most. The question is, what The major domestic and foreign policy initiatives of the Reagan Administration have been carried out, allowed to run their course and reveal their disastrous effects. The most thorough rewriting of the US tax code in half a century has been completed, leaving a paper trail to massive debt. The largest escalation in military spending since the Kennedy-Johnson era has reached its outer limits. The cuts in social spending have been measurably greater than those of the previous four administrations - though each of them made significant cuts.
The Reagan doctrine of supporting insurgent reactionaries such as the Nicaraguan contras and taking credit for the collapse of rotting dictatorships such as that of Marcos in the Philippines also appears in decay. Direct and indirect support to repressive regimes such as El Salvador, Israel and South Africa has failed to halt the rising tide of
The majority of Americans have paid a high price for the Reagan experiment in supply-side economics. Real wages remain below the 1973 level. Real unemployment, including those who have given up looking for work and those forced into part-time work, is over 10%. Sixty percent of US families have experienced a loss of income in the last decade. The number of homeless has grown to crisis proportions. And, in spite of all the tax-cutting rhetoric, the poorest 40% of the population experienced an increase in taxes after 1980.
Beyond the statistics is a malaise in the quality of life. It is reflected in the general crisis of education and in the rise of racist incidents on the college campuses and in working class neighborhoods. It is evident in the now routine government corruption scandals. It can be seen in the chronic abstention of the majority from the political
The "Reagan era" started before Reagan
The Reagan era is not simply a product of the man whose name it bears. The malaise, the economic devastation, and even the interventionist foreign policy all began long before Ronald Reagan moved into the White House. The economic policies of the two Reagan terms are applications of a new business agenda formulated by America's corporate elite in the 1970s. Traditional Keynesian policies had failed to deal with the crisis in profitability that began in the late 1960s throughout the capitalist world. Reagan era foreign policy was a response to the failure of the Nixon-Carter "surrogate power" strategy that ended with the overthrow of the Shah of Iran and the Somoza dictatorship in Nicaragua in 1979. 14 nomics a wally began thinker aRea. in. Much of what we now think of as Reaga-
1978-79 the Carter Administration and the Democratic Congress took their own right turn toward the fulfillment of the business agenda. In 1978, the tax code was amended to grant business and the wealthy a cut in the top capital gains tax rate from 48% to 28%. At the same time, social security taxes were raised. The wealthiest 50% of taxpayers got a 79% savings in taxes from the entire 1978 tax "reform." In the 1979 budget, federal grants-in-aid were cut.
Deregulation was begun under Carter
Deregulation, another darling of the business community, got its major momentum under Carter. In began in 1978 with airlines; trucking deregulation followed in 1980. In 1978, Carter invoked the TaftHartley Act against 160,000 striking coal miners. In 1980, the Administration approved the Federal Aviation Administration's Management Strike Contingency Force, the plan that Reagan used the following year to break the air traffic controllers' strike and their union, PATCO.
The appointment of Paul Volcker as chief of the Federal Reserve Bank, meant to please business, led to a tightened monetary policy and a subsequent recession in 1979-80. Carter had pioneered what Reagan would carry out consistently, but Carter had the misfortune to end up with a
Reagan's 1980 election was not the result of some new conservative mood among voters, but of the failures of the Carter Administration. When even a recession failed to dampen inflation, Carter turned toward wage/price controls and spoke of austerity Reagan and the supply-side ideologues presented both business and the electorate with an upbeat promise of growth, while the Democrats still talked belt-tightening. It was no contest.
The theoretical junk-pile known as supply-side economics, accompanied by far-reaching deregulation and a more consistently anti-labor atmosphere, offered the US capitalist class what it wanted most -money. The 1981 and 1982 tax bills cut effective taxation rates for business from 33% to 16%. Deregulation of transportation saved business an estimated $50 billion annually.
The recession of 1981-83 effectively killed the high inflation of the 1970s. The wave of wage and benefits concessions by unions that began in earnest with the 197981 Chrysler bailout created another massive transfer of income to business. After 1983, the stock market took off (until its 1987 crash) and the corporate merger movement (strong since the late 1960s) accelerated. The longest business expansion since the 1950s justified almost any excess.
