

It is often easier to give advice to others than to learn lessons oneself. What lessons should those of us who are self-conscious leftists learn from the midterm elections of 2010?


Teachable Moments: Rewind back to September 2008: An economic crisis of shocking proportions is breaking, soon to reveal that the celebrated “good times” of the previous three decades was largely a hollow myth. The left critique of neoliberal economics as regressive redistribution, combined with unsustainable asset bubbles in lieu of productive investment, on course to unleash unprecedented environmental havoc is completely vindicated. Unlike previous neoliberal crises which devastated economies elsewhere, this time Europe and the US would not be spared. Moreover, the critique of neoliberalism is no longer without prominent voices unencumbered by leftist reputations. Joseph Stiglitz, former chairman of the President’s Council of Economic Advisors and former Chief Economist for the World Bank, and Paul Krugman, New York Times columnist, have joined fellow Nobel Laureate Amartya Sen validating everything left economists had been warning about neoliberal economic policies for decades. Not only leftists, but former cabinet members like Robert Reich are pointing out that neoliberalism has hollowed out the American economy by systematically eliminating productive jobs. Most importantly, disgust with massive taxpayer bailouts filling adipose tissue on fat cat bankers without imposing any conditions to stem the rising tide of home foreclosures and get credit flowing again for the rest of us is boiling into a popular fury the likes of which nobody can remember. And finally, the Fox News/Rush Limbaugh/Glen Beck right wing is momentarily caught without a story line to explain how all this was possible to a listenership, who for the first time in decades is willing to listen to anyone who can explain what went wrong and how to begin to fix it. It is hard to imagine a more “teachable moment.”


It would be fooling ourselves not to admit that we largely failed to take advantage of this teachable moment. And unfortunately, Fox &Co. were quick to recover and serve up tea for their listeners. What the midterm elections confirm is that tens of millions of Americans seeking to slake their thirst for ways to make sense of their shock and pain have now guzzled right wing tea to excess, never having sampled left wing beverages. We on the left are perfectly correct to point out that Obama and the Democratic Party “blew” a golden opportunity to keep the Republicans on the run, but we on the left also “blew” an historic “teachable moment.”


My point is not to cry over spilt milk, much less wallow in defeatism, but rather to learn lessons so we can make needed adjustments. Why did we fail to take better advantage of a rare window of opportunity to connect with “the other” America? And what must we concentrate on now?


Comfort in Isolation: The Northwest Regional Conference on the Economic and Ecological Crises held in Portland Oregon in October 2009 was a self-conscious attempt to take advantage of this teachable moment. But even though “Econvergence” was co-sponsored by more than 60 organizations working on a wide variety of progressive issues, all attempting to reach out to broader segments of the population, and even though more than five thousand people attended hundreds of panels and a dozen plenaries and keynote addresses over three and a half days, almost all who came were “the usual suspects.” Very few were people from the “other America.” In a city and region where the divide is arguably less than elsewhere, the cultural divide between “us” and “them” was reconfirmed and undeniable. Had the conference been held when originally scheduled in the Spring of 2009 we might have had more success attracting newcomers. Unfortunately by the Fall of 2009 the right wing had largely recovered its balance and was blaring its reactionary story line into the homes of “the other America” 24/7. Consequently “they” no longer needed “us” to tell them what had happened and who to blame.


To some extent the cultural divide between the left and right in America cannot be avoided because both we and they are about cultural change, not just economic and political change. And in many respects the cultural changes we stand for are incompatible. But one counterproductive characteristic of the American left at this point in history is that we have become comfortable in our cultural isolation from mainstream America. A light bulb went off for me when I realized that while everyone present would swear they wanted more than anything for new people to attend Econvergence, the truth was that most were actually relieved that “they” had not intruded on “our” space.


The wrong kind of arrogance: The US left has too much of the kind of arrogance that is a cover for deep-seated self-doubt. Anxious to prove our superiority, we delight in ridiculing our opponents ignorance because it makes us feel better about ourselves. Combined with an abundance of “life style” leftism and precious little “organize politically” leftism, this aggravates our isolation by alienating Americans with less education and creating a dysfunctional “echo-chamber.” What the US left lacks is the kind of arrogance that stems from knowing you are right and have answers. Ironically, this lack of inner self-confidence is most apparent in reform campaigns where “system change” is not the primary issue. The movement to organize the CIO in the 1930s was as successful as it was partly because there were tens of thousands of socialists building the CIO saying “we are fighting for unions now, but we know what real economic justice and democracy are, and this is only our first step toward achieving it.” The Civil Rights movement of the 1960s was successful partly because leaders like Malcolm X and Stokely Carmichael helped millions of Afro-Americans know that Black is Beautiful, and it is racists who are personally weak. Radical “women-libbers” provided necessary self-confidence for the Women’s Movement in the 1970s. And the anti-Vietnam war movement was successful in part because its anti-imperialist component gave it the insight and confidence to rebuff every ploy devised to delay unconditional US withdrawal from Indochina. In contrast, the US left today is uncertain about many things: What should we replace capitalism with? What should activist organizations look like? How should activist organizations relate to reform movements and campaigns? Of course many old answers to these questions turned out to be wrong, so reflection and reevaluation is healthy and necessary. But until we have found the right answers to these and other critical questions, we will continue to lack the kind of self-confidence that can provide reform campaigns today with a “hard edge” that has often helped them in the past.


