Why Blacks Aren't Reading Reagan Right
WEINTRAUB, SIDNEY
GRAPPLING WITH THE BUDGET Why Blacks Aren't Reading Reagan Right BY SYDNEY WEINTRAUB Constituencies seeking jobs, more and better urban housing, or special educational and training opportunities...
...Inflation has made everybody more tax-conscious, and more willing to dismember programs accepted in less turbulent times...
...The early conviction that the Reagan cowboys would be headed off at the pass by the Democratic posse in the House is seen today to be a delusion...
...The elephant has shrunk in height compared to the giraffe, conservative misinformation to the contrary notwithstanding...
...Further, when truly effective they are quickly dismantled on the premise that they are no longer necessary...
...Inflation defeated Gerald Ford and then Jimmy Carter...
...This dispute began early on in economic history and simply does not lend itself to a 15-round bout with a clear victor...
...Although they can hardly stray from a firm commitment to equity in income distribution, controversy will rage around the multi-faceted question of how much of a politically inspired income tilt confutes "fairness...
...Beyond the popular perception that inflation emanates from the "give-a ways," the ordinary taxpayer makes the intimate connections between the outlays and his tax predicament...
...Governments at every level have been driven to retrench by constituency anger at increased spending that exacts concomitant tax levies...
...As Civil Servant pay follows market salary scales, government paychecks must also mount...
...The results have overturned some of the hard won progress toward a more humane society dedicated to relieving victims left behind in economic blight...
...The Caucus position may deter, and even slightly deflect, the Reagan ideological steamroller...
...Democratic past positions, being scuttled now, will not again command popular support without a significant transformation of the economic environment...
...Some black leaders have called for a tighter Federal Reserve monetary policy and increased Federal Reserve vigilance...
...My own opinion is that the black leadership has not amply interpreted the Reagan triumph as an anti-inflation vote...
...Or perhaps it can come up with a better scheme of its own to get the economy out of its present bind...
...The surplus two votes in 100 do not exactly a Reagan "mandate" make, despite the hyperbole of the Reagan claque...
...Efforts to derail a measure, "of the affluent, by the affluent, for the affluent,"-the latest version of the "who has, gets" trickle down theory?are commendable...
...Without inflation there would be less anguish over taxation, as well as a climate conductive to fairness, justice and promoting humanitarian concerns that would diminish the suffering by those at the lower end of the income scale...
...I believe it could render inflation as obsolete as the dodo-without the horrendous Federal Reserve price futilities and job-crushing jolts to the economy, which hit blacks hardest because too many of them are still "last hired first fired...
...cost more, the government must spend more...
...At a deeper level, the Democrats have remained simply obtuse-that is not too harsh a word-About the inflation ordeal...
...Unfortunately, the black leadership has been largely mute on all this...
...What is more, given the widespread cheering that greeted Budget Director David A. Stock-man'shatchet, if an election were somehow held tomorrow and, say, Walter Mondale were elevated to the Presidency, the chances for reviving the Great Society would be virtually nil...
...as the new affront of usury made legal it has ripped jobs in all directions...
...In their torpor they do not as yet know what hit them, or what they must do to fight a better, more bitter, battle on another day...
...It could defeat Ronald Reagan, judging from his present programs...
...Nevertheless, if black leaders evade the inflation issue involving the wage and productivity tangle, they will remain in the political wilderness-And bewildered by their inability to rally support for their legislative programs...
...Every time the Fed aims a blow at prices it lands a haymaker on jobs, while prices hold their steady skyward pattern...
...it is the tactical priorities that will have to be redrawn...
...Likewise, in devising counter proposals, the greater burden for articulating directions capable of yielding the jobs, the housing and the educational standards that they properly regard as vital to bringing about economic justice will fall on the black leadership...
...The Administration's fixation consists mainly of adamant hostility to Lyndon Johnson's Great Society programs and, whatever their imperfections or abuses, they were tailored to aid the underprivileged...
