Wednesday Jun 26

Money Matters: So, Who’s A Democratic Socialist?

In a New York Times column, David Brooks discussed the current political spectrum in surprisingly tired, old, and inadequate terms, at least in his description of “the left.” Brooks, whom I generally admire for the intellectual rigor he brings his right-of-center analysis, writes that “the left offers the idea of Social Justice. The left tells stories of oppression. The story of America is the story of class, racial and gender oppression. The mission now is to rise up and destroy the systems of oppression….” On the other end of this Brooksian continuum (he argues for the middle) are the Trumpian tribalists languishing in sedentary opposition to change through nativist isolationism. It’s hard to argue with this description of the Wall-obsessed president and his minions, but to write off the left as solely mired in identity-based opposition to oppression seems to be missing the big news in this early phase of the 2020 presidential sweepstakes. Socialism.

For those of us who started working for progressive change in the 60’s — literally half a century ago — to hear the word “socialism” return to usage in civil conversation is nothing short of shocking. There have always been the outliers like Bernie Sanders who, until his quixotic 2016 campaign, was always tolerated like a beloved drunk uncle at a wedding. But in general parlance, “socialist” was more an epithet than an adjective. Bernie, I suppose, gets some credit for never losing his 60’s bearings and eventually bringing the idea of seeking collective good back into acceptability. What a contrast to the cacophony of immigrant bashing and outright corporate greed that is our current administration. Perhaps a more important thread is being woven by the current political comet known as “AOC” and her (and Senator Markey’s) thoughtfully crafted Green New Deal. Clearly, they have struck a chord with millennials and others over an idea that sees using “big government” for “big social good” in a manner we haven’t experienced since the 30’s. While the right has quickly labeled the Green New Deal as “socialist,” hoping beyond hope to watch frayed Cold War bias smother the beast, it hasn’t really worked. Technically, the word “socialism” describes a system where ownership and control of the means of production are vested in the community as a whole. In Marxist theory, it is the phase the follows capitalism and is seen as imperfect and subject to inherent flaws, and thus prepares society for communism. But this isn’t how the word is being used in the current dialog. Instead, the word has adopted different meaning, perhaps drawing from the “control” part of the Webster’s definition to address rising economic inequality and unfettered power of large corporate interests running rampant in the Citizens United era. The idea — as for example in the Green New Deal — is to use government to channel both private and public sector action in a manner that addresses the twin crises of climate change and economic inequality through a mix of both carrots and sticks. This requires one to believe government can help solve problems and rests in stark contrast to the fraying conservative meme.

State power has always had a role in addressing national needs when a consensus develops to do so. World War II is always the best example, though one that has become muddied by subsequent conflicts like Vietnam, Iraq, and Afghanistan where self-preservation was less clear as a motivating factor. But even before the mid-Twentieth Century war against Fascism, a broken private sector had driven the US economy into the Depression of the 1930’s, and the only response was the state. The emergence of “Keynesian” economics and resultant “deficit spending” by the state, and long overdue financial regulatory regimes of the ’30’s showed both the effectiveness of state intervention and the necessity for government to corral the private sector’s countless abuses. The broad public support that New Deal democrats enjoyed slowly eroded in the 50’s with Cold War era “red scares” when McCarthyite forces held sway over much of the Republican party, much as the anti-immigrant forces do today. Fear of socialism was the common, divisive ingredient.