But the stock market crash of October 1987, the massive federal deficit, and the intractable trade deficits were a warning to the business elite that all was not well. The
The Dem
post-Reag
WITH REAGAN's programs
Reagan "prosperity" beginning many people in America and t the upcoming presidential ele
US politics. What sort of an alt and its candidate Michael That question is examined extracts from the pamphlet 7
Democrats in Post-Reagan An socialist organ KIM Reagan Administration had done what it promised, yet US competitiveness in a highly integrated global economy had still not been satisfactorily restored. For one thing, the social wreckage visited on the US working class, oppressed national minorities and on women of all races was creating a shortage of low-wage labor in many parts of the country. The decay of primary and secondary education was contributing to a future labor shortage by failing to teach basic literacy.
Since US industry had chosen to use its new-found funds for mergers, paper wealth
›crats in
n America
Itering on all fronts and the look more and more unstable, world are wondering whether ns will mark a turning point in ative do the Democratic Party kakis offer to Reaganism? letail in the following major Truth About Dukakis and the ca published by the American tion Solidarity.* ODY and investment abroad, it was not keeping up with other nations in new technology.
Reagan's military build-up was not creating the political stability that US investors needed to protect their investments in the
Third World. Something beyond Reaganomics and the Reagan Doctrine were needed by corporate America. But the Republicans had nothing to offer their corporate masters but more of the same.
Business dissatisfaction with Reaganomics emerged publicly in 1987, when scores of business leaders signed an advertisement in the New York Times calling on the Reagan Administration to do something about the nation's federal deficit. One of the ad's initiators, investment banker Pete Peterson, wrote in the October 1987 Atlantic Monthly that Reaganomics "promised us highsavings, high productivity, highly competitive economy, with trade surpluses; and gave us instead a torrid consumption boom financed by foreign borrowing, an overvalued currency, and cuts in private investment, with debt-financed hikes in public spending and huge balance-of-payments deficits." Peterson's manifesto of corporate dissent was followed by a flurry of business packed bi-partisan commissions callfiscal responsibility and new Democrats jump on neo-liberal bandwagon
Hungry for campaign funds, the Democrats jumped on the bandwagon with the formation of the Cuomo Commission on Trade and Competitiveness. The majority of this body were business figures, joined by neo-liberal academics and a few labor leaders. The final report of this commission, published in the summer of 1988 as the Cuomo Commission Report, is clearly offered as a strategy for US business in the post-Reagan era. Its conclusions are a jumble of fiscal conservatism, tax give-aways to business, and neo-liberal cliches about
A growing number of people at the bottom of the social heap were also looking for something new. The Black community had already expressed its anger and frustration in the 1984 campaign of Jesse Jackson. A second Jackson run in 1987-88 appeared as a natural vehicle for the pent-up frustrations of millions of Reagan-era victims. And, indeed, Jesse Jackson's second historic run for the presidential nomination of the Democratic Party took on a momentum that few had predicted.
As in 1984, the Jackson campaign ran up against the capitalist nature and rightward momentum of the Democratic Party. But unlike 1984, it confronted a Democratic Party that now had the legislative momentum in Congress and a track record on new economic policies in many states.
The Democratic Party of 1988 also differed from that of 1984 in that its 20-year crisis of leadership succession had been resolved. If the party still appeared open to revolt, it was because it had not solved the thorny problem that had plagued it since the New Deal coalition [the bloc of labor and Blacks welded together under Roosevelt] began to decay in the 1950s: how to rebuild a national electoral majority.
Jesse Jackson had a strategy that went under the name of the Rainbow Coalition. He proposed that the party secure this national majority by turning toward 80 million poor and working class voters who had abandoned the electoral process altogether since the early 1960s. Voter registration
USA and mobilization were a key element of this strategy. It naively presumed that the party, beholden to this constituency for national victory, would cede decision-making powers to a fortified "left wing." The Democratic Party would be realigned, pushed back from its rightward trajectory.
