Can Liberalism Survive Clinton?

...The welfare of the poor, the upkeep of the infrastructure, the health of the populace—these are increasingly the province of the market now...

...wage rates have finally risen a little, but unit labor costs, which factor in benefits, still have gone nowhere...

...On the central question of our time—how to recreate a widely shared prosperity—the globalization of business and the contraction and discrediting of both government and the organized working class leave them, even the most doctrinally pure among them, with few plausible policy options...

...They were able to restore disability benefits, though not food stamps, for legal immigrants...

...Really significant legislative remedies—laws that strengthen unions or that establish trade pacts premised on international Keynesianism—require a shift in the political climate that is nowhere in the winds...

...But it is a tricky and unenviable task for the left to have to govern in a time of rightward drift—and govern in large part because it is a time of rightward drift...

...So does the success of municipal living wage campaigns for city-contract workers in a growing number of communities...

...The first—charging seniors five dollars for every home-health care visit—will surely keep poorer seniors from getting treatment they need, and probably lacks sufficient support to be ultimately enacted...

...for George Stephanopoulos, Rahm Emanuel...

...The professional/ managerial class supported globalization 55 percent to 35 percent...

...Like last year's KennedyKassebaum health care bill, which gave the newly unemployed the right to maintain their coverage if they could just keep up their payments, it brings us to the era of post-entitlement entitlements...

...Clinton himself is said to be frustrated with the paucity of policy...

...The void of proposals highlights the limitations of New Democracy as an ideology...

...When he introduced his universal health care plan in 1993, President Clinton rightly insisted that partial solutions do not work...

...Once the defender of Main Street on cultural questions, it has become the defender of Wall Street on economic ones...

...In America of 1997, as Vince Lombardi might put it, labor isn't everything...

...They have succeeded too well: absent the Old Dem initiatives, the New Dems have nothing to say...

...Never mind that the notion that reducing capital gains taxes will spur the economy is entirely, as they say, faith-based...

...For their part, liberals see limited political space for promoting governmental solutions to social ills...

...The New Dem solo seemed about to commence...

...Indeed, our productivity increase lagged behind those of Germany, Japan, and France...

...The New Dems have no exclusive franchise here: the financial community, the deficit hawks, and their Gen-X front groups all got there first...

...Conducting a postelection poll for the Democratic Leadership Council (DLC), White House pollster Mark Penn went so far as to cook up a question—Would you support entitlement reform or pay more taxes to keep Medicare as is?— that fairly bludgeoned respondents into the reformers' column...

...Another popular partial solution in Congress these days, enacted in this summer's budget, is to extend health coverage to uninsured children through block grants to the states...

...For their part, Republicans won massive tax breaks for wealthy taxpayers, who make most of their money through investments, as if America's most urgent need, with the Dow breaking 8,000, was to persuade the rich to invest...

...It then took on a new mission: prodding the Democrats to embrace such politically unsustainable positions on economic issues as supporting free trade, opposing minimum wage hikes, and calling for cutbacks in Medicare...

...A similar slippery slope is apparent in the Senate's other proposal, to increase the age of eligibility from sixty-five to sixty-seven...

...But the belief system of supply-siders, like that of the Taliban warriors, is perfect and complete and can withstand any assaults of vulgar empiricism...

...He remains the most buttoned-down of populist tribunes— but in its current state, populism is in no position to quibble...

...With both right and left in retreat, a hush fell over the political stage...

...A Los Angeles Times poll found 70 percent support for the L.A...

...no political solutions need apply...

...Introducing steeply progressive premiums to pay for rising costs is commendable— right up to the point where it jeopardizes Medicare's base of support...

...Conversely, Clinton's 1993 tax hike on the rich (which is not the same as a capital gains hike, but which certainly affects the same people) has been followed by a record four-year rise in the Dow...

...Like little kids everywhere, they'd hang around doctors' offices, clamoring for shots...

...Gephardt urged Clinton to veto the Republican tax proposals, which all polling showed to be politically insupportable...

...As the State Withers The budget and tax plan that came out of Washington this summer was a mish-mash of Republican principles and Democratic particulars...

...Alignments like these are a leading indicator of Democratic 28 • DISSENT Liberalism 8 Clinton divisions—or dithering...

...But if the $8 worker with no coverage is our benchmark for equity, how can we justify his paying for a $20,000-a-year retiree...

...Is Jospin bound to fail at his attempt to preserve statism in one country...

...Governors' mansions are likely to remain preponderantly in Republican hands after the 1998 elections, and, as the fate of mayoral candidates Tom Hayden and (so far) Ruth Messinger illustrates, the urban liberal coalition has collapsed into brain-dead, parochial, squabbling camps...

