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Working In These Times

Tuesday, Mar 20, 2012, 10:47 am

Labor Sees Election Choice: Renew Economy or Dig Deeper Ditch

BY David Moberg

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With their endorsement of the re-election of President Obama last week, the unions of the AFL-CIO wanted to go beyond that expected decision. Besides preparing a political work plan more independent of party and candidate organizations than in the past, the labor federation also began an effort to define the nature of the economic choice that voters will make this fall.

Union leaders hope that by independently pushing their own economic program and analysis, they may influence the president and other Democrats to embrace a more fundamental reconstruction of the American economy than they might otherwise be inclined to advocate. And to the extent that labor and at least some candidates define the choice sharply, unions will be in a stronger position to argue with Obama in a second term, should he win, that voters gave a mandate for their ambitious policies. 

"Our view is that this election is about something," says AFL-CIO policy director Damon Silvers. "The election is profoundly about the nature of the economic and social course our nation will take for the remainder of our lifetimes....We will be talking with our members about how we got into this mess and and about the fundamental choice we face with long-term problems of our society—jobs, economic inequality, and economic strategy in a globalized world."

Union leaders, despite their many disappointments with Obama, see him as at least rhetorically moving away from last summer's focus on deficits and austerity in their direction with more talk about jobs and public investment. They also realize that either Obama or a Republican will be president and that given the rightward march of the Republican party, it is difficult to imagine being worse off with Obama, whatever their disgruntlements.

"Regardless of which Republican wins, there's a very different vision, essentially returning to the policies that caused the crisis, and returning with a vengeance," Silvers says. "We want it to be clear when voters go to the polls and after what the election was about and who has a mandate."

Now unions will also be able to lay out their message in a hastily planned "labor summit" just before the Democratic National Convention in September in Charlotte, N.C.  Upset that the Democratic party seemed to dismiss union concerns about the lack of unionized hotels in Charlotte and the state's hostility to unions, the building trades, UNITE HERE (hotel workers) and other unions decided against attending the convention. But unions also do not want their action to be taken as a swipe against Obama or labor-friendly Democrats. 

In the AFL-CIO view, America's economic problems are deeply rooted, going back over three decades and supported by many Democrats even if primarily pushed by Republicans. The government needs to act more aggressively to get out of the Great Recession and to reject calls for government austerity, but it also needs to abandon many of the key policies in place at least since the Reagan administration.

The ongoing crisis "was brought about by a lack of regulation, gaming the system, and by [those in the financial industry] thinking they're in a casino with someone else's money," Steelworkers president Leo Gerard says. "I think it's a fallacy to look just at what caused the last recession....The ditch that we're in didn't just start with the Great Recession. It started 30 years ago." The string of financial crises since the savings and loan scandal all reflect similar problems with a deregulated, inflated financial service sector, Gerard says. It all too often drains, exploits and destroys the real economy, creating one speculative bubble after another and increasing both economic insecurity and inequality rather than aiding growth of good jobs in a robust overall economy.

"We have to make sure we have a rising standard of living," with comprehensively strengthened labor law, an inflation-indexed minimum wage, a commitment to full employment, Gerard says, as part of an overall plan to increase demand and revive the economy. Austerity does not work. "The countries that have already done austerity have gotten into worse condition, whether it's the U.K. or Greece," Gerard says. "The countries that have tried to use austerity to get out of the ditch have only dug the ditch deeper."

The country needs public investment of trillions of dollars in infrastructure, transportation, energy, manufacturing, new technology and manufacturing as well as a new approach to globalization that refuses to drink "the free-trade Kool-Aid," Gerard says.

Government's strategy, as well as investments, need to change, the AFL-CIO said in a policy statement. De-industrialization and dysfunctional financialization have increased inequality and slowed growth. Policymakers must reverse both trends, as well as the flawed decades-long attempt to create a low-wage, high-consumption economy.

Financial Times columnist Edward Luce sees three approaches to the current "crisis of capitalism" under discussion in the U.S. The "purgative" Republican strategy calls for cutting drastically government taxes, spending, services and regulation. The Obama administration and mainstream economists, he says, want simply to "rekindle demand" to "restore" the economy to its pre-crisis functioning.  But a third school of thought, Luce writes, sees deeper problems that preceded the crisis, such as growing inequality, and a need to "renovate" the American economy.

The labor movement clearly seeks renovation, and its political strategy for this year aims to maximize the chance for renovation, given the profound limits of American politics.

David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]

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