Jeff Faux and his Economic Policy Institute have consistently shed light on the dark recesses of the American economy--exposing the decline of wages that accompanied the Reagan and Clinton booms and debunking the promise of an export boom with Mexico. I agree with his criticism of Clinton's trade policies. But I don't feel the same enthusiasm about Faux's political prescriptions in "A New Conversation: How to Rebuild the Democratic Party" (TAP, No. 21, Spring 1995). Indeed, Faux's underlying political and historical premise is exactly what has crippled liberal Democratic thought since 1968.

Faux's prescription for the Democrats rests on a distinction between voters' core anxieties, which he views as economic ("the decline in real wages and living standards . . . at the heart of the anger and frustration"), and social anxieties about crime, welfare, and schools that he regards as peripheral. Faux argues that because Clinton Democrats address the core economic concerns inadequately, Republicans succeed in "diverting the economic question into a social one." And so the key for Democrats is to develop a compelling economic message and stop trying to compete with Republicans on social concerns. Clinton, he says, "will not get credit for a punitive [welfare] bill, just as he did not get credit for the crime bill."

This argument is an example of what Lenin, still to be respected as a political thinker, called "economism"--the reduction of motivation to a vulgar model of homo economicus. Faux's position rests upon a confusion of two kinds of causal relationships. He and other Democrats seem to be suggesting a psycho-political relationship. Deep down, Americans worry about their pocketbooks, but with Republican help, they displace these fears onto social concerns as a father anxious about his job displaces his anxiety onto his children's performance in school. The task of politics is, therefore, to acquaint citizens with their real rather than imagined fears--a kind of therapy.

Imagine the following "new conversation" between one of Faux's therapist organizers and a demented Reagan (or Gingrich) Democrat:

Organizer: Look, Mr. Jones, you say you're worried about the break-ins next door and the drug dealers who hang out at your son's high school, but aren't you really worried about the fact that, counting for inflation, your wages have decreased 1 percent over the last two years and that other people in your position have been laid off?

Mr. Jones (pounding his palm against his forehead): I've never thought of it that way. God, you mean I am not really that worried about crime or my son's education?

A simple look around the country will confirm the absurdity of this approach. For two decades, American have been reacting to a decline that equally involves wages, schools, and neighborhood and urban crime. One aspect of this process is not necessarily more fundamental than another. For many middle-class Americans, the problems of crime and schools are much more urgent than those of wages. To put this still another way: Wages, neighborhood safety, and the availability of good schools are all part of Americans' standard of living.

At one point, Faux quotes a pollster's findings that Americans hold "highly negative" views about public schools in general but are "positive" about "the specific public school in their neighborhood." Faux suggests that Americans' concerns about school are not as "real" as their concerns about wages because schools have not declined as wages have. But the very wording of this finding--"in their neighborhood"--gives it away. Many Americans are somewhat content with the elementary schools in their neighborhoods, but as soon as their children reach about fifth grade, they begin to panic. By the time their children are in junior high, they start thinking that vouchers aren't such a bad idea at all. I don't have any pollster to quote: I speak here as a suburban parent and as a journalist who has interviewed lots of voters.

Why does Faux's view seem so plausible to many liberal Democrats? One reason may be that they confuse psychological causation with another kind of causal relationship between the economic and the social. Sociologist William Julius Wilson, among others, has argued that a major cause of urban decline, high crime rates, fatherless families, and related problems is the loss of urban manufacturing jobs to the suburbs, the South, and overseas. In this sense, the real cause is economic. While this explanation has its limits, as Wilson has admitted, it has some plausibility; and its plausibility lends a false veneer of credibility to the psycho-political argument.

What Wilson and others describe as "economic" causes are far broader than the "economic question" of wages and jobs that Faux and other Democrats think really disturbs voters. Wilson is concerned with a historical shift in industry and the transformation of the urban working class that it has brought about. This process has equally affected jobs and wages, on the one hand, and welfare, crime, and schools, on the other hand. What Faux takes to be the "economic" and the "social" are both manifestations or effects of Wilson's industrial-economic causes. The loss of manufacturing jobs in Milwaukee caused a decline in wages among blacks, a rise of homicides, and the deterioration of the schools. And the residents of Milwaukee are right to be concerned about all three.

Should Faux's Democratic organizers talk about these industrial-economic causes? They certainly should, but they should not delude themselves into thinking that such conversations are a substitute for proposing remedies for crime or deterioration of the public schools. Ultimate historical causes don't necessarily imply ultimate political solutions: Lowell couldn't get its textile mills back from the Carolinas; Milwaukee probably won't be able to reclaim its lost foundries or breweries.