...America's highest-rolling liberal PAC (outside of labor), the Hollywood Women's Political Committee, has disbanded, not just disgusted at the fund-raising process, but frustrated at its increasing inability to identify minimally progressive candidates...

...That may suit the New Democrats fine, but the left has a different set of promises to keep...

...Indeed, you could reasonably conclude that these parties of the left have become the natural party of government for this age of frenetic globalization, downward leveling, and erosion of the social compact— their mandate derived from the plaintive wail of voters everywhere to make it a less wrenching time...

...If we look, for instance, at California Department of Finance figures on personal income from 1995 to 1996, we find that wage income increased by a scant 3 percent, while dividend income rose by 10.7 percent, rent income by 11.5 percent, and business proprietor income by 10.7 percent...

...And if the American welfare state were as stable and popular as the French, this wouldn't be the problematic proposal that it is...

...What's confounded American liberalism and European social democracy is that the very realm of the political has shrunk...

...The legislator who's seen more liberal opportunities and took 'em over the past couple years has been Edward Kennedy...

...What's a Liberal To Do...

...A question on a Wall Street Journal poll from late June as to whether globalization of the economy was a good or bad development—by a margin of 48 percent to 42 percent, people thought it bad— revealed a fairly extreme, if predictable, class polarization...

...Part of the problem—but only a small part— stems from their understandable ambivalence, as David Corn has noted in the Nation, toward the grotesquely imbalanced Clinton prosperity...

...The crisis of liberalism today is that within the limits imposed by the budget-balance mania, and the markets, and the Republican control of Congress, and the mobilization of business, and the demobilization of almost everyone else, Kennedy-Kassebaum may well be the wave of the future...

...It's not that libs lack the trappings of power: with the Liberals governing Canada, and socialdemocratic parties ruling alone or in coalition in thirteen of the fifteen member nations of the European Union, parties of the center-left have seldom been more dominant...

...The first half-year of Clinton II has come and gone, and his New Democratic administration has come up with few if any notable initiatives...

...The very idea, though, was anathema to the White House bipartisans, and by including kiddie-care in the package, they were able to win at least half the liberals on Capitol Hill to their position...

...His success in getting the minimum-wage hike enacted, and putting kiddie-care on the nation's agenda, suggest one way to attack inequality in a time of balanced-budget lunacy...

...The Tricky Politics of the Uneven Boom A particular frustration for liberals in general and House Democratic leader Dick Gephardt in particular is their continuing inability to exploit the issue of stagnating wages and rising inequality...

...More remarkably, some fairly new arrivals to high White House positions already want out (and not, as in Bowles's case, just for personal reasons...

...q 32 • DISSENT...

...Our very real advantage was in unit labor costs, which rose just 1.4 percent annually over this period, while Germany and Japan experienced yearly increases of 5.9 percent and 10.9 percent, respectively...

...A greater emphasis on statelevel legislation that rewards work—living-wage laws for state-contract workers, adding Earned Income Tax Cut provisions to state income taxes—is certainly a strategy the left should consider...

...respondents with no more than a high school diploma judged it bad by 59 percent to 33 percent...

...To be sure, the hardy perennials of the centerright agenda either have moved through Congress (the balanced budget deal) or are waiting in the wings (the North American Free Trade Agreement [NAFTA] extension, the scaling back of universal benefits...

...It's the exclusion of the worker—not the largesse allegedly lavished on the seniors—that destabilizes the system...

...The construction of a supranational civil society—of unions and parties that flow across borders—must move from the status of ethereal vision to a practical program, with unions and parties dedicating resources to developing transnational institutions...

...Indeed, Lionel Jospin suggested a similar policy change in presenting his program to the French Parliament...

...FALL • 1997 • 29 Liberalism 8 Clinton Founded (by Gephardt, among others) in the mid-eighties with the mission of bringing the Democrats back to more centrist and politically sustainable positions on social issues like crime, the council, greatly abetted by former DLC chair Clinton, largely succeeded in its initial task...

...Locked into national governments that can no more than shadow-box with global capital, American liberals and their European counterparts face a future of rearguard incrementalism...

...This is no less true today...

...The DLC has had a curious evolution...

...Their prospects are even bleaker on the state and local levels...

...But the New Dems in and out of the administration have brought a distinct, if farfetched, analysis of their own to the case against entitlements...

...Kiddie-care is a genuine achievement, but it will be several years before anyone knows how much of one...