Ultimately, the strategy required a social program that could awaken the interest and energy of those who saw politics as irrelevant to their daily lives — the victims of Nixon, Ford, Carter and Reagan alike. Though Jackson's message was by no means a socialist one, he presented the party and the electorate with an inspirational populism that strongly challenged the practices of business in a crisis-ridden capitalist world. Furthermore, Jackson's populism implied a significant redistribution of wealth toward the poor and the working
Perhaps most outrageous, it proposed that this new populism would be led by a Black person and a mobilized Black community that would unite the "locked out" of all colors on their "economic common ground." In the context of mainstream US politics, it was a bold strategy. In the context of the Democratic Party, where the party elite could taste the potential for big business bucks and electoral victory, it was an unwelcome one.
Jesse Jackson's 1984 campaign proved there was an electoral constituency for new politics. His 1988 campaign proved it was growing. In 1984, Jackson got 3.2 million votes in 30 primaries. In 1988, he received 6.8 million votes in 38 primaries. His proportion of the Democratic presidential primary vote increased from 18% in 1984 to 29% in 1988. In 1984, he ran third, in 1988
Jackson deepened his electoral base this year
In the 1988 primaries, Jackson deepened his electoral base among both Blacks and whites. Whereas in 1984, he won about 80% of the Black vote, in 1988 over 90% of Black voters pulled the lever for Jackson. While white resistance to a Black candidate remained strong in 1988, Jackson's vote among whites grew from about 5% in 1984 to 12% in 1988. In some states Jackson drew as high as 20-25% of the white vote.
As a Black civil rights leader with a national reputation and a sympathetic, organized base in the Black churches, Jackson had the kind of mass electoral base that few others could call on. Furthermore, it was a base whose mobilization was not dependent on either the leadership of national civil rights organizations such as the NAACP, the Urban League or the new Black urban political machines. This fact is underlined by the opposition or neutrality of much of the Black political leadership in
Only an outsider could have mounted 15 such a rebellion. Insiders "owe" the party
International Viewpoint #149 • October 17, 1988
USA and have to play by its rules. It's okay to challenge one or another party policy, such as the war in Vietnam or support to the contras, when such divisions already exist among the elites that fund and guide the party. It is not okay to question the entire political direction of the party. This Jackson has done precisely because he was able to flaunt protocol and question the party's direction, beginning with the announcement of his unwanted and seemingly quixotic protest candidacy in 1983.
Finally, Jackson's populist defiance expressed the sentiments of millions who have suffered the effects of the Reagan era. The technocratic "new ideas," managerial competence, and business competitiveness espoused by Hart, Gephardt, Dukakis, et al. have no more appeal or relevance to the plight of working-class people of all races than the worn-out liberalism of Walter Mondale. Indeed, such themes only reinforce the conviction that these politicians are so many bureaucrats, removed from the life of the average person and on the payroll of big business.
Giving a new boost to
Black pride
The Jackson campaigns and the Rainbow populism they projected can claim two great accomplishments. The first is to have regenerated pride, self-esteem and hope in the Black community. The social and economic crisis of the Black community in the past 20 years can hardly be overstated. The gains of the civil rights and Black liberation movements of the 1960s have been halted, undone or limited to a small middle class stratum. Jackson's ability to break the white rules and put himself forward on white turf was in itself bound to give a boost to Black pride. His campaign brought Black concerns to center stage in the twi16 light of the Reagan era.
Jackson's second accomplishment has been to open the minds of millions of whites to the ideas of a Black leader representing much of the Black community. While the number of whites to make this transformation is still a small minority of the population, this blow against racism and its potential dynamic are crucial to the future of any left perspective in the United States. Among those whites who heard and agreed with Jackson are the most active elements in organized labor and the social
Populism yielded to paternalism
On the face of it, the Jackson campaign and the new populist mood among many Democratic voters should have gotten more out of the 1988 Democratic National Convention. The Jackson camp commanded over 1,200 delegates, while organized labor claimed over 1,000 - 300 of them committed to Jackson. Women's organizations were strongly in evidence and the gay and lesbian movements had a militant presence. Jackson stole the show with his prime-time speech.
