By Jon Rynn
November 13, 2016
The Core Problem: Trump Plays the Employment Card
Donald Trump offered a solution to the problem of not enough good jobs, and Hillary Clinton did not. That is the core of what happened. Democrats need to offer a better solution than Trump, and then they will take the Presidency and the Congress. Sure, he stirred up racism, sexism, xenophobia and other bigotry, but progressives are not going to compete to be the best bigot. They can compete to be best at creating jobs, and by creating jobs they will clear away the bigotry. I will argue that the best way to create jobs is to spend trillions on a massive green infrastructure building program, which will revive manufacturing and the Democratic working class coalition.
Let’s look at what Trump offered, and what Hillary did not. One of the core parts of his rally speeches was a story: that he would threaten a company that was going to close a factory and go to Mexico instead. He would tell the company that he would slap a 35% tariff (he called it a tax) on the imported goods from the factory that moved. At the end of his story, the company backs down and keeps the factory and jobs in the United States. He also promised to renegotiate bad trade deals, like NAFTA, that have destroyed jobs. Both of these ideas, renegotiating trade deals and imposing tariffs on runaway factories, are to the left of most of the Democratic Party. They appealed powerfully as a story of hope for people who have lost most hope.
The next batch of ideas are not good ideas, and progressives don’t need to deal with them: attacks on immigration, rhetoric like the wall between Mexico and the U.S., and mass deportation. These are obviously horrible. But they are logically consistent and concrete (literally), an argument for creating jobs.
Democratic Party Deficits
Now let’s look at Hillary’s ideas — actually, maybe we shouldn’t because they are pretty sparse and very wonky, and they bore me and just about everybody else in the country. She said she would spend $50 billion per year on the infrastructure, which considering the state of the infrastructure is inadequate and wouldn’t lead to many jobs anyway. She also talked about ending the tax break corporations get for moving factories overseas. This is the same, small idea that John Kerry pushed out in 2004. I am still furious about that one, because at the time there was a huge media spotlight on factories going overseas, and when he proposed to end the tax break as the solution the entire issue went floating away.
So clearly, we need, at the core of a Democratic/progressive campaign, a solution to the problem of not enough good jobs. Other issues should be discussed, but jobs have to be at the center, and we need a concrete policy that people can readily understand.
An Alternative Economic Plan
I would like to propose the idea of a massive program of rebuilding the infrastructure — on the order of one or two trillion dollars per year, not per decade. Something large enough that it would clearly lead to tens of millions new jobs. Something large enough, in fact, that it would not just lead to jobs to construct infrastructure, but would also lead to the creation of millions of new manufacturing jobs, and thousands of new factories. This would not only pull in the non-racist part of the white working class (and probably many of the superficially racist), but also it would increase the enthusiasm of the black and Latino working class. And rebuilding cities and suburbs would keep the college-educated/white- collar voters engaged as well.
I offer the following as constructive criticism: as important as a raise in the minimum wage may be, it is not enough to challenge the Republican domination of national politics. Even health care, climate change, or changing the justice system, separately are not enough. These issues can only be addressed if the economic problem is solved at the same time. Otherwise, Trump and his successors will feed on the lack of jobs and pit segments of the public against one another.
The only way to guarantee that jobs will be created is for the Federal government to provide the funds to hire tens of millions of people. What Trump offers is to keep the existing jobs by imposing a 35% tariff; but renegotiating trade treaties do not guarantee jobs because they depend on the vagaries of the market. If you want the enthusiasm of both the white, black, and Latino working classes, you need to guarantee jobs, and only the government can do that.
There is certainly plenty to be done. The American Society of Civil Engineers estimates that we need to spend over $2 trillion dollars just to get our roads, bridges, water systems, schools, etc up to an adequate level. But I am talking about an entirely higher level of infrastructure rebuilding: to create a society that does not create greenhouse gases, in other words, a society that will prevent the worst of global warming. If you look at my site GreenNewDealPlan.com, you will see how $1.7 trillion could be spent each year over a twenty year period, including plans for an Interstate Wind System, an Interstate high-speed rail system, a building boom of dense residential housing in city and town centers, transit, solar panels, and many other kinds of production that would then lead to a boom in manufacturing in this country. In fact, the government could probably guarantee a job for anyone who wanted one.
So we can address two existential threats at the same time: mass unemployment (by fixing an economy that is leading to authoritarianism), and sustainable development (by creating a society that prevents global warming).
How Do We Pay for It?
