmuch as states must ratify the amendment, it could generate a widespread debate, one that is at the heart of our national crisis. Such a debate would be immensely valuable in itself and could accelerate a march through the amendment process.

Political insiders point out that reforming campaign spending does not seem to be a
 top priority among surveyed voters. But this is because it is invariably presented as an abstract issue, of interest mostly to law school professors and “good government” liberals.

It may be the moment to liberate the issue of plutocracy from this high-minded political ghetto. The response of the country’s elite
to the economic crisis—that is, welfare for corporate America and a brutally competitive labor market for the rest of us—has laid bare the way in which political contributions influence the economic fate of the typical American. Class lines are hardening. The highly touted service economy is morphing into a servant economy of low wages, insecure work, and eroding personal dignity. Connecting the dots between Big Dollar and that bleak future should not be too difficult.

Where would the energy for such a movement come from? Certainly not from Washington. As Lessig observes, “The one

thing that every incumbent has done under the current system is win.” But the nation outside the Beltway is clearly dissatisfied with that current system. This November a large number of both Obama and Romney voters will go to the polls holding their noses.

A collaborative mobilization by progres- sives that can reach out to the disaffected middle and even parts of the confused Right is certainly imaginable. Lessig’s book helps to widen our horizons.

As with most serious efforts at change, the odds may be long. But even longer are the odds that Americans can deal effectively with the twilight of our economic empire without radically reducing the dominance of Big Dollar over our democracy.

FALL 2012 DISSENT MAGAZINE

Historians who look back to our time will surely conclude that our problem was not that we didn’t know where we were headed, it was that we didn’t act on what we knew.

Before the financial crash of 2008-2009 and the Great Recession that followed, there was ample warning. Whether you were a journalist who reported the news, a politician who made the news, or a citizen who read or watched the news, it was hard not to be aware that for the past 30 years, the following had been happening:

Most Americans experienced stagnant real incomes, shrinking financial security and fraying social safety nets.

The nation bought more from the rest of the world than it had been selling and was borrowing to finance the difference.

Despite the erosion of U.S. economic power, the governing class—Democrats and Republicans alike—insisted on maintaining its global hegemony, whatever the cost.

Sweeping historical analogies between the present-day United States and the decline and fall of earlier empires had been seeping into public consciousness for three decades. Yale historian Paul Kennedy’s best-selling book, The Rise and Fall of Great Powers, revived grand theories of the natural life cycles of empires that had been proposed earlier in the 20th century. Kennedy suggested that the United States might be headed for the same fate as past superpowers that had collapsed because their political ambitions had expanded beyond their economic bases. His book spawned an academic cottage industry that fondled the historical analogies: Were we Rome in the fourth century? England at the beginning of the 20th century?

Kennedy’s book also spawned an even larger industry of politicians, pundits and academics who flatly rejected the notion that anyone could hear the bells of history tolling the end of America’s time in the sun.

After all, the end-of-empire story has limited appeal for the U.S. governing class: the politicians, the media pundits, and the policy managers who move through revolving doors to and from investment banks, global corporations, universities, think tanks and high-level government jobs. Of course they admitted that the country had problems; indeed, it was their job to solve them. But the suggestion that the United States might no longer be able to have it all is not very useful for ambitious leaders whose careers depended on their ability to project self-confidence. Nor was it useful for their wealthy patrons who valued the prices of the futures in their global portfolios more than the future of their country.

Acknowledging these limits is dangerous territory. If the free market is no longer delivering the prosperity promised to the citizen in the American dream, then the political system bears more responsibility than our leaders want to admit for the relentless redistribution of income and wealth from the bottom and the middle of the pyramid to the top. Most dangerous of all, such an acknowledgment encourages discussion about who our political representatives actually represent. The Democrats are no more eager to have this conversation than the Republicans are.

Hardwired denial
The future is, of course, unknowable, and prediction is always a matter of probabilities. History, like life, is marked by unexpected turns. Black swans, to use author Nassim Nicholas Taleb’s metaphor for the unforeseen, fly in undetected by our best radar. But major dislocating events that could not have been foretold are rarer than we commonly acknowledge. Paddling into a strong current and accelerating toward the sound of a waterfall does not guarantee that you and your canoe will crack up, but if you ignore the evidence, that is certainly the most likely outcome.

