August 28, 2010


Doug Henwood: Austerity in the face of weakness Pt.3
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Doug Henwood is the founder and editor of the Left Business Review; a contributing editor to the U.S. weekly The Nation; and author of several books, including Wall Street and After the New Economy.


WAGES AND THE CRISISPAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay in New York. I'm joined again by Doug Henwood, who for almost 25 years has been editing Left Business Observer in New York City. Thanks for joining us, Doug.


JAY: What about the issue of real demand? I mean, does any of this work if there isn't some movement on wages?

HENWOOD: Well, that's another fight we're going to have to have. You know, we've seen tremendous growth in productivity over the last 30 years and almost no growth in wages over last 30 years, the real wage. Aside from a period of four or five years in the late 1990s, real wages have been either flat or down for most of the last 3, 3.5 decades. That's not good. You know, that's been very good for profits, but it's not very good for demand, and it's just unjust, and now I think it's been revealed it's economically unsustainable. Something's got to give. The wage share has to grow, and that's not going to happen unless we raise the minimum wage and have better labor law allowing for better unions. And, you know, that's not on the agenda, really, here, either.

JAY: Well, it was supposed to be talked about. There was supposed to be this Employee Free Choice Act. It was one of the main objectives of the labor movement from the Obama administration. Haven't heard the word in months and months.

HENWOOD: No, the Obama administration wouldn't touch that thing with a 10 foot pole. They don't want to be seen as pro-labor. They don't want to be seen as pro-union. So they'll make the occasional symbolic gesture. They'll appoint pretty hefty some...labor secretary. But she's not part of the inner sanctum of the economic policy. She's not part of the National Economic Council. You know, we don't have labor people doing that. We have a labor guy, Andy Stern, formerly the SEIU [Service Employees International Union], on the deficit commission, but Andy Stern's been buddying up to all the Republicans and talking about putting Social Security money in the stock markets. Just after they took office, then-chair of the Council of Economic Advisers Christina Romer spoke to the Council on Foreign Relations. I saw her there. She said a lot of good things: we need to get investment up; we need to do the kinds of long-term R&D and investment in clean energy and other green technologies that could save the planet and generate long-term economic growth. And she denounced a lot of people in the crowd, who were a lot of investment bankers and Wall Street lawyers, saying, you're going to have to change what you do. And somebody asked in the audience, what do you mean we should—what do we have to do? And she said, you have to start making things. And they hissed her. I noticed that she just resigned and is going back to academia. So I think that kind of voice has been lost within the administration, and it's just—they're really going back to doing things the old way. And the financial regulations have been—they're not completely insignificant, but they're pretty minimal, and it's going to allow Wall Street to do pretty much what it did beforehand. They're going to have to invent some new games and create some new subsidiaries and find loopholes, but they're very good at doing that sort of thing, and they're going to be able to do pretty much what they want to do. It's not like, you know, the 1930s, when the whole financial landscape was reorganized and tightly regulated, and we're not seeing anything remotely like that now. And even the ideological environment hasn't changed all that much. I mean, at the elite levels, nobody has, really, a problem with Wall Street. And, you know, a friend of mine said the other day, I don't understand why Wall Street isn't burning. You know, there's just—the level of popular rage is quite low, the prestige of labor unions, Gallup just reported the other day, very low. It's as if the consciousness of the American public is the private sector's basically correct in its wage-setting and the public worker is overpaid. It's not that, you know, the private sector's greedy and driven by maximization of profit and the public sector workers really should be a model for all of us. That's not the way we think. So one of the things that has surprised me about this crisis, as I thought that we would at least see some beginning of an ideological renovation, that even if there are a lot of obstacles towards material change in this country, but I thought at least people will start thinking and seeing things differently. It doesn't seem to have happened, at least in any visible way.

JAY: Well, maybe that's the word, "visible" way, because maybe it's not breaking through because the media doesn't want to report on it.

HENWOOD: Yeah. But there's also really no organized expression of it, either. You know, the most visible expression of discontent are the lunatics who are wearing tea bags on their heads and who think that Obama is a Kenyan-born Muslim socialist. And it's—certainly the media focus on those people. That is their choice. But it also—you know, this is kind of consonant with the whole tradition in American history of having an activist, crazy right wing.

JAY: But you have to blame the left as not able to inspire people. It's the—.

HENWOOD: No, the left has been very absent, and I think there are any number of reasons for that, you know, going back to the collapse of the Soviet Union leaving the left worldwide feeling very demoralized, and we don't really know what to think or do, we don't really have a good agenda. But also I think there's a special situation that the more respectable left, the part with some access to power, was so entranced by the fact that a Democrat won the White House, there's just this vast sense of relief that, you know, at least our guy is in there. And so the unions were perfectly willing to cut him a lot of slack during the health-care debate.

JAY: And still do.

HENWOOD: And still do. So as long as that kind of organized, respectable left is so demobilized, so defanged, so disarmed, then we're not going to get anywhere.

JAY: Well, we'll see. If this is decades of slowdown, maybe the American people start to wake up.

HENWOOD: Well, let's hope that disillusionment can be a productive force.

JAY: Thanks for joining us.

HENWOOD: My pleasure.

JAY: Thank you for joining us on The Real News Network.

End of Transcript

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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