APRIL 1983 VOL. XL, No. 4 $1 Deficits and Deficient Thinking Carol O'Cleireacain on the Reagan 'Recovery' 3 Democracy in 'Clout City' l John Cameron on the Chicago Primary---------------J I off ICE SPACE Building Blocks Campaign ooking forward to a year of growth and intense activity the DSA National Executive Committee voted in February to launch a campaign to raise $126,L 000 in 1983 in special matching-fund contributions. Unions and individuals who have supported DSA's work generously in the past are being asked for "challenge" gifts to match contnbutions made by DSA mem­ Peace 2,500 bers and friends. Over $25,000 such "chal­ Tour new lenge" gifts have been pledged or received members toward this $63, 000 portion of the campaign. In addition, DSA locals are urged to raise Ehrenreich, Stanley Aronowitz, and Man­ maximum personal contribution to the $8, 000 for national purposes. ning Marable have spoken before large and "Building Blocks Campaign" but to work to DSA has grown rapidly since the NAM/ enthusiastic audiences in major cities and broaden the organization's base of support. DSOC merger. Over 2, 500 new members small towns. The Youth Section's first West This means recruiting more members, or joined in 1982. At its February meeting the Coast conference attracted double the ex­ getting friends to contnbute to the campaign National Board chartered five new locals and pected participants. The Youth Section and who haven't yet made up their minds to join. two organizing committees. These are add­ the Institute for Democratic Socialism have The first campaign appeal will be in your ed to the 87 locals and organizing committees launched Peace Tour '83, which will bring mailbox in a few weeks. and nearly 50 Youth Section chapters. Many visibility to democratic socialism in more Democratic socialism is still a novel idea of the locals and YS chapters have participa­ than 50 cities. to the vast majority of Americans. 1bat's one ted in electoral campaigns, the most dramat­ All this costs money-for staff work, reason why its potential is ahnost unlimited. ic one of which, in Chicago, resulted in the mailings, telephones, etc. Most DSA local But we aren't going to "Change the U.S.A." nomination of Harold Washington for mayor. activity is financed locally-but it requires by some magical formula. We must build Others are concentrating on the nuclear national communication and coordination to socialist consciousness and socialist partici­ freeze, on campaigns against plant closings increase its resonance in the body politic. pation from the ground up-block by block. and for jobs, and the like. DSA leaders such Thus it will be absolutely essential for every Put your blocks where your hopes and your as Mike Harrington, Harry Britt, Barbara DSA member not only to make her or his heart are-today. • EDITORIAL BoARD Leo Casey Gordon Haskell FitldDWrctor PoliticalDindM Maxine Phillips ~Dindm' F<W'llllrly Nt111$lettw of tile Dmwcralic uft CIM MwitrgO... ADVISORY BoARD Joanne Barlcan David Bensman MICHAEL HARRINGTON Jim Chapin Jack Clarlc Edi/or Gretchen Donart KateEDis Patrick Lacefield Ricardo Otheguy MAXINE PHILLIPS Jan Rosenberg Bernard Stephens Single copy, $2; 20% discount for orders of 5-9; MalfO,/fi1rg Edi/or Peter Steinfels 30% discount for orders of 10 or more. Make checks payable to DSA Feminist Commission. DEMOCRATIC LEFr is published nine times a year (monthly except July, August and October) by --5end me copies. Democratic Socialists of America, formerly DSOC/NAM. The editorial office is located at 853 --5end me more information on the DSA Broadway, Suite 801, New York, N. Y. 10003, Telephone (212) 260-327<t Other national offices are Feminist Commission. located at 1300 West Behnont Ave., Chicago, Il.. 60657, (312) 871-T/OO and at 29 29th Street, San Francisco, CA 94110, (415) ~1849. Subscriptions: $15 sustaining and institutional; $8 regular. Name ------------ Address ___________ _ Signed articles express the opinions of the authors and not of the organization. ISSN 0164-3207. Microfilm. Wisconsin State Historical Society, 816 State St, Madison, WI 53703. Indexed in the City tate___ZIP __ Alternative Press Index, P. 0. Box 7229, 8aJtirnore, MD 21218. Second Class Permit paid at New York, N.Y. Mail to: DSA Feminist Commission, 1300 W. Bel­ mont, Chicago, lL 60657. DEMOCRATIC LEFT 2 APRIL 1983 ECONOMY BLUNDER ON BLUNDER by Carol O'Cleireacain s Ronald Reagan traveled year = 20 million). ln fact, given that the increasing probability of becoming unem­ across America in his cam­ unemployment rate is more than 10 percent, ployed, with an increasing certainty that un­ paign for the presidency, he the labor force slightly larger than 100 mil­ employment will last longer and will cost liked to say: "If your neigh­ lion, and