COMMENTS: High Unemployment-What Will the Democrats Say?
Lekachman, Robert
unemployment averaged 7.1 percent in 1977, declined in the next two years to 6.1 and 5.8 percent, and jumped upward again in 1980 to 1977's 7.1. For January 1981, the month the...
...Mondale has retreated from advocacy of comprehensive health care to emphasis upon hospital-cost containment...
...Mondale ought to grab the issue of full employment, organize a domestic agenda around it, and proclaim it to the public with passion and conviction...
...At its best, government is not a burden to be lifted from our backs, as this Administration endlessly insists...
...In World War II, the American economy provisioned and armed 13 million men and women in uniform, diverted half the Gross 137 National Product to fighting a two-ocean war, and at the same time actually improved civilian living standards—all because hordes of young, old, female, black, unskilled, and "hard-core" unemployed persons previously dismissed as unemployable had become cherished contributors to the war effort...
...The failure will be perceived, I believe, as honorable and as a favorable omen for 1988...
...Since the mid-1970s, the incidence of joblessness has been persistently higher than it was in the three decades following World War II...
...I shall supplement these sums with savings from Pentagon appropriations...
...In my first State of the Union message to Congress and the nation, I shall propose measures to make noninflationary behavior profitable to both management and labor...
...Let us continue this quest...
...Success demands imagination in the design of training and retraining programs...
...How will we pay for new programs of public construction, public employment, and education and training...
...To paraphrase William Safire, a presidential nosebleed may revive the age-and-health issue...
...Just possibly such prudence will pay off in November...
...He has rejected as a canard the grave "charge" that he favors renewed public job-creation efforts...
...As we look around us, we see urgent, unfilled, or poorly met needs—libraries open a few hours each week, undermaintained and underprotected parks, sketchily staffed social services, and deteriorating roads, bridges, sewers, power lines, buses, and subways...
...I want at the same time to celebrate medical triumphs—the conquest of polio and other infectious diseases, openheart surgery, and encouraging improvements in cancer survival rates...
...I say it is unnatural and un-American to make 10 million Americans pay the price of idleness and dependency, so that the rest of us can enjoy stable prices...
...Should this second scenario approximate this summer's reality, Mondale stands in danger of losing the election out of terminal timidity...
...The numbers tell a story...
...His Latin American attitudes are murky, and the major difference between him and Caspar Weinberger on the swollen Pentagon budget appears to be the contrast between 5 and 10 percent annual increments...
...Outright controls worked exceedingly well in World War II, reasonably efficiently during the Korean conflict, and much better than anyone anticipated in the 1971-72 Nixon episode...
...They are responsible also for the triumphs of space technology...
...To achieve full employment, we must face some changes in our habits of thought and the ways we conduct the nation's business...
...In candor, the strategy I shall sketch might also fail against an opponent as lucky as Ronald Reagan...
...It is also unnecessary...
...We must rely upon private employers and risk-taking entrepreneurs to make the investment decisions, gamble upon new products and markets, and create jobs for ourselves and our sons and daughters...
...The Treasury will collect much larger tax revenues from a fully employed nation than it derives from a labor force in which one out of every dozen workers is unemployed...
...For January 1981, the month the Carter administration departed, the statisticians registered a figure of 7.5 percent...
...I say that a decent job is the right of every American who wants to work and earn his or her own living...
...If I were writing The Speech for Mondale, the basic set of remarks that candidates reiterate around the country with suitable local variation, I should begin like this: El I AM PROUD that the Carter administration enacted the Humphrey-Hawkins Full Employment bill...
...I am ashamed as an American that the Reagan administration has cynically ignored its targets and goals...
...But it is at least equally plausible to suggest that disaster abroad will be averted, recovery continue, and Democrats will discover that they lack, like Winston Churchill's unsatisfactory pudding, a theme...
...During the eight-year period 197582, unemployment averaged 7.5 percent, compared to the 4.7 percent of 1967-74...
...Their habit is to define as the so-called natural rate of unemployment a number that, according to professional speculation, is consistent with reasonably stable prices...
...We can afford to create enough new public jobs to supplement private-sector employment if Congress and the president act simultaneously to sponsor effective incomes policy...
...0 MONDALE-or whoever will emerge as the final candidate— may lose with this appeal to Democratic continuity...
...His response to Grenada was evasive...
...In this cynical endeavor, mainstream economists (Keynes's "horrid creatures") have aided and abetted the squelching of the unemployment issue...
...Conclusion: unless and until the skills and attitudes of the unemployed improve, we must accept high levels of unemployment or face the alternative of dangerous inflation...
...However, on crucial foreign-policy and domestic issues Mondale has been, shall we say, cautious...
...Unless, like the president's friend and counselor Ed Meese, we are wilfully blind, we see desperate men, women, and, yes, children lined up at shelters, soup kitchens, cheese distribution depots, and welfare centers—humiliated by their plight and eager to play productive roles in the American economy...
...In the short run, we must raise taxes...
...Therefore, I shall urge Congress to raise additional sums from the large corporations and rich individuals who have reaped the bulk of the Reagan administration's harvest of tax breaks...
...These unworthy citizens are advised to reform and rejoin the middleclass celebration...
...We are indeed an enterprise economy...
...I have a vision to share with you...
