President Clinton's new economic plan has been strongly criticized by the Right and embraced (a bit) by moderates and progressives. What are we to make of the overall effort?
First, of course, is the obvious: Progressives have been in the desert so long that even a tiny drop of water is welcome. Some of the social programs and upper-income taxes are clearly an improvement over the Reagan-Bush era.
But--and this is a big "but"--relief at token improvements should not blind us to the larger realities. In its overall scope and scale, the Clinton program is a dramatic return to extremely conservative economic policies--a point many people have not yet confronted.
Do not skip lightly over a clear tip-off--the fact that Clinton's plan was quickly endorsed by Alan Greenspan, the austere chair of the Federal Reserve Board. The basic idea is that everything will be fine if we cut the deficit enough so that people who buy bonds will be comforted and interest rates will come down.
Our national political-economic debate has moved so far to the Right since Richard Nixon declared "we are all Keynesians now" that few have noticed that the essential theory our "populist" president is operating on is the hoary notion that the economy can be aided by returning to ideas rejected by most progressive economists. The fundamental goal is to reduce government's role in the economy by nearly $500 billion--based on exactly the same theory that during the 1920s paved the way for the Great Depression. As late as 1933 Herbert Hoover urged that "it would steady the country greatly if there could be prompt assurance that...the budget will be unquestionably balanced...."
Again, since the military budget will probably only be cut modestly, it is important to be clear about the longer term implications. Some new taxes are contemplated, but there is really only one place, politically, that many important spending cuts can ultimately come from--social programs.
Looked at another way, the plan as a whole is designed as a systematic reversal of traditional full-employment policies. People like Labor Secretary Robert Reich, who urged major new public programs to stimulate (and rehabilitate) the economy, lost the internal White House battle months ago.
The deeper truth is that the economic package reflects a profound stalemate in our political system--one which, unfortunately, is not likely to go away for a long time: A truly progressive, community-based economic program is simply not politically feasible in the United States today. American suburban taxpayers who are angry at welfare on the one hand, and Ross Perot and his followers on the other, make an expansive economic strategy impossible.
EVEN MORE DAUNTING is the longer term economic challenge. The fact is our economy has rarely achieved sustained high employment during the 20th century except in time of war or very unusual postwar conditions. We were in trouble in the first quarter of the century until World War I bailed us out. The postwar years faded into the mixed bag of the 1920s, which collapsed into the Depression--until World War II bailed us out.
Then the famous postwar boom occurred--aided and abetted by the Korean War, the war in Vietnam, and the Cold War. (The war-time destruction of Germany, Japan, and Britain, our major global competitors, helped too--until they returned to the trade wars with renewed vigor.) Having binged on unsustainable Reagan tax cuts and military Keynesianism, we now appear to have entered an era of deepening post-postwar economic decay--give or take minor up and down ripples in the overall statistics.
The bottom line is that given the conservative economics of the Clinton package, given American political realities, and given the nature of the longer term problems we face, almost certainly we are likely to see only modest improvements in the lives (and jobs) of most Americans. Possibly some of the abstract economic indicators may improve marginally, but in all probability it will take a long, agonizing period of social and economic pain before a serious new politics and serious new economic program will be possible.
The lesson for progressives is a difficult one: Clinton may, in fact, be doing the best that can be done at this point in history. Nothing really important is likely to change until a new political force is built to demand change. We should applaud the modest splinters of decent policy in the overall package, and at the same time call a spade a spade.
Most important, we need to build new community-based economic institutions that actually deal with problems where the pain is greatest--and simultaneously call for new public policies to achieve ecologically rational full employment based on support of a community-based approach.
In an era of token gain, larger political stalemate, fundamental economic stagnation, and social decay, there is need for disciplined understanding--and the patient community organizing and slow and steady work of vision-building that are the preconditions of moving beyond the difficulties of the current era.
Gar Alperovitz, author of Rebuilding America (with Jeff Faux), was president of the National Center for Economic Alternatives and a fellow of the Institute for Policy Studies in Washington, D.C. when this article appeared.
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