Prepare for the war ahead: One painful conclusion I draw from the midterm elections is that a rare window of opportunity has closed, at least temporarily. Over the past two years we largely failed to engage white, male, rustbelt, Fox-watching, working class Americans when they were momentarily confused and temporarily accessible. But we now need to prepare to fight the war that lies ahead and not dwell on the one we just lost. We are not going to appeal to “the other America” through discourse alone while an elixir of tea they find familiar and comfortable runs hot through their veins — no matter how cynical, manipulative, and bereft of real cures for their pain those pouring the tea may be. We have passed a moment when significant political realignments through discourse was possible, and find ourselves back in the “civil war” landscape of the 2000 and 2004 elections: We are a country divided, one third on the left, one third on the right — in total disagreement and disinclined to listen to one another — with one third in the middle — clueless and prone to blow with any prevailing wind.


So it is time for the left to think more about energizing our base, and at least for now, worry less about reaching out to working class comrades who are regrettably once again temporarily beyond our reach. It is time for the left to mobilize the 5% of the population who self-identify as left to make our anger even more visible than the displeasure of tea partiers, and to serve notice that there will be consequences as long as real crises go unaddressed by elected leaders, rather than waste our time whining over the failure of Obama and the Democratic Party to do what needs to be done. I am not suggesting we ridicule working class tea drinkers. Nothing could be more elitist and self-defeating. Nor am I suggesting we write off the American working class. For leftists who believe in democracy, and understand this implies we must build a majoritarian movement, that would be defeatist by definition. Nor am I saying that we should give up on pressuring Obama and the Democrats. I am saying that since tea party revelers are once again deaf to our insightful lectures, they will have to discover on their own that right wing analyses are inaccurate, and right wing cures only aggravate their pain. I am saying that Obama and the Democratic Party are equally deaf to our arguments that a right turn guarantees defeat. So while we mobilize for real solutions to historic crises we should be under no illusion that this will prevent Obama from triangulating and Democrats from collaborating with the Republican agenda. I am saying that while we continue to work on becoming more self-confident and less comfortable in isolation, we now need to concentrate first and foremost on mobilizing our own troops for action, however few they may prove to be initially, because otherwise there will be only one fighting army to join in a political civil war that has already resumed.



Teaching Keynes: As an economist nothing has been more infuriating for me than watching the world lapse back into nineteenth century economic thinking, completely forgetting the key lesson John Maynard Keynes taught economists and politicians alike over eighty years ago: In a recession, when businesses are laying off workers because they cannot sell the goods they would produce, when interest rates cannot be pushed any lower to stimulate business investment in plant and machinery, when falling wages do not increase employment but only further depresses demand for goods, and consequently for labor as well, the government needs to step up to the plate as “buyer of last resort.” Only by increasing its own spending can the downward recessionary dynamic be reversed. This used to be macroeconomics 101. This was the major improvement in economic theory the Great Depression produced. Nineteenth century economic theory taught that when recessions hit, income drops, and government tax revenues fall, governments should reduce spending to restore balance in their budgets. This was the advice of Treasury Secretary Andrew Mellon which Herbert Hoover acted on in 1929. Post World War II mainstream economics celebrated the lesson Keynes taught and delighted in ridiculing Hoover’s “tragic mistake.” From 1940 to 1975 mainstream economists taught a generation of students why, by cutting government spending and increasing tax rates, Hoover had witlessly turned a serious recession into the Great Depression.


Globally, aggregate demand for goods and services can only come from three sources: private consumption, business investment in more plant and machinery, and government. While an increase in exports increases aggregate demand for one country’s goods, and thereby boosts employment in that country, it only does so at the expense of demand for goods produced by the importing country, and a loss of jobs there. So when households and businesses are incapable of providing the boost in global aggregate demand that is needed, governments need to provide a “fiscal stimulus.” Governments need to increase spending and/or lower tax rates. In other words, governments need to run bigger deficits on purpose until the economy has recovered. Moreover, failure to do so will only aggravate future deficits as production, income, and tax revenues continue to decline, whereas running temporary budget deficits will reduce future deficits by increasing production, income, and tax revenues.


