How paranoia and racism will jam us up

With his Chris Collins Congress reaffirmed as decisively as he was, President Barack Obama faces the stubborn fact that most of the jobs being added in our slow-growing economy pay so little that they will keep the bitter white men who supported Republicans bitter, broke, and resentful—and as ready today as they were on Tuesday to believe that Obama’s 332 electoral votes do not constitute a mandate, and that Obama should not raise taxes on the bankers, financial speculators, and corporate operators whose practices keep hurting working families.

The time for a very strong leftward turn in tax and fiscal policy is now. Demand is low because the median household income has fallen sharply, even as the incomes of bankers, speculators, and corporate chiefs has rocketed up. Emmanuel Saez of Berkeley reports that the top one percent have taken 93 cents of every new dollar of income since the economic recovery began in 2009. But a Chris Collins Congress, which got elected on the exact opposite of Obama’s promise to raise taxes on the top one percent, will never vote for tax increases on investors, or on Blue State infrastructure. That’s because Republicans love to spend public money, but only on the projects that benefit their paymasters, and weak Democratic messaging allows them to get away with it.

Upstate New York is one of the eggs, or one of the chickens, in this negative-feedback loop of political economy. Votes for the Republicans’ presidential candidate, once described in these pages as The Obsolete Man, track closely with the despair of white males whose livelihoods have been imperiled as the financialization of the American economy has proceeded. Wherever the household income of low-wage white workers fell hardest and isn’t recovering is where support was strongest for the Republican message of tax cuts for investors, cuts in entitlement spending, and anti-consumer, pro-corporate regulation. The Great Plains and the South voted in members of Congress who feel that they have a mandate to push that agenda. So did Upstate New York, small-town Ohio, small-town Pennsylvania, Illinois, Michigan, and Wisconsin, even while those states voted Obama and returned Democratic Senators.

In Upstate, which depends heavily on cash transfers from the faraway, resented, and now storm-battered New York City metro area, pockets of decline in Buffalo-Niagara and in the Southern Tier micro-regions of Binghamton and Elmira are overmatched by big, healthy, robust, happy-making economic recovery not only downstate but in the rest of Upstate, too. The New York State Department of Labor tells the tale of two kinds of cities: Winner New York City added more than 92,600 net new private-sector jobs in the last year, with the 10-county downstate area as a whole gaining almost 110,000 new jobs. Ditto the Upstate metro areas—winners Albany, Rochester, Syracuse, and even beleaguered Utica and little Ithaca: All of them added jobs, a total of more than 20,000 new jobs.

But not here in Paladino country. While Rochester gained almost 8,900 jobs since 2011 and re-elected Democrat Louise Slaughter over tax-cut messenger Maggie Brooks, the Buffalo-Niagara metro, where the voters outside city boundaries voted solid Republican yet again, faced a net loss of 300 jobs in the past year.

The Fiscal Policy Institute in Albany complains, with good evidence, that most of the new jobs in this recovery are low-wage gigs, work that isn’t so hot because it is short on benefits, and nothing like the middle-class jobs that existed before the Crash of 2008. They’re correct. So are those who note that even with a revived American automobile industry, the parts-makers in Western New York are still shadows of their former selves—GM Powertrain is far smaller than it was 10 years ago, Delphi is a shadow, and American Axle is dark—and that the oft-promised manufacturing renaissance isn’t happening, and when it does, it will bring dozens, not thousands, of high-wage and high-benefit jobs.

There has been a structural change in the American economy that has been made worse by leaving marginal tax rates on investors so low, and the rewards for financial speculation so high, that the money business has displaced what we use to think of as industry. The social consequences are visible all around us in the Red America. And the discourse of the new elites, especially the educated folks whose politics is shaped by the still-rational expectation of career advancement, explains why pissed-off lower-wage white men, especially those without college, voted so overwhelmingly for the Republicans.

The only place they didn’t was where Republican governors over-reached. In Ohio and Wisconsin, lots of white men, led by cops and firemen and other Civil Service workers who had been targeted for extinction by Republican governors bent on wrecking their economic security, took part in a rebirth of something like actual class consciousness. The white men in those states gave Obama his margin of victory there. This poses a problem for Democrats of the “symbolic analyst” class, folks who like to run races on gender-identity politics rather than on household-income politics. Consultants who help candidates raise money from speculators, bankers and corporate chiefs will be hard-put to put the Ohio and Wisconsin lessons to work because their instinct is to retreat from, not to embrace, the class dialectic.

Coping with Cantor

While Obama was being elected, so was another session of the Tea Party Congress. The House of Representatives is still the province of the cynical manipulators of frustrated white men and worried old white folks, who are convinced that their Medicare is something other than a government program, and that the inevitable federal income tax increases ahead will bankrupt them rather than nip (not bite) the investor class. Already, the battle inside the Republican leadership of the House of Representatives is not over where to compromise with Obama, but over whether Virginia’s Eric Cantor will unseat Ohio’s John Boehner as Obama obstructionist-in-chief.

Rural and suburban voters in Western New York voters endorsed that obstructionism, just barely, when they chose Chris Collins over Kathleen Hochul. Within the Buffalo media market, we will be treated to an apparently endless recitation of Republican talking points, principally blaming Obama for all $16 trillion of the debt George Bush left him, along with two wars and a crashed economy.

That rhetoric may persist awhile. But soon enough, it will be replaced by new rhetorical formulations concocted in the consultancies paid for by the Koch Brothers and other tycoons who hate, hate, hate the prospect of paying higher marginal tax rates. Notwithstanding the fact that Romney could not win with his tax message, Tea Party Republicans can be expected to do as Sarah Palin has already done, which was to declare that Obama’s re-election will be an economic disaster.

That message will be amplified here in Paladino country, where there is always strong rhetoric that government spending is the impediment to economic health, but where the chief funders of campaigns are all on the public tit. At a recent lunch with a member of the state capitol delegation, our conversation was enhanced by the contributions of a local business-owner, a pillar of the Republican establishment, who implored the official to get behind a plan to spend $300 million to $400 million in public money to build a new convention center. A state senator was just re-elected with a beautifully crafted and expensive media campaign featuring his opposition to taxes and spending, artfully combined with excerpts from Governor Andrew Cuomo’s praise for the senator’s support for the $400 million or so that Albany will be spending on new buildings for the publicly funded SUNY medical school. Chris Collins, who was elected with a message of opposition to federal spending, happily used $74.5 million of the Obama “stimulus” package he reviled to balance his budget while he was Erie County executive. The hypocrisy is breathtaking, but here, it’s the norm.

It may be that the only solution for Obama is to allow the so-called “fiscal cliff” to occur on December 31, 2012. Then and only then will it be governmentally possible to raise the top marginal tax rate to 39 percent, which is the rate that allowed Bill Clinton to balance the federal budget. But much more will have to happen—especially the end to the capital gains tax preference. One should hope for the few remaining sensible Republicans to make an accommodation with the ever accommodating Barack Obama before December 31. After then, there will be only conflict. If you don’t believe me, ask Representative-elect Chris Collins and his colleagues Representative Michelle Bachman and their leader, soon-to-be-Speaker Eric Cantor.

-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.