Reagan's Labor Pains

DETROIT AT MIDDAY is strikingly quiet. It is a city of 1.5 million people--but it seems devoid of the characteristic noise and bustle. There is relatively little automobile traffic. City buses lumber about, half-empty. Almost no one shops in the re-developed shopping plazas. And there are no guests in the castle-like Renaissance Center hotel complex, which stands over the Motor City like a gleaming caricature of "urban revitalization." Detroit is not thriving: it resembles nothing so much as an empty shell. And it is empty, too, of hope for the unemployed who line the streets, selling apples and bananas from pushcarts.

The apple carts, more than anything else about the urban listlessness of Detroit, evoke the imagery of economic depression. They are a part of the visual heritage of the Great Depresssion that has survived into the 1980s. They confirm that a new depression is crushing industrial America and industrial workers. In Detroit, the depression stems from the collapse of the automotive industry, which has lost 10 per cent of its market to Japanese competitors over the last three years.

But Detroit's plight only varies in kind from that of other ailing Northern cities. In Akron, the sick industry is tires; in Gary and Baltimore, steel; and everywhere, construction. This depression in heavy industry has triggered a spectacular rise in the unemployment rate from 7 per cent in July to 8.9 per cent in December. Unemployment in basic durable goods manufacturing as a whole stands at 11.8 per cent; in the automotive industry, at 21.7 per cent. So it should come as no surprise that two heavily industrialized states now boast unemployment figures in the Great Depression neighborhood: Michigan at 15.1 per cent and Ohio at 12.5 per cent.

All this means that joblessness is increasing rapidly among unionized blue-collar workers, the proletariat par excellence. The very people who are used to steady work--work that provides dignity and enables one to support a family--are being laid off in droves. That makes the unemployment number an index of anxiety, anger, and humiliation as well.

Such distress is inevitably politically devastating; just ask defeated presidents Gerald Ford or Jimmy Carter, both of whom were done in by blue-collar unemployment. Blue-collar unemployment under Ford hit 11.7 per cent, lingering at 9.4 per cent on election day. Under Carter, the figure rose from 6.9 per cent in 1979 to 8.9 per cent for the first five months of 1980. Ronald Reagan doesn't face the voters for two and a half years, but unemployment highs under him already exceed marks of his two ill-fated predecessors. The severity of the nation's economic crisis threatens the already-dimming Republican hopes of further gains in the 1982 congressional elections.

For Reagan and his party, economic paralysis is even more dangerous than it was to Ford and Carter. The Republicans swept into power in 1980 by promising a massive revitalization of the economy that would primarily benefit blue-collar workers. Convening, appropriately, in Detroit itself, they proclaimed a "new populism" based on supply-side economics. GOP party chairman Bill Brock promised "jobs, jobs, jobs"; the President himself informed the Carpenter's Union several months ago of an imminent "American renaissance that will astound the world; a new era of good feeling in America, a time when jobs will be plentiful and the richness of the country can be shared by anyone who is willing to work." In short, the Right hoped to break into the New Deal coalition by convincing traditionally Democratic workers that the Republicans had turned over a new leaf--that they were no longer the party of fight money, but of full employment. In 1980, that strategy worked: Reagan's share of un-ionized voters was about 43 per cent, dwarfing Gerald Ford's 30 per cent in 1976.

BUT BEHIND the effusive rhetoric stands an economic program laden with contradictions. The economic "foundation" of which the president speaks is built from a grab-bag of materials, assembled hastily by economic architects who have been likened to voodoo practitioners. The president expects the public to believe that the formula for full employment is tight money and unprecedented tax breaks for corporations and the rich, garnished with huge defense outlays and sharp cutbacks in federal employment programs for good measure. The high priests of Reaganomics tell us tax breaks are critical because the country is short on investment supply--hence, the "supply-side" name. But it is investment demand that remains weak because of high interest rates that themselves stem from the Administration's restrictive monetary policy--a policy that Business Week has said is much tighter than that of any of the previous four recessions. Whether the supply-side bonanza will produce the predicted flood of new job-creating capital spending is thus doubtful at best. For all its self-styled radicalism, then, Reaganomics is just old-time Republican fiscal conservatism brushed up with a fresh coat of supply-side paint; in effect, the administration is running a recession to diminish inflation.

The Republican strategy of building a new worker-based coalition around supply-side policies is thus a high-risk proposition--the administration gambled not only that its "voodoo economics" would work, but also that the public would fail to see its essential duplicity. Hence, the rhetorical excesses: Reagonomics is a program that must be oversold if it is to be sold at all.

Workers trusted Ronald Reagan in 1980; they wanted to "give him a chance." But this trust was given grudgingly--people who have voted Democratic all their lives would often rather fight than switch. Reagan's victory was a cautious mandate born of desperation, not an enthusiastically written blank check. The failure of Reaganomics to deliver jobs sets the stage for an especially harsh backlash heightened by blue-collar feelings of betrayal.

Ronald Reagan, it seems, can have his election coalition or his economic program, but he cannot have both. The president shows no signs of abandoning his economic dogma, however. Just last week, he hailed the "private sector" as "that tough little tug that can pull our ship of state off the shoals and out into open water." Unless GOP congressional leaders can change the president's mind--or start rowing fast--a resurgence of Democratic strength at the polls is probable in both 1982 and 1984. Democratic programs would likely include some form of direct capital allocation to ailing industries, jobs spending, and wage and price controls to curb inflation as the economy heats up agin.

Rising unemployment sharpens the feeling among workers--"the little guys"--that they are powerless to control their own lives. It shows people that decisions made by corporations and politicians can deprive men and women their basic right to earn livelihoods, for no apparent reason. More than anything else, the unemployed vote against incumbents to assert their dignity and their will to have a say in their own futures.

Voting one's resentment is a small gesture. But as Ronald Reagan may soon find out, these individual gestures add up to a potent political force. It is anyone's guess whether the resurgent government interventionism that is likely to follow the defeat of Reaganomics will prove more successful in addressing the sources of that resentment.

But Democrats would do well to remember that Ronald Reagan triumphed because he seemed to respond to these feelings of powerlessness, by pointing an accusatory finger at "big government" and promising to return the economy to "the people". This promise has now been exposed as a populistic cover for a blatantly pro-corporate policy. If Democrats genuinely wish to do any better, their program must be more than rhetorical: it must incorporate meaningful ways for working people to participate in decision affecting their livelihood. The denial of this participation is ultimately behind the resentment transmitted at the polls during the last decade. If it is denied much beyond 1984, it may seek other, more direct forms of expression.