Will America Remain a Good Society?

Our country is in the midst of a clash between two competing moral visions, between those who believe in the common good, and those who believe individual good is the only good. A war has been declared on the poor, and it is a moral imperative that people of faith and conscience fight on the side of the most vulnerable. – Rev. Jim Wallis

I have been reluctant to write about the partisan bickering in Washington over the debt ceiling, if only to resist the urge to become overly cynical about our political process. But it is difficult. President Obama presented Republicans with a “Grand Bargain” that should have been embraced as every conservative’s dream – spending cuts of $4 trillion over ten years, an increase in the age of eligibility for Medicare, and other structural changes to the vast entitlement programs – but House Speaker John Boehner walked away. Boehner walked, I suspect, because he has a metaphorical gun to his head by the anti-tax, Tea Party radicals in Congress. Nevertheless, walk away he did, not because the spending cuts were insufficient, but because they would be achieved, in part, through very modest tax increases and the closing of loopholes on hedge fund managers, corporate jet owners, and companies that move offshore.

There once was a time when the Republicans would have embraced the President’s proposal as an opportunity to limit the size and scope of the federal government while also preventing a default of the nation’s obligations (see Where Have the Moderate Republicans Gone?). Led by the Tea Party, Republican refusal to compromise is a symptom of a much larger problem, a dysfunction in our political process. As David Brooks of The New York Times noted recently, the Republican Party no longer occupies the realm of normalcy, but has instead “been infected by a faction that is more of a psychological protest than a practical, governing alternative.” To the Tea Party radicals, compromise is weakness. They are the Hezbollah faction of American politics, suicide bombers willing to destroy themselves to destroy their opposition. Meanwhile the country is collateral damage. “The members of this movement do not accept the logic of compromise,” Brooks noted, “no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.”

The Democrats in Congress are only slightly better. While the Republicans are acting like children, neither side is taking into account the people who always get left behind in these debates, the poor, the weak, and the vulnerable. Senator Harry Reid presented an alternative to Obama’s plan that contained deep cuts in spending and no revenue increases, but upon closer scrutiny it involved numerical smoke and mirrors and “fuzzy math” as one former President liked to say. Only the President seems to understand that anyone serious about reducing the debt and deficits must put forth a plan that contains a balance of real spending cuts and tax increases, but he appears unwilling to insist on this. Where is LBJ when you need him?

Where are the statesmen in the Republican Party? Where are the moral voices in the Democratic Party who used to fight for the most vulnerable in our society? Where are the voices of reason, the men and women who believe in the end that the good of the country outweighs partisan ideology? Even Ronald Reagan, the most right-wing President of my lifetime, raised the debt ceiling 18 times and raised taxes eleven times when he occupied the White House in the 1980’s. Were Reagan around today, I suspect the anti-tax mafia of the Republican Party would metaphorically instruct their underlings to “take him to the airport” and have him “swim with the fishes”; he would be politically excommunicated. Reagan knew that the debt ceiling debate was about the country fulfilling its obligations and paying its creditors, not a fight over tax policy and government programs. That is reserved for the budget debates. But the anti-tax fundamentalists are threatening to savage the already flickering economy and the country’s long-term interests to win a political game, to humiliate the President, and to force their ideology onto an American public that yearns only for America’s leaders to act responsibly.

Meanwhile, the nation’s unemployment rate hovers at 9.2%, while the real unemployment rate consisting of those who have given up on finding work and the severely under-employed, exceeds 16.2% of the workforce. Forgotten and ignored in the debt ceiling talks are “the people who come to my church’s front door every day,” writes the Rev. Jennifer Kottler, Associate Pastor of Park Avenue Christian Church in New York City, in this week’s Sojourners. She talks of the people hurting the most from our current economic structure.

It’s the guy I met last week who is trying to make ends meet with a $300 per week job (in New York City) with three kids and a wife, on parole, and at the end of his rope. He doesn’t need piecemeal charity; he needs an economic system that rewards hard work and allows him to work and provide for his family. He doesn’t want to end up back in prison, but he knows that he might go back to the underground economy so that he can feed his family. It was 104 degrees here last week, and he’s already thinking about his kids needing winter coats and boots and school supplies.

CNN has reported that one in five males in the United States presently fill the ranks of the unemployed. But the anti-tax radicals insist this is the time to shrink government and to let everyone fend for themselves.

What is really at stake, it seems, is a much larger, more crucial debate over the role of government in a good society. How do we maintain the greatness that is America while ensuring that we remain a decent, fair and compassionate country?

We live in a country that values freedom and rugged individualism. Born of a revolution, Americans achieved independence from colonial oppression, expanded westward and made their own way. We developed the frontier, survived a civil war, and won two world wars. Through it all, we allowed our citizens to dream and innovate, compete, and create enormous wealth. We have historically, through the unfettered engines of capitalism, free enterprise, and competition, combined with substantial government support and investment, produced the richest, most productive economy in the world’s history.