Denying the evidence in front of your nose seems to be hardwired in individuals. Throughout history, kings, popes, presidents and corporate CEOs have been surrounded by circles of advisers who have made persuasive arguments in favor of ignoring the evidence. The short-term cost of changing course was just too great. Typically the costs would have to be paid by those at the top, and advocating a level of change to match the level of the danger ahead was too risky for one’s career. It was better then, these advisers thought, to trust that the future cost of not changing course would be mitigated by the exceptional virtue, strength and destiny of those in charge. History and common sense did not apply to them; they were “exceptional.”

The widespread belief among Americans that our country is “exceptional” is not unique. All countries, like all human beings, are exceptional in the sense of being different from one another. But the assumption of 200-plus years of success intoxicates, and it will take a while to sober up.

In 2011, the third year of the global recession, the Pew Research Center polled public attitudes in the United States, Germany, Britain, France and Spain. Only in the United States did a majority agree with the statement, “Our people are not perfect, but our culture is superior to others.” Even the notoriously proud French were only half as convinced of their exceptional culture as Americans were of theirs.

It is therefore not surprising that members of the U.S. governing class assume that their rise to the top of the global hierarchy is the result of their nation’s—and therefore its leaders’—inherent superiority. The assumption of exceptionalism relieves our governing class from having to learn the lessons of history. Every episode of our country’s expansion—from the ethnic cleansing of Native Americans to the invasion of Iraq—has been accompanied by the confidence that success was certain because of our moral virtue.

On Feb. 19, 1998, on the Today show, speaking of the alleged threat posed by Iraq, Secretary of State Madeleine Albright put it this way: “If we have to use force, it is because we are America. We are the indispensable nation. We stand tall, and we see further than other countries into the future.”

A disconnected elite
History, as the adage says, is written by the victors. George Orwell famously stated, “He who controls the present controls the past. He who controls the past controls the future.” This is a point we normally think of as referring to the ability of conquerors to justify and immortalize their victories. But it also applies to the way the “winning” generations think about past losers. From the perspective of the former, the price, however steep, paid by the latter was clearly worth it. We in the succeeding generations take for granted that the pain and suffering of those who went before us justifies our happiness.

Scolding those who worry about the country’s prospects, John Podhoretz, editor of Commentary Magazine, told a conservative business audience in the fall of 2011 that the country’s past is ample proof of its future success: “The amazing durability of the American system over 235 years is the primary reason for optimism about the American future.”

The United States as a country will obviously survive almost any conceivable economic hard times. Given its level of development and size, even as its relative rankings decline, the United States will continue to have one of the world’s largest economies. The disconnect between the interests of the nation’s citizens and its economic elite will accelerate the decline, but the decline will occur over decades. It took more than three centuries for Rome to fall, and a century for the British to drop to the second tier of world powers. In any practical sense, the United States is immortal.

Although not quite as secure, the concentrations of wealth held by Americans also have a sort of immortality that is the special privilege bestowed on the corporation by the state. Individual corporations can die from bad luck and incompetence or a reorganization of investors’ portfolios. But adequately managed, the wealth moves from one protected corporate nest to another—deathless as long as its special status is indulged by society.

“In the long run,” John Maynard Keynes famously said, “we are all dead.” But living off large privileged stores of capital, most members of the governing classes are protected on the downside from the natural capitalist cycles of boom and bust. Recessions, even depressions and other economic calamities, are not typically life-threatening. As the crash of 2008 taught us once more, money may be lost, CEOs may be forced to retire early, and some assets might have to be sold, but those who drove the economy off the cliff did not end up sleeping on park benches. Three years later, Wall Street profits and bonuses were at or exceeding pre-crash levels.

The interpretation of the past, upon which much of the optimism for the future is based, also blurs the difference between the life of America and the lives of Americans. Ordinary citizens live in shorter, more fragile time frames. The damage from being out of work for six months, losing your house and/or your marriage, not being able to afford an operation, or having to drop out of college is never made up over a lifetime. The call for patience and shared sacrifice for the future has costs for the governed that those who govern typically never face.

Thus, in 2007, Forbes writer Quentin Hardy took naysaying Americans to task for their creeping pessimism: “We are longer-lived and with access to more knowledge and experiences than any king or pope who has come before, never mind the lives of countless billions whose ordinary tragedies are collectively called ‘history.’ This much luck should make us hug ourselves with delight.” Furthermore, he argued, “Having slipped catastrophes like the 1914-1945 worldwide conflicts (with 100 million dead), or the nuclear threat of the 44 cold war years that followed, there are also reasonable grounds to believe we can work out our problems. The daily advances in science and technology lend hope that on balance things can be even better.”

