“Just say no” has been a winning strategy for Democrats. Social Security privatization looks dead. Ditto with “progressive indexing” of Social Security benefits. CAFTA (the Central American Free Trade Agreement) is on its last legs. Tax “reform” is a nonstarter. But if the Democratic Party is to win back the Senate or the House in 2006 and the presidency in 2008, it needs a positive agenda.
The biggest problem in the daily lives of most Americans is a lousy job. Wages and benefits of nonsupervisory workers (80 percent of the workforce) continue to drop, adjusted for inflation. The biggest fear of most Americans is that their family will plunge into poverty because something big goes wrong -- loss of job, drop in wages, major illness, or bankruptcy. United Airlines just dumped its pension obligations. General Motors just announced it was shrinking by 25,000 employees.
Republicans have no response. They'd rather change the subject to abortion and gay marriage. They'll succeed unless Democrats face these economic issues squarely and convincingly. How?
Not by protecting and preserving old jobs. Some Democrats on the left, fearing what seems a limitless supply of Chinese and Indian workers, want to put the breaks on globalization -- bar more trade pacts, make the Chinese raise their currency, hobble outsourcing. But none of this will work. Even if lots of American jobs weren't migrating abroad, new technologies would replace them right here at home. Robots people today's factories. E-ticket kiosks are doing the jobs of airline ticket attendants.
And not by becoming Republicans. Self-styled New Democrats, harkening back to the Democrats' last presidential victory, want the party to return to the agenda they remember from Bill Clinton's 1996 re-election campaign: free trade and fiscal discipline. But what really worked for Clinton then was a rebounding economy, caused by low interest rates. Neither free trade nor fiscal discipline was responsible. More to the point, neither of these policies will help transform the American workforce in the face of globalization and technological change. And neither will allay the fears of average workers, which subsided somewhat during the boom years of the late '90s but have returned with a vengeance.
These New Democrats are nostalgic for the wrong Clinton campaign. The real model is 1992, when Clinton offered up a uniquely Democratic agenda. It accepted as inevitable the forces of change; old jobs weren't coming back, he said. But he didn't stop there. Americans needed to be prepared to take the lion's share of the good jobs of the future. And the only way was through substantial new public investments in education and job training, so we'd have the smarts to do the new jobs; public infrastructure, so we could easily get to them; and affordable health care, so our bodies would be fit enough. Alas, Clinton never had the chance to follow through. Fiscal austerity rendered such investments impossible.
Clinton also spoke about new forms of social insurance that would cushion workers against some of the stresses of a new economy. One example: moving from a system of unemployment insurance to “re-employment” insurance. Instead of waiting for an old job to come back, out-of-work Americans should get the help they need to find a new one. Here again, though, Clinton didn't have the money to do it.
Clinton's '92 agenda has to be updated, of course. In future columns, I'll detail how to make the American workforce once again the most productive in the world, and thus justify high wages -- notwithstanding globalization and technological change. And I'll discuss new forms of social insurance that will give workers the courage and capacity to accept change.
But how to pay for any of this without breaking the bank? Here, Democrats should be more courageous than Clinton, who feared raising taxes on the rich -- or John Kerry, for that matter, who called only for a rollback of the Bush tax cuts on people whose annual incomes exceed $200,000. As detailed in a new series on “class” in The New York Times, the rich are now far richer than ever before -- even as America's vast middle class is less secure and many in the bottom half are sinking. So in addition to a rollback of the Bush cuts, Democrats should call for a 2-percent surcharge on high incomes (earned and unearned), coupled with a small (say, one-half of 1 percent) annual tax on net worth.
It's a small price to pay for making all Americans as productive as possible and allowing our workforce to face the economic future without undue fear. It's a winning agenda for Democrats. And for the nation. (More details to come.)
Robert B. Reich is co-founder of The American Prospect.