But fundamental to our economic system and the free flow of capital is a dark reality, one easily overlooked by the people who most benefit from our economic system. A market-based economy requires a certain level of inequality and unfairness to function efficiently and properly; it demands that some people be left to fend for themselves. A competitive economy, consisting of winners and losers, offers great wealth to some and a long, uphill struggle for others; it is a zero sum game with millions of people left behind. In business, the bottom line is king, a dictator with an army of accountants and financial wizards whose impersonal decisions affect the lives of employees and their families. When times are good, we can be a generous nation, taking care of the weak, the vulnerable, the poor, the sick, and the unemployed. But in times of peril, when we experience phases dominated by greed and intolerance, our society begins to look less friendly, less ideal.

Throughout the Twentieth Century, it had been the government’s proper role to narrow the gaps inherent in a profit-driven, market economy; to uplift the poor and to make certain that society remains, if not equal, at least fair and compassionate. Government is needed, in part, to do the things that private enterprise, left to its own devices, cannot or will not do: protect our air and water; ensure a safe food supply; educate our children; build and repair our roads and bridges; protect our country from foreign and domestic threats; enforce our laws fairly and equally; regulate our disputes and maintain a fair judicial system; protect consumers and oversee fair and competitive markets. Following the Great Depression and American victory in World War II, the United States enacted the Employment Act of 1946, which made full employment a national priority, in which it was understood government would play a significant role whenever the private sector fell short.  Although we never achieved the ideals of the Great Society, we sought as much as possible a Good Society.

In their zeal to return the United States to a 19th century world where property and privilege dominated, the Tea Party has lost sight of the world in which we actually live. The countries that shape the 21st century will be those most adept at managing the private-public partnership needed to sustain infrastructure, energy sources, scientific and medical research, the environment, and the development and nurturing of human capital. The financial collapse of 2008 that led to the Great Recession, and the rapid advances of technology that continue to eliminate people and jobs, demand reforms of today’s hedge fund capitalism. If the Tea Party insists on imposing a 19th century form of capitalism onto the nation’s economy, it will only accelerate the country’s moral and economic decline.

In the current debate over the debt ceiling, concepts of justice, fairness, decency, and hope have been forfeited to the forces of power politics. The victims are the poor, the middle class, the millions of laid-off and underemployed Americans who have settled into a semi-permanent state of economic depression. Responsible leaders are not those who force a makeshift debt ceiling bill at the midnight hour designed only to delay another fundamental debate and to prevent an economic collapse. Responsible leaders sit down together and find ways to cut spending without damaging our economy and hurting our most vulnerable citizens; they agree on ways to raise new tax revenues to pay down our debt (which merely pays for past expenditures, including the Bush tax cuts and the unfunded wars in Iraq and Afghanistan), while maintaining those programs that benefit our people and our economy; and they find ways to maintain a fair and compassionate society, while at the same time reinvigorate economic growth and success.

Budgets are moral documents. They involve choices that reveal the kind of country we are and desire to be. Do we continue to lavish tax cuts on people who make more than $250,000 a year, or do we instead increase the top marginal rates by two percentage points to help fund defense, infrastructure, environmental protection, and food stamps for the elderly poor? Do we really need the new $2 billion fighter jet if it means cutting Head Start and early childhood nutrition programs? Should we allow unlimited mortgage-interest deductions on vacation homes if it means spending less on improvements to our highways and bridges? The answers cannot simply be to cut food stamps, or to stop protecting the environment, or to eliminate Head Start, or to ignore the nation’s transportation systems. The implications of such negligence are too painful; the consequences to the nation’s soul too severe.

It is in these difficult times when the moral fabric of our society is most tested. Anyone who claims that we should cut Medicare, food stamps, and education but will under no circumstances increase taxes, does not have a plan for America’s future. Anyone who believes that millionaire hedge fund managers and corporate jet owners should pay no more while the elderly, the poor, the environment, the nation’s infrastructure, our schools and the sick must do with less, are not serious about leading this nation and solving our problems. I am not yet ready to give up on the American Dream or the hope and vision of a Good Society. And I am willing to pay for it, individually and collectively, through a reasonable, progressive tax system. But if the anti-tax radicals of the Tea Party have their way, America as a nation will have lost its soul.