With a large, potentially disruptive force at the convention, and the eyes of loyal Black voters upon them, the Democrats had to "respectfully" acknowledge Jackson. But like most things at Democratic conventions, this was form and symbolism that did not yield any real concessions, much less power. In exchange for a little prime-time tokenism and talk of incorporating the Jackson forces into the high counsels of the Dukakis campaign, Jackson floor whips patrolled the hall. They calmed emotions, urging full cooperation in return for hollow victories, and closed down potential floor demonstrations around contra aid and freedom in southern
Many Jackson delegates were bitter at how readily populism had yielded to pater-
Dukakis and family campalgning in Atlanta (DR) nalism. Bernard Parker, a Jackson delegate and chairperson of the Detroit chapter of the National Black United Front, told a public forum in Detroit: "I went to the convention to see if there is any democracy in America, and I came here tonight to tell you there is no democracy in America." When Michael Dukakis selected Lloyd Bentsen as his running mate, he sent a message to white America: "We're still in charge here." The message was an insult to Black America and by implication to all oppressed people. This insult was intentional, a signal that the managers of the Democratic Party had opted for a campaign designed to recapture the white "swing voters" who had deserted the party to vote for Reagan in 1980 and 1984. They roundly rejected the alternative strategy, advocated by Jesse Jackson, of reaching out to those who had given up voting or were new to the electorate.
Along with that strategy, the Democrats just said no to both Jackson's populism and their own traditional liberalism. In a deal struck with Jackson, his forces were allowed to bring three platform amendments before the convention, including the highly controversial call for a Palestinian homeland. But the outcome was a foregone conclusion; the amendments on "no first strike" and increasing taxes on the rich went down in a pre-arranged 2-1 defeat.
The Palestinian question was not even put to a vote. As for the future of the Palestinian people under a Dukakis-Bentsen administration: What Palestinians? Dukakis sees only the state of Israel and likes what he sees. He opposes any form of a Palestinian homeland and says he stands by the Camp David Accords. Token places for Jackson camp at DP convention
The Jackson camp was given a token 15 seats on the 400-member Democratic National Committee (DNC). This compared to the 50 seats given organized labor in 1984 in return for helping Walter Mondale sandbag the Jackson delegation. Battle-proven anti-Jacksonite Paul Kirk was renamed chair of the DNC. A Jackson supporter, New Orleans Mayor Sidney Barthelemy, was made a DNC vice-chair with the specifically limited assignment of voter registration and turnout. Jackson was promised a ceremonious "special role" in the Dukakis campaign.
By the end of the Democratic convention in Atlanta, a new politics and a new electoral coalition had emerged in command of the post-Reagan Democratic Party. At the heart
October 17, 1988 • #149 International Viewpoint of this new centrist alliance were the neoliberals of the North and West, a new generation Business Week dubs the New Age Democrats, and the neo-Dixiecrats of the South.
Usually known as neo-liberals, the New Age Democrats might better be called postliberals. They have made national political careers in the post-Watergate, post-Great Society era of money-driven media politics. Far removed from the urban machines of bygone days, they have no ties to the Black community, organized labor or other social movements.
The "New Age"
### Democrats
The Dixiecrat side of this alliance is composed of Southern politicians who made their way to office in the decades following the destruction of formal segregation. Dependent on the Black vote and shorn of the old lynch-mob lingo, they remain conservatives in domestic and foreign policy. Michael Dukakis and Lloyd Bentsen symbolize the convergence of this New Age/ Dixiecrat axis.
Dukakis is an apt and willing representative of the New Age Democrats. While he eschews PAC [Political Action Committee, groups that make collective contributions to candidates] money, he readily accepts contributions from wealthy individuals. He has even received donations from Henry Kravis, an investment banker who is New York State financial chair of the Bush campaign, a fact that says a lot about just how business greases the American political
Dukakis' 1987-88 media and polling expenditures for the campaign up to June ($5,688, 764) surpassed all other Democratic and Republican candidates including George Bush. Dukakis's network of what the New York Times (May 5, 1988) described as "a dozen wealthy fund-raisers" around the country allowed him to raise $18 million by May 1988, more than double that raised by any of the other Demo-
The Duke's legendary frugality doesn't stop at rumpled suits and subway rides. When he took office as governor of Massachusetts in 1975, one of his first acts was to cut 15,000 people from the welfare rolls at a time when the state's unemployment rate was around 10%. It was all downhill from
"Massachusetts miracle" he takes credit for is nothing but a high-tech business boondoggle [bubble].
