Indiana’s
Democratic Party Establishment is at it again:
against a strongly right-wing Republican challenger in Indiana, a state
so traditionally extremely conservative it can be called hidebound and
politically, economically ignorant, the Democrats have once again turned to a
self-professed Blue Dog Democrat, Joe Donnelly, as challenger to Tea
Party-endorsed Republican candidate Richard Mourdock, who handily defeated
veteran “moderate” incumbent Richard Lugar 61-39% in the Republican primary. Once again, as with the successful running of
Blue Dog Democrat Evan Bayh for Indiana Governor and Senator and the hapless
campaign in 2010 of Blue Dog Democrat Brad Ellsworth against Republican Dan
Coats, Indiana’s Democrats are taking “progressive” and labor voters for
granted, assuming they will automatically support Democratic candidates who are
more akin to Republicans than they are to traditionally-labeled “liberal”
Democrats.
But while this paid off electorally
in the case of Bayh, the result was not good for either Indiana or the
nation. Bayh, who as Governor labeled
the state’s labor movement, which had supported him, a “special interest group”
and introduced a punitive “welfare reform” measure while saying that single
mothers needed to be “slinging burgers” rather than receiving welfare
assistance, further demonstrated his self-identified “fiscal conservative”
leanings as Senator by being not only the Democrat in office who had voted the
most times with the Republicans, but was also a “bipartisan” co-author of the Congressional
authorization for George W. Bush’s ill-fated war in Iraq as well as a co-author
of the “bankruptcy reform” law that penalized the “middle class” that Blue Dogs
claim to support against those “undeserving poor” allegedly leeching from the
teat of federal largess. Bayh, who
resigned from the Senate, went on to work for the Chamber of Commerce as an
advocate against business regulation, when deregulation itself was a major
contributor to the economic recession that has plagued the U.S. since 2007 (which
is more than simply a “liberal” view, unless one considers the views of Nobel
Prize-winning economists Joseph Stiglitz and Paul Krugman to be based on “liberal”
ideology rather than professional understanding).
Currently the Donnelly-Mourdock race
is a dead heat, with each candidate having 40% support each among potential
voters, with 20% undecided. Of course,
the Donnelly campaign is having a field day decrying Mourdock as a Tea Party
extremist who appeals to the far right while alienating independents and
moderates, including many supporters of former Senator Richard Lugar. (The Donnelly campaign has actually launched
a “Republicans for Donnelly” committee to pick up support form disaffected
Lugar voters, which is already reaping some success). Further, for the Donnelly campaign to label
both the Republican Party and Mourdock himself as dominated by the far right is
a pretty easy task, as shown by the items posted on the official Donnelly website,
linked at http://www.joeforindiana.com/news, which contains
not only Donnelly-camp press releases and citations of Mourdock’s official
stances on issues, but news stories taken from the Indianapolis Star and the New
York Times.
It doesn’t take much to demonstrate
that Richard Mourdock is heavily indebted to the Tea Party not only
ideologically but financially, having received important campaign contributions
from groups linked to the Tea Party and the far right, and that Mourdock himself
expresses positions that many self-identified “moderates” and even
“conservatives” would find extreme.
Donnelly’s website shows that very well.
But does Donnelly himself, as a self-identified Blue Dog, i.e., very
conservative, Democrat, offer a positive alternative? A look at his Jobs Program, linked at http://files.www.joeforindiana.com/DonnellyJobsPlan.pdf, shows Joe
Donnelly’s proposals themselves to be Tea Party Light, as opposed to Mourdock’s
Tea Party Heavy.
And it’s more than a question of
“liberal” versus “conservative” ideology; it’s a question of what’s really
going to work to create jobs and a vibrant economy both in Indiana and
nationally, and what is just a repackaging of the neoliberal economic nostrums
that have been around ever since the Reagan days from 1980 until now, a time already marred by three major
recessions, stagnant wages for working people while the already-rich have
become even richer, economic inequality that’s at its greatest since 1929
(itself a major contributor to the severity of the Great Depression of the
1930s), significantly increased poverty and intractable unemployment even in
good times, and the undermining of the “middle class” that has been going on
since the 1970s and which is continuing with a vengeance. These are all demonstrable facts, and it
doesn’t take a “liberal” to see that none of these are desirable; nor does it
take much to see that the much-decried New Deal reforms that raised taxes on
the rich, provided for Social Security, unemployment compensation, collective
bargaining rights for unionized workers, and put into place a minimal social
safety net, were positive contributors, not drags on, the prosperity that
characterized the U.S. economy from the late 1940s into the mid-1970s. Anyone saying that they didn’t goes against
the palpable realities of economic history and statistical measurement, even
though denouncing the New Deal is currently politically fashionable; which by
no means would be the first time that ignorance and dismissal of fact became politically
fashionable! Even the most cursory look
at U.S. and world history would demonstrate that.