Unfortunately for them, the 19-year-olds whose futures were blown to pieces at Verdun, Iwo Jima or Khe Sanh; the young immigrant women incinerated in the Triangle Shirtwaist Factory fire; and the kidnapped slaves from Africa worked to death on cotton plantations did not “slip the catastrophes” of history. We cannot ask them if their sacrifices were worth it.

Amid plenty, a poverty of will

The U.S. governing class does not lack access to ideas and proposals that can stop the decline in average incomes. Rather, it lacks the will to pursue them. The current economic model is obviously not working perfectly, but for the privileged and powerful it is working well enough. If anything, the extraordinary display of Wall Street’s political muscle in the wake of the financial crash and the Supreme Court’sCitizens United decision will further weaken our political leaders’ capacity to change our economic trajectory.

Yet even within the confines of this plutocracy, it does matter who becomes president and who runs Congress. More economic stress is on the way. Under Democrats, it will come at a slower pace and hurt the working class less than under Republicans. Under Democrats, there will be less shredding of social safety nets than under Republicans. Under Democrats, labor unions will be tolerated; under Republicans they will be assaulted. Under Democrats, Supreme Court appointees will tend to be economic centrists; under Republicans they will tend to be economic reactionaries.

These distinctions are not unimportant. For people who struggle every day to pay the rent or mortgage, to buy food and clothes for their kids, to squeeze out a health insurance premium, there is a world of difference between having a smaller Social Security or unemployment compensation check and not having one, between having access to a threadbare Medicare program and having no program at all, between having to piece together a living with several low-paying part-time jobs and being completely without work.

The difference between the parties is significant, but just electing Democrats will not stop the fall in the standard of living.

Scarlett O’Haras of the ruling class
Aside from promoting the political soap opera that is delivered around the clock by the news media, the business and political establishment has little to say to Americans about their economic prospects other than that they should not give up hope. This is the United States of America, after all.

“Somehow” something will come up. Some unpredictable black swan will appear to lead us back to the old-time prosperity. Some deus ex machina will descend from above the stage to rescue the middle class without discomforting the rich and powerful. Perhaps we will invent another Internet, the Chinese will self-destruct, or the magical tax cut will bring back full employment.

“I’ll go home,” says Scarlett O’Hara at the end of Gone with the Wind. “And I’ll think of some way to get him back. After all, tomorrow is another day.”

But we know that Scarlett will never get Rhett back. We also know that we Americans will never get back to the good times of rising wages from 1947 to 1973 or to the string of credit bubbles that compensated for wage stagnation from 1979 to 2008. The world in which both of those eras played out has disappeared.

Moreover, the ecological limits to growth are starting to impinge upon us. No serious observer believes that the world’s natural resources can sustain the growth of consumption necessary to bring the standard of living of the rest of the world up to the level of the major advanced nations. By 2050, we can expect the global population to have grown by another 2.5 billion, to more than 9 billion people, most of them in the poor and developing regions. That U.S. consumers, representing less than 5 percent of the world’s current population, can continue to use 25 percent of the world’s fossil-fuel resources is not credible. Moreover, although we don’t know how long it will take for the full force of climate change to arrive, we can see it coming.

In the wake of our recent financial disasters, to imagine that these resource and environmental pressures can in any way be resolved by the price mechanisms of unregulated markets is preposterous. Yet, no serious observer believes that our current political institutions are capable of dealing with that reality. A governing class that will not bring itself to rescue the sinking incomes of the majority of its voters in the next election is hardly going to lead the world to stop a projected rise in the sea level decades in the future. And neither is it likely that a public, suddenly finding itself under more financial stress, will force its governing class to pay more attention to the fate of the planet. Somehow, we’ll think of something—tomorrow. We hope.

It is already too late to stop the decline in the middle-class standard of living for the next few years. It may even be too late to stop it from declining for the next 20 years. But if it is not, reversing the slide will require more than modest changes in economic policy.

To bring a different future within our grasp, we must first also abandon hope that our current political system will deliver it. We must face the reality—not just the easy “plague on both their houses” attitude that is so often an excuse for refusing the obligations of citizenship—that no established party (not the Democrats, not the Republicans) so dependent on money from the reactionary rich and the globalizing corporations will act to alter our economic trajectory. From the point of view of the governing class, if the American people are willing to suffer an official unemployment rate above 9 percent for three years, they will probably—if maintaining elite privileges so requires—accept it for three more years, or six, or more.