...Further flaws in the budget—the major cuts it mandates in as-yet-unspecified domestic programs in the years 2001 and 2002, and its elevation of budget balance over social need in the hierarchy of American public purposes—were apparently too distant or abstract to dampen support from many liberals, and weren't flaws at all in the calculus of the New Democrats...

...economy enjoyed no edge in productivity rates over other industrialized nations from 1990 to 1995...

...But unlike the welfare decimation of 1996, none of these can claim a particularly New Dem pedigree...

...In applauding the Senate's audacity, the Wall Street Journal's Gerald Seib wondered how we could justify having the health insurance of a $70,000a-year retiree paid for by a worker making eight bucks an hour with no benefits at all...

...And the only way to ensure that it won't is to make health care universal...

...For Democratic pols, one problem of an uneven boom is that it benefits their donor base while hurting their voter base...

...And a minimalist solo it'.s turned out to be...

...The first problem—how do sixty-five- and sixty-six-yearolds get coverage?—is partly addressed by Bob Kerrey's suggestion that they be allowed to receive partial benefits at age sixty-two—or younger...

...But precisely because the American welfare state is so spotty in its coverage, almost any attempt at modification has the potential of leading to a general leveling downward...

...But that rush of ideas we associate with Democratic administrations in their first six months has been strikingly absent from Clinton's second term...

...Unlike other aspects of the uneven boom, where policy options are seldom crystallized, the question of global trade is one on which the public takes unambiguous positions...

...Democrats won a significant expansion of health coverage for hitherto uninsured children and tax credits for college students and families with children under eighteen...

...Moreover, it wasn't as if anyone else was advancing a program...

...Just by threatening to make an issue of it, he was able to kill the proposed wholesale revision of the Consumer Price Index to satisfy the budget cutters, but that was the rare exception...

...Is Tony Blair's assessment of the limits of the possible—putting a smiley face on Thatcherism—not just chastened but correct...

...Why the moral character of the states is thought to be less corruptible than the moral 30 • DISSENT Liberalism 8 Clinton character of children is a mystery best left to the Republicans and New Dem congresspeople who insisted on this form of program...

...College graduates thought it good by 58 percent to 30 percent...

...In the two years since that study, U.S...

...Instead, we will appropriate twenty-four billion dollars to the states to purchase health insurance for anywhere from two to five million of the almost ten million uninsured children...

...The Senate put the entitlement debate on fastforward this June by passing three provocative Medicare modifications that were killed in conference committee but will be resurrected soon enough...

...Meanwhile, a more fundamental assault on government, and on the social compact, looms on the horizon: an attack on universal entitlement programs...

...These actions left liberal Democrats pondering how to assess a prosperity based on the very economic changes their supporters fear most...

...Now, entitlement programs do face a demographic challenge: over the next third of a century, the number of seniors will double, from thirty-four million today to sixty-eight million in 2030...

...Up to now, New Democrats have largely defined themselves by what they're not—not big spenders, not high taxers, not pro-unionists, not environmentalists, not supporters of universal programs or of a higher minimum wage...

...It's one reason why he's bringing two non-New Dems, consultant Paul Begala and commentator Sid Blumenthal, into the White House—though whether this means he thinks his agenda is insubstantial or just not being sold very well remains to be seen...

...By cutting back on employee benefits and enrolling their workers in health maintenance organizations that repeatedly reduced health care standards in order to raise profits, American business realized savings unavailable to their foreign competitors...

...For Democrats, the boom is a double-edged sword: on the one hand, they gladly take credit for low unemployment...

...Unlike the great postwar prosperity, this is a rising tide that forces Democrats to make some very uncomfortable choices—and none more uncomfortable than the proposed extension of NAFTA (which so discomfits the Clinton administration that it's been loath to bring it to the Hill...

...And yet, for all that, the New Dems are in better shape than any other ideological grouping on the American scene...

...Medicare is trickier, because the problem isn't only demographic, but also a function of our uniquely hit-and-miss health care system...

...No body of doctrine or experience offers any guidance here...

...One could, of course, simply extend health coverage to uninsured children as we do to seniors and Medicaid recipients, but that would reek of the old entitlement ethos and damage the recipients' moral fiber...

...blue-collar workers opposed it 57 percent to 36 percent...

...it's the only thing...

...Clinton has given his administration over to a tendency comfortable chiefly in opposition...

...Their raison d'être is often no longer even to mount a rearguard defense of eroding governmental programs, but just to mitigate the catastrophes that arise when those programs get axed (for example, fixing the welfare bill...

...Making a priority of rewarding work can also lay some of the groundwork for a renewed effort to re-legalize union organizing the next time Congress is not under the control of NewAge Herbert Spencers...

