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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Anti-Labor Day

As Dana Milbank and Spenser Hsu noted in today’s WaPo, George W. Bush spoke to union audiences on the last three Labor Days, but instead spent yesterday regaling a partisan crowd in rural Missouri with his stump speech.
Now perhaps BC04 simply couldn’t find a friendly union audience this time around. And there’s no question Rove and company wanted to keep the campaign focused on the GOP convention message that all this economy and deficit and health care and energy stuff should be subordinate to the argument that Bush is the embodiment of America’s war on terrorism.
But the attitude of this president towards labor is worth thinking about in some depth.
And I’m not just talking about the labor movement. Yeah, this administration seems to hate unions like sin, and appears perfectly happy to appeal to union members not in terms of their economic interests, but through a combination of national security fear tactics and the usual cultural slurs against the opposition.
On a more fundamental level, however, Bush’s policies represent the most profound disrespecting of the value of labor and the contributions of working families to our economy in a long, long time.
The most obvious example of this attitude is the administration’s tax strategy, which is clearly aimed at shifting the burden of government from wealth to work. Bush has already succeeded at least provisionally in eliminating federal taxation of inherited wealth. He has also succeeded in “flattening” personal income tax rates, and is reportedly flirting with a full-fledged “flat tax” assault on the principle of progressive taxation. His goal in the aborted 2003 tax offensive was to all but eliminate federal taxation of investment income. His friends in Congress are beavering away at the task of undermining federal taxation of corporations, through an assortment of new loopholes and concessions. Everywhere you look, the federal tax base is getting narrower, and where it’s broadest is in the taxation of work.
Worse yet, Bush’s borrowing binge means that this narrow tax base will have to sustain an even-larger share of today’s spending and tomorrow’s interest costs. Add in the strong possibility that the GOP’s raids on the Social Security trust fund will likely mean either (a) cuts in benefits or (b) increases in the most regressive tax on labor, the payroll tax, and you’ve got one of the most profound tax shifts from wealth to work in history. And that’s without even considering the reverse-Robin-Hood tilt of Bush’s spending policies….
But it gets worse. Bush’s economic strategy, such as it is, increasingly focuses on the atavistic premise that lowering the cost of doing business is the sole key to economic growth.
Why is this atavistic? Let me explain.
As regular readers of this blog have probably figured out, I’m from the South. And I’m just old enough to have experienced the tail end of the century of grinding poverty the South experienced following the Civil War–not just for African-Americans, but for most of the population.
If you had to identify one simple reason for this grinding poverty, beyond the legacy of racism, it was the perpetual delusion of southern political and business leaders that the region had to stay poor and dumb in order to attract the capital necessary to eventually climb out of the ditch. Like some of today’s third world countries, the South, right up to the 1970s, was paralyzed by the idea that decent wages, unionization, protection of natural resources, business regulation, progressive taxes, and quality education were all impossible because they would “price” the region out of opportunities for economic development. All of the South’s social and economic weaknesses were perceived as essential to maintaining a “good business climate.” And that benighted belief also helped perpetuate Jim Crow, since the ability to keep roughly a third of the region’s population in semi-serfdom gave the South a cost advantage no other part of the country could ever meet.
Gradually, by the 1970s and 1980s, southern political leaders, and even many business leaders, woke up to the fact that deliberately maintaining a low standard of living wasn’t worth the paltry payoff in low-wage textile jobs. And slowly but surely, a consensus developed that decent education and adequate public services were positive, not negative, factors in long-term economic development. The states that pursued this “high road” strategy–especially North Carolina and Georgia–tended to prosper. The states that stayed on the low road–especially Mississippi and Alabama–didn’t.
That’s why it is so profoundly depressing to see the theory of economic development that my home region finally began to abandon over the last few decades now being embraced by the national government as the way for America to successfully compete in a global economy.
That’s sure what it looks like to me. And it’s the best measurement imaginable of how far off track Bush has taken our economic policies over the last four years. Bill Clinton endlessly proclaimed the key to U.S. leadership in an information-age economy was to promote innovation, encourage small entrepreneurs, value work, and invest in the knowledge and skills of our workforce. Implicitly and sometimes explicitly, today’s Republican party argues that the key to economic success is to reduce taxes, end regulation, insulate businesses from the costs of malfeasance, slow down environmental protection, subsidize corporate operations, gut collective bargaining, and shift as many public services, including public education, into the private sector.
If that approach made any sense, then Mississippi would be the economic dynamo of the nation, and of the world. But that’s the road this administration and its party appears to be paving for us all.
So when you hear Kerry or Edwards talk about Bush’s tendency to value “wealth, not work,” this isn’t just a clever campaign line. It’s an accurate description of the GOP’s basic world-view of the economy, and it’s worth shouting about.

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