Hal Ginsberg: The Case of Steven Salaita
Doc Cleveland: Who Lost Scotland?
Half-way points in two-term presidencies are inevitably moments to take stock and to consider redirections of policy. Right now, the political blogosphere is properly full of that stocktaking and redesign. Lists abound on policies needed and priorities to be pushed, which is why there is no need to add to those lists in any detail here.
What may therefore be more valuable is this: an insistence that, to properly situate this second Obama Inaugural, we need more than favorite lists and seamless histories. We need coherent policy platforms that are anchored in the proper periodization of time. For as a country and as an economy we are not just at any random moment in history. Rather, we are at the very end of the second great growth period experienced by the American economy since 1945. In consequence, we are currently in a deeper hole than any that can be quickly corrected by this policy or by that. And unless we realize this underlying truth – and design the full sweep of our public policies accordingly – we run the risk (indeed, probably face the certainty) that the 2010s will eventually be remembered, as the 1970s are now remembered, as a lost decade. The 1970s cost one generation easy access to the American Dream. We must do all that we can to make sure that the 2010s do not impose a similar cost on another generation.
Our situation is serious, but it is not entirely hopeless. For the moment at least, Washington does seem to be inching itself away from a politics focused on debt and austerity towards one focused on job creation and economic growth. That move is long overdue, but even so any resulting economic growth will necessarily be anemic unless those who govern us realize that successful job creation in the immediate past was the product of wider social and political conditions that have now largely gone and which cannot easily be replicated. For sustained economic growth to return, therefore, the political class will need to create new supportive social and political conditions. They will need to create a redesigned social contract at home and a more modest global role abroad. New jobs will be created in the numbers required only if this Administration begins to move the whole economy towards a social settlement based on a new model for economic growth. Job growth in the past required the existence of favorable general conditions, from whose character and impact we need to learn. To shape the future, therefore, we first need to know the past.
The first great growth period of the post-war years, between 1948 and 1973, rested on a particular set of international and internal conditions left in place by the Second World War. At home, economic growth rested on the rapidly rising productivity that was generated as war-focused industries successfully converted to civilian production. It also rested on troops returning from war who refused to return to 1930s conditions, instead sustaining strong trade unions that linked wages to rising productivity for at least the north-eastern and mid-west white male working class. Abroad, it rested on America’s place in a world order divided by communism and under-development, with prosperity across much of the capitalist bloc resting on American economic leadership, communist isolation in eastern Europe and northern Asia, and colonial/post-colonial domination of much of the conceptual “south”.
That first growth period fell to pieces in the stagflation of the 1970s: as U.S. leadership was challenged abroad militarily in Vietnam and economically by a reconstituted Germany and Japan. It fell to pieces as the productivity growth that had sustained rising northern blue-collar living standards for a generation plateaued out in the 1970s, leaving America to endure more than a decade of challenge to white working class wages. That challenge came both from above ( in a growing employers’ offensive against trade unions) and from below (by those excluded from the prosperity negotiated by manufacturing unions, particularly from the urban black poor). The first great American growth period of the post-war years ended in the hot summers of the late 1960s and the paddy fields of Vietnam.
All this is still relevant because our contemporary problems remain firmly rooted in the collapse of the social and economic settlement that was eventually constructed on the ruins of the first growth period – the great Reagan settlement that held sway between 1980 and the financial crisis of 2008. At home, that settlement broke the link between productivity growth and wages, so that the bulk of the benefits created by IT-based productivity growth in the 1990s were captured only by the American super-rich. In this second growth period, most wages stagnated except briefly in the second Clinton term. Living standards were maintained by most Americans – if they were maintained at all – only by working longer hours, sending more members of the family out to work, and by running up unprecedented levels of personal debt. Abroad, the demise of the Soviet Union brought a brief peace dividend that ended on 9/11, a fall and transformation of the communist bloc that eventually opened the entire global market place to the full force of capitalist competition. Large U.S. manufacturing firms responded to these new conditions primarily by outsourcing production to cheaper labor markets abroad, in the process helping to turn the United States from the world’s leading creditor nation to its leading debtor one. That second growth period crashed about our ears in 2008, leaving the Obama Administration not simply with the task of immediately reviving the economy but also of finding a new long-term growth model on which that revival could then be soundly based. The modesty of the recovery from the 2008 recession is strong proof of how little progress the Obama Administration has made on this longer-term task.
That lack of immediate progress should not necessarily surprise us, because failed growth models throw a long shadow forward. The inflation that accompanied economic stagnation in the 1970s took a decade or more to squeeze out of the system; and the federal debt racked up in the attempt to head off the worst excesses of the 2008 financial crisis continues to block the easy use of federal funds to reactivate economic growth. Collapsed growth periods leave real legacies with which Washington has to deal; and dealing with those legacies this time round is more difficult from a progressive point of view even than it was in the 1970s. For the Reagan years have left anti-progressive political legacies as well as economic ones: particularly weaker trade unions than before 1973, and a closer identification in the public mind of Reagan economics with all things American. Persuading the electorate to support a fundamental redesign of the American model is now more difficult than it was at the end of the Carter presidency precisely because so many conservatives now consider that call for redesign not simply unnecessary but also unpatriotic, and because so few trade unions are economically strong enough to push for it.
