Tuesday, June 17, 2008


Seventy-five years ago, just a month before my father was born to working-class immigrants in the depths of the Great Depression, Franklin Delano Roosevelt signed the National Industrial Recovery Act, one of the most important pieces of legislation in American history. The NIRA created the minimum wage. In soaring rhetoric that recognized the dangers of inequality in America, FDR argued that a "self-supporting and self-respecting democracy can plead no economic reason for chiseling workers’ wages.” Amen.

Check out today's Times for a superb op-ed by Adam Cohen on the New Deal and the troubled history of the minimum wage. We are no longer a "self-supporting and self-respecting democracy" in the Rooseveltian sense. Cohen points out that the net effect of the Bush administration's economic policies has been chiseling workers' wages. (At the same time, Republican tax giveaways have lined the pockets of the richest with the proceeds). Cohen makes the sensible argument that "there should be talk of tax credits and health care — and the minimum wage. Advocates for the working poor argue for a better raise than the one Congress passed last year — perhaps one set at half the national average hourly wage, which would bring it roughly to where it was in the 1960s, and tie it to the rate of inflation." That Cohen's argument sounds radical is a reminder of how impoverished our political discourse has become after decades of neoliberal economic policy, especially after seven plus years of Bushism.

One of the unexpected benefits of the prolonged Democratic primary is a renewed interest in the problem of economic inequality. This week's issue of The Nation is indispensible reading for those concerned about the growing gap between rich and poor. Emanuel Saez and Thomas Piketty, two superb economists, find that the the economic gap in the United States has not been as high since the Great Depression. Their data are presented in the graph above, available in a larger, more readable version here. Left Business Observer's Doug Henwood, a rigorous economic analyst who knows Wall Street from the inside and outside, contributes a piece comparing today with the Gilded Age which ends with the sober reflection that the major difference between the two is the lack of robust social movements challenging inequality today. The expansion of regulation in the Progressive era took the form that it did because of pressure from below. The same goes for the Great Depression and the New Deal. The take-away point from the sum of The Nation articles is this: if we elect Barack Obama in the fall, pressure from the left is necessary to pave the way for systemic reform. If there is a Bush/McCain White House--with a renewal of tax and economic policies that favor the richest segment of the population--one can only hope that the left does not remain quiescent on economic issues. We can't afford to be silent as the rich get richer and the poor get poorer, while the ideal of economic democracy languishes.