The Higgins plan: running in 2012 on the peace dividend

Congressman Brian Higgins has it just about right with his endorsement of the New America Foundation’s $1 trillion infrastructure investment program. He is endorsing what centrists and progressives of an earlier era called the “peace dividend,” which we were supposed to give ourselves as a reward for having won the Cold War. Higgins’s bill is good policy and it’s good politics, too. The American Society of Civil Engineers uses the same input-output models that the economists at Moody’s Investor Services uses, and that we use at the Center for Economic and Policy Studies, to show which investments leverage what economic results. The input-output models show that expensive but small-scale wars, tax cuts targeted to investors, and fiscal austerity that undermines the safety net are policies that make economies shrink. Infrastructure investment not only stops that bleeding but stimulates demand, lubricates commerce, makes polluted shorelines habitable, speeds transit, and has an observable, quantifiable “multiplier effect.”

Ever since Ronald Reagan grabbed hold of the deficit issue, however, the rhetoric of austerity has had a ferocious power. Reagan himself raised taxes even while over-spending year after year after year, ever blaming Congress for enacting the unbalanced budgets he kept sending them. Reagan created deficits while demonizing domestic spending.

That’s why Higgins’s rhetoric on this $1 trillion infrastructure plan is correct, too. With luck, Higgins and his buildup plan could become the national counter to Congressman Paul Ryan of Wisconsin, the pro-plutocrat Republican who hornswoggled his gullible House majority colleagues into voting for a budget that guts Medicare, Medicaid, and health and safety regulation; threatens middle-income tax breaks without naming them; and explicitly endorses higher defense spending and more tax relief for oil companies and the investor class.

It’s the long-delayed peace dividend versus Marie Antoinette. It’s Ike’s plan to build the interstate highway system without the salesmanship of saying it’s for national defense. Higgins’s endorsement of the New America Foundation program is just straight-up, unreconstructed New Deal, Fair Deal, New Frontier, Great Society policy. If the punditocracy starts talking about Higgins on the Sunday morning chat shows, the gesture could help this election season become the most ideologically clear discussion since Harry Truman squeaked to victory over Tom Dewey in 1948.

At the moment, though, progressive Congressional Democrats have the same problem that our progressive president has—namely, that the plutocrats control the rhetoric. And there’s an important sideshow underway, too, as the predictably partisan United States Supreme Court deliberates Obamacare rather in the way that Justice Rehnquist “deliberated” whether to allow metropolitan-wide school desegregation in 1974, or the way that the court “deliberated” Al Gore’s presidential victory, and “deliberated” giving unlimited political messaging power to the most profitable corporations in history in Citizens United.

The Supreme Court has always reflected the zeitgeist of the nation’s elite. To study American constitutional law in any historical depth is to be given a long course in the preferences of the men, mainly, who are least likely to question a social order that most resembles the hierarchy in a British country house, a la Brideshead Revisited, Gosford Park, or Downton Abbey.

Healthcare: a proxy fight

Soon, certainly before summer, the Supreme Court of the United States will deliver a decision about the Health Care and Education Reconciliation Act of 2010, i.e., Obamacare. The story may be set in 2012, but the terms of that story were set way back during the early years of the Cold War, when Harry Truman floated the idea of a nationalized healthcare system paid for with public money, and saw himself and his allies vilified as communists.

That’s the lesson of a very fine book by Pamela Behan called Solving the Health Care Problem: How Other Nations Succeeded and Why the United States Has Not. If people who can remember the Korean War are feeling a certain sense of déjà vu, there’s no surprise: Many of the arguments trotted out against Truman have been dusted off and re-used against Obama’s far less ambitious plan to incrementally extend the private insurance system, and to broaden Medicaid coverage, in an effort to prevent 14 million people from falling through the cracks. Slightly younger adults who may recall the fight that Lyndon Johnson fought for Medicare and Medicaid in 1965 probably feel that same sense of been there, done that.

Behan’s analysis isn’t particularly safe or comforting. She wrote her story before Obamacare was enacted. Canada, Australia, Britain, and Europe all have versions of national healthcare systems that have become consensus policies that even the Conservatives in those countries stick with, because the contrast with the American system is the contrast between universal systems that cost about 10 percent of gross domestic product and the American way, which will soon cost us double that.

The best part of Behan’s book is her explanation of how our slave-owning, land-accumulating, and wealthy American aristos’ revolution against royal tyranny was so complete that the American version of the executive hardly ever gets a chance to make big changes. Our presidents are castrati compared to prime ministers fortunate enough to command enduring parliamentary majorities, in which the majority party not only legislates but acts as the executive once it takes power. As progressives know too well, it has been a very rare occurrence in American history that our Congress and our president and our Supreme Court all concur on acts of liberation. Only when crisis is upon us do we make big changes.

Unfortunately for this country, the last crisis we faced was on November 9, 1989, when we won the Cold War. It was the day we were supposed to start enjoying the “peace dividend.” Instead, it turned out to be inauguration day for the era of the plutocracy.