When Richard Nixon and Milton Friedman said in the mid-1970s that “We are all Keynesians now” they were stating economic reality, not political ideology. Regardless of political opinion, John Maynard Keynes made major contributions to economic science as such, and he and his successors among economists and economic policy makers did something far more that simply spout some new “liberal” orthodoxy. So did another derided economic thinker, Karl Marx, who is returning to deserved recognition now, thanks to the Great Recession of 2007. “By their fruits ye shall know them”: and the fruits of neoliberalism, extreme political conservatism, and centrist political adaptation are much in abundance, have been since the 1980s, and certainly since 2007—and they are unpalatable indeed. This author submits that not only as a self-identified person of the political left, but also as the holder of an actual university degree in economics itself.
So let’s look at Joe Donnelly’s Blue
Dog program for job creation, as stated in the PDF linked above. The first thing to note is that his proposals
are not all bad, as even hard-line economic conservatives would have to admit;
but those that are manifest reliance
on ‘big government” and applying Keynesian measures in economic policy! Those that express the current nostrums of
political conservatism and economic neoliberalism would actually work against
job creation, as I shall demonstrate below.
First, on the positive side,
Donnelly demands, “Oppose unfair trade deals that ship Hoosier jobs overseas”
and “Close tax loopholes that encourage some Wall Street corporations to send
American jobs to other countries.” Good
ideas advocated by many, but also good ideas that run counter not only to
neoliberal orthodoxy, but which were also placed into practice by conservative
and centrist political practice under Ronald Reagan, both Bushes, Bill Clinton,
and are maintained today by Obama.
Renegotiating “free trade” pacts such as NAFTA and CAFTA would be a very
good idea, and would benefit not only workers in the U.S. but also workers in
countries such as Mexico, where workers emigrate, often illegally, to places
such as the U.S because of the poverty engendered by destruction of their own
domestic economies by multinational corporations enhancing profitability
through unregulated markets that undercut domestic jobs throughout, trample on
environmental protections and workplace safety regulations, slash wages, and
engender race-to-the-bottom “free market” trade policies. Same goes for “tax loopholes,” again another
manifestation of “unregulated free market” economic policies that supposedly
bring benefits to all by enabling the free movement of capital to the most
productive workforces, but only mean job cuts for “overpaid” workers and
starvation wages for those workers elsewhere who have “more competitive” wage
rates. As Joseph Stiglitz has written so
accurately on markets:
This we should know by now: markets on their own are not stable. Not only do they repeatedly
generate destabilizing asset bubbles, but, when demand weakens, forces that exacerbate the downturn come into play. Unemployment, and fear that it will spread, drives down wages, incomes, and consumption—and thus total demand. Decreased rates of household formation—young Americans, for example, are increasingly moving back in with their parents - depress housing prices, leading to still more foreclosures. States with balanced-budget frameworks are forced to cut spending as tax revenues fall—an automatic destabilizer that Europe seems mindlessly bent on adopting. (“After Austerity,” Nation of Change, May 7, 2012, http://www.nationofchange.org/after-austerity-1336401779.)
The dismal jobs
report released by the Bureau of Labor Statistics on Friday, June 1, which
reported a dismal creation of only 69,000 jobs in May and the first rise in the
unemployment rate in nearly a year, only underscores the need for a proactive
program of direct job creation. Donnelly
indirectly understands this by calling for an increased share to Indiana of
federal revenues for road and bridge upgrades, which would directly employ more
workers to work on such projects; but then he undermines this understanding by
emphasizing “trickle-down” indirect job creation by calling for more tax cuts
and economic incentives for small businesses—which may, or may not, result in increased hiring by such businesses. And though historically small businesses
(officially defined as those businesses with 100 employees or fewer) are the
biggest job-creators, they are also the biggest creators of jobs with lower
wages and fewer benefits, if indeed, any benefits. What would be far more effective would be a
policy of direct job creation such as a new Works Progress Administration (WPA)
modeled on the WPA created under the New Deal that provided direct employment to
some 8.5 million workers in the late 1930s.
(On such a program and its historical effectiveness see the following
articles on the New Politics website: George Fish, “Open
Programmatic Proposal to the Broad U.S. Left for Directly Dealing with the
Present Unemployment Crisis,” http://newpol.org/node/425; Brian King, “Jobs for All,” http://newpol.org/node/445; and Jesse Lemisch, “Occupy
the American Historical Association: Demand a WPA Federal Writers' Project,” http://newpol.org/node/555; as well as UCubed, “WPA 2.0
is Solution to Unemployment Crisis,” http://www.unionofunemployed.com/blog/recent-news/ucubed-wpa-2-0-is-solution-to-unemployment-crisis/.)
