Two weeks before New York Senator Charles Schumer once again delivered for Wall Street with the omnibus budget deal, he gave amajor speechin which he sounded like a progressive champion. Schumer offered a stirring defense of government as the only force that can stand up to the private sectors attack on the middle class, and argued that for Democrats to roll to victory in 2016 First, we must convince Americans that government can be on their side and is not just a tool of special interests.
Schumer is not just any Democrat. He led the successful election efforts for Democratic senators in 2006 and 2008, is number three in the Democratic Senate leadership, where he is responsible for policy and communications, and he sits on several of the most powerful Senate committees. His speech at the National Press Club on November 25 was billed as a major analysis of why Democrats did so badly in the midterms and how they should chart a path to victory in 2016.
Unfortunately, Schumer embodies the contradictions that will tear the Democratic Party apart over the next two years. He understands the need to embrace a populist, progressive narrative and program, but his ties to Wall Street and big money lead him to blunt any real moves by Democrats to take a bold stand for working people against corporate power.
The budget proposal to allow more government bailouts of banks that gamble with their depositors money was a hugelost opportunityfor Democrats to paint Republicans as being on the side of the big banks that wrecked the economy. That opportunity was negated by President Obamas pushing for the budget and Senator Schumers stealth maneuvers (widely known in Congress) to keep the Wall Street deal intact. As a result, the leaders of both parties demonstrated, as theyve done before, that government is in fact on the side of the rich and powerful.
Schumer knows that this is a problem if Democrats hope to win at the polls. While his speech at the National Press Club got a lot of attention for his negative comments about the Presidents strategy on the Affordable Care Act, those remarks were only a small part of a long analysis that has a lot in common with progressive views of the economy and the role of government. Some highlights:
The most salient factor in our political economy is that for the first time in American history, middle-class incomes have been in decline for over a decade The powerful have much more access and influence over government and specific and strong actions must be taken to curb that influence so government can really represent the average person We must illustrate that government can provide solutions by delineating specific concrete programs that if enacted would actually improve lives and incomes We must convince the middle class that the only way out of their morass is by a stronger and effective government, not by demeaning or running from it
When large forces harness power and push you around, you need a large after force to stand up to to stand up for you. The only force that can give you the tools to stand up to the large tectonic forces that can mitigate the effects that technology creates on your income is an active and committed government that is on your side.
Schumer highlights the same key economic fact that progressives emphasize: wages have not kept up with productivity. But it is in his explanation of what is behind stagnant wages that he departs from progressives. For Schumer, it can be described in one word technology. Technology allows capital to garner [a] far greater share of increases. He goes on to note globalization as another factor.
Schumer leaves out the powerful political forces that drove down wages. The biggest omission is his total failure to discuss the role of Wall Street in wrecking the economy and, more broadly, in driving down wages at the expense of corporate profits. Schumer, who as much as anyone in government isresponsible for unleashing Wall Streetis incapable of making that case. Schumer, a leading champion of banking deregulation, has collectedmore than $20 millionin campaign contributions from the financial sector, more than any other senator who hasnt run for president.
And its not just Wall Street that Schumer leaves out of the story. It is also the corporate attack on labor unions and on labor standards. He makes no mention of the slashing of taxes on unearned income, so that the rich pay lower taxes than the rest of us, or of the gutting of corporate tax collection. Where are the corporate villains abetted by both political parties who have enriched themselves at the expense of American families while driving down taxes and government investment in the public structures that are foundations of a powerful economy?
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Democrats middle-class hypocrisy: Why omnibus will haunt them