The New York Times (July 13, 1988) said, "Lloyd Bentsen resembles George Bush more than he does Michael Dukakis." Bentsen deserves this political look-alike award. In 1979, two years before Reagan, he wrote in the Report of the Joint Economic Committee of Congress, of which he was chair, "the major challenges today and for the foreseeable future are on the supplyside of the economy." He acted on this conviction by voting for Reagan's 1981 supply-side tax bill and other Reagan measures. He is an avid compañero of the Nicaraguan contras and, as someone once remarked, he never met a weapons system he didn't like.
The Christian Science Monitor (July 13,
"For much of his 25 years in public service Bentsen endeavored to promote the interests of American business." According to Common Cause, Bentsen is America's number one PAC-man. Since 1983, he has garnered $5 million in PAC donations, $1.5 million in 1988 alone. Among his contributors are America's corporate elite and, in 1983, the National Conservative Political Action Committee (NCPAC), possibly the most right-wing
Like all of the candidates in this year's election, Bentsen is a wealthy man, with net family wealth of over $10 million. Aside from oil, Bentsen's wealth also comes from his family's deep involvement in Texas agribusiness. This involvement includes opposition to farmworker organizing drives and heavy investments in Tide Products, a distributor of toxic pesticides of the kind being protested by Cesar Chavez, the United Farm Workers, and Jesse Jack son. As a Senator, Bentsen has voted to weaken the regulation of pesticides and Neo-liberal politics shaped by corporate America
The power of the New Age/Dixiecrat axis stems from its shared domination of a majority of the nation's statehouses, state party organizations and the committee structures of both houses of Congress. Such pervasive control means that this new leadership will set much of the legislative agenda of the next decade regardless of who wins the White House in 1988. Since both the majority of the Democratic Party's leadership at the national level and its presidential candidates are drawn from this milieu, it is certain that they will dominate party affairs for some time to come.
As Philip Stern's recent book, The Best Congress Money Can Buy, has shown, neo-liberal politics are shaped by the needs and contributions of corporate America more than by conviction. The universal lack of charisma of New Age politicians is a function of their technocratic approach to politics as well as to social issues.
The post-Watergate generation of Congressional Democrats form the core of New Age Democratic politics. Since, in alliance with both older and newer-style Dixiecrats, they control the committee structures of both houses of Congress, business is more than willing to fund their campaigns and the party's apparatus. According to Business Week(February 18, 1985), by mid-1980s the Democrats were more dependent on "fat-cat contributors" than their Republican opponents. The aver-
USA
The Duke on lesbian and gay rights
DUKAKIS has earned well- founded suspicion and hostility from the Massachusetts lesbian and gay community, and now from lesbians and gays across the US. His personal intervention installed a foster care policy in
Massachusetts that took teenagers away from the gay foster parents they had finally managed to get placed with. The policy virtually rules out any future placements with gay people.
The Duke has refused to prom-
Ise to issue an executive order banning anti-gay discrimination in the federal government if he's elected. He has failed to fight actively for a Massachusetts gay rights law, which has been narrowly defeated several times in
His own state insurance commissioner quit when Dukakis insisted on letting insurance companies test life insurance applicants for the AIDS virus. He vetoed a needle exchange program passed by the Boston city council. This record explains why the lesbian and gay community is seriously divided about supporting Dukakis even against age Democratic donation was three times the size of the average Republican
In return, business expects and receives both specific favors (the good old pork barrel) and reasonable adherence to business's legislative agenda. As the older generation of liberals, such as Hubert Humphrey, Edwin Muskie, George McGovern, and Walter Mondale have died or retired, it is the
New Age Democrats who have inherited both the US Congress and the leadership of the party's mainstream.
This is the first post-Great Society the slogan of L.B. Johnson's social program] generation of Democrats to be confronted with the global crisis of capitalism, the decline of US economic and political hegemony, and the discrediting of liberalism's policy bedrock, Keynesian economics.