...All have been made possible by generous public funding and creative federal bureaucrats in the National Institutes of Health, the National Science Foundation, and the Department of Health and Human Services...
...As a 1980 candidate, Ronald Reagan quite properly excoriated Carter's job performance, and so stole the unemployment issue from its traditional Democratic custodians...
...I do not dodge the difficulty of matching public needs with the people capable of filling them...
...If they are right, the public will almost surely prefer a genuine reactionary to a timid centrist...
...For the foreseeable future, most of us will be on private payrolls...
...The mood of the country might be as mean and conservative as some of the pollsters conclude from their data...
...As your next president, I pledge myself to make full employment my first priority...
...Such are the political ironies that the oddsmakers have declared Reagan a reelection favorite in part because, with luck, unemployment just might descend to the numerical neighborhood that four years ago Republicans decried as utterly unsatisfactory— after stopping in December 1982 just short of 11 percent...
...Under public sponsorship in war and peace, American scientists and engineers have developed horrifying weapons...
...Never setting a foot wrong, he collected a garland of endorsements climaxed by NOW's first presidential intervention and his choice over Jesse Jackson by Alabama black Democrats...
...The land-grant universities—in Michigan, Iowa, Nebraska, Kansas, Ohio, Illinois, Texas, and California—have supported the research in cultivation and animal husbandry that has made American agriculture the world's most productive and American farmers an admired global elite...
...Unmistakably, the unemployment of the 1980s is a troubling, structural problem responsive neither to Carter's timid version of the Great Society, the supply-side nostrums with which the Reagan administration deluded itself in 1981, nor yet the military Keynesianism to which it has more recently resorted...
...It can play the role that it had in Franklin Roosevelt's New Deal and Lyndon Johnson's Great Society, helping all of us to become all that we can be...
...Echoing convenFebruary 25, 1984 tional conservative wisdom, Reagan and his associates habitually focus upon the asserted educational, moral, and attitudinal deficiencies of stigmatized welfare recipients, long-term unemployed, and poor people in general...
...We have been blessed with a state university that owes its birth to the federal land grants of the last 138 century...
...Recovery may slow or stop...
...Earlier than usual, the National Education Association and the AFL–CIO aligned themselves under his banner...
...In the 1980s as in World War II, full employment threatens inflation in the absence of appropriate public initiatives to restrain it...
...I hope to summon the spirit of World War II, a time when a much smaller economy supported armies and navies in Europe and Asia, put to work millions of men and women regarded as unemployable, and simultaneously raised living standards on the home front...
...The alternative, now as earlier, to meek resignation in the presence of high "natural" rates of joblessness is a declaration of restraints upon key price-and-wage decisions...
...I shall offer tax benefits to corporate price-setters and union negotiators who conform to public standards of price-andwage conduct...
...MONDALE CAN AND SHOULD do better, as much in his own interest as in that of his party...
...I ask you, at the outset, to reconsider our traditional custom of trashing government and glorifying private business...
...As the argument runs, should unemployment threaten to drift below 6.5 or even 7.0 percent, employers will be reduced to hiring inferior, less productive new workers...
...The Administration's belligerency in foreign policy may frighten the electorate into a ballot for sobriety...
...Ultimately, full employment is self-financing...
...Inflation is the enemy of full employment...
...With cause, women and blacks may continue to be angry enough at Reagan to vote against him rather than in favor of a rival carefully colored light-gray...
...Ronald Reagan's "humdinger" of a recovery has done little for unemployed teen-agers, technologically displaced steel and auto workers, women, and minorities...
...HERE I REACH 1984's DEPRESSING POLITICS...
...I do not underestimate the challenges of paying for health care that reaches the poorest of our fellow citizens...
...References in his speeches to the Humphrey-Hawkins Full Employment statute have been exceptional enough to qualify as collectors' items...
...Nevertheless, for our own economic interest, we must recognize the creative role of government in our history and its creative potentialities for the future...
...If anything, matters are worse on the domestic front...
...However, this Administration has excelled in adroitly blaming the victims of a malfunctioning economy and of its own policies...
...It is the excuse our Republican opponents use to justify running the economy at the 7 or 8 percent unemployment levels that some economists call the "natural" rate of unemployment...
...My own roots are deep in the Minnesota soil...
...I believe that a fully employed, noninflationary economy represents our best hope of domestic tranquillity and our best prospect of rapid progress toward the legitimate goals of the New Deal and the Great Society—health protection for every American, decent homes, job security, abolition of poverty, completion of our progress toward racial and sexual equality, and the American aspiration for new 139 opportunities and better lives for our children and grandchildren...
...According to the usual authorities, Walter Mondale, the presumptive Democratic candidate, conducted a brilliant 1983 campaign...
...Does anyone except health providers favor continuing escalation of hospitalroom charges and physicians' fees...
...IN THE CURRENT STATE OF NATIONAL AMNESIA, the country is in danger of forgetting the most important lesson John Maynard Keynes and World War II in tandem should have taught us: that who is employable depends strictly upon how badly employers need workers...
...They will drive labor costs up, encourage more efficient colleagues to seek inflationary wage hikes, force employers to pass on larger labor costs to the customers, and set off a new round of wage demands and price responses...
...But I can't help reiterating my gut sense that the Democrats are well launched on a losing campaign, one that might—just possibly—be transformed by a touch of audacity...
Vol. 31 • April 1984 • No. 2