Unfortunately, instead of orchestrating a global fiscal stimulus, at the recent G-20 meetings in Toronto the major economic powers pledged to cut their budget deficits in half over the next three years. The Tory government in England is imposing fiscal austerity that far exceeds what Margaret Thatcher meted out in the 1980s. The European Commission and Central Bank are imposing draconian fiscal austerity on Portugal, Ireland, Italy, Greece, and Spain. The Obama administration has given up on any further fiscal stimulus, signed onto the G-20 deficit reduction pledge, and has created a bipartisan commission to recommend ways to reduce the government budget deficit. Keynes is surely rolling over in his grave at what amounts to global economic suicide, and a return to misguided, nineteenth century economics many of us thought had been put behind us once and for all.


But what has all this got to do with the left? So what if mainstream economists have labored mightily to become idiot savants, self-deluded by complicated rational expectations macroeconomic models bereft of Keynesian wisdom. So what if liberal as well as conservative politicians now listen only to bad economic advice, and are busy aggravating the current capitalist crisis as a result? The problem is that the left needs to understand how capitalism really works, and what will, and will not mitigate the damage it causes until a majoritarian movement replaces capitalism with participatory socialism. And unfortunately, many on the left are quite confused about what to call for and why. As a result, part of the reason we failed to take advantage of the recent teachable moment was we spoke in self-contradictory ways. Unlike the right, who quickly recovered and developed a coherent story line, no matter how illogical, the left failed to develop a coherent story line about the causes and cures of the economic crises. Too many on the left do not understand how to reconcile demands to dramatically increase deficit spending with the charge that rising indebtedness was largely responsible for getting us into today’s mess in the first place. Is debt the solution or is debt the problem?


Economics in capitalist economies is often about priorities and timing. When the official unemployment rate is 10% and the real unemployment rate is close to 20%, putting Americans back to work again should be the first priority. When the federal government is sufficiently credit worthy to be able to borrow at historically low rates of interest, whatever long-run deficit problems we may have are certainly not pressing at the moment. The only way to reduce unemployment right now is for the federal government to unleash a large fiscal stimulus. This means a larger budget deficit over the next two years. Moreover, until people are back at work, and production and incomes are rising again, it is impossible to address future budget deficits in any case – as the citizens of Great Britain will soon discover to their dismay. So the answer is really quite simple: Government must go farther into debt now, and work to eliminate socially irresponsible structural deficits only later, after the economy is back up and running. This only seems contradictory if one fails to understand the importance of timing.


Apparently this is a particularly difficult lesson for leftists to digest and communicate to others. What the left stands for, in brief, is empowering people to make their own decisions as long as they behave in socially responsible ways. Moreover, people in our base are particularly motivated by strong feelings of social responsibility. Therefore, leftists often experience indebtedness as irresponsible indulgence, whether done by individual households, businesses, banks, or government. Sometimes this gut feeling is entirely justified. Because the top 1% stole almost all of the increase in economic productivity over the past thirty years, and because the wealthy spend a smaller fraction of their income than the rest of us, it became necessary to buoy aggregate demand to keep booms from collapsing by increasing household indebtedness in unsustainable ways. This was irresponsible, and helped create an accident waiting to happen. And in the long run we need to correct this distortion and reduce household debt which can best be done by reducing income inequality. Inequality is what drives “competitive consumption” in the first place, and rising inequality is what makes it necessary to increase household debt to prevent economic stagnation. Similarly, when government debt is the result of tax cuts for the wealthy and postponing the bill for wars in order to dampen popular resistance to imperial ventures, government indebtedness is socially irresponsible. However — and this is the key point — when the only way to put Americans back to work again is to temporarily increase the federal budget deficit, and when this can be financed at historically low rates of interest, it is socially irresponsible to fail to do so. And what is even more irresponsible is to engage in economic quackery and prey on people’s credulity and sense of social responsibility to peddle counterproductive, nineteenth century, deficit reduction tonics as real medicine.


Don’t Mourn. Organize! In the end Mother Jones said all that really needs to be said. It ultimately comes down to what used to be called good old “elbow grease,” and what we need now more than ever is for people to dedicate themselves to organizing. Organize for action. Organize to reach others, particularly during “teachable moments.” Organize ways for more and more people to “live within the movement,” because we are in for a long haul. This commentary is dedicated to the memory of a friend and comrade, Paul Lodico, who exemplified dedication to organizing for radical social change. From the time he was a teenager Paul spent every day of his life until he passed away at the age of 70 on October 29th this year organizing for the kind of change one truly can believe in. In the 1960s Paul was hitch-hiking across country as a student organizer. In the early 1970s he was running for office as a Socialist in Detroit. After a brief interlude studying for his doctorate in political economy at American University in the mid-1970s where we met as fellow graduate students, Paul moved to Pittsburg to work as an organizer for the United Electrical Workers Union. In the 1980s Paul helped found the Monongahela Valley Unemployed Committee, where he worked tirelessly for the past thirty years. Paul Lodico, Presente! You will be missed.

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