Faux's confusion about core and periphery, economic and social, and cause and effect subverts his history of the Democratic Party. "Historically," Faux writes, "Democrats have always been out of sync with the white working class on social issues, most notably on race. Nevertheless, white workers voted Democratic for decades because they saw [Democrats] on their side on the central question of economic security and jobs." Not so. During the New Deal, the Democrats were very much in sync with what Faux calls "social" concerns, including those on race. The minute that northern Democrats began to diverge from southern Democrats on this issue--at the 1948 Democratic convention--the party began its decline, which after 1968 became precipitous. (The Democrats' only decisive presidential victory from 1944 to the present was in 1964, the result of the assassination's aftermath and voters' fears about Goldwater's foreign policy and opposition to Social Security.)

Faux is equally wrong about Clinton and his crime and welfare bills. Clinton won in 1992 largely because voters believed that he was a "different kind of Democrat" on these and related issues. Clinton understood correctly (Carville's slogan about the economy aside) that for the Democrats to regain their popular majority, they could not appeal to Americans simply on the basis of wages and job security. When he signaled his indifference to these other concerns at the beginning of his administration--by embracing the cause of gays in the military, through his cabinet appointments, and by putting off his welfare bill--he lost his credibility among voters and has never recovered it.

I am not suggesting here my own program for the Democrats in 1996 or beyond. The social fissures in the society and the Democratic Party itself may prevent Democrats from uniting successfully around anything other than opposition to Republican failure. I am also not siding with those "new Democrats" who argue that Clinton should have ignored the "economic question" in favor of welfare or crime. That argument seems equally shortsighted. Rather, I am contending that, contrary to Faux, the Democrats cannot hope to recapture their majority by focusing exclusively on what Faux defines as the "economic question." Doing that won't counter Republican proposals for addressing crime, welfare, or schools. If the Democrats adopt Faux's new conversation, they will simply confirm to middle-class voters the old Republican charges--first voiced by Richard Nixon in 1968--that the Democrats either don't understand or are hostile to their concerns.

JEFF FAUX RESPONDS:

John Judis often provides us with sharp insights about contemporary politics. But on this matter he is confused. There is both less and more in dispute here than meets his eye.

Let's first clear away the straw man. Nowhere do I assert that the Democrats should focus "exclusively on economics." I said Democrats who sound like Republicans on economic issues lose because they are not credible as social conservatives. Having misstated my point, Judis goes on to redefine my economic view as a simple-minded notion that we can bring back the lost textile mills to Lowell. He then sits the straw man on top of an even more rickety straw theory of "core-and-periphery" psychological "economism."

However, all this is Judis's fanciful construct, not mine. In fact, I'm happy to accept his own formulation that a "historical shift in industry and the transformation of the urban working class that it brought about . . . has equally affected jobs and wages on the one hand, and welfare, crime, and schools on the other hand." I will go further: voters will often be more concerned about crime, sometimes about education, and occasionally about welfare, than they are about falling wages and the disappearance of decent jobs. We both accept an "economistic" view of the origin of these problems and agree that voters are angry about almost everything.

But the subject is strategy. Here is where we part company. Acknowledging that both social and economic issues concern voters does not necessarily mean that they must all be equally emphasized by liberal Democrats in challenging the conservative Republican story of how the world works.

Contrary to Judis's astounding claim that Democrats have been following my prescription since 1968, the Democrats have no story line of their own in which to locate their policy proposals. When pollster Celinda Lake asks focus groups to write down their understanding of what Democrats are for, she gets back lots of blank paper. Is this because Republicans have come up with better technical answers for crime, education, or welfare than Democrats? Hardly. It is in large part because Democrats are trapped in the Republican story that the problems that threaten the average voter come from out-of-control big government. Thus, Democrats should challenge conservatives with a story that reflects what Judis himself agrees is the economic cause of much of our problems.

This makes sense for two reasons. First, the decline in incomes and living standards of their natural constituency in the bottom three-quarters of the workforce will certainly continue throughout the rest of this decade. Second, unless Democrats can challenge the conservative tale that private markets are always superior to public management and that natural rates of unemployment are fundamental laws of nature, they cannot prevail--not just in electoral terms but in the sense of building a better society that gives higher priority to human values.

Judis concedes that my imagined organizers should talk about the economic causes of our present condition, "but they should not delude themselves into thinking that such conversations are a substitute for proposing remedies for crime or deterioration of the public schools." Again, I do not propose that. But neither should Judis deceive himself that liberal remedies are possible unless Democrats reformulate the economic question.

