By Cesar Fernando Lumba
There’s hand-wringing and neck snapping going on right now in the Democratic Party, now that populist Donald Trump (really?!) is poised to enter the White House.
Democrats have always been the populist party, so why were they soundly defeated by progressive pretenders: the Donald and, in theory, the Republican Party in the elections just past?
Because Democrats were perceived as the heartless party. The improbable happened, which was Donald Trump and by extension his Republican Party were perceived as caring more for the shrinking working class than did the Democrats.
That was the story in Wisconsin, Pennsylvania, Ohio, Michigan, Iowa and the heartland of America. Democrats were caricatured as the elitist party by one of the unabashed elitists in America, Donald Trump, whose most important friends and associates – the ones he has nominated for cabinet positions – are either billionaires or multi-millionaires or HNWI’s (high net worth individuals).
Democrats are in panic mode because they have just been ambushed at the mountain pass by the Trump army on their way to OK Corral. They seem to have ceded the progressive mantle to Trump and his Republican cohort. They are in panic mode because the earth-shaking new reality could be their new permanent reality.
Or is it? The Republicans are going to repeal Obamacare, which is the lifeline of many former middle-class Americans whose jobs have been shipped to China and Mexico and are now either in the poverty class or teetering on its edge. Republicans are going to change Medicare and make it unrecognizable in the future. They are going to cut taxes of the rich and the corporations to make them wealthier still.
It doesn’t sound like the Republicans really care about the working class. And this picture presents a unique opportunity for Democrats.
Democrats must be the party that unmistakably is the one that bats for the middle class, and for that matter, the poor. The New Economy has many victims, most of them working class. Their jobs have been shipped to other countries, primarily China and Mexico. They have lost all hope, they have become alcoholics, drug abusers and worst, suicidal. That is why white working class men have seen their life expectancy decrease.
Many studies have confirmed that white working class, and for that matter minority working class, have endured years of despair and its partner, depression. These are former middle class men (and women) who were in the nation’s middle class. Now they are a part of the working poor, if they are working at all.
True, Trump’s policies may bring some jobs back, but it would be naive to think that most of the jobs lost to China, Mexico and other countries are coming back. Even my plan of requiring all manufacturers who market their products in America must produce 51% of such products in America will not bring all or most of the lost manufacturing jobs. Remember: we are advocating the return of 51%, not 100%. Besides, those jobs that have been replaced by robots are never coming back.
Pew Research points out that middle class Americans are down to 43% of the total population. In 1970 middle class Americans were 62% of the total population. A loss of nearly 20% is a staggering figure. If applied to the total labor force of about 160 million Americans, 20% means that the middle class is proportionally less by 32 million people. In other words, there are 32 million Americans who should be in the middle class but who are not. Many of them are now in the lowest-income category, that category increasing from 16% of the population in 1971 to 20% today. Other middle-income Americans are now retired and are therefore no longer counted as a part of the labor force. Some became rich.
In contrast, there are now 540 billionaire Americans, up from 41 in 1987. And the millionaires (those whose net worth or cash and investment holdings are in excess of $1 million in today’s money), increased from 500,000 in 1980 to 1.2 million in 1987 as a result of President Reagan’s policies, and to 10.4 million today.
Clearly middle-income Americans need help. The poor need help too not only because a society as rich as the U.S. should not have so many poor people, but also because their ranks are increasing as Americans continue to lose their jobs and careers as a result of globalization and robotics.
Simply put, American workers are being replaced by Chinese workers, Mexican workers and robots. Soon even Uber drivers as well as long-distance truck drivers will be replaced by self-driving cars and trucks.
So with the prospects of more Americans losing their jobs to globalization and robotics, how does society ensure that Americans are protected from the ravages of this brave new world?
Here is where the Democrats have a distinct and golden opportunity. Democrats must adopt a European-style capitalist-welfare mindset. If modern industrialized economies, of which America is the prime example, can no longer create enough jobs for its people, the country must become a capitalist-welfare state. It already is, to an extent. There’s unemployment compensation, Social Security, programs that aid the disabled and handicapped, Obamacare as well as other government policies.
The Democrats must be the party that takes the country down the road to a capitalist -welfare state much further than today. Like a quantum leap.
If the party’s hierarchy adopts the following policies, it will become the dominant political party in America well into the future:
1. The party must be ALL IN for a universal basic income system. Every working-age or retired person in America must have a guaranteed basic income. Those earning less than the basic income amount will be given money by the government to bring up his or her income to the basic income level. How to finance this? Tax the corporations. Tax the millionaires and billionaires more. Tariff the products of factories that moved to other countries.
2. Be the party that promises universal health care – a Medicare for All patterned after the Australian or Canadian system. Finance this with taxes on people’s income. Exempted from such an income tax is money given by government to American workers to bring their income to a level that sustains them above poverty level.
3. Make public universities tuition free so that Americans can compete in the New Economy.
4. We should consider replacing Social Security with the Basic Universal Income system. If all adult Americans are guaranteed lifetime basic income that is above poverty level, in addition to their private pension plans, there would be no need for Social Security. The money in the Social Security pool will be used to partly fund the Basic Universal Income system. With one caveat: That the law that establishes the Basic Universal Income system shall be immune from repeal. Basic Income must be bipartisan and passed by a super majority in Congress
5. We shall work for an amendment to the World Trade Organization charter that would permit countries to install defensive tariffs to protect their manufacturing industries. When a country’s manufacturing base is in danger of being decimated by globalization, the WTO rules should permit such countries to erect tariffs.
Americans would still have an incentive to innovate and work hard because as a people Americans will not be content with earning only the basic minimum income, which is what the Basic Universal Income is. We will still have people like Bill Gates, Mark Zuckerberg, Steve Jobs and Warren Buffet. The people we won’t have are the depressed and hopeless and suicidal Americans whose careers have been pulled out from under their feet like an expensive rug that is being shipped to other countries. If not to China or Mexico, to Bangladesh, India, Vietnam and Indonesia. If not to those countries, to Africa.
There will always be low-cost labor in industrializing countries in all continents, and if Americans are not protected from the dislocating effects of the flight of those jobs as well as the increasing use of robotics in factories, tens of millions of Americans will permanently be home in the ranks of the dispossessed, depressed, hopeless downtroddens in ultra-rich America.
This while the billionaire and millionaire classes have their cocktail parties in giant yachts parked in a Miami Beach marina.
Calling on Mr. Howard Dean. Can you hear me? The Democrats must be the party that converts the American system to a hybrid capitalist-welfare state.
The Republicans certainly won’t do it, so it is up to the Democrats to step up to the plate.
(The author may be reached by email at email@example.com.)