The Lingering Great Recession: Jobs Needed

Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.
--Franklin Roosevelt, Inaugural Address 1933

Confronted with bread lines, soup kitchens, and nearly a quarter of Americans without work, President Franklin Delano Roosevelt knew on his first day in office in 1933 that America needed a massive jobs program. Although Roosevelt wanted private industry to hire workers, he understood the limits of capitalism and knew that, to create jobs in the short term, government needed to hire people. Roosevelt did not doubt the ability of Americans to respond to a national crisis. In a display of ingenuity and creativity not matched since, he proposed legislation establishing the Works Progress Administration (WPA), the Civilian Conservation Corps (CCC), and the Public Works Administration (PWA). Combined, these agencies funded tens of thousands of projects and put millions of people to work, building waterworks, post offices, bridges, prisons, airports, swimming pools, athletic fields, playgrounds, and railroad stations, many of which are still being used today.

• At a time when America’s needs seemed limitless, WPA workers painted murals on post office walls, delivered books to rural areas, wrote plays, composed music, and employed more than eight million Americans. Its accomplishments were stunning, as it built or improved 651,000 miles of roads, 19,700 miles of water mains, 500 water treatment plants, 24,000 miles of sidewalks, 12,800 playgrounds, 24,000 miles of storm and sewer lines, 1,200 airport buildings, 226 hospitals, and more than 5,900 schools. Among the WPA’s most famous projects were LaGuardia airport, the San Antonio Riverwalk, and the Timberline Lodge in Oregon.
• The CCC, Roosevelt’s favorite New Deal creation, was up and running within 37 days of Roosevelt’s inauguration. It put to work 500,000 young men (women were excluded from the CCC), who were taught skills in carpentry and masonry and performed useful work related to conservation and the development of natural resources. These young men, who lived in military style camps throughout the United States in national parks and forests, went on to plant more than three billion trees, erect 3,470 fire towers, and construct 97,000 miles of fire roads; they fought forest fires, built campgrounds, and implemented disease and insect control. By 1942, the CCC's projects positively affected virtually every state in the country.
• PWA’s workers built the state capitol building in Oregon, the highway linking the Florida Keys to the mainland United States, San Francisco’s Bay Bridge, the city hall building in Kansas City, Outer Drive Bridge in Chicago, Washington National Airport, the Grand Coulee Dam in Washington state, and Ellis Island Ferry Building. Between July 1933 and March 1939, the PWA funded over 34,000 construction projects, including airports, electricity-generating dams, and aircraft carriers. It also constructed seventy percent of the new schools and one third of the hospitals built during that time.

The investment in America’s infrastructure during the New Deal made possible the incredible economic growth that occurred after the end of World War II. Much of that infrastructure remains in use today, from bridges and dams to schools and sidewalks.

Although conservatives love to point out that New Deal spending did not end the Great Depression – it took American involvement in World War II and the mobilization of a war economy to do that – in reality, Roosevelt’s programs dramatically reduced unemployment. The unemployment rate dropped steadily from its peak at 24.9% in 1933 to 14.3% in 1937, when Roosevelt, eager to return to a balanced budget, raised taxes and cut spending. Not surprisingly, unemployment jumped back to 19.0% in 1938 and only the deficit spending of the war finally lifted the U.S. economy out of its doldrums more than three years later.

In hindsight, it is apparent that Roosevelt, whose conservative instincts precluded more radical measures, did not do enough to put even more Americans to work. Nevertheless, his jobs programs not only employed millions of American citizens – providing them with productive work and increased self-esteem – but also greatly enhanced the nation’s infrastructure. The New Deal employed millions of Americans at a relatively low cost and, while it did not end the Depression, it reduced the suffering of countless American families.

We could use a little of that New Deal spirit today. The unemployment rate in the United States is now at 10.2%, the highest it has been since the dark days of the Great Depression. It is even worse for African Americans and Hispanics, who face unemployment levels in their communities hovering above 15% and 13%, respectively. If you count the underemployed and those of all races who have given up looking for work (and who are not counted among the ranks of the unemployed), the rate exceeds 17% of the American workforce. We are indeed in the midst of a Great Recession. President Obama and Congress rightly responded to this latest crisis with a $787 billion economic stimulus package in the American Recovery and Reinvestment Act, but there is little evidence that these billions have been targeted to putting real people to work in real jobs. We bailed out the banks, gave modest tax credits to middle-class Americans, and plugged the leaking budgets of state and local governments, but we have done nothing approaching a Rooseveltian solution to massive job losses.

Paul Krugman, the award-winning economist of the New York Times, correctly noted in a November 12, 2009 editorial that the United States does not have a jobs policy, but a GDP policy. Our policymakers believe that stimulating overall spending will make GDP grow faster, thus inducing the private sector to stop laying-off workers and to start hiring again. Americans are justly proud of our economic system, which has historically produced goods and services and created wealth at rates far exceeding anything ever before seen in history. The standard of living of most Americans has steadily increased over the past sixty years, with America the envy of the world. Although the industrial nations of Europe and Asia have largely kept pace with, and in some cases exceeded, the growth and productivity of the American economy, Americans have generally prospered. We have benefited from an expanding and increasingly educated workforce, until recently a stable financial system, and a legal and regulatory scheme designed to promote free and fair trade while checking corporate excesses. Due to progressive reforms instituted during the New Deal and after, the elderly (social security and Medicare), the poor (aid to families with dependent children and Medicaid), and children (children’s health insurance programs, mandatory education, school lunch programs) are generally protected by government programs designed to provide a social safety net. Yet cracks remain, and have grown increasingly larger, as the ranks of the unemployed have swelled.