Chris Hedges, a former New York Times reporter who shared a Pulitzer Prize, believes that a fascist future is in the cards, and when it arrives, he predicts: “The goal will no longer be the possibility of reforming the system but of protecting truth, civility and culture from mass contamination. … The goal will become the ability to endure.”

The evidence does not yet clearly suggest Hedges’s nightmare scenario. Still, history has repeatedly shown that democracy becomes more vulnerable during hard times. One recent study of how people in various countries respond to the statement that it is good to have “a strong leader who does not have to bother with Parliament or elections,” showed that in the United States being unemployed increases the favorable response from 27 to 38 percent.

Is the Right smarter than the Left?
The last few years have demonstrated that the American Right has proved itself tougher, more strategic, and bolder than the Left. If that continues, no one can be sure where it will lead.

The Left has not come up with a unifying and appealing challenge to the Right’s simple answer for the economic crisis: “lower taxes and small government.” The major institutions of the Left are stuck seeking protection from the Democratic Party, despite the fact that the party has been so compromised by its enemies.

Again, it is not that the Left doesn’t see it. Labor union leaders, for example, fully understand that the Democratic Party takes them for granted. Richard Trumka, the most dynamic leader the AFL-CIO has had since its inception in 1955, has complained bitterly about the Obama administration’s broken promises to labor. Contempt for labor was routinely expressed by the Wall Street wannabes who worked for Presidents Clinton and Obama. When Rahm Emanuel, who was an advisor to both, said to negotiators on the auto bailout, “Fuck the UAW,” it was nothing the people in the White House had not heard before. Nor was he publicly (or apparently privately) rebuked by President Obama, who could not have been elected, nor could he be reelected, without union support.

But having been systematically weakened by Reagan era policies, union leaders are more dependent than ever on Democrats to shield them from the Republican Right that is out to destroy them. So, on the one hand, the blogs and newsletters of unions and other liberal groups criticize the Democrats, but at election time support them with money and votes in the quixotic belief that this will somehow “put pressure” on them. Election Day for Democratic constituencies are now mostly efforts to shore up their crumbling defenses. Hope implicitly rests on the dangerous premise that some outside catalyst—perhaps the next, even greater economic catastrophe—might force the needed political change.

This represents a fundamental failure of our democracy. Within the two-party system the way out of this trap would be for the progressive party—the Democrats—to explain the economic reality to the electorate: for the middle class to prosper, the government must intervene to reignite growth, to guide that growth into a sustainable future, and to subordinate the dreams of Wall Street and the military industrial complex to the well-being of the middle class.

But the dependence of the majority of Democratic Party leaders on corporate largesse for their careers and for their personal wealth blocks that escape. Like Clinton, Obama turns populist at election time. And, as with Clinton, once elected Barack Obama refused to exploit the educable moment. It was no accident. As journalist Thomas Edsall observes, the pollsters and consultants who guide the party and who themselves are connected to the money that supports the governing class, continue to promote the Democrats’ long-term trend away from economic class issues that have the potential to unite their constituencies and toward the fracturing politics of social identity. This obsession with social niche marketing feeds into the Right’s portrait of the Democrats as affluent liberals, single career women, and racial minorities.

This vision is an aggregation of special interests. The suburban liberal elite want environmental protection, good schools, freedom for individual lifestyles and a lid on taxes. Their fellow Democrats on the other end of the wealth continuum want food stamps, health and childcare subsidies, and a generally stronger and more expensive safety net.

In times of rising prosperity, reconciling these different agendas is hard enough. But in a prolonged period of pressure on living standards at the middle and the bottom of the income and wealth pyramid, it is a formula for division. It is, after all, the minority poor and single mothers who bear the brunt of a politics of austerity.

One outcome of the emphasis on social liberalism, notes Edsall, “could be exacerbated intra-party conflict between whites, blacks and Hispanics—populations frequently marked by diverging material interests. Black versus brown struggles are already emerging in contests over the distribution of political power, especially during a current redistricting of city council, state legislative and congressional seats in cities like Los Angeles and Chicago.”

