Where Will Clinton Go?

...First, he's increased the progressivity of taxes, which gives government a more politically sustainable funding base...

...Indeed, the Perot vote had no traditional political definition...

...Clinton doesn't need Carville to remind him that there are more votes on the far side of the Pool than on the near...

...It was his analysis that manufacturing mattered, his pledge to place the government's R&D capacities at the call of civilian manufacturing, his interest in managed trade, at least when it came to crucial new products like computer chips...

...Last November, they made up only 19 percent of the voters...

...There was one other presidential candidate whose voters fit the profile of Perot supporters in the '92 campaign, and that was Jerry Brown...

...In the spring of 1992, when the policy liberals made the case within the campaign for a public investment program, it was the pols—consultants James Carville and Paul Begala, pollster Stanley Greenberg—whose arguments for the program's political merits put it over the top...

...it would further his economic policies...

...What was missing from the mix during the transition and the administration's first weeks was the populists, which in Clinton's entourage SPRING • 1993 • 137 Clinton Proposes, We Respond means the pols...

...From my vantage point on the far side of the Capitol Reflecting Pool, Clinton's biggest applause line in his inaugural address was his attack on the money-driven culture of Capitol politics...

...Today, from Silicon Valley to Route 128 to L.A.'s aerospace row, high-tech execs have a similarly keen interest in policies that ease their transition to a post-Soviet world...

...Since the mid-sixties, most new government programs have either been regulatory or targeted narrowly to specific minority or income groups...

...The Perot Vote Clinton entered office to a steady drumbeat of demands from $90,000-a-year editorialists for tax hikes on $30,000-a-year retirees...

...First, reducing the deficit along the lines Perot laid out will abort what is already the frailest of recoveries...

...The Ghost of the CIO Clinton needs to do well at the peripheries of the Democratic coalition, because the Democratic core continues to erode...

...But deficit reduction fiber alles has been a preoccupation of the American elite for years...

...Which will have to be achieved without notably radical appointments...

...After twelve years, you'd think these folks would have thought through what they want out of a Democratic administration...

...That, at least, is the conclusion reached by the leaders of half a dozen major internationals, who are arguing that it is time to resurrect labor-law reform—rewriting the National Labor Relations Act to allow for the kind of innovative workplace Clinton champions and to enable workers to organize once more...

...It was his stump speech decrying the fact that the U.S...

...Third, most of Clinton's new programs should have broad-based support...

...But they haven't...

...Some parts of labor are simply out to protect what small membership they have and are putting forth the most parochial agenda imaginable," says a ranking official of one international...

...The problem is that over the past half century, America's politics have atrophied alongside America's government...

...He won 17 percent of the liberal vote, 21 percent of the centrist and 18 percent of the conservative...

...But realizing his moderate goals may require more immoderate means than he's been accustomed to pursuing...

...was "the only nation that would shut down its defense industry and not have a plan for the people thrown out of work...

...Except that beneath the broad support for right-wing non-intervention lurked an even broader support for right-wing intervention— for that distinctly conservative brand of Keynesianism known as defense spending...

...What's not clear, given the dispirited state of unions and their leadership, is whether anyone is remotely capable of becoming a latter-day Lewis...

...But as he makes his trade-offs on the Hill, he needs forces on the ground: supporters in every district who are at least an implicit threat to Perotnoid congressional Democrats...

...A recent Newsweek poll found that by a margin of two to one, Americans thought it more important to raise taxes on the rich than cut taxes on the middle class...

...But Clinton's liberalism must be more cunning than that of his Democratic predecessors...

...Better to sacrifice some of his program, the argument goes, than to risk the wrath of the markets or the ire of Ross Perot...

...Some, like increasing civilian R&D, can be justified as making America more competitive...

...On the campaign trail, Clinton argued that we had fallen behind other nations—Germany in particular—that had trusted their workers with more knowledge about the work process and more power to affect it...

...Ending the recession at home may require ending it in Western Europe and Japan as well...

...Similarly, Clinton ran best among the poorest voters and worst among the wealthiest, while the class contours of Bush's vote were predictably the reverse...

...Nonetheless, many of the same forces that thwarted the French Socialists are arrayed against the reforms Clinton has said he'll pursue...

...Then again, the Mine Workers under John L. Lewis weren't historically a source of dissidence either—until the prospects for organizing took a quantum leap with the accession of Roosevelt, and AFL president William Green proved totally indifferent to the opportunity...