Donnelly also endorses the
shibboleth of retraining unemployed workers, which is at best only a partial
solution. First, because skills demanded
by employers at any one time are regularly changing, and retraining programs
through technical colleges and other places traditionally teach the skills that
used to be in high demand, but are not necessarily so at present; second, many
laid-off workers are older, and/or have family obligations that interfere with
going back to school; and third, the need for employment for the unemployed is now, at whatever skill level the
unemployed have now—which can often
be quite high, as many potential workers who are classified as “unskilled” or
“lacking in experience” are in fact well-educated college graduates! (See Bonnie
Kavoussi, “Unemployed College Graduates As Vulnerable As High School Dropouts to
Long-Term Unemployment: Report,” Huffington
Post, February 2, 2012, http://www.huffingtonpost.com/2012/02/02/long-term-unemployment-college-graduates_n_1250418.html; Catherine
Rampell, “Many with New College Degree Find the Job Market Humbling, New
York Times, May 18, 2011; and Hope Yen, “1 in 2 new graduates are jobless or underemployed,” Associated Press, April 22, 2012.) This is especially true in Indiana,
which has long suffered a “brain drain” due to the lack of high-skill jobs, and
where many Indiana college graduates are unemployed, underemployed, or have
only temporary jobs. (See in particular
on how college graduates in Indiana can be derisively dismissed as “unskilled”
George Fish, “Add
another Frustration to Being Unemployed: A Case in Point from Indiana’s WorkOne
State Employment Agency,” New Politics, http://newpol.org/node/564, and George Fish, “Indiana’s
Brain Drain: the problem that won’t go away,” Examiner.com, reposted on "politically Incorrect Leftist.")
Last, Joe Donnelly advocates
measures that would actually be counterproductive
to job creation, such as calling for a Balanced Budget Amendment to the
Constitution and being fixated on the so-called “deficit problem,” which, as
economists Paul Krugman, Joseph Stiglitz (as mentioned above, both Nobel
Prize-winners in economics) and University of California economist and former Clinton
Administration Secretary of Labor Robert Reich have all emphasized numerous
times, is a pseudo-problem manufactured by conservatives. Krugman, Stiglitz and Reich have all
demonstrated that truth of “Keynesian orthodoxy,” also confirmed by economic
history, that the use of temporary deficit spending by government to create
employment (coupled with progressive income taxation on higher income brackets)
not only directly produces revenue for paying off the deficit by making
unemployed workers employed taxpayers, those same workers’ wages also directly
fuel consumption which further creates jobs.
A full-employment economy is a win-win situation, whereas an economy
with significant unemployment is a downward-spiral lose-lose situation. (In fact, the budget surplus that was created under the Clinton Administration was
turned into a deficit under George W.
Bush by tax cuts for the very rich coupled with high defense spending, notably
for the futile wars in Iraq and Afghanistan.)
Donnelly also indulges in the
all-too-common “bash China” syndrome, by which the U.S.’s economic ills would
be solved if China would only revalue the yuan and “play fair” in trade. But that argument is only partially true, and
contains fundamental fallacies. As the report
by the Economic Policy Institute (EPI) cited by Donnelly himself in support of his
hard line on Chinese trade, that of Robert E. Scott, “Growing U.S. Trade
Deficit with China Cost 2.8 Million Jobs Between 2001 and 2010,” EPI Briefing
Paper, September 20, 2011, http://www.epi.org/publication/growing-trade-deficit-china-cost-2-8-million, states (p. 18):
Is America’s loss China’s gain?
The answer is not clearly affirmative. China has become dependent on the U.S.
consumer market for employment generation, suppressed the purchasing power of
its own middle class with a weak currency, and, most important, now holds over
$3 trillion in hard currency reserves instead of investing them in public goods
that could benefit Chinese households. Its vast purchases of foreign exchange reserves have stimulated the overheating of its domestic economy, and inflation in China has accelerated rapidly in the past year. Its repression of labor rights has suppressed wages, thereby artificially subsidizing exports.
So, while Joe Donnelly stands as fundamentally
different from open Tea Partier Richard Murdock, by staying within the Blue Dog
Democrat framework he himself does not propose an adequate solution to either Indiana’s
or the U.S’s fundamental unemployment problem.
He may be the “lesser of two evils,” but the lesser of two evils is not
in itself a positive good.