Looking ahead to 2016, there is little reason to think that the potential candidates in the Democratic pipeline represent anything close to the transformational leadership the country needs. Hillary Clinton and Rahm Emanuel are loyal products of the current system. As is Andrew Cuomo, who in his first year as governor of New York slashed public spending for the poor and lowered taxes for the rich. None of the others in the early betting, such as ex-Virginia Gov. Mark Warner, Illinois Sen. Richard Durbin and several small state governors, have shown a willingness to bite Wall Street or the military-industrial complex from whose financial hands they will have to feed.

The Democratic political consultants argue that given a polarized electorate, the politics of group identity is the only realistic way for the party to keep competitive in close races. In some cases they are surely right. But it is not a strategy for fashioning a large coalition unified by common economic interests. Occupy Wall Street’s “99 %” slogan may exaggerate the potential majority on economic issues, but the Democratic Party’s “50 percent plus one” strategy abandons it.

So, is it hopeless?

To expect the American governing class at the top to change the direction of the economy that has brought its members prosperity—yes. To expect a confused and divided citizenry to agree on a common economic agenda and impose it on the governing class—yes.

What then is the citizen to do? Wait until the next economic catastrophe? Perhaps if, next time, instead of just $12 trillion, the markets lose $25 trillion, and instead of reaching 10 percent, the unemployment rate goes to 20 percent, perhaps then our governing class will act for the good of the country. Or perhaps then the people will rise up.

Perhaps, but we could wait a long time for such a revolution in America. After eight years of depression, the unemployment rate rose back to 20 percent in mid-1938 and still there was no political insurrection. And, if there had been, it could as easily have come from the Right as the Left.

Acknowledging that it is hopeless to expect the governing class as presently constituted to change our economic trajectory does not signal the end to politics. Rather it could allow the citizen to concentrate on attacking the central obstacle to the reshaping of our collective future.

In just about 10 minutes of serious political discussion with other Americans about what is wrong with our country, you will most likely get to the bottom-line answer: the pervasive corruption of our politics by money. The vast majority of Americans believe that money corrupts and prevents the government from serving the public’s needs. After the Supreme Court handed down its Citizens United decision, aWashington Post-ABC poll reported that at least 80 percent of Americans disagreed with it, including 76 percent of Republicans. No matter; neither party’s leadership is about to change this system.

The root problem is the way the court has interpreted the Constitution, and this is not just the case with the Roberts Court. Since 1886 with its Santa Clara County v. Southern Pacific Railroad ruling, the Supreme Court has been providing corporations with the rights of individual human beings that were neither contemplated by the Founding Fathers nor supported by the majority of Americans.

The solution, therefore, is a constitutional amendment establishing once and for all that corporations do not have the political rights of, in the language of the court, “persons” and mandating hard limits on campaign spending. Unlike the efforts of the radical Right to amend the Constitution over issues that are irrelevant to the process of governance such as abortion, flag burning, gay marriage, or prayer in the schools, regulating the money in politics is truly an important constitutional question.

A massive mobilization of citizens for a constitutional amendment has the potential for loosening the death grip of the nihilist, antitax, antigovernment ideology on U.S. politics in the following ways:

It gets to the easily understood heart of the matter: money.

The overwhelming majority of the country agrees with it, crossing party and ideological lines.

It breaks out of the stalemated and confused “government versus business” argument and focuses the anger on the fundamental problem of the corruption of the government by big money.

It has the potential for exposing the gap between the interests of the globalized governing class and the interests of the American middle class.

Yet conventional wisdom holds that trying to amend the Constitution is hopeless: the governing class will never allow it. But given the power over America’s future of financial networks divorced from and uninterested in the well-being of people, even more hopeless is the illusion that Americans can deal with the long economic twilight of empire that lies in front of them without radically reducing the dominance of money over our democracy.

If the conventional wisdom is right, it is not because the governing class and its corporate and military-industrial supporters are too powerful to challenge under any circumstance. It is because the opposition—Wall Street Occupiers, trade unionists and progressive middle-class Americans—cannot unite around a simple message that gets to the root cause of our national inability to talk about, much less plan, an alternative to the future toward which we are hurtling.

This essay was adapted from Jeff Faux’s most recent book, The Servant Economy: Where America’s Elite is Sending the Middle Class (Wiley).

– In These Times, September 2012

The answer is, they don’t.