...And neither can his supporters be categorized neatly as deficit reduction fiends—as, say, Paul Tsongas's might...

...The issue requires an in-depth study" rather than a rush to hearings, says Robert McGlotten, the Federation's lobbyist...

...One of his favorite lines was "Let's do it...

...What Brown and Perot had in common, of course, wasn't the politics of deficit reduction, but their war on politics and on the culture of money that dominates it...

...From the end of World War II through 1971, currency speculation was a rather minor activity...

...The two tendencies that dominate the administration are the Wall Street/K Street corporate establishment, a bastion of fiscal orthodoxy on macroeconomic questions, and the liberal wonks, who will provide some innovative policies in matters non- and microeconomic...

...Clinton was elected because he offered a program for economic revitalization that struck voters as plausible and fair...

...What's new is the prominence that deficit reduction has assumed in mass public opinion—a change that is partly Ross Perot's doing...

...The Carville-led war room that guided the campaign was disbanded on election day...

...The pols have now returned, primarily to remind Clinton why his program— not Paul Tsongas's, not Ross Perot'sprevailed...

...The swing voters of California weren't drawn to Clinton by his fiscal prudence...

...Clinton's success among two key swing constituencies—Sunbelt suburbanites and hightech industries (many of whose leading executives, from Hewlett-Packard CEO John Young on down, endorsed him)—derived precisely from his rejection of laissez-faire and his support for public investment along the lines that high tech approved...

...Not coincidentally, all the nations Clinton cited as "working smarter" were nations that have higher rates of unionization than the United States...

...Lane Kirkland, as one leader puts it, "has been more concerned with who will be heading the USIA than with who will be heading the Department of Labor...

...As John Eatwell pointed out in a recent issue of the American Prospect, the sovereignty of the markets over governments is not an immutable planetary fact but a historically specific development...

...As Stephen Fraser makes clear in his biography of Sidney Hillman, an important source of support and funding for Roosevelt was marketers such as the Filenes, who had a keen interest in policies that boosted and stabilized consumer purchasing power...

...In the 1984 and 1988 presidential elections, for example, SPRING • 1993 • 139 Clinton Proposes, We Respond voters from households that had at least one union member—a group that tends to vote 12 to 13 percent more Democratic than the electorate at large—constituted 26 and 25 percent of the electorate, respectively...

...As I write, the effective opposition to Clinton in Congress isn't coming from Republicans but from conservative Democrats...

...While Clinton ran best among liberals and worst among conservatives, and Bush's vote had precisely the opposite character, Perot's had no ideological identity whatever...

...Even more galling is the Federation's continuing preoccupation with foreign policy...

...But does Clinton win the Perot vote by embracing the Perot program...

...Paris, like Washington, rocked all night when the center-left took power...

...Since the collapse of the system in 1971, the values of the world's currencies have become subject to constant revaluation against one another: today, 90 percent of currency transactions are pure speculation...

...It is, to begin, redistributive—taking its funding from the rich and the Pentagon, and giving tens of billions of dollars to the working poor, via the earned income tax credit and a higher minimum wage...

...Deficit reduction matters to them, but so does a managed trade 138 • DISSENT Clinton Proposes, We Respond policy and, I would guess, a credible, universal, latter-day WPA...

...With the Democratic National Committee as his improbable base, Clinton may have to try building a mass movement from the ground up...

...This is also a profile of voters who see government as an agency that taxes them to benefit others, precisely the kind of voters to whom the universality of Clinton's proposals was intended to appeal...

...Second, it's not even clear that deficit reduction is the sine qua non of Perotism...

...Linchpin of the Republican presidential coalition from 1968 through 1992, birthplace of the tax revolt of the late 1970s, home to both Nixon and Reagan, California was the place where the New Deal order succumbed to a new regime of low taxes and laissez-faire government...

...Second, by raising taxes both to fund that activism and reduce the deficit, Clinton has substantially defused elite opposition both to the tax increase and the Pentagon cuts...

...Though Clinton has never discussed labor law reform per se, he nonetheless offers a way out of the "special interest" trap: organized workers are indispensable to creating Clinton's "high-skill, high-wage" twenty-first-century economy...

...The most critical difference is that the capitalism Clinton confronts is global...

...Increasing the number of good manufacturing jobs, for 140 • DISSENT Clinton Proposes, We Respond instance, depends on a managed trade policy that begins with raising wages and workplace and environmental standards in Mexico—and then might move to mandating a hemispheric or global minimum wage (establishing a percentage, say, of the value added to a product) through a broader treaty...