These New Age Democrats have bought the policy agenda of their corporate sponsors: regulation (mostly completed under
Carter); abolition of progressive income taxation (begun in 1978 under Carter and completed under Reagan in the 1981 and
1986 tax acts); weakening of organized labor in order to make US business internasocial programs from affirmative action to 1 77 tionally competitive; rollback of "costly"
International Viewpoint #149 • October 17, 1988
USA health, safety and environmental programs;
and the re-composition of US military power.
Fight over Democratic policy
Also important among New Agers are several Democratic governors who learned how to use scarce Reagan-era state resources to attract business to their states (and away from others) through tax abatements, seed money give-aways and a low-wage workforce. Besides Dukakis they include
James Blanchard of Michigan,
Clinto of Arkansas, Bruce Babbitt of Arizona, Charles Robb of Virginia, and Mario Cuomo of New
York (despite his reputation as a
New Dealer). Barely distinguishable are such Republican governors as Thomas Kean of New Jersey and
Richard Thornburgh of Pennsylvania, who was recently appointed to replace Edwin Meese as Attorney
The fight over the policy direction of the Democratic Party goes back a long way. But its culmination occurred after the disastrous defeat of Walter Mondale in 1984.
In the aftermath of this defeat, many of the Dixiecrats and Western
New Agers took the initiative by founding the Democratic Leadership Council (DLC). The DLC advocated distancing the party from its traditional base in labor, the
Black community and social movements, which they termed "special interests." They explicitly rejected
New Deal or Great Society-type programs aimed at income redistribution and called for a hawkish foreign policy stance. Richard Gephardt, Joseph Biden, Bruce Babbitt, and Albert Gore are all members of the
Paul Kirk, an erstwhile liberal who became chair of the Democratic National
Committee in 1984, picked up these themes. He abolished much of the DNC representation previously guaranteed to minorities and women. Not to be outdone, he formed the Democratic Policy Commission (DPC), which adopted the same orientation as the DLC. Its statement, New
Choices in a Changing America, proposes
"to get out from under the false image that
Democrats are weak on defense, have weird life styles and are big taxers and spenders." Except for [Jesse] Jackson and
Paul Simon, all the Democratic candidates for the presidential nomination in 1988 are members of the DPC, including Dukakis. It is these forces that now control the Democratic Party.
The New Age/Dixiecrat axis needed a national election strategy. The old New
18
Deal coalition, composed of northern city machines, labor and the "Solid South," had collapsed. The alternative was a combination of organized labor, the new Black urban machines, the social movements and
Jesse Jackson calls the "locked out," many of whom don't vote. Right-wing Democrats, however, argued that non-voters are not dependable, white working class voters often prefer Reaganite social values over fuzzy liberalism, and Blacks will vote Democratic no matter
Instead these party ideologues propose to re-conquer the white "swing vote." This is not, as some have said, a Southern strategy, but an attempt to appeal to the basest instincts and fears that pervade this entire ra-
'After me, the deluge!"
The selection of Lloyd Bentsen as Dukakis' running mate signaled the adoption of this strategy, urged by many since the 1984 Mondale defeat, as the way to the White House in 1988. As a Texas Tory, Bentsen is above suspicion among those whites who voted for George Wallace in 1968 and Reagan in 1980 and 1984 in "swing states" like Michigan, Florida, Texas, California
There is a bitter irony in allocating voter registration and turnout to the Jackson camp. Jackson, of course, has demonstrated ability in this area. And new registration is central to his strategy of broadening the party's voting base in hopes of influencing its direction. Yet the Jackson camp is being asked and has agreed to increase voter turnout for a racist strategy over which they have no control.
No matter how many new Black or Latino voters are registered, Dukakis and Bentsen are going to campaign for the white "swing vote," appealing to white racism in code words about "forgotten ethnic voters"
and "hard-working, average Americans."
Locked out of real policy making, the Jackson forces have been ghettoized with the legwork of a job no one in the party elite deems important, and some find a detrimental embarrassment.