History tells us that when presidents lose their re-election it is not because voters love the challenger or care much about his platform. It is because the incumbent hasn’t delivered on jobs. Think: Hoover, Carter, George Bush I. When Ronald Reagan turned to the TV audience during his 1980 presidential debate with Jimmy Carter and asked: “Are you better off now than you were four years ago?” the election was over.

As it was in 1980, the answer today is, No. So, despite his lack of any coherent plan, voters favor Romney, the successful businessman, on the issue of managing the economy. The race is neck and neck largely because Romney’s pandering to the right has made voters fearful that he will weaken Medicare, Social Security and other protections people need even more in hard times. The press reports that the Obama campaign now intends to make Medicare the central issue.

Therefore, over the next two months, the time when the independents and swing voters make up their minds, we can expect that Republicans will keep the sharp knives of the radical right – reflected in Paul Ryan’s proposals for draconian budget cuts — under wraps. Romney’s handlers will now present him as a practical businessman, liberal enough to have been governor of Massachusetts and therefore trustworthy on protecting the middle class safety net. Paul Ryan is on board for the scam. And so is the Tea Party mob.

Ryan’s speech at the convention gave us a preview. He lavished praise on Medicare, claiming to be especially grateful for the help it provided to his sick mother and grandmother. ‘Medicare is a promise, ” he said solemnly, “and we will honor it.”

The convention erupted with a standing ovation.

Wait a minute! These were supposed to be Ayn Rand conservatives dripping with contempt for big government programs. And Ryan’s own budget was inspired by Grover Norquist, whose unabashed goal is to shrink government to a size where it can be drowned in bathtub. Hard to think of a program more representative of liberal big government than Medicare – a creature of the despised Great Society no less.

In effect, although you couldn’t see it, Ryan’s praise of Medicare came with a wink. Don’t worry it said to his fellow conservatives; you know that when I say “honoring” Medicare, I mean turning it into a voucher program and drowning it in the bathtub.

What that moment told us was that the far right is now confident that it will run a Romney administration. Their cheers meant that the Romney-Ryan ticket has their permission to say whatever it takes to win.

Their confidence is well taken. Moderates have now been systematically eliminated from virtually every nook and cranny of the Republican power structure. So, whatever Mitt Romney’s inner political convictions – if there are any – his government will be staffed by ultra-conservatives dedicated to imposing 19th century social and economic values on a 21st century America.

Democrats assume that the public is on to them, and that the GOP will sink under the weight of its reactionary social platform. Maybe. But the Republicans have a huge advantage in super-PAC money to give credibility to Romney and Ryan who will be cross-dressing as compassionate conservatives. And if the polls are accurate, jobs and economic growth are more important issues for swing vote independents than Medicare.

It is too late for Obama to change the economic record of the last four years. So if the election is a referendum on the recent past, he is in deep trouble. What he needs to do is make it a referendum on the future, to contrast where he wants to lead the people with where Romney will take them.

In a modern economy, government is an essential instrument for shaping the future. So in order to make this an election about tomorrow, Obama has to confront Romney on the issue of government’s role in the economy. For too long, Democrats have remained mute in the face of mindless Republican attacks on domestic government. The attacks of course are hypocritical – Republican economic policies have been riddled with government subsidies and interventions on behalf of business interests. The attacks are also stupid. A prosperous 21st century capitalist economy is impossible without a substantial involvement of the public sector to mitigate the human costs of competition and shape the future with investments in infrastructure, education and technology.

The question is not government’s size. This is a big country with big problems. We are not going to overcome them with a government the size of Costa Rica’s. The question is whose side the government is on?

On occasion, Obama seems willing to take on this issue. In a speech in Roanoke, Virginia this July, he made the point that no one in America succeeds entirely on their own. “There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges…”

He then misspoke: “If you’ve got a business – you didn’t build it, someone else made that happen.” Republicans jumped on this to claim he was anti-business. Intimidated, the president backed off, and has largely abandoned the issue since.

The President needs to go back to it and use it to remind Americans that it was the lack of government regulation of Wall Street that was responsible for our present economic agony.

Obama cannot compete with Romney on the issue of who knows more about how to make business profitable for investors. But he can demonstrate that he knows more about how to make an economy prosperous for its people. He needs to remind voters that the U.S Constitution starts with “we,” not “me” the people. And that the lesson of the crash of 2008 is that if we return the economy to the same people that drove it off the cliff, they will do it again.

–Huffington Post, September 4, 2012

MS. DIANE REHM