November 15, 2016
By Larry Cary
It’s been a week since Donald Trump won the election. I needed time to process the defeat before writing about it. The stakes were so high – America’s position in the world order and whether the federal government is to become a complete right-wing tool of the rich and powerful. It was and continues to be discombobulating.
We need to begin assessing what happened so we can work towards making it right come the next election. There are many reasons for why the Republicans emerged this election as the hegemonic political party in this country with control of all branches of the federal government and over 60 percent of the state governments. But among the reasons, importantly, is that globalization has been a disaster for America’s working class and the Democratic Party is as much responsible for it as anyone else. Were this not the case, the “fire wall” of the so called “Rust Belt” states would have held.
The Rust Belt states used to be called the industrial heartland. The name alone tells the story – of working class life slowly, inexorable decaying away. Statistics back that up. While manufacturing has accounted for the same percentage of real GDP for the past 50 years, about 12 percent, the manufacturing workforce has significantly declined. In 1960 about 25 percent of workers were employed in manufacturing, while today it is down to only about 9 percent. And in absolute terms, the Great Recession was especially unkind - since 2000, 6 million manufacturing jobs disappeared. See, Baily, N. and Bosworth, B.P., US Manufacturing: Understanding Its Past and Its Potential Future, Journal of Economic Perspectives, Winter 2014. This has left these industrial workers unemployed, underemployed or working at jobs that pay a fraction of what they used to make.
While the number of jobs declined, productivity dramatically went up. Between 1973 and 2013, productivity in the manufacturing sector rose by nearly 75 percent. Compared to his or her father, today’s industrial worker is about 250 percent more productive. (1948 vs 2013). See Mishal, L., et al., Wage Stagnation in Nine Charts, Economic Policy Institute. This means that many manufacturing jobs are never coming back, no matter what Trump does.
Because American manufacturing is heavily dependent on foreign imports of materials and components, protectionist trade policies may boomerang. The manufacturing sector will become less competitive if tariffs increase the costs of inputs from overseas’ suppliers. And foreign countries could retaliate by putting tariffs on American goods imported into their country, which could result in less manufacturing activity in the U.S.
Our formal corporate tax rate is higher than the foreign average, so some people, like mainstream Republicans and Democrats, think reducing the tax rate may make the U.S. a more attractive place for investment and thereby increase the size of this sector. But I think it unlikely to stem the tide of further deindustrialization as wage rates and others costs of doing business will still remain much lower in other countries.
The point is - Trump will likely not be able to keep his promise of bringing jobs back. He may not even be able to slow the rate of loss. This may mean Rust Belt workers will not support Trump in the next election, but it doesn’t necessarily mean these voters will return to the Democratic Party. They could turn further to the right.
We must acknowledge that the Democratic Party abandoned these workers nearly two generations ago if we are to win these workers back. Unless the Democratic Party truly becomes the advocate for working people, not just in manufacturing, but throughout the economy, it will not be the alternative these workers seek when Trump fails.
Thirty years ago the “New Democrat” wing of the party took over. Socially progressive, but fiscally conservative, the party espoused free trade and lower tax rates as the solution to our social economic problems. The party no longer saw organized labor as the spokesperson for the working class but relegated it to one of a number of interest groups within the party to be cultivated for electoral support.
This thinking led Jimmy Carter to deregulate the airline and trucking industries, which destroyed the living standards of these workers. Bill Clinton signed NAFTA. Barack Obama supported TPP. But worse than that, Obama also failed to prosecute a single Wall Street type for the mortgage fraud that nearly destroyed the world economy. By comparison, after the savings bank scandal in the 1980’s we saw hundreds of executives jailed. While Obama bailed-out the banks, 7 million Americans lost their homes to foreclosure. That did not have to happen. The government could have refinanced these mortgages at attractive rates and saved these people from the worst economic trauma they had ever experienced.
The party continues to this day to be dominated by “New” Democrat thinking. Hillary Clinton was a remarkably poor candidate to put up for this election cycle. She had a connection to a savings bank scandal in her past. Don’t you remember Whitewater? She was identified with her husband’s free trade policy and she supported Obama’s roll out of the TPP. She was severely wounded by her email scandal (which FBI Director James Comey effectively used against her right before the election). She took big speaking fees from Goldman Sachs and Wiki leaks further damaged her because it gave grist to the mill that she was in the pocket of Wall Street. Clinton also repeatedly proclaimed she was the candidate of the status quo. She said that people should vote for her if they liked the past eight years.
But Bernie Sanders showed that a large part of the Democratic Party’s base was interested in change. In particular, they wanted policies that narrowed the income inequality that has returned to a level not seen since the 1920s – before all of the New Deal and Great Society programs were created and rising wages supported by unionization had propelled the American worker into the middle class. They opposed free trade and instead wanted free college education. Sanders, while calling himself a socialist, was not much more than a Lyndon Johnson Great Society Democrat, the way the party used to be before the “New” Democrats took over. While Clinton adopted some of Sander’s rhetoric and policy prescriptions she continued to suffer from a lack of credibility.
Trump did take advantage of racist and anti-immigrant sentiments to drive his campaign. He was helped by a generation of Fox News propaganda and an anti-Obama backlash. All the right wing groups flocked to support Trump. But in the end, Clinton lost the Rust Belt worker more because she was not seen as being on their side and Trump promised change. They switched from voting for Obama to voting for Trump when he said he will put high tariffs on manufactured goods when plants move overseas.
So what does this all mean? It means the Democratic Party needs to change and return to being the party of the working class if it expects to win back the hearts and minds of the Rust Belt workers, the young and the rest of the ordinary hard-working people in this country. It needs to figure out how to increase and improve the manufacturing sector of this country, while it still champions tolerance, and fights against discrimination and bigotry in all its forms. It’s not enough to give them transfer payments to ease their pain. We have to figure out how to promote growth in the manufacturing sector. I don’t have an easy prescription for that, but it must be done. And in so doing, we can expect the party to get the support of some of the rich.
As part of rebuilding the Democratic Party, democrats need to do everything they can to fight all of the hate groups that now feel emboldened by Trump’s victory. Since Trump has picked Steve Bannon of Breitbart News as his senior Whitehouse counselor, there will be no dearth of opportunity to fight “the good fight.” Breitbart News promotes anti-Semitism, racism, white nationalism, Islamophobia, and nativism and is considered the chief promotor of the alt-right agenda. We can expect Trump to use the far right as needed to battle against the free traders and anyone else who oppose his policies whether they be Democratic or Republican. The passion of the youth on display at the daily demonstrations around the country against Trump will fuel this fight back. And in so doing, we can expect the party to get the support of some of the rich.
Within the labor movement we should begin an educational campaign to enable workers to better understand Trump’s terrible agenda. We should raise many issues, but in particular the anti-worker and anti-union measures that assuredly will be forthcoming. We need to agitate against elimination of the new overtime rules which give overtime protection to millions. We need to agitate against a federal right-to-work amendment to the Nation Labor Relations Act. And we should educate Union members about the impact of Trump putting anti-union people on the Labor Board. We should also support efforts to raise the minimum wage on a federal level. Towards this end, it would be very helpful if every local union increased its support of print and internet publications to their membership. In the past ten years, too many locals have ceased to publish an official organ.
There is no conflict between being the party of the working class and being the party fighting for human and civil rights, for peace and against discrimination in all of its forms. But if it is to win, the Democratic Party needs to understand that workers are not just another interest group, they are the people who do the work that makes America go.
*Larry Cary is a labor lawyer in New York City. His website is www.carykanelegal.com.