Early in September, Jackson rushed to correct reports by his aides that the Dukakis camp had come up with a list of "forbidden states" where Jackson should not campaign on behalf of the ticket. Not surprisingly, the alleged list included "swing states" like
Michigan and Texas where Jackson's
"help" could "send the wrong message" to some white voters. Though the existence of such a list was denied by the Dukakis campaign, spokespeople admitted that they had urged Jackson to campaign in states where he would be "most effective." The Jackson forces are still demanding their ministerial portfolios. No money or effort toward a national voter registration drive has yet come forth from Democratic headquarters.
The policy agenda of the New
Age/Dixiecrat Axis is better understood as post-Reaganomics than as anti-Reaganomics. It has been shaped by Reaganomics in a number of ways. For one thing, the huge deficits the Democrats will inherit should they take the White
House will limit any residual urge to spend on social programs without cutting the defense budget drastically. This they will not do, because military spending is essential to their model of growth. As born-again Cold Warriors, they take their "Conventional Defense
Initiative" seriously.
New Age economic policy is the other side of the supply-side coin.
The historic tax give-aways foreshadowed in 1978 and carried through from 1981 on provided US capital with the money it needed to restructure through mergers and buyouts, plant closings, and workforce reduction. Corporate raiders and Wall Street traders aside, the purpose of much of this restructuring was to increase the competitive position of a company by making it bigger and, by eliminating the less profitable operations, more
Reagan tax structure will stay intact
The Democrats do not propose to change the Reagan tax structure. They have consistently used their legislative majority to cooperate with the White House and pass these bills through. Lloyd Bentsen has been a chief Senate booster of Reagan's tax "reforms." The Democratic National Convention's 2,499 to 1,092 vote against Jackson's platform amendment to increase taxes on the rich should come as no surprise. Jack-
October 17, 1988 • #149 International Viewpoint son commanded over 1,200 delegates, indicating that even some of his supporters voted against this amendment.
The random distribution of supply-side booty through the market restricted investment in technological innovation. To compensate, New Agers like Dukakis developed a form of "leveraged" industrial policy that complemented the supply-side orgy. By providing seed money, Massachusetts, Michigan, North Carolina and Pennsylvania encouraged the kind of high-tech companies that could supply new technology to both new and old industries. "Smokecompanies were encouraged to modernize through tax breaks and incentives. This "leveraged liberalism" is not so much a counter policy to Reaganomics as a complementary feature of it.
The role of the military budget
Restructuring and innovation are major aspects of the religion of competitiveness the New Agers share with the Reaganauts. Dukakis's techno-faith can largely be explained by the fortuitous success of high tech business in the export market. In his Massachusetts Miracle, David Lampe of MIT explains: "Massachusetts benefited particularly because one of the technologies developed in the region — the computer - unexpectedly proved to have enormous international market potential.
A central, usually unmentioned, aspect of New Age economics that overlaps Reaganera priorities is the role of the military budget. Reagan's nuclear detente reflects a recognition by Republicans and Democrats alike that the defense budget must now be restrained in the light of the federal deficit. However, both also reject any attempt to reduce military spending.
Dukakis' increasingly hawkish rhetoric involves more than a pitch to swing voters. For one thing, as he approaches the imperial mantle that goes with the presidency of the United States he must show himself fit to rule and, perhaps, conquer. But he is also keenly aware of the central role of military spending in the "Massachusetts miracle.'
While the state provided some funds for high-tech firms, it was the Carter/Reagan military build-up that pulled Massachusetts and New England out of their doldrums. With $8.7 billion in the Department of Defense contracts in 1986, tiny Massachusetts was fourth at the military trough.
Dukakis also has the New Age love of big-ticket [high priced], high-tech conventional weapons. In August, he summarized his views on military spending
*The fact of the matter is we have a massive survivable nuclear deterrent right now, 12,000 strategic nuclear warheads. What we don't have is the kind of strong conventional defense capability we must have, and that is going to be my top priority."