...In establishing 15 per cent and higher interest rates it has practically demolished the housing industry...
...Essentially, this is a clamor for the impossible...
...The answer is critical, and the black leadership may be in danger of misperceiving the causes for the swing in public attitudes...
...Conversely, Reagan won by 51-49 per cent when Anderson's votes are added to the Carter total...
...The national mood will be to sustain the Reagan ideology opposing government spending, for the public accepts the notion that government outlays cause inflation...
...it was not a mandate for the "fairest tax cut...
...Even if the programs are ultimately dismantled, the debate over them will persist at least intermittently because it can never really be settled...
...This is another fallacy on which the black leadership must fasten a national dialogue, lest it become atrophied by a power play designed to confuse that was clipped out of a script written during the McKinley era...
...For every time the price of military hardware goes up the government must pay more to achieve the same real outcome...
...Today, the national debt is about $1 trillion, but the GNP is about $3 trillion...
...Sidney Weintraub, professor of economics at the University of Pennsylvania, is the author of Capitalism's Unemployment and Inflation Crisis and Keynes, Keynesians, and Monetarists...
...GRAPPLING WITH THE BUDGET Why Blacks Aren't Reading Reagan Right BY SYDNEY WEINTRAUB Constituencies seeking jobs, more and better urban housing, or special educational and training opportunities for lower income groups have good reason to be apprehensive about Ronald Reagan's views on the scope of government...
...Its poignancy will govern attitudes in the 1980s...
...The conservatives won, fair and square, but not by an overwhelming margin that cannot be toppled if the Democrats come up with better ideas...
...Some apologists have blamed Iran's seizure of American hostages for his undoing...
...Now it is the liberals' time to square away their position...
...After World War II, the national debt of roughly $285 billion slightly exceeded the GNP, then in the $250 billion range...
...Chances are slim even for any meager restoration of the Great Society concepts as long as inflation remains a national way of life...
...Practically any opponent, in the light of the domestic mess, would have beaten Carter...
...Inflation was the cutting edge that gave us the traumatic 1970s...
...They are bureaucratic, officious, rigid, and obnoxious in their mimicry of Captain Queeg tracking down a missing plate of strawberries...
...Considering that many who voted for the Democratic standard bearer did so only because of a dread of Reagan, Carter may well have been the least preferred incumbent in modern history...
...They foster a despotic government attitude and make 'criminals' out of individuals engaging in the most trifling acts of economic exchange...
...The final tally was 59 per cent of the vote for Reagan and John Anderson, and 41 per cent for Carter...
...The Reaganites simply read the relation backward, confusing effects as causes and confusing the public as well...
...The ordinary American who voted against Carter because of his inflation fiasco obviously knows he will be better off personally paying less taxes...
...It is the 'one in many,' ramifying out to color personal and political prejudices...
...But without Iran's barbarous acts capturing the headlines, the weird Carter economic performance would have attracted additional media attention and more thoroughly devastated public confidence in the beleaguered White House occupant...
...Unemployment of 7.1 per cent amounts to a relatively tiny group appealing for jobs...
...In short, government spending is far more the consequence of inflation than the cause...
...Since the strident assertion of the conservative ideology at the polls last November, the black leadership has thrashed about as a bloc in search of a rallying standard...
...The key is inflation...
...Stopping inflation should be the number one priority of black leaders...
...They were not the cause of the balloon going up...
...Price and wage controls will not serve very well, or last very long, in the American business system...
...The numbers have swollen because of inflation...
...If logic prevailed, and if expenditure were the cause of inflation, we should try strenuously to cut all expenditure, private as well as public...
...Once it is halted, they can focus on specifics more attuned to the needs of the constituency...
...Otherwise blacks will long remain unheeded voices, attracting sympathy but shunted aside politically...
...The debt has become less onerous, not more...