When the financial system was teetering on the brink of collapse, the funds were found to help the banks; basically the government simply created money, and nothing terrible like inflation happened. The same thing can be done in order to fix the economy and create a large middle class. And unlike bailing out the banks, this money would lead to real, concrete wealth, not changes in bank accounts. When money is created to reflect new wealth, that money does not lead to inflation. So most of the money to rebuild the country could simply be created, not borrowed.
Of course, we could also increase taxes on the very rich and on profits of the large corporations, and we could also cut the fat out of the military budget. These could be part of a larger solution. But I think the main way to get away from being dismissed as not being “serious” is to simply respond that we can do what private banks do all the time: create money. In fact, we could also create a network of public banks to create money.
If the infrastructure can be rebuilt without borrowed money and its attendant interest payments, then another innovation could change politics: the revenue from the new infrastructure, from things like wind-generated electricity, rents from new housing, or fare for high-speed trains, or interest charged at public banks, could be used to decrease or even entirely eliminate income taxes for the middle class. Here is a way to do an end-run around the Republican Party and their constant blathering about cutting taxes. Income taxes were originally designed to be only paid by the rich, and we could go back to that model if most of the revenue for the government came from revenue-generating industries that the government owned.
Why Planning Can Work
Of course, many people in the Democratic Party would object that the era of big government is over, that nobody thinks the government can do anything right, and that the main strategy of the Democratic Party should be to capitalize on the fear of the bigotry of the Republican Party. Well how well is that strategy working?
The Democratic Party has, frankly, become very pro-corporate, and their policies pretty much reflect that position. In order to create a program to rebuild the country, almost all of the goods used to rebuild the infrastructure would have to be manufactured in this country. “Buying American” would be a rejection of free trade ideology and of many of the ongoing trade policies that Democrats have been supporting. There is a central question that must be asked and answered. What do you want: (a) to be ideologically pure and help Trump create authoritarianism, or (b) to create a country with a thriving middle class committed to progressive causes and one that prevents the worst of global warming?
The idea of government has been trashed, from both the Right and Left. From the Right, we have been told that the market can solve all problems, and that the government is the problem, not the solution. From the Left, the government has been fought to stop horrible wars and resist encroachment of the national security state. Many progressives have given up and don’t think the government could ever do anything useful again. But we need to be reminded that throughout American, indeed, throughout human history, government has been at the center of economic life.
FDR was not the only president that used government to save the economy. As far back as George Washington and Alexander Hamilton, the government has been used to encourage manufacturing and infrastructure. The original Republicans implemented a very strong program of building infrastructure, education, and trade protection. Teddy Roosevelt and the progressives legislated necessary regulation of the market and protection of the environment, and even conservatives like Calvin Coolidge and Dwight Eisenhower oversaw expansion of the national infrastructure. Of course, FDR and the New Deal led to Social Security, support of unions, a massive jobs program in the 1930s, the creation of governmental infrastructure systems like the Tennessee Valley Authority and rural electrification, and support for agriculture. All of these supports for the economy led directly to political realignments, as large sectors of the population saw the good that government could do for their daily lives, and we can build on this stellar history to reverse the conventional wisdom about government.
So what kind of political realignment would a massive green infrastructure jobs program kick start? The Democratic Party would once again become the party of the working people. New factories and the promise of more factories would not only revive white working class areas, they would transform African-American population centers in the inner cities as well, because the loss of manufacturing hurt African-Americans years before it hurt white communities. Manufacturing decline is the root cause of income inequality. This is a multiracial issue, and the mantra of “manufacturing won’t come back” is not based on fact, it is an argument for decline of the United States and of the Democratic Party. Either the Democratic Party implements some kind of program to revive manufacturing, or it will forever be lost in the wilderness.
The white-collar class wants rebuilt cities and a full employment job market, and they want a prosperous economy. Even the rural areas should profit from a rebuilt infrastructure, because they are even more spread out than surburbia, which should also want a rebuilt infrastructure that is bankrupting their towns and counties.
With an infrastructure jobs program at its core, the Democrats could add various other important policy changes that would fit in with the core agenda. Medicare for all would be easy to finance if everybody has a job. Free public college, a high minimum wage, better policing, childcare, a decrease in the sources of bigotry, all of this can be integrated into a massive jobs program.
We stand at a crossroads. If progressives and the Democratic Party don’t offer an alternative, the right-wing nationalists like Trump (and others in Europe and around the world) will offer an alternative, because regular conservatism and Clinton/Obama liberalism will not. A progressive alternative is easy: use the government to rebuild the infrastructure and manufacturing, creating tens of millions of jobs, and ushering in a new era of progressive prosperity.
Jon Rynn is author of Manufacturing Green Prosperity.