Thomas Palley runs the Economics for Democratic and Open Societies Project. He is the author of Plenty of Nothing: The Downsizing of the American Dream and the Case for Structural Keynesianism. His weekly economic policy blog is at www.thomaspalley.com.
It is widely recognized that the debacle in Iraq has contributed importantly to disenchantment with the Bush administration and Republican Party. However, less recognized is its potential long-term political impact, which has opened the door to moving beyond the red state-blue state division that has marked U.S. politics for the past generation. That in turn could create a lasting progressive majority.
American electoral politics has operated historically along two dimensions of “values” and “economics.” The values dimension concerns issues of abortion, guns, religion and flag. The economics dimension concerns the perceived efficiency of markets, corporate power and trade. For the past 25 years economics has played second fiddle to the values dimension, which has dominated politics and defined the division between red and blue states.
This political ordering reflects the triumph of Ronald Reagan and Milton Friedman, who captured middle America’s political imagination and established a new laissez-faire consensus. That consensus lowered the electoral traction of economic argument and raised the traction of values, which helps explain the convergence of New Democrats with Republicans on matters of economic policy and globalization.
Now, America’s searing experience in Iraq has unexpectedly opened the door to reversing this ordering. The brutal intolerance of Islamic fundamentalism has provided a mirror for reflecting upon Christian fundamentalism and what it might mean for American society. In a sense, Iraq has discredited all religious fundamentalisms by showing what happens when religions try to enforce their views on all. That stands to reduce support for the Christian right’s agenda and strengthen support for separation of church and state and the right to privacy.
A second plank of the right’s values agenda has been the construction of patriotism in terms of muscular militarism. That construction grew out of the humiliations of U.S. defeat in Vietnam and the 1979 Iran hostage crisis, and it is reflected in the popular Rambo fantasy. This neocon fantasy has been permanently discredited by the dismal military outcome in Iraq. Despite easily defeating Saddam Hussein, the U.S. has been unable to achieve victory. That failure stands to diminish the appeal of framing patriotism and national security in terms of unilateralist militarism.
At the same time that Iraq has exposed these failings of the right’s values agenda, economic issues have increased in salience. Globalization, wage stagnation, and rising income inequality and economic insecurity have all become major public concerns in both red and blue states. When values ruled the political roost these economic concerns were trumped, but now they are surfacing and redefining the political terrain.
These changes are captured by the “new populism” associated with the likes of Sens. Jon Tester of Montana, Claire McCaskill of Missouri and Jim Webb of Virginia. All won election in 2006 in red states running on messages that contained a strong economic component.
The success of new populism is driven by two factors: first, growing willingness of red-state voters to see through the veil of values-based identity politics; second, recognition that red states share common economic challenges with blue states. Once the veil of identity is pierced, it becomes clear that farmers, factory workers, and urban white-collar workers share many similar problems.
Those problems are loss of livelihood, be it the family farm or a manufacturing job; economic insecurity, be it due to outsourcing or agricultural price volatility; and exploitation due to unequal economic power. Manufacturing workers must negotiate with multi-national corporations and face low wage competition from the global sourcing practices of retail firms like Wal-Mart. Service sector workers also increasingly confront global out-sourcing.
Farmers face similar problems. Corn and grain farmers confront the power of Archer Daniels, Cargill and Monsanto; beef, chicken and pork growers must deal with Smithfield and Tyson; dairy farmers confront Dean Foods, while all purchase equipment from John Deere and use the railroads to ship product to market. Up and down, the farm economy is dominated by economic power concentrated in massive agro-businesses.
Just as global sourcing has squeezed manufacturing workers and shifted profits to large retailers and brands such as Nike, so too small farmers are receiving less of the value created in the farm-to-food production chain. In effect, workers, small manufacturers and farmers all compete on a tilted playing field, which calls for new policies that restore a balance of power.
Growing recognition of this reality has created the possibility of a new politics spanning red and blue states, auguring well for a future progressive majority. Iraq has played an important role by lifting the political fog generated by the right’s divisive values agenda.