...Black leaders have ritually urged price and wage controls to deal with the situation...
...Shock, dismay and discouragement can perhaps be alleviated through a close analysis of the economic base of the massive "shift to the Right" that shattered the old coalitions sustaining the Democratic party...
...The Reagan victory came on inflation...
...As Democratic leadership in Congress hand Reagan the popular tax-cut issue for three successive years by denying him an outright legislative triumph the first time out, any future Democratic Presidential contender may be batting with three strikes against him...
...But humanitarian zeal to cut our social losses stemming from unbridled faith in the enterprise system will not flourish so long as the malady is rampant...
...It was an anti-Carter landslide...
...The plea to the President for a conciliatory gesture has turned out a misplaced appeal to a hardened non-donor for philanthropy...
...If 1963 prices prevailed, government out-laysfor 1981 would not be $650 billion, but about $300 billion...
...it has failed to combat the exaggerated reverse logic tendered by conservatives...
...Without inflation it might be possible to provide jobs for all who want them, skilled and unskilled alike, and sharply reduce discrimination...
...For several historic reasons, blacks probably have the most at stake in the Reagan reduction or dissolution of existing social schemes...
...It will come as no surprise to New Leader readers that I think this can best be done through a tax based incomes policy, since they well know that I am the author of tip...
...Republican conservatives learned that lesson well during their many disenchanted years in the wilderness...
...That bares the groundwork for the next round of price chaos...
...Whatever the case, it cannot linger in silence on inflation...
...And should the GNP, while private outlays grab 78 per cent of the pelf...
...For white workers the figure was 6.3 per cent, for blacks it was 13.2, or more than double the white rate...
...The blacks should have made the counterarguments as the Stockman budget decimated programs that are vital for their constituency...
...Clearly, blacks should resist any tighter turning of the Federal Reserve monetary screw, because they are its chief victims in terms of jobs lost, and the Fed is the seven maids with the seven brooms flailing to sweep back the seven seas...
...The fact is that government spending absorbs 22 per cent of the desks, paper, paper clips, roads, buildings, etc...
...While President Reagan is fond of vividly conjuring the mountainous sums, the pure facts do not support his fictions...
...In any case, it is necessary to recognize that the current economic facts promise to strengthen the conservative stranglehold, barring a major Reagan political mishap...
...The too active government sharing of his income is especially resented in a climate where lurching prices compel personal belt-tightening...
...Jimmy Carter's inept handling of the inflation was bound to defeat him...
...The objectives are linked...
...The Congressional Black Caucus has put forward what the Democratic Study Group has termed "the largest and fairest tax cut" alternative to the Reagan package...
...But it does not confront the critical inflation-stagflation malaise...
...As a result of the latest Fed attack on inflation, which will easily become a 100 Year War before aiming for 1,000 years of relentless failure, the 1980 unemployment rate was 7.1 per cent...
...After all, inflation hurts everyone who makes a purchase and thus 100 per cent of the adult population is ready to do battle against it...
...The relation is weak, for the misguided demagogues also rail against the deficit and national debt, and these testify to the lack of coincidence between outlays and taxes...
...The black leadership might find it beneficial to give some thought to tip...
...Their plea only courts poisonous disaster for the black community...
...To do so is to offer approval of the Reagan pseudo-logic that the trauma was triggered by government spending...
...Egregious confusion prevails over the relation of government expenditures to the inflation mess...
...At least the Federal Reserve acts on this more consistent plane-Even if Reagan gets full passage of his program, government outlays will continue to rise as prices rise...
...There seems far less need to revise their objectives than to alter their strategy for achieving them...
...It cannot be that the 22 per cent tail wags the 78 per cent dog...
...This theme has been sounded by me many times, as New Leader readers will aver...
...More objective observers, however-including the New York Times in its lead editorial last April 12-have strongly endorsed the concept...
Vol. 64 • June 1981 • No. 13