The triumph of the plutocrat

The reason that we face the Paul Ryan budget, the 26-state effort to destroy the “individual mandate” in the healthcare-reform act, clearly insane concealed-weapon statutes, another Scopes trial ahead in Tennessee, zero action on regional school desegregation by income groups, no chance of a national policy in favor of the fast trains that other countries have had for decades, much less climate change or greenhouse gas emissions control, is because the end of the Cold War removed all the restraints on the financial elite in the United States.

During the Cold War, the US was in a difficult competition for the hearts and minds of the rest of the world. Our consensus, until the Reagan victory in 1980, was that progressive taxes were needed to restrain the rich so that we could invest in the rest. The public investment Brian Higgins advocates today was Nelson Rockefeller’s idea, and Earl Warren’s when he was governor of California: Public works were a bipartisan consensus item when we were proving to the world that we were strong and getting stronger. The Soviets entertained themselves with “socialist realism” novels like Gladkov’s Cement, but we were the world’s leaders in pouring it.

Our plutocrats were part of the national fabric, not self-isolating in gated communities, all through the Cold War era when the United States was required to prove itself not only as a military power but also as a global social innovator. For the duration of the Cold War, our civilization was in competition with the Communist world’s narrative. We had to prove that our ruling elites were under control, subject to the rule of law. Conspicuous displays of personal wealth were nothing compared to conspicuous displays of philanthropy and of public wealth. All those new nations arising out of the British, French, Belgian, Dutch, and Portuguese empires in the 1950s and 1960s were looking for a champion, an ally, and a model, which is why we had to get shut of our old segregated self and participate, if grudgingly, in the war against South African apartheid. We also had to get going on empowering women, and to stop treating our waterways as sewers, and we had to work harder, longer, and smarter, much smarter, than the Soviet Union’s scientific and technical people, because the Soviet Union’s best and brightest were matching us and sometimes overmatching us, very visibly, in many fields. The rest of the world kept watch to see who was ahead in the space program, who was advancing basic human rights (defined radically differently, of course), and which of the powers were leading in advancing a standard of living that working people could credibly hope to achieve.

Then, abruptly, the competition ended on November 9, 1989, when the ordinary working folks of East Berlin reacted to a verbal stumble by an East German official, breached Checkpoint Charlie, and started hacking down the Berlin Wall. Our side, suddenly, had won. Since that day, the world’s scramble has not been for justice but for money—and now there is no competing vision of what constitutes human freedom that stands a chance against what has become the American version, except, here and there, the Taliban’s.

A muscular Left in 2012?

Emmanuel Saez’s numbers on how the top one percent have garnered 93 percent of all the income gains since 2008 are already old news. Since the Berkeley economist published last month, former Texas Senator Phil Gramm has come forth with a full-throated call for ending tax progressivity in the United States, claiming that had it not been for George W. Bush’s major tax reductions for investors, the rich wouldn’t have made nearly as much money as they have, and thus wouldn’t be paying nearly as much of the overall tax burden as they are—and that therefore, it’s high time America started charging investors even less, and demanding that the middle class pay more.

It’s a breathtaking argument, and it includes that old saw of the Right in America—that no country ever got rich by growing its government. Beleaguered Elizabeth Warren, the Harvard law prof who should have been an Obama recess appointment to the new post of consumer fiscal watchdog, isn’t doing very well with her Senate campaign based on her truthful narrative about how we Americans are all in it together. She might have been reading another Harvard lawyer’s words, spoken 150 years ago by Oliver Wendell Holmes, when he was a member of the Supreme Court. They’re inscribed over the portico of the Department of Justice in Washington, DC: “Taxes are the price we pay for a civilized society.” Today’s members of the Supreme Court evidently deliberate otherwise.

As we no longer have the need for a world-leading national narrative about justice, as we did in the Cold War, we may, in 2012, have to articulate a new narrative about fairness to ourselves, but in the tougher terms than the Occupy movement and other progressives find comfy. A country that has been reorganized to favor investors over new workers, only 53 percent of whom today are covered by employer-paid healthcare plans (compared to over 79 percent of workers before 2008), should not be at peace with itself.

The Left should start to muscle up to rebut the Gramms and the Ryans. When that ilk complain about the mildly progressive US income tax, it’s time to remind them of the regressive payroll tax, and also of the almost universally regressive state and local tax systems, especially in places like Texas, Louisiana, and Washington State, where steeply regressive sales taxes devour five to eight times the share of incomes of the bottom 40 percent of households compared to the top one percent. A comprehensive look at the shares of income paid in taxes by each income group, from the poorest to the richest one percent, shows precisely the opposite of what Gramm says: the US does not practice progressive taxation when you add it all up. And when you compare who gets versus who pays, the nervous, whipsawed, ideologically confused $60,000 to $120,000 households should be the most angry at the holiday the rich have had since we won the Cold War, since it is the children of the middle class whom Mitt Romney, Paul Ryan, and their allies say, quite explicitly, are worth neither infrastructure investment nor help for college.

It’s time for a robust rebuttal of the plutocracy’s most fraudulent claims. It is time, at last, for a peace dividend. The Cold War ended some time ago. There is indeed a lot of nation-building to do, starting in the Rust Belt. But the infrastructure part is only the beginning.

Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His new book is Borderland: Essays from the US-Canada Divide, available at bookstores or at www.sunypress.edu.