[Marxism] A New Economy?

[Louis Proyect]

NY Times Magazine, January 27, 2008
The Way We Live Now
Old-School Economics
By CHRISTOPHER CALDWELL

Why do presidential candidates touting their concern for the economy 
pose with factory workers rather than with ballet troupes? After all, 
the U.S. now has more choreographers (16,340) than metal-casters 
(14,880), according to the Bureau of Labor Statistics. More people 
make their livings shuffling and dealing cards in casinos (82,960) 
than running lathes (65,840), and there are almost three times as 
many security guards (1,004,130) as machinists (385,690). Whereas 30 
percent of Americans worked in manufacturing in 1950, fewer than 15 
percent do now. The economy as politicians present it is a folkloric thing.

If Republicans have had more luck talking about the economy for the 
last generation or so, it is because they were the less folkloric of 
the two parties. Broadly speaking, they cut taxes and regulation and 
trusted that entrepreneurs would hasten the arrival of the economy to 
come. There were Democrats who did the same, but they shared a party 
with others who were nostalgic for a disappearing world, reflexively 
backing unions and fighting management. Republican optimism beat 
Democratic nostalgia.

This campaign season, Republicans no longer look so confident. Mike 
Huckabee suggested to a group of Detroit executives that "instead of 
talking to people in the corporate boardroom, you talk to people on 
the line." He aspires to remind Americans "of the guy they work with, 
not the guy who laid them off." The latter guy, in Huckabee's view, 
resembles Mitt Romney, who may have triumphed in Michigan, but only 
after promising to restore 250,000 factory jobs lost to layoffs. 
Republican rhetoric about trusting the transition to a new economy is 
not allaying fears as it once did.

The reason is simple. It is that the transition is over. The new 
economy we have been promised is in place. While the economy of 1998 
was a world away from the Internet-less, land-line-dependent, 
non-Nafta, I.B.M.-Selectric-powered, partly Communist world of 1988, 
today's economy is fully recognizable as the one we inhabited in 1998.

Today's economic anxiety is not the same anxiety that simmered 
between 1980 and 2000. Back then, recessions and slowdowns were 
understood as the pangs of a new economy struggling to be born. But 
the recession we now seem to be entering is to the information age 
what the recession of, say, 1957-1958 was to the industrial age — a 
"normal" recession in the midst of an economy with stable bases, an 
economy that (to use a current cliché) "is what it is." The "jobs of 
the future" that were promised 20 years ago are here. Choreographers, 
blackjack dealers and security guards have replaced factory workers 
as the economy's backbone, if not yet its symbol.

New economies have always required a kind of initiation fee of those 
who would participate fully in them. As the historian Richard 
Hofstadter showed in "The Age of Reform," the aftermath of the Civil 
War was marked by paeans to the prosperity that would arise from 
technological change. The 19th-century farmer went to great lengths 
to join it. "His demand for expensive machinery," Hofstadter wrote, 
"his expectation of higher standards of living and his tendency to go 
into debt to acquire extensive acreage created an urgent need for 
cash and tempted the farmer into capitalizing more and more on his 
greatest single asset: the unearned appreciation in the value of his 
land." These problems will be familiar to many a 21st-century 
security guard or Wal-Mart cashier. They are the problems not of 
someone "left behind" in the old economy but of someone struggling in the new.

Economic orders have life cycles. Policies designed to "unleash" 
business in a fledgling economy offer diminishing returns in a 
developed one. To have overregulated or overtaxed Bill Gates 20 years 
ago might have killed a goose that still had many golden eggs to lay. 
But it seems probable that 20 years hence, regardless of tax policy, 
Microsoft will be intact, thriving, based in the United States and 
doing roughly what it is doing now.

Yet Republican prescriptions have changed not a whit. Mitt Romney 
recently attacked the latest federal energy bill, which mandates 
average fuel-efficiency of 35 miles per gallon, as an impediment to 
Detroit's ability to crank out sport-utility vehicles. He is quite 
right. But does he mean to say we're going to get out of our economic 
doldrums by driving 10-mile-a-gallon cars in a world of $100-a-barrel oil?

All Republican candidates want to make President Bush's deep tax cuts 
permanent, and even to expand on them. Rudolph Giuliani has promised 
to pass the largest tax cut in U.S. history. But this is yesterday's 
policy trying to pass itself off as tomorrow's. Americans are evenly 
split on whether taxes ought to be raised back to pre-Bush levels. 
Large majorities would gladly pay more in taxes for various purposes 
(notably more access to health care). Voters, it seems, have begun 
asking of entrepreneurs and their champions what they asked of 
hippies around 1971: Aren't you liberated enough already?

Cutting taxes and slashing regulations were appropriate strategies 
for managing a transitional economy. But we no longer live in such an 
economy. This does not mean that Republicans need to embrace a 
single-payer health system or subsidized day care. But neither can 
they go on automatically favoring the hypothetical needs of 
tomorrow's entrepreneurs over the real needs of today's dental 
hygienists and landscape gardeners. The future is now, as the late 
Redskins' coach George Allen used to say. The promise that prosperity 
is just one more tax cut or one more rescinded regulation away is a 
rapidly depreciating rhetorical asset.

Christopher Caldwell is a contributing writer for the magazine.