...Carville was the Cajun Falstaff left behind as Clinton transformed himself from boyish candidate to serious statesman—a Falstaff, however, who offered a surer guide to governance than the Beltway insiders...

...In particular, deunionization is taking its toll...

...It's that impatience, and a literal distance from any political institutions (unions, say, or urban organizations) that defines Perot's voters, even more than their anti-deficit zeal...

...In particular, cobbling together an enduring Clinton majority out of his own base of support and November's Perotistas won't be accomplished by policies of fiscal constraint but by a more unabashed populism...

...In California, that 40 was drawn disproportionately from aerospace scientists and engineers, and it spelled an end to the huge vote totals the Republicans characteristically racked up in such conservative bastions as Orange County...

...The push for a more ambitious agenda has originated from a number of internationals that haven't always been boat-rockers (the list includes the Steelworkers, the Mine Workers, AFSCME and the Clothing Workers...

...So far, he's doing just that...

...We need to be working smarter," Clinton said over and over again...

...Public skepticism at the idea of government remains high...

...A number of Clinton's domestic priorities simply can't be achieved domestically...

...Simply reinventing social spending may require reining in the markets—fixing some international currency ratios pegged, say, to the mark, the yen, and the dollar...

...But it will do little to rebuild the American economy, and even less to reinvent the Democratic coalition...

...Clinton may be tempted to try a grand compromise—Reich fosters a more egalitarian workplace, say, while Panetta comes in with a budget that reassures the markets...

...The most critical 1930s parallel, of course, is that Clinton, like Roosevelt, is a probusiness president who, without wishing to, will have to duke it out with capitalism in order to renew the system...

...During the campaign, they not only sharpened Clinton's message but played a decisive role in tilting the economics leftward...

...Which is not to say the liberal moment is upon us...

...The last time labor-law reform was floated, during the Carter administration, it was savaged as a piece of "special interest" legislation...

...And enacting his domestic program, or even just presiding over an economic recovery, may prove difficult without forcing changes on unwilling global markets...

...They've already been rewarded with one of Clinton's most innovative appointments—that of Laura Tyson, an economist utterly disenthralled with the shibboleths of laissez-faire, to chair the Council of Economic Advisers...

...He was also the trade hawk, the industrial policy hawk...

...that now looms as the transition's biggest mistake...

...One month into the Clinton administration, Kirkland is looking more and more like a dead ringer for Green...

...Perot was not merely the deficit hawk...

...For a movement that once represented one-third of private-sector workers and now represents one-tenth, you'd think the opening Clinton provides would be a welcome one...

...leaving studiously undefined what exactly "it" was...

...But if Bill Clinton's 43 percent mandate in the November election was not quite a clarion call for social democracy, George Bush's 38 percent was a decisive repudiation of Republican rule, a verdict that twelve years of laissez-faire had imperiled American jobs and living standards...

...The deficit reduction incurs a price, of course: many of Clinton's programs— worker retraining, for instance—are nowhere near as well funded as they should be...

...Part of the problem is that decades of governmental inaction has bred SPRING • 1993 • 141 Clinton Proposes, We Respond popular contempt for government...

...Clinton's activist agenda—universal health insurance, worker training programs, "invest and grow" economics—has been beset from the start by the artifacts of a conservative era: chiefly by the discrediting of public enterprise and a deficit designed to continue Reaganism by other means...

...Then-transition director Warren Christopher, for instance, was hardly the person to gauge the sense of outrage and betrayal that the revelation of Zoe Baird's employment of illegal aliens would unleash...

...Hostile though they be toward both government and politics, the Perotistas are nonetheless an action faction, too...

...Christopher knows K Street...

...The key state to building an enduring Democratic majority, surely, is California, which before November had gone Democratic in just one presidential election since 1948...

...Taking office, as they did not, at a time when the dominant ideology for the past two decades has been relentlessly antigovernment, Clinton has to recreate not merely government but the constituency for government...

...Clinton has come up with the first government program in decades intended to create a more equitable nation, but the institutional forces for greater equity—unions above all—have dwindled to near-insignificance over that time...

...His ultimate challenge, it turns out, won't be reinventing government...

...Some, like the earned income tax credit, appeal through their reciprocity: they reward work, they're not offering "something for nothing...

...At bottom, the euphoria with which the public has welcomed Bill Clinton to Washington— and which, if the polls are right, has substantially survived his rocky first few weeks—is a euphoria at the reinvention of government...

