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Labor Day

The election of 2016 is still over a year away,  but on this Labor Day we can feel something brewing.  Democrats are being called back to their basic values of standing up for working people, especially with the tremendous crowds that Sen Bernie Sanders is drawing. Republicans also feel a need to be more populist in a turbulent fight that feels like just about anything might happen.  The people of the US are clearly in the mood for more support for working people.

If we can only get it together for once something great may happen.  I, for one, think it’s going to take a much deeper understanding of our core values and what is really happening around us before we can make it happen.

There is work to be done.

There is work to be done.

The last three decades have produced a remarkable Republican victory in one very critical sense – it has become universally accepted that wealth is created by investment.  This view is not entirely wrong, but it has created a dark shadow in our politics – a blindside which has made it impossible for us to get a handle on this Depression.  The current argument about what government should do boils down to either get out of the way of naked capitalism or spend money like crazy to “prime the pump” and encourage consumption.  Everyone, on both sides in both parties, is focused on the money.

Yet it is work that creates all wealth in the end.  Investment is only the tool that makes it possible.

The Tech Bubble of the 1990s, which rolled forward into the Housing Bubble, is the source of this problem.  Dramatic improvements in communication naturally made nearly all businesses more efficient through what are called “Productivity Gains”.  The processes of setting up contracts, billing, paying, and all the other stuff that used to be managed entirely by people pushing paper were all automated so that they could be handled by far fewer people.  Markets in distant cities could be managed from afar and great economies of scale in distribution were realized.   What few people cared about at the time was that this meant there were fewer jobs to go around.

It's been a tough decade or two for Labor.

It’s been a tough decade or two for Labor.

The “Productivity Gains” of the 1990s are the “Unemployment” of today.

This is a historically typical response to a big leap in technology.  The Industrial Revolution put many small craftsman out of work, creating a backlash against technology known as “The Followers of Ludd” or “Luddites”.  Cheap internal combustion engines mechanized travel and farming in the 1920s, increasing production and distribution of nearly everything right up until the Great Depression hit.  In all of these cases, sudden and dramatic increases in efficiency created genuine wealth – but also made a tremendous number of people redundant.  That leaves fewer people with the scratch to take full advantage of the new economy a mere one generation later.

Every time this has gone down, the easy money made by the industrialists and investors has been dazzling enough to distract everyone away from the shadows of these great leaps.  Cast into that shadow are the people whose skills are no longer needed and whose careers simply no longer exist.

Politically speaking there is only one answer, and that is a renewed emphasis on the role of work in creating sustainable, lasting wealth.  A flexible workforce is essential to the Restructuring that has to take place, yet labor markets are terribly inflexible for many good reasons.  That is the origin of this particular kind of boom-and-bust cycle.

Not everyone can do this.

Not everyone can do this.

It’s not that we are lacking in capital, especially when the Federal Reserve can create money out of thin air if necessary.  Nor are we lacking in good ideas that can be rendered into new technologies.  What we lack is the ability to manage risks that threaten our ability to pay the mortgage on the roof over our heads, the health care for our families, and our ability to put food on the table for our kids.

That’s a political change because it is a cultural mindset.  “Too big to fail” has become “Too big to understand”, but it has to move on to become “Too little to fail”.  That’s what Democrats have to stand for in order to be successful.

A truly flexible workforce thinks on its feet, grounded in a solid education.  It has information on tomorrow’s opportunities and the ability to change jobs without worrying about starving today.  It doesn’t have to fret about what will happen if the kids get sick or how to manage small crises on a daily basis.  It also knows that work is something they can rely on, which is to say that tomorrow will always bring them something to do with dignity and decent pay.

In a world awash with wealth and new ideas the Depression that we find ourselves in is lacking only one thing to move ahead – an emphasis on people and their work.    It’s a tall order, but one that is essential to being relevant in today’s politics and economy.

Wealth isn’t created by investment alone.  It takes work.  It takes people, with their heart and arm and brain fully engaged.  We Democrats can change the entire debate if we take some time to understand exactly what that means.

15 thoughts on “Labor Day

  1. The mobility of capital is almost without constraints these days. On the other hand, it seems to be politically popular to put more and more limits on the movement of people, build Berlin walls and concentration camps…. Structural unemployment …. Somehow I don’t find this a very encouraging Labor Day.

    • That is the problem today – money is far more mobile than people. And that will be the case from here out no matter what because even when you choose to be a migrant the connections needed to get a good job and the cost of moving around are still out of reach for most people.

  2. More to the point, people don’t like to move around too much, and tend not to except under fairly extreme economic or political circumstances. It would probably make more sense to restrict the mobility of capital (ie, the opposite of “free trade” agreements ….) than to, in effect, say that people should be global nomads.

    Incomes in the US are being equalized downwards while in some places they are being equalized upwards. For sure there is some justice in this, but it’s odd to see US politicians promoting actions that reduce the incomes of US voters. I think it speaks to the non-functional status of “our” democracy that this can happen, let alone that a character like Obama can spearhead it. And that organized labor can’t stop it…..

    • It really is a matter of labor being put at a disadvantage. I see that changing in the near future and that will be a good thing. But yes, we need government support to make that happen.
      Closing off borders to goods is one way to do that, but there are others. Consciously recognizing what it takes to make a flexible workforce – which is to say free education and good unemployment benefits while in school for a new trade – would be essentially the same thing.

      • I hope you are right about the balance shifting! Totally agree on open access to education and training (not the same thing, perhaps). Allowing higher education to operate as a profit-maximizing industry has been disastrous. And just look at the unending scandals at the “University of Minnesota.”

  3. I don’t think this is a happy day for labor all around but I agree that people are at least pissed off about it and looking for a major change. Will anything happen or will this just fade out? I think it will fade like so many other things but I hope I am wrong.

    • I am still optimistic in the long run, but we still eat in the short run. We got this far from 2010, but we’re more than halfway through it from what I can tell.

  4. Any of the Democratic candidates would be good presidents, so long as Congress is led by Republican majorities. I would vote for Clinton, Biden, Sanders or O”Malley. Sen Klobachar would be good VP choice. Minn should try to get in the national spotlight again like back in the late 60s with Humphrey and McCarthy.

    Divided government and gridlock seems to produce good results.

    I would agree with liberal Democrats that Presidents Clinton and Obama were sell outs to many liberal causes. They were and have been too attuned to Wall Street and the 1%. They should have supported the Occupy Wall Street movement.

  5. “it has become universally accepted that wealth is created by investment.”

    This is the rabbit hole that capitalism has gone down.

  6. “Divided government and gridlock seems to produce good results.”

    Harry,

    For who? Certainly not the overwhelming majority of Americans. Then again it has worked extremely well for the financial elite. So I guess it depends on whose ox isn’t being gored.

  7. Pingback: Labor Day 2016 | Barataria - The work of Erik Hare

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