For one thing, liberal remedies require money. Take welfare. Any student of this issue understands that up-front investment in education, training, child care, and job creation is necessary for a progressive solution. But having bought into the conservative economic paradigms that give deficit and tax reduction top priority, liberals have no money. (Money is not a sufficient condition for effective change, but it is a necessary one.) Having conceded the economic principles to the other side, Democrats' "proposed remedies" are weak-- either watered-down versions of conservative ideas or oversold pilot programs that everyone knows will not be adequately operationalized. Democrats themselves grow skeptical about the ability of government to deliver, and increasingly join Republicans in braying about the breakdown of social values--divorce, teenage sex, and dysfunctional families--about which politicians can do little. Yet, terrified of being tagged as a friend of government, they avoid addressing seriously the financial deterioration of the middle class, over which public policy can have some influence.

Judis does not explain his "remedies," but his discussion of crime illustrates how focusing on social issues outside the economic context pulls us right. According to Judis, Clinton was not credible on crime because he alienated the populace by "embracing the cause of gays in the military, through his cabinet appointments, and by putting off his welfare bill." I am baffled by his reference to the cabinet. (In a cabinet dominated by Lloyd Bentsen, was Donna Shalala too big for Bubba to swallow?) And I've made the point about welfare, so let's deal with gays in the military.

Everyone agrees that Clinton horribly mishandled the affair. But our concern here is with issues, and there was, after all, a fairly fundamental question for people who profess to be liberals--the right of gay people to serve their country, a right they have in all other advanced nations. Judis suggests that Clinton should have traded this off in order to gain credibility for a crime bill that provided the electric chair for 60 more federal crimes and allocated scarce new dollars for prisons already stuffed with small-time pot sellers. This reflects a doomed strategy of retreat, in which the question of the day is about which of our principles we should throw to the right-wing wolves.

Neither is it clear that a trade-off of gay rights would have provided liberals with the prized credibility on crime. Since Judis has opened up the theater of the political absurd, let me use it to stage a different scene.

Judis: "Look Mr. Jones, you say you're worried about the break-ins next door and the drug dealers who hang out at your son's high school? But aren't you really worried about the fact that gays are allowed to serve in the armed forces?"

Mr. Jones (pounding his other palm against his forehead): "I've never thought of it that way . . . etc."

Judis is right that our disagreement leads us to see history through different lenses. But whether we date it at 1948 or 1968, there is no doubt that the Democratic Party paid a high price for being the political instrument of integration in postwar America. Lyndon Johnson's Civil Rights Act was arguably more politically courageous than Lincoln's Emancipation Proclamation. LBJ accurately predicted that it would lose the segregationist South for the Democratic Party. The political tragedy is that the Democrats did not think through a strategy that would compensate for that loss. They still do not have one. My position is that such a strategy should be grounded in an economic argument.

Judis says Clinton won the 1992 election not on economics, but because he was a "different kind of Democrat." Presumably, given Judis's analysis, the difference was a less sympathetic attitude toward minorities--Sister Souljah and all that. The election results were clearly more complicated than this conventional DLC wisdom. Ruy Teixeira has pointed out that Clinton got a slightly smaller share of white votes than did Michael Dukakis four years earlier and that a uniting characteristic of both Clinton and Perot voters was the experience of real wage declines. As I have written elsewhere (see "Myth of the New Democrat," TAP, Fall 1993, No. 15), Democrats in every election starting with 1976 have run as a "different kind of Democrat." Even the liberal Walter Mondale made cutting the budget deficit the center plank in his platform. Clinton did win on "the economy, stupid." But the major economic issue had less to do with Clinton than his opponent. If George Bush had prevailed on Alan Greenspan to cut interests rates earlier, he would still be president.

It is not enough for liberal Democrats to come up with technically sound programs to separately defined problems of crime, education, welfare, jobs, etc. Unless they can come up with a different story--a challenge to the conservative assertion that minimalist government is the best strategy for middle-class prosperity in this new global economy--they are condemned to an increasingly futile effort to search for Judis's "remedies" under tighter and tighter fiscal and ideological constraints. Economics is not the only issue, but it is the battle-ground where conservatives hold the weakest position. Therefore, it is the best place to engage them.

Finally, I appreciate that Judis speaks from the heart, as well as the head, as a suburban parent outraged at drugs in the schools. Policy debates are improved by a dose of real life. But there are a variety of liberal experiences. My own suggests that it is possible to send your kids to public schools without being panicked into supporting vouchers, to wait on line at the motor vehicle bureau without concluding that it should be privatized, and even to be mugged with a gun in your chest and not believe that frying more people in a federal government electric chair will do much for the crime rate.

So, buck up, Brother Judis. These are hard times. But with a little strategic imagination and a lot of work, liberals might yet get to play a few more tunes on the keyboard of American history.