SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
political economy
Why Did the Democrats Lose? Because They Gave Up on the Working Class 40 Years Ago
It really hurts to have called this one. I so wanted to be wrong.
Nov 06, 2024
I feel like I’ve been in a brawl, a massive street fight where the punches are words and concepts instead of fists. I got clobbered while trying as hard a possible to warn the Democrats that they are losing the working class and that they absolutely must change course.
It should have been obvious that the Democrats could not cuddle up to Wall Street and then pretend that the “opportunity society” would help working people emerge from 40 years of mass layoffs and stagnant wages. It was so clear that the Democrats would be viewed as members and defenders of the elite establishment that rules over both the economy and government, and that Trump would be seen as the disrupter—the friend of the working class.
It really hurts to have called this one. I so wanted to be wrong.
The Democrats assumed the working class had nowhere else to go. They were wrong!
Exactly how the Democratic Party lost the working class is described in my book, Wall Street’s War on Workers: How Mass Layoffs and Greed Destroyed the Working Class and What to do about it.
It’s about how Democratic Party elites abandoned the working-class over the past four decades while enriching financial elites, promoting runaway inequality, and tolerating a tsunami of mass layoffs.
The book provides original research that shows how the Democratic Party vote declined in the Blue Wall counties of Pennsylvania, Michigan, and Wisconsin as the mass layoff rate increased. The Democrats—once the party of the working class—were blamed for the economic and social destruction that followed. They earned it by doing nothing to stop mass layoffs whose sole purpose was to enrich CEOs and their Wall Street partners.
The book also refutes the widely shared notion about the “deplorable” white working class. It provides conclusive data that shows these workers actually have become more liberal, not illiberal, on divisive social issues over the past several decades.
The Democrats assumed the working class had nowhere else to go. They were wrong!
Actually, the book should be retitled: Wall Street’s War on Workers and How the Democrats Enabled It.
It's time to end this sad chapter in U.S. history when the Democratic Party leaders refuse to be genuine allies for workers and the Republican Party is rewarded for pretending to be.
BTW, Amazon is giving away the book for $5.67, hardback or Kindle. All royalties go to the Labor Institute’s Political Economy for Workers courses, one of which was conducted this year for Amazon workers who are struggling to form a union.
Keep ReadingShow Less
A Progressive Political Economy Guide to Inflation
Mainstream economics failed miserably in addressing the financial crisis of 2007-08, so why would it be any different now when it comes to making sense of the rising inflation of the past 18 months?
Jan 06, 2023
Since 2021, prices have surged dramatically across countries and inflation has become a global challenge. Global central banks delivered historic rate hikes in 2022 in order to tame inflation and continued doing so even when inflation was falling, thereby risking a global recession.
Indeed, for the past five months, average inflation in the U.S. has been at 2.4%. Across Europe, inflation has also been dropping. In Spain, for instance, consumer prices rose 5.8% in December, down from 6.8% in the previous month. The December figure represented the fifth consecutive month of declining inflation in Spain. Yet, the European Central Bank—which like the U.S. Federal Reserve has also set the target rate for inflation at the arbitrary number of 2% per year—plans to continue raising interest rates “significantly further” as it deems that inflation “remains far too high and is projected to stay above the target for too long.”
Meanwhile, both the U.S. and European economies are expected to enter a recession in 2023. For what it’s worth, the head of the IMF expects a full one-third of the world to slide into recession this year.
What has been causing the upward trends in inflation and why do central banks around the world keep raising interest rates, a policy which will slow economic growth and result in lower wage increases and fewer jobs? Several factors are at play in causing a surge in prices, which include the Covid-19 pandemic, geopolitics, and corporate mark-ups and profit margins, while pure capitalist logic and interests explain why central banks are raising interest rates to fight inflation.
These were some of the conclusions reached by the progressive economists who participated in an international conference on “Global Inflation Today” organized by the renowned Political Economy Research Institute (PERI) at the University of Massachusetts Amherst and held from December 2-3, 2022.
To start with, a co-authored paper by Robert Pollin (Distinguished Professor of Economics and Co-Director of PERI at UMass Amherst) and Hanae Bouazza shows convincingly that there is no justification why the Federal Reserve and other central banks aim for an inflation target of 2%. Indeed, their research finds “no consistent evidence supporting the conclusion that economies at any income level will achieve significant GDP benefit when they maintain inflation within low single digits, i.e., between the 0 – 2.5 percent inflation range.” Not only that, but the “evidence… suggests that, in general, economies are more likely to achieve higher GDP growth rates in association with inflation ranges in the range of 2.5 – 5 percent, 5 – 10 percent and, for the most part, 10 – 15 percent.”
These are significant findings which raise serious questions about the goals of macro policy. Indeed, if inflation-targeting policy is not conducive to promoting economic growth, what is its primary aim? Citing the work of scholars who have done extensive research around this question, such as Gerald Epstein (Professor of Economics and Co-Director of PERI at UMass Amherst) and others, Pollin and Bouazza suggest that corporate profitability is the primary aim of inflation-targeting policy. “Protecting the wealth of the wealthy” is the reason why the Fed has taken aggressive steps to tame inflation by raising interest rates, Epstein pointed out in a recent joint interview with Pollin.
Needless to say, the mainstream economic paradigm keeps silent on such matters, and one will never find answers in it on the most important processes that affect the workings of the real world and on the issues that are of paramount importance to the lives of working people.
To be sure, mainstream economics failed miserably in addressing the financial crisis of 2007-08, so why would it be any different now when it comes to making sense of the rising inflation of the past 18 months?