...The old order is discredited...

...In the recession of '90-92, they made up about 40 percent...

...it is not yet dispelled...

...To be sure, the pollsters tell us that Perot's supporters are more skeptical about government intervention than Clinton's...

...In previous postwar recessions, white-collar workers made up about 20 percent of the unemployed...

...Then as now, a newly activist government would provide the jobs, the industry, the sense of equity and new beginnings after two decades of conservative control...

...For millions of Americans, then, taxes are real but programs are less so, and the ensuing skepticism is the biggest obstacle Clinton must surmount...

...Both exuded an impatience with politics-as-usual that won them followings that were disproportionately young...

...It's certainly the course of least resistance...

...More likely, applied Perotism is a prescription for economic and political disaster...

...Instead, McGlotten insists, labor's agenda should be limited to those items left on the table from the Bush administration—the striker replacement ban, family leave (now enacted), the issues surrounding NAFTA, and the enactment of a form of national health insurance that forgoes "any taxation of our members' health care benefits...

...Only one transfer of power in the West over the past several decades has provided a sense of one era dying and another being born comparable to Clinton's arrival in Washington: the accession of Francois Mitterrand and the French Socialists in 1981...

...And yet, it's the spending side of Clintonomics, not the cutbacks, that's encountered the opposition...

...Persuading these legislative titans not to whittle away the Democrats' last best hope at governing will take all Clinton's wiles...

...Euphoria just that a government exists again, that it isn't gridlocked, that it's identified the problems (if not yet all the solutions), that it doesn't abdicate on ideological grounds when confronted with the challenge of rebuilding America...

...But the Perot vote, again, neither rose nor fell across the lines of income...

...Besides, Clinton carried a number of historically Republican constituencies last November not because he promised caution ahead but quite the reverse—a burst of activism, even state planning...

...Merely reformist ends, in this new world disorder, may require radical means...

...Some, like the college loan—national service program, appeal through their universality...

...Clinton, after all, is the first reform president to try to exert the power of the state over an economy that's no longer only national...

...Clinton has repeatedly been urged not to test these limits, to resign himself to the economic and political restraints he has inherited...

...And when defense spending fell prey to the end of the cold war, it turned out that any intervention— right-wing, left-wing, planning for conversion, industrial policy—was preferable to none...

...Carville knows K-Mart— and Carville's expertise is much the more valuable as the new president struggles with his economic plan...

...The program Clinton's now laid out is fundamentally liberal, in the tradition of Roosevelt and Johnson...

...Clinton's agenda, of course, is nowhere so radical as Mitterrand's...

...q POST-STATE-OF-THE-UNION POSTSCRIPT: Well, he resisted the worst of the Panetta temptation...

...But, paradoxically, Perot also stood for the prospect of decisive governmental action, freed from the constraints of politics...

...But not at the AFL-CIO, which has been distinctly unenthusiastic about the congressional hearings that liberal Illinois Senator Paul Simon has convened on reforming labor law...

...Revitalizing America's unions would not only help Clinton's political prospects...

...Though Governor Clinton's record of union support was spotty, candidate Clinton made the best implicit case for unionization heard on the stump in years...

...Unexceptionable positions all—and ones that largely fail to address the larger concerns of the 85 percent of the work force that isn't unionized...

...By creating fairer taxes, Clinton has created the space for a more activist state...

...By campaign's end, high-tech had positioned itself to become for Clinton what the massmerchandising sector had been for Roosevelt: the sector of capital committed to Democratic economics...

...During this time, under the Bretton Woods accord that pegged the values of the world's currencies to the dollar, there was nothing to speculate against: 90 percent of currency transactions were long-term investments...

...The salutary effect of the Baird affair is that it forced Clinton to this conclusion, too...

...November exit polls showed Perot supporters to be not only younger than average, but also more likely to be non-college educated, white, male, suburban, Western...

...FEBRUARY 8, 1993 The constraints on Clinton are excruciating— and if he prudently adhered to them, he would guarantee that there would be no Clinton program or second term...

...An even surer article of support—and one, unlike deficit reduction, that would unite Perot supporters with Clinton's — would be campaign finance reform...

...Friends who heard the address on the near side of the Reflecting Pool tell me that closer to the seats of power the applause was nowhere so vociferous...

...It will be reinventing politics...

...The key to the realignment of California, and a key to Clinton's victory nationally, was the rise in middle-class insecurity, apparent in such indices as the percentage of the unemployed who had held white-collar jobs...