Our economic problems boil down to this:
The fact is that for a generation we have built our economy on a lie—that we can have a low-wage, high-consumption society and paper over the contradiction with cheap credit funded by our foreign trading partners and financial sector profits made by taking a cut of the flow of cheap credit.
This is from a recent speech at Harvard by AFL-CIO President Richard Trumka. It should be read by every American:
The jobs hole – and the decades-long stagnation in real wages — are the source of the anger that echoes across our political landscape. People are incensed by the government’s inability to halt massive job loss and declining living standards, on the one hand, and the comparative ease with which government led by both parties has made the world safe again for JP Morgan, Goldman Sachs and Citigroup, on the other hand.
Rescuing the big banks hasn’t done much for Main Street. The very same financial institutions that got bailed out have not only cut way back on lending to business, they have never stopped foreclosing on American families’ homes.
The fact is that for a generation we have built our economy on a lie—that we can have a low-wage, high-consumption society and paper over the contradiction with cheap credit funded by our foreign trading partners and financial sector profits made by taking a cut of the flow of cheap credit.
So now a lot of Americans are angry. And we should be angry. And just as we have seen throughout history, there are plenty of purveyors of hate and division looking to profit from our hurt and our anger.
I am a student of history, and now is the time to remember our history as a nation. Remember that when President Franklin Roosevelt said, “We have nothing to fear but fear itself,” other voices were on the radio, voices saying that what we really needed to fear was each other – voices preaching anti-Semitism and Nazi-style racial hatred.
Remember that when President John F. Kennedy stepped off the plane in Dallas on November 22, 1963, radio voices were calling for violence against the President of the United States. And the violence came—and took John and Robert Kennedy and Martin Luther King and Medgar Evers and so many others.
But in the United States, we chose to turn away from the voices of hatred at those critical moments in the twentieth century. In much of Europe, racial hatred and political violence prevailed in response to the mass unemployment of the Great Depression. And in the end, we had to rescue those countries from fascism– from the horrible consequences of the failure of their societies to speak to the pain and anger bred by mass unemployment.
Why did our democracy endure through the Great Depression? Because working people discovered it was possible to elect leaders who would fight for them and not for the financial barons who had brought on the catastrophe. Because our politics offered a real choice besides greed and hatred. Because our leaders inspired the confidence to reject hate and charted a path to higher ground through broadly shared prosperity.
This is a similar moment. Our politics have been dominated by greed and the forces of money for a generation. Now, amid the wreckage that came from that experiment, we hear the voices of hatred, of racism and homophobia.
At this moment of economic pain and anger, political intellectuals face a great choice—whether to be servants or critics of economic privilege. And I think this is an important point to make here at Harvard. The economic elites at JP Morgan Chase, Goldman Sachs and the other big Wall Street banks are happy to hire intellectual servants wherever they can find them. But the stronger the alliance between intellectuals and economic elites, the more the forces of hatred—of anti-intellectualism—will grow. If you want to fight the forces of hatred, you have to help empower the forces of righteous anger.
And at this moment, the labor movement is working to give voice to the justified anger of the American people. We need help. We need public intellectuals who will help design the policies that will replace the bubble economy with a real, sustainable economy that works for all of us….
Government that acted in the interests of the majority of Americans has produced our greatest achievements. The New Deal. The Great Society and the Civil Rights movement — Social Security, Medicare, the minimum wage and the forty-hour work week, and the Voting Rights Act. This is what made the United States a beacon of hope in a confused and divided world. In the end, I believe the health care bill signed into law last month is an achievement on this order, one we can continue to improve upon to secure health care for all.
But too many thought leaders have become the servants of a different kind of politics—a politics that sees middle-class Americans as overpaid and underworked. That sees Social Security as a problem rather than the only piece of our retirement system that actually works. A mentality that feels sorry for homeless people, but fails to see the connections between downsizing, outsourcing, inequality and homelessness. A mentality that sees mass unemployment as something that will take care of itself, eventually.
We need to return to a different vision….
President Obama said in his inaugural address, “The state of the economy calls for action, bold and swift, and we will act — not only to create new jobs, but to lay a new foundation for growth.” Now is the time to make good on these words – for Congress, for President Obama and for the American people.
These are big challenges. But it is long past time to take them on. If you are worried about the anger in our country, if you don’t want the forces of hatred to grow, be a part of the fight for economic justice and a new economic foundation for America. Be a critic of power and privilege, not its servant.
Be the source of the ideas that can rebuild our economy and restore confidence in government. As students, as teachers, as workers—all of us can play a role in this great effort. Whether here within the university, at think tanks, in the government, in the press, or even working with us in the labor movement, working people need the help of engaged policy intellectuals if we are together going to build an economy that works for all.
h/t Brian Leiter
