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posted by cmn32480 on Thursday November 03 2016, @01:36PM   Printer-friendly
from the when-times-are-forced-to-change dept.

When trying to understand the two bad choices we have now, it can help to look into the past at where they came from. In this article, Matt Stoller at The Atlantic provides a deep dive into a transformation the Democratic party underwent in the late 1960s onward. In it we see how the Democrats morphed the anti-big-business politics that had powered it for over a century into the big-government politics that define the political conversation today.

Modern liberals tend to confuse a broad social-welfare state and redistribution of resources in the form of tax-and-spend policies with the New Deal. In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy. The New Deal divided power, pitting faction against other faction, a classic Jefferson-Madison approach to controlling power (think Federalist Paper No. 10). Competition policy meant preserving democracy within the commercial sphere, by keeping markets open. Again, for New Deal populists like Brandeis and Patman [ed: links mine], it was democracy or concentrated wealth—but not both.

[...] The story of why the Watergate Babies spurned populism is its own intellectual journey. It started with a generation of politicians who cut their teeth on college-campus politics. In their youth, they saw, up close, not the perils of robber barons, but the failure of the New Deal state, most profoundly through the war in Vietnam. "We were the '60s generation that didn't drop out," Bob Edgar, a U.S. representative from the class of 1975, told me. The war in Vietnam shaped their generation in two profound ways. First, it disillusioned them toward the New Deal. It was, after all, many New Dealers, including union insiders, who nominated Hubert Humphrey in 1968 and who supported a war that killed millions, including 50,000 Americans their age. And second, higher education—the province of the affluent—exempted one from military service, which was an explicit distinction among classes.

[...] By quietly cutting back the influence of unions, [Democratic strategist Fred] Dutton sought to eject the white working class from the Democratic Party, which he saw as "a major redoubt of traditional Americanism and of the antinegro, antiyouth vote." The future, he argued, lay in a coalition of African Americans, feminists, and affluent, young, college-educated whites.

[...] By 2008, the ideas that took hold in the 1970s had been Democratic orthodoxy for two generations. "Left-wing" meant opposing war, supporting social tolerance, advocating environmentalism, and accepting corporatism and big finance while also seeking redistribution via taxes.


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  • (Score: 3, Interesting) by khallow on Thursday November 03 2016, @02:23PM

    by khallow (3766) Subscriber Badge on Thursday November 03 2016, @02:23PM (#422041) Journal

    In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy. . The New Deal divided power, pitting faction against other faction, a classic Jefferson-Madison approach to controlling power (think Federalist Paper No. 10).

    The obvious rebuttal is the National Industrial Recovery Act [wikipedia.org] (NIRA) of 1933 which created a large number of business cartels in addition to starting the well-known concentrating of labor union power. And of course, it was ineptly administered by the federal government which remains to this day a huge concentration of power and conflict of interest in the economy. The New Deal people didn't have any problems concentrating power as long as they were the ones in charge (which remains a problem of this flavor of political fix-it, they never seem to think Trumps and other undesirables can get into power to abuse what they create).

    So no, it wasn't a classic Jefferson-Madison approach, but rather a classic top-down idealistic approach that ultimately failed when the Supreme Court completely voided this law.

    Reading the article, I see this:

    The result today is a paradox. At the same time that the nation has achieved perhaps the most tolerant culture in U.S. history, the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century. This is not what the Watergate Babies intended when they dethroned Patman as chairman of the Banking Committee. But it helped lead them down that path. The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump.

    No word of labor competition with the developing world? The most important development of the past half century, and the key reason that said concentration of economic power happened, and it's just talk about near useless banking regulation?

    From telecommunications to media to oil to banking to trade, Clinton administration officials—believing that technology and market forces alone would disrupt monopolies—ended up massively concentrating power in the corporate sector. They did this through active policy, repealing Glass-Steagall, expanding trade through NAFTA, and welcoming China’s entrance into the global-trading order via the World Trade Organization. But corporate concentration also occurred in less-examined ways, like through the Supreme Court and defense procurement. Clinton Library papers, for example, reveal that the lone Senate objection to the Supreme Court nominations of both Stephen Breyer and Ruth Bader Ginsburg was from a lurking populist Ohio Democrat, Howard Metzenbaum, who opposed the future justices’ general agreement with Bork on competition policy. And in response to the end of the Cold War, the administration restructured the defense industry, shrinking the number of prime defense contractors from 107 to five. The new defense-industrial base, now concentrated in the hands of a few executives, stopped subsidizing key industries. The electronics industry was soon offshored.