It has taken many years to overcome that fear, and the tawdry labeling as socialists those advocating for a state role in managing the economy. The declining era of Keynesian economics and government-driven programs (think “Great Society” in the 60’s) designed to address perceived problems ran into a brick wall with the Reagan politics of the 1980’s when he famously declared that government WAS the problem. Adopting this posture, Republicans have spent four decades decrying “big Government” and the federal deficit (except of course when one of their own occupies the White House). This was so effective that by the mid-’90’s, people forgot the lessons of the 30’s and undid the Glass-Steagall Act of 1932 that separated bank deposits from speculative investments by banks. We can thank Bill Clinton and a Republican Congress. It took about 10 years before the Great Recession reared its ugly face in what many argue was a direct result. Even after that, progressives and conservatives alike avoided an overly strong role for the state in managing the economy. In the wake of the Great Recession, Obama’s efforts for a massive stimulus package — a very Keynesian move — was thwarted and reduced to far less than most economists believed necessary. The 2010 Dodd Frank Act, and later the Consumer Financial Protection Bureau, addressed the need for new financial regulation, but failed to establish broad support beyond Congressional Democrats. Now, those constraints are largely being emasculated by the current administration.

In the recent arc of history, from the 60’s through the present, the idea of a strong regulatory role for the state has waxed and waned…and mostly waned. It has been an era of declining appreciation generally for the role of government (outside of the military). We’ve deregulated to the point of absurdity while our supposedly “populist” president neatly obscures the corporate inroads into our once robust regulatory efforts on everything from student loans to toxic chemicals. With all the drama in the White House, little light is shed on how the EPA, Interior Dept., Treasury, and the CFPB have had policies and procedures
gutted to the delight of the big Pharma, big Oil, Pay Day Lenders and Wall Street. And few seem to notice — reversing constraints on mercury pollution doesn’t produce very good headlines relative to the next scandal or announcement from the Special Prosecutor. How then, does the idea of “socialism” have a chance to even creep into the conversation?

A lot has been written about the alienation of the working class and the declining career prospects for millennials, and there are many reasons for both. But, despite the best efforts of corporate distractors like Fox News and their political counterparts funded by Citizens United-enabled dark money, not to mention the Tweeterin-chief, people are not happy. At all. While some may (and do) lash out at immigrants and other perceived “interlopers,” more and more the absurdity of current national policy trends is showing through the mist.

The structure of the economy has shifted drastically in the past 5 decades, and I’d argue this has a great deal more to do with this socio-political alienation than
immigrants, wars, or urban/rural disparity. Peter Temin, in his remarkable book, The Vanishing Middle Class, presents a very few graphs with a very big message. The first, presented in his Preface, shows that between 1970 and 2014 a remarkable shift in the distribution of US aggregate household income. Divided into three groups, he shows the portion of national income each receives. Lower income households fell slightly from 10% to 9% over the period, but middle-income families declined a whopping 19% from 62% to 43%, and the upper income folks rose from 29% of national income to 49%. All told, middle income people are contracting not in number, but in share of the pie. This is then explained by Temin in showing how “real wages” (i.e. inflation-adjusted) rose steadily from 1945 to 1975, and then flattened out ever since. From the mid-70s through the present, productivity rose by 200% while wages went nowhere. Another way to notice this change is the observation that the top 1% took home between 8 and 10% of total income from the ’50’s through the mid’80’s. But since the Reagan years, the one-percenters are sitting pretty and now take home nearly one in every five dollars earned in the U.S.

We see the disparity between the haves and the have-nots everywhere: absurd CEO pay, money-driven politics, corporations extracting tax gifts before locating literally anywhere, union density declining below 10% of the private sector workforce, corporations using Trump’s tax cuts to buy back their own stock, and all the inroads to undermine sensible regulation of business. Young people, literally a generation or two removed from the McCarthy years, neither recall nor comprehend what the fuss is all about. Government is perceived as based more in law and fairness than rapacious over-reach. And the problems that the Green New Deal proposes to address are both deeply felt and, despite science-denying politicians, believed. Inequality is real. Climate change is real. Using mechanisms of government to address these gargantuan challenges — in partnership with the private sector — only makes sense. If that’s what “democratic socialism” means, then I’m all for it.

Drummond Pike, a frequent Organizers’ Forum participant and contributor to these pages, was the founder and CEO of Tides in San Francisco, and continues to be involved in philanthropy and social change.

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