the average duration of unemploy­ them more financially and personally than it bor loses his job, it's a ment slightly shorter than six months, 25 has before. downturn;A if your friend loses his job, it's a million Americans experiencing unemploy­ recession; if you lose your JOb, it's a depres­ ment in this coming year is not far off the Policy Crisis sion." The grain of truth in the story is that, mark. Most of those unemployed workers The second major aspect of the current in human tenns, we judge the economy on will not receive unemployment compensa­ U.S. crisis is the policy c:nsis. Although the jobs it provides. And a central component tion for all of the time they are unemployed. those within the administration recognize of the present crisis is the lack of jobs. We Today, only about 40 percent of the more that their policies haven't worked, they can­ have gone through two years of dramatically than 11 ~ million Americans out of work are not admit to having made the biggest blun­ rising unemployment From an average of receiving benefits. Thus, the labor market ders in economic policy since the 1920s. 7. 6 percent in 1981, rates are now in double crisis facing workers in the U.S. means an They are backing off a bit, but the fundarnen- digits. More important, it is clear that unem­ ployment rates are not going to come down soon. We are going to see what economic experts will call a "recovery" taJcing place at the same time that unemployment rates rise '~ turnaround in GNP will not lower unemployment. There or remain very high. The focus of the "recov­ is simply too much excess capacity in the economy to make ery" talk will be on one number: the Gross National Product. It will be up to progres­ significant inroads into the increased use of labor by a sives, particularly workers, to define "recov­ smallish rise in output. " ery" to include getting people back to work. A turnaround in GNP will not lower unem­ ployment. There 1s simply too much excess capacity in the economy to make significant inroads into the increased use of labor by a smallish rise in output. Jobs Crisis According to the Organization for Eco­ nomic Cooperation and Development (OE­ CD), 1983 will see a 10~ percent average unemployment rate in the US. We all know by now that unemployment is distributed un­ evenly among the population, with black teenagers being the hardest hit. But what receives much less publicity and is as sig­ nificant and as frightening is the lengthening duration of unemployment. When we read that, on average, in 1983, we can expect more than eleven million Americans to be unemployed, that does not mean that only eleven million workers will experience un­ employment. The true nuffiber will be closer to 25 million. Why? Let's assume a labor force of one hundred million people, an aver­ age unemployment rate of 10 percent, and an average duration of unemployment of six months. On average, twenty million people could have been unemployed during the year (10 percent x 100 million = 10 million I ~ DEMOCRATIC LEFT 3 APRIL 1983 tal inconsistencies of Reaganomics remain. have been the case if Laffer had been right, the federal government is restored to a rea­ They have been embedded in our economy but we know he wasn't.) Instead of having a sonable level with a dependable growth rate, and in the federal budget through the policies convergence toward a full-employment ba­ thus ensuring the potential for elimination of of the administration. These policies were lance, we have a very expansionary budget a considerable amount of the deficit with eco­ put together by people who said that: we path. This makes monetary policy and high nomic growth, interest rates will not come could cut taxes without increasing the deficit; interest rates the only "brakes" available to down. The huge demand for funds to finance we could reduce inflation without increasing use on the economy. The deficit as a percent the deficit as weU as the knowledge by the unemployment; we could increase defense of national savings or loanable funds is very financial markets that monetary policy is the spending without affecting domestic spend­ high, which means that those who argue that only available anti-inflationary tool will keep ing; we could increase the deficit without the government will be financing the deficit upward pressure on interest rates. And, raising interest rates. These mconsistencies by taking funds away from private invest­ without lower interest rates, employment in guarantee that this government cannot pro­ ment have a point. That would be less of a housing construction, auto, steel, most man­ duce acceptable levels of unemployment and worry if the government were using the ufacturing, and in state and local govern­ inflation between now and 1984.