With regard to the actual causes of inflation in 2021-22, a paper co-authored by Asha Banerjee and Josh Bivens of the Economic Policy Institute identifies the Covid-19 pandemic and the Russian invasion of Ukraine as key factors in the inflationary surge of the past 18 months or so but argues that profit mark-ups added immensely to inflationary pressures over the same period. Of equal importance here is that the authors present more than sufficient evidence to counter the mainstream economic perspective that lays the blame for the rise of inflation in the U.S. on the American Rescue Plan. Indeed, the data they present, on both the domestic and international fronts, does not support the claim that too much fiscal spending overheated the economies, fueling runaway inflation.
Another paper presented at the PERI conference, co-authored by C. P. Chandrasekhar and Jayati Ghosh, on how low-and middle-income countries can respond to inflation, also argues that there are more important factors than the pandemic and Russia’s invasion of Ukraine behind the current inflation crisis. The sharp rise in global prices of food and fuel, Chandrasekhar and Ghosh contend, was driven by “profiteering, price expectations, and associated speculation.” They show, for instance, that while there were sharp spikes in the prices of food and fuel between February and July 2022, “the supplies of oil and gas to Europe remained largely unaffected.”
The analyses on inflation and its causes, as well as the actual aims of inflation-targeting policy, made by all of the presenters at the PERI conference (which included many leading progressive economists such as William Spriggs, Gerald Epstein, Thomas Ferguson, Nancy Folbre, James K. Galbraith, Servaas Storm, and Isabella Weber, among others) can be described as a Progressive Political Economy Guide to Inflation. Indeed, they show how powerful heterodox economic approaches are in disclosing the real forces driving inflation and the actual reasons for central banks raising sharply interest rates. And, by extension, they also reveal the flaws and limitations of mainstream economics, which is in dire need of a major overhaul.Keep ReadingShow Less
Commercializing Elections to Destroy Our Democracy
Jun 18, 2016
Our political economy - a wonderfully embracing phrase much used a century ago - has three main components: The electoral/governmental powers, the marketplace, and the civil society, which is composed of we the citizens.
It is well known that when "we the people" get lax about our consumer rights and our voting choices, both the companies and the politicians turn their backs on us and look out for themselves and their fat-cat donors. The civil society's energy or apathy has a profound role in shaping how the other two sectors function, and can either safeguard our democracy or drive it into the ground.
All this is by way of saying that increasingly commercializing our elections every four years is devastating to the freedom and justice produced by a functioning democratic society. Our presidential and congressional elections this year represent a commercial conglomerate profit center.
There are the corporate Super PACs and the billionaire patrons who manipulate their sponsored candidates, who in turn make explicit or implicit promises to their paymasters to keep the money flowing into their campaigns. The corporate mass media thrives on the high ratings generated by the mud fights (recall the Republican presidential primary led by Trump). The media moguls charge high advertising rates and make more profits than ever from elections.
Taken together, commercializing elections means that everything is for sale - unless you opt out Bernie Sanders style and refuse corporate PAC contributions and super-rich funding.
When elections are for sale, you know who is most likely to win the auctions. You know how much less your votes and your views count. You know how cleverly sleazy will be the flattery that politicians send your way so as to obscure who really owns them.
As the election business worsens, the civil community--those neighborhood, local, state and national nonprofits that work to reduce many injustices and defend our civil rights and liberties under law--are ignored, side-lined and disrespected.
Whether by the mass media interview shows or on the daily campaign trail, citizen activists and citizen group leaders are rarely asked for their views, for their experience, for their horizons as to what is long overdue and possible.
But the bloviating pundits are regularly featured on the political talk shows; so are the garrulous political consultants to the candidates. But the bedrock of our democratic potential--the real experts, the movers and shakers, who start and continue decade after decade the difficult march toward a better society--are treated by the media bookers as off-limits or as interlopers.
One result of this two-party, for-sale tyranny is that most issues on people's minds are not debated or discussed inside the electoral arena. In 2008, I listed over a dozen such proposals--many with majoritarian support--that both the Republican and the Democratic Parties took off the table (see votenader.org).
Another result of commercial elections is that, by cordoning off its political dances while flattering "the American people," they lull the electorate into complacency. When enough people get indignant they act and take back control by vigorous engagement in the election process before the choices and pathways are narrowed by the two-party duopoly.
Sure, some people get steamed but it is rarely enough to combat the tendency to revert back to cynicism, withdrawal or proud apathy.
Last month we convened the greatest number of accomplished citizen groups on the largest number of reforms and redirections ever brought together. One after another on the stage of historic Constitution Hall in Washington, D.C. they spoke of the entrenched power and greed that they overcame over the past half-century to improve America.
These are the citizen champions who, for example, led the fight for safer and nutritious food, less harmful medicines, cleaner air and water, more secure pensions, a freer media, more open government, waging peace instead of war, securing indigenous peoples' rights, safer transportation, the well-being of children, insurance industry accountability and great advances for people with disabilities.
Will you ever see or hear them on national TV or radio broadcast by companies using our public airwaves so profitably for free? Unlikely. Go to the website breakingthroughpower.org to see them and dozens of other leaders who too often get shut out by our rulers.
We invited every member of Congress to attend this event by delivered mail and some by repeated phone calls. Not one of these 535 Senators and Representatives (nor their staff), who spend so much time raising campaign cash, saw fit to go a couple miles from Capitol Hill to this unprecedented convocation.
One percent or less of the voters, organized in every Congressional District, can civilize these commercialized elections, because that is what the vast majority of the citizenry want.
Do those few people have enough dedicated time for the basic patriotism of making their country more lovable?
Your replies are welcomed at nader.org.
Keep ReadingShow Less
Most Popular