While long-term unemployment is at its highest level since the 1930’s, the bankers – bailed out with government largesse – thrive; it was recently reported that bonuses at Goldman Sachs, Morgan Stanley, and JPMorgan Chase, among others, are up 60% from last year, with over $30 billion scheduled to be paid out this year. The growing inequality of American society continues to present ethical and moral challenges to the defenders of a free enterprise system that enforces a callous form of social Darwinism. Thus, unemployment is on the rise at the same time that productivity, as measured by the GDP, is up by an impressive 3.5% this past quarter, and 80% of the S&P 500 reported better than expected earnings.

Why such a disparity? The United States permits employers to hire most workers "at will" which allows employees to be fired without cause at the whim of an employer. The American corporation, upon the first signs of difficulties, cuts costs by cutting people; it is how companies become more “efficient.” Unemployment thus continues to rise while the corporate bottom line improves. Unlike Germany and some other European Union countries, which have strong employment protection legislation, in the United States we fire employees and let them fend for themselves, while those untouched by layoffs continue to prosper.

Imagine if you were a farmer with a large family. One year, due to a drought and bad weather conditions, you have a very poor harvest. Your accountant advises you that, due to declining revenues, you can make ends meet if you simply evict three of your seven children. This cost cutting measure will permit the rest of your family to maintain its present lifestyle. Do you accept the accountant’s advice? Would anyone accept as ethical the farmer who implemented such a cost saving measure? Of course not, as we naturally expect the farmer to have his family make do on less until next year’s harvest. Why do we treat our economy differently? We bail out the banks to shore up our financial system – rewarding risky behavior motivated by greed – rather than ask the rich to make do with less to prevent the increased depravation suffered by recession’s victims.

It is past time to borrow a page from the New Deal and use a significant portion of the stimulus money to put people to work. It is not as if we have a shortage of needs in this country. America’s core infrastructure – roads, bridges, sewers, airports, trains, mass transit – is outdated and crumbling. While poor road conditions cost us billions of dollars in repairs and countless hours of delays, China opens a new subway system every year and Europeans travel on modernized, high-speed rail systems from Paris to Frankfurt. Our cities have an epidemic of broken pipes, dilapidated and vacant buildings, and sinkholes – just look at Camden, Philadelphia, Newark, and most any Northeastern city for examples. One-third of our schools are rundown and in need of repair. Add to this the fact that our addiction to oil has prevented any serious consideration of transitioning to smaller, more fuel-efficient cars, renewable energy development, and expanded mass transit systems, and we have a recipe for a long-term decline.

Economic relief without jobs makes no sense and has a devastatingly negative affect on the psyche of millions of Americans. Workers who have been unemployed for a long time find it difficult to re-enter the labor market even after economic conditions improve; and the hidden costs of long-term unemployment – the emotional damage, for example, to children and families when parents are unemployed – are immeasurable. As Krugman argues, “We need to start doing something more than, and different from, what we’re already doing. . . . [I]t’s time for a policy that explicitly and directly targets job creation.”

Most economists acknowledge that, historically, spending on public works has a far greater effect on the economy than tax cuts, as more money is spent and jobs created at home than abroad. Let us put Americans to work where the nation’s needs are greatest – retrofitting schools and public buildings, repairing our highways and sewer systems, expanding the nation’s broadband capacity, and improving our cities and landscapes. President Obama understands this; he has put Vice President Biden in charge of a team that is making certain that federally financed projects are targeted to meet real needs, are smart investments in America’s future, and are not wasteful. But Obama, like so many Presidents before him, is caught in that great Congressional power hold that is Washington. Although $152 billion is earmarked for infrastructure investment, it constitutes only 20% of the total stimulus package. And much of that money has yet to be spent, caught in a system of earmarks and legislative trading, which leaves far too much discretion in the hands of individual state governments on how to spend the money.

Although we spend hundreds of billions of dollars on supporting a corrupt regime in Afghanistan and putting at risk the lives of American soldiers, we somehow consider the concept of employing Americans with public money to be dangerous and subversive activity. How is spending public money to create jobs and re-train workers a bad thing, when unemployment hovers at 10.2%? Do we wish to have economic and social policies that protect and look out for the general welfare of our citizens, or policies that protect the haves at the expense of everyone else? I do not have all of the answers, but I believe that looking to the New Deal and adjusting it to today’s needs is a place to start.