    Finally, this most important US economic trend of the past half century gets obliquely mentioned via the WTO and NAFTA. Somehow those trade agreements supposedly results in a concentration of corporate power even though these agreements introduced many new competitors to the US. The delusion is strong here.

    I think the source of the problem here is the simplistic idea that regulation fixes stuff. But corporate concentration of power is actually driven by that very regulation. When you look at the massive amount of regulation that exists today, which grows faster than one can read it, it strongly favors large businesses over small ones. There is a huge economy of scale to dealing with it. It's not much more onerous to handle regulation for 100k employees as it is 100 employees.

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  • (Score: 4, Interesting) by meustrus on Thursday November 03 2016, @02:29PM

    by meustrus (4961) on Thursday November 03 2016, @02:29PM (#422045)

    I was taught that the New Deal was a bunch of "throw it on the wall and see what sticks" legislation. NIRA was found unconstitutional by the Supreme Court in 1935, so obviously it didn't stick. Not every law in the New Deal was ideologically consistent, but when you look at only the laws that stuck around through near-future Congresses and the Supreme Court, the "classic Jefferson-Madison approach" won out.

    --
    If there isn't at least one reference or primary source, it's not +1 Informative. Maybe the underused +1 Interesting?
    • (Score: 2) by Thexalon on Thursday November 03 2016, @02:44PM

      by Thexalon (636) on Thursday November 03 2016, @02:44PM (#422052)

      That is absolutely correct about FDR's general approach. The key factor was that (a) the economic situation was quite desperate, and (b) the received economic wisdom of the time had been exactly what Herbert Hoover had done. Which famously didn't work.

      --
      The only thing that stops a bad guy with a compiler is a good guy with a compiler.
    • (Score: 1) by khallow on Thursday November 03 2016, @02:51PM

      by khallow (3766) Subscriber Badge on Thursday November 03 2016, @02:51PM (#422058) Journal
      That's like claiming modern Nazis in the US are strictly free speech advocates. Because the only consequence of their ideology and activities has been an opportunity to defend their speech from various impositions on free speech.
    • (Score: 1) by khallow on Thursday November 03 2016, @04:22PM

      by khallow (3766) Subscriber Badge on Thursday November 03 2016, @04:22PM (#422100) Journal
      As to your subject title, New Deal advocates are not the US Government.
  • (Score: 0) by Anonymous Coward on Thursday November 03 2016, @02:36PM

    by Anonymous Coward on Thursday November 03 2016, @02:36PM (#422049)

    No word of labor competition with the developing world?

    That's because it is not a big issue. Only about 15% of the jobs lost are to overseas competition. Most of the rest is due to automation. You may want to split hairs and argue that the robots are working overseas, but the fact is that the jobs aren't being taken by foreign people. Trump supporters shouldn't be mad at immigrants taking their jobs, they should be mad at automation taking their jobs, but big walls aren't going to keep robots away from their jobs.

    • (Score: 1) by khallow on Thursday November 03 2016, @02:48PM

      by khallow (3766) Subscriber Badge on Thursday November 03 2016, @02:48PM (#422054) Journal

      Only about 15% of the jobs lost are to overseas competition. Most of the rest is due to automation.

      Sure.

      The problem with such assertions is that billions of jobs, many of the sort of job that supposedly got replaced by automation, were created throughout the developing world.

      • (Score: 2, Informative) by Anonymous Coward on Thursday November 03 2016, @04:10PM

        by Anonymous Coward on Thursday November 03 2016, @04:10PM (#422095)

        > The problem with such assertions is that billions of jobs, many of the sort of job that supposedly got replaced by automation, were created throughout the developing world.

        So what is your point? It sounds like you think the US has some claim on jobs that never previously existed. Like the MAFIAA claiming that every pirate download is a sale they would have made otherwise.