The main requirements of the new growth model we now need are not difficult to list. The past is there to guide us as we construct the future. We need a growth model that is more like the first than the second, but one based this time on quite different (and less exploitative) external and internal conditions. We need a new (third) growth model based on generalized prosperity that is anchored in rising productivity, just like the first growth model; and so one rooted in a strengthened U.S. manufacturing base, a significant investment in human capital, a renewed war on poverty, and a reduction of U.S. overseas military involvement. With productivity growth now possibly plateauing again, the achievement of generalized prosperity over the next decade will also require a new social settlement based on the low levels of inequality characteristic of America’s first growth period – with income equality now extended to the social categories left out between 1948 and 1973. There is no route back to generalized prosperity for this generation of Americans if the economy remains scarred by the levels of income inequality and personal debt that so bedeviled the second growth period. Republicans will claim otherwise, of course, pushing trickle-down economics once more: but they are quite wrong on this as on so much else. Banks might be tempted to recklessly lend again, but people will not recklessly borrow. We have all been burned too much to seek prosperity in that fashion: the way forward for America this time has to be one based on strong wages and secure employment, not on speculation and on debt. The job of Washington is to create the conditions in which those strong wages, and that security, can be generalized again.
Inaugural speeches are always short on detail, but even so we should watch for verbal signs today – signs that might indicate that the Obama Administration, at the start of its second term, is aware of the scale of the social settlement required, and of the direction that this redesign of the American model so urgently needs to take.
These arguments are developed more fully in David Coates
Making the Progressive Case: Towards a Stronger U.S. Economy 
Pursuing the Progressive Case? Observing Obama in Real Time
First posted at www.davidcoates.net
 See for example, Gar Alperovitz and Steve Dubb, 6 Economic Steps to a Better Life and Real Prosperity for All, posted on Alternet, January 19, 2013: available at http://www.alternet.org/economy/6-economic-steps-better-life-and-real-prosperity-all
 See for example Robert Kuttner, “Obama’s Second-Term BFD Agenda,” The American Prospect, January 17, 2013: available at https://prospect.org/article/obamas-second-term-bfd-agenda
 See Michael Linden and Michael Ettlinger, The Deficit Reduction We Have Achieved So Far, Center for American Progress, January 11, 2013: available at http://www.americanprogress.org/issues/budget/news/2013/01/08/49137/the-... http://www.americanprogress.org/issues/budget/news/2013/01/08/49137/the-deficit-reduction-we-have-achieved-so-far/
 The underlying approach here is one heavily influenced by the “social structures of accumulation” approach to American economic history. For that approach, see Terrence McDonough, Michael Reich and David M. Kotz, Contemporary Capitalism and Its Crises. Cambridge: Cambridge University Press, 2010. Also Michael Perelman, The Confiscation of American Prosperity. Houndmills UK: Palgrave Macmillan, 2009.
 See David Coates, ‘Poverty Amid Plenty,” in his Pursuing the Progressive Case? Observing Obama in Real Time. Bloomington: iUniverse,2013, p.138: also at http://www.davidcoates.net/2011/10/31/poverty-amid-plenty-%E2%80%93-america%E2%80%99s-continuing-shame/
 For data on poverty among the U.S. working poor, see Brandon Roberts et al., Low Income Working Families: The Growing Economic Gap, Working Poor Families Project, Policy Brief Winter 2012-13, p. 1: available at http://inequality.org/topreads/lowincome-working-families-growing-economic-gap/
 Matt Stoller, Towards a Creditor State: 1 in 7 Americans Pursued by Debt Collectors, posted on Alternet February 28, 2012: available at http://www.nakedcapitalism.com/2012/02/matt-stoller-towards-a-creditor-state-%E2%80%93-one-in-seven-americans-pursued-by-debt-collectors.html. For the full story, see Louis Hyman, Debtor Nation, the History of America in Red Ink. Princeton: Princeton University Press, 2011.
 Hyman,op.cit., p. 279; also Chapter 10 of David Coates, Answering Back: Liberal Responses to Conservative Arguments. New York: Continuum Books, 2010; and the Appendixes to David Coates, Making the Progressive Case: Towards a Stronger U.S. Economy. New York: Continuum Books, 2011.
 Jim Tankersley, ‘Manufacturing jobs used to pay really well. Not anymore,” The Washington Post, January 17, 2013: available at http://www.passfail.com/blogs/washington-post/manufacturing-jobs-used-to-pay-really-well-not-anymore/manufacturing-jobs-used-to-pay-really-well-not-anymore-6841006.htm
 See, for example, Leo Hindery and Leo W. Gerard, “Our Jobless Recovery,” The Nation, July 13, 2009: available at http://www.thenation.com/article/our-jobless-recovery; and chapter 6 of Making the Progressive Case, op.cit.
 Evan Soltas, “Has the ‘Great Stagnation’ Hit the U.S.?” Bloomberg, January 18, 2013: available at http://www.bloomberg.com/news/2013-01-17/has-the-great-stagnation-hit-the-u-s-.html
 For a European perspective on this, see Will Hutton, “Davos man thrives while the rest of us pay for his excesses,” The Observer, January 20, 2012: available at http://www.guardian.co.uk/commentisfree/2013/jan/20/davos-world-economic-forum-bad-capitalism