...A few months later, the British election results suggested that New Democracy could have global reach, that it might even evolve into a latter-day ism...

...for Robert Reich (in his domestic policy maven role), Bruce Reed...

...Better, they've apparently concluded, to be at the margins of something than the center of nothing...

...With House Minority Leader Richard Gephardt having failed to persuade his colleagues to stand and fight the GOP's tax cuts, liberals will get just one more crack at the inequality issue this year: the fight over the NAFTA extension, which will be waged as much within their own party as without...

...The last time the capital gains tax was cut, in the Great Reagan Giveaway of 1981, it was followed in the next year by the deepest recession since the thirties...

...The center-left parties in many nations will cling to office—who in today's world wants parties that accelerate capital mobility?— but genuine power will elude them until politics and government become as transnational as the economy...

...Republicans have backed off their agenda of 1995, and the ideas they do sporadically promote—tax cuts for the wealthiest 1 percent, holding up flood relief to ensure that the next census doesn't create too FALL • 1997 • 27 Liberalism B Clinton many Democratic districts—seem chosen with an eye to pushing Newt's negatives into the nineties...

...And, for aficianados of the Democrats' decades-long identity crisis, the first Silicon Valley PAC was formed this summer, a bipartisan group whose Democratic cochair, venture capitalist and Al Gore confidant John Doerr, is a registered Republican...

...Well, some of their supporters...

...Gephardt may raise the idea this fall—but with no expectation of quick results...

...on the other, the decline in unemployment is largely a function of the stagnation of living standards that they wish to decry...

...Virtually by default, it becomes the only sector of society doing battle with the tide of inequality...

...The paucity of public-policy remedies also places a terrific burden on the new, improved, Sweeneyized labor movement...

...But what is to stop an employer from dropping his coverage entirely, and letting workers eligible for this partial coverage get it from the state...

...Of the more distinctly New Dem progeny, most are holdovers from the 1996 campaign (jiggling the tax code to make college more affordable) or almost entirely symbolic (recommending that the states submit their primary and secondary students to national testing) or both...

...Now they have the peculiar misfortune to come fully to power at a moment when hardly anyone is floating the kinds of policies they shoot down...

...A $10,000 retiree...

...As if labor didn't have enough to worry about...

...On its face, there is nothing preposterous about asking the wealthiest to shore up a system facing substantial financial difficulties...

...chastened liberals were still woozy from their failure to enact any significant progressive legislation during Clinton's first two years...

...This last proposal in particular asks liberals to choose between two of their longstanding and hitherto noncontradictory values: universality and progressivity...

...For, according to one recent Department of Labor comparative study of national economies, the U.S...

...Can the left create a "social Europe," as Jospin demands, absent a political Europe—a legitimate, demoFALL • 1997 • 31 Liberalism 8 Clinton cratic, transnational government—to enact those social reforms...

...The Senate's senior liberal has realized that the voters' aversion to general tax hikes and expanded government coexists alongside their desire to mitigate the plight of the worthy—that is, working— poor...

...ordinance, enacted this spring over the opposition of the city's business community and Republican mayor, though no media campaign had been waged on its behalf...

...A few minor modifications is all it will take to keep Social Security solvent...

...This may well be the best that liberals can do within the current political climate, but it creates the unsettling possibility that the American welfare state will turn into a tease...

...The administration briefly entertained a kind of back-door labor law reform earlier this year, when it proposed making employees' right to join a union a criterion for awarding federal contracts, but they withdrew the offer as the price for getting Alexis Herman's confirmation as secretary of labor through the Senate...

...But the other two proposals, raising the age of eligibility from sixtyfive to sixty-seven, and raising the premiums of the wealthiest 4 percent of recipients, present liberals with a more considerable challenge...

...Despite all the polling that showed voters rallying to Clinton in 1996 both because he acknowledged the era of big government was over and because he defended Medicare and other popular programs, the New Dems have a revisionist spin: the public actually supports checking the growth of those pesky entitlements...

...Chastened Republicans were still reeling from the backlash against their shutdown of government...

...But liberals also confront a more fundamental and paralyzing problem than either the Democrats' divisions or their own ambivalence about the economic boom-stagnation...

...Gephardt has steadfastly opposed the return of laissez-faire, whether through trade deals or welfare cuts, but he has thus far lacked the votes to derail many such initiatives...

...It's small comfort if any, but American liberals are hardly alone in their confusion and drift...

...The fight to include genuine labor and environmental standards in an expanded NAFTA is a good way to begin...