        The simple truth is that US manufacturing output is up ~60% since NAFTA to the highest it has every been [stlouisfed.org] even while employment is down and that's because of automation. Employee efficiency increased 2.5x during that same time. That's your job killer and its only going to get worse.

        • (Score: 1) by khallow on Thursday November 03 2016, @09:02PM

          by khallow (3766) Subscriber Badge on Thursday November 03 2016, @09:02PM (#422242) Journal

          So what is your point? It sounds like you think the US has some claim on jobs that never previously existed.

          Let's review the thread. I quoted a paragraph where the author blames the decline of labor power on Democrats replacing a committee chair. That doesn't even make a little sense since the decline of labor power would only trivially be affected by such a change. But competition with developing world labor which works for a small fraction of the price? Bingo. Then some AC wag claims that only 15% of all US jobs "lost" (whatever that means since no context was given) were due to foreign competition and the rest was somehow determined to be due to automation. I merely noted that there's been a vast amount of job creation including much of those jobs which supposedly were lost due to automation.

          My point is that there is a huge amount of clueless blame shifting here. US business CEOs didn't suddenly discover greed in 1970. Labor unions didn't lose power over decades because some political ally got kicked out of his posh chairman position. There was a huge shift in power once labor competition from the developing world set in. This was manageable in the 1950s and 1960s when it was only Europe and Taiwan. Japan's ascent upset the balance of power in the US between labor and business.

          The simple truth is that US manufacturing output is up ~60% since NAFTA to the highest it has every been even while employment is down and that's because of automation. Employee efficiency increased 2.5x during that same time. That's your job killer and its only going to get worse.

          The obvious rebuttal is why aren't they hiring more employees, if they're so valuable? Answer: because it's even more valuable than that in places like China.

          • (Score: 0) by Anonymous Coward on Thursday November 03 2016, @11:02PM

            by Anonymous Coward on Thursday November 03 2016, @11:02PM (#422285)

            > Let's review the thread. I quoted a paragraph where the author blames the decline of labor power on Democrats replacing a committee chair.

            Oh look, callow only reads to find something to make non-sensical arguments about, not to understand. If you think the story was about a committee chair then you completely missed the point.

            > The obvious rebuttal is why aren't they hiring more employees, if they're so valuable?

            Lol, you are such fucking dumbass. Who said they are valuable? Why don't you buy 3 rolls royces, they are valuable aren't they? So what's your problem?

            The only thing obvious is that whenever you open your mouth you don't have a fucking clue what you are talking about. Your understanding of the world is a joke. I mean come on, you cite the NIRA as major shaper of the current market when it was outright killed by the scotus within 2 years of enactment. Your entire worldview is defined by taking outliers and assuming they are the common case. You have zero sense of perspective or scale.

            How many times does reality have you to slap you upside the head with your own idiocy before you realize your self-confidence is completely misplaced?

            • (Score: 1) by khallow on Friday November 04 2016, @04:13AM

              by khallow (3766) Subscriber Badge on Friday November 04 2016, @04:13AM (#422369) Journal

              How many times does reality have you to slap you upside the head with your own idiocy before you realize your self-confidence is completely misplaced?

              Ok, what does reality have to do with your post?

              I mean come on, you cite the NIRA as major shaper of the current market when it was outright killed by the scotus within 2 years of enactment.

              Did I? I seem to recall citing it as an example of the absence of Jefferson-Madison qualities to New Deal strategy. And I pointed out the law got reversed. It's an example not a complete explanation of what's wrong for the past 80+ years. I find the accusation particularly bizarre, because I spoke of labor competition instead.

              Your entire worldview is defined by taking outliers and assuming they are the common case.

              You don't seem to get the point of an example. And for an "outlier", if the Supreme Court hadn't reversed it, we might still be living with the law today and a bunch of other stuff like it. FDR changed his strategy thereafter because he got effectively blocked by the Supreme Court (he even tried and failed to pack the court) not because the law was an "outlier".

              There seems to be an unfortunate pattern to these AC accusations. Blatantly misrepresentations of what I wrote followed by clueless, low content commentary. But it's all "reality" so it must be good.