He proposes a Conventional Defense Initiative (CDI) to provide sophisticated weapons that can actually be used. This emphasis on useable weapons should give pause to those who thought Dukakis' past opposition to contra aid indicated a tolerance for revolution abroad. This preference for conventional weapons, however, does not prevent the Duke from favoring Trident 2 D5 submarine-launched nuclear missiles, cruise missiles or the Stealth bomber. Dukakis denounces SDI (Star Wars) as a "fantasy," but still advocates $1 billion for research on it because his mind can be
Another Reagan-like aspect of New Age growth policy is low-wage labor. As Bank of Boston analysts Linda Frankel and James Howe wrote in 1985, factor contributing to the substantial increase of high tech manufacturing jobs in New England was the fact that in the 1970s New England's wage structure became relatively quite competitive." Today's New Age governors encourage wage concessions by unions in older industries and routinely fund non-union industries in their
The fear of labor shortages, which tend to drive wages up, also fuels the New Age search for business-government partnership in getting people "off the welfare rolls, onto the work rolls." This means the Democratic embrace of that old Republican favorite, workfare. Workfare already exists in one or another form in 38 states. On June 16, the Senate voted 93 to 3 for a law requiring 22% of all welfare mothers to enroll in work programs by 1994. The House had previously adopted a version of workfare that differed only in offering more generous incentives to the states. By July, House Democrats were already urging cuts in those incentives in order to negotiate a
State-of-the-art workfare program
Dukakis' Education and Training Choices program in Massachusetts, known as ET, is a state-of-the-art workfare program because it provides day care and medical benefits for up to a year. Unlike most workfare programs, it is voluntary. Nevertheless, ET's goal is the same — to enlarge the low-wage workforce and provide a literate, semi-trained reserve army of labor. In fact, the highly touted ET placed only about 15,000 people in low-wage jobs from 1983 to 1986. By mid-1987 another 10,000 had been placed at an average wage of $6.50 an hour, which is between $2.00 and $2.50 below the national averages for the private non-agricultural sector, the insurance, finance and services industries.
If Massachusetts is the model for America's future, it is a deeply flawed one. Since 1984, Massachusetts has lost 79,000 manufacturing jobs. According to some union organizers, the number of union members has dropped by 25% since 1982, when only
USA 19% of the state's workers were in unions. Dukakis's state agencies hand state incentives and contracts to non-union firms over unionized companies.
Unemployment and social services
The state's low unemployment rate does not extend to the Black community. In Black Roxbury, unemployment is 12% among adults and about 50% among youths, both equal to the national averages. In fact, the 3% unemployment rate is largely a function of out-migration caused by the high cost of living in the eastern part of the state where all the jobs are. Dukonomics has gentrified that area to make it attractive to the managers and professionals who are the true beneficiaries, after capital, of this military miracle.
This is not to say that a Democratic administration won't pass any social leg-
Congressional Democrats have already taken the initiative on some social measures meant to address serious labor market problems. These include the Catastrophic Health Insurance bill and proposals to increase day-care funding. Both are measures needed to keep poor people, particularly poor women, in the labor force. Indeed, the the issues of health, education and child care for low-income workers have become so pressing that even George Bush supports (and Reagan is prepared to sign) the Catastrophic Health Insurance bill and has proposed a $1,000 tax deduction for day-care, a measure that doesn't address the lack of day-care facilities.
In a similar vein, Reagan Secretary of Labor Ann McLaughlin has told business and labor leaders there is a "widening gap between workplace needs and workforce capabilities." New Agers share this concern with business leaders and Reagan cabinet members. It is possible that the Democrats will also want to address the near collapse of the nation's unemployment and insurance system, which now covers about 25% of the unemployed.
With federal budget reductions and increases in military spending as stated Democratic priorities, it does not require a computer to calculate that the first New Age administration will produce meager results for the vast majority.
The greatest likelihood is that all this slick high-tech trickle-down finagling [tinkering] will collapse with the next recession. The Democrats' agenda is by no stretch of the imagination an agenda for the
* This pamphlet is available for $1 from Solidarity, 7012 Michigan Ave., Detroit, MI 48210, USA. It is a sequel to the pamphlet Jesse Jackson, The Rainbow and the Democratic Party: New Politics or Old ($1.50), of which major excerpts were published in /V 143, 19 June 13, 1988.