The 'Vicious But Brilliant Exploitation' That Drives Right Wing Economics

By Hamilton Nolan | January 4, 2018 | 3:45pm

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This month, Thea Lee took over as president of the Economic Policy Institute, America’s premier left-wing economic think tank. We spoke to her about Trumponomics and the fight for equality.

Lee spent two decades as an economist at the AFL-CIO, America’s largest federation of unions, before taking over as head of EPI—a group that produces some damn good charts. She will have her work cut out for her.

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Splinter: What do you think are the root causes of the decline of unions and organized labor in America, over the past several decades?

Thea Lee: There’s probably not a single cause. But I think that I would start with the pretty concerted attack on unions and workers by the right. And it’s been a successful attack. They identified unions as the biggest threat to consolidation of power by the wealthy and corporations, in terms of electoral impact. And they were right. Unions are a successful organizing force, both in elections and in the political debate.

That concerted attack happened at the state level and the national level. We’ve been decades and decades without any modernization or strengthening of our labor laws, as the world has changed around us. For labor it becomes a vicious cycle, where you’re small and you’re weak so you don’t have enough political power to change the laws to make union organizing easier and fairer, and then you become smaller and weaker and you lose power.

Splinter: Are there any realistic ways for labor to break out of that vicious cycle you describe?

Lee: That is the question, isn’t it? Is there a turning point, a point at which you hit bottom? Sometimes it feels like we’re at that turning point right now. Things have become so bleak and grim in terms of the political landscape, and there’s been so much overreach on the part of Republicans in Congress, that maybe that has created the opportunity for both political change and cultural change and institutional change. And we need all of them. I don’t think it’s as easy as saying “If only we could elect the Democrats.” Obviously that’s not sufficient. But it might be a necessary first step, and on top of that, unions and workers and progressives have to be dynamic and creative and opportunistic in a way that we haven’t been before.

Splinter: Do you think the rise in economic inequality is at the heart of our current political insanity?

Lee: I think it is. What’s happened is there has been a really vicious but brilliant exploitation of that inequality to create racial and other divisions within the working class. And that’s been remarkably successful, unfortunately. It’s an age-old thing, and we’ve seen historically that when the working class is divided amongst itself and set to squabbling between immigrants and native-born, and black and white, and Latino and Asian, that’s something that never benefits workers in the long run. And that’s something that we’re seeing now in a really grotesque version.

Splinter: Who’s driving that exploitation? Is it just the investor class trying to enrich itself, or is there more to it?

Lee: At the end of the day, if you look at who the big beneficiaries are of the recent tax reform bill, it does feel like the investor class not just tolerated Donald Trump, but was complicit in that trend because they saw that there was a personal and class benefit. They couldn’t win fair and square—an establishment Republican like Mitt Romney wasn’t able to win an election, but the toxic sludge of racist, xenophobic, fake populist rhetoric succeeded where the Republican establishment, Chamber of Commerce, Business Roundtable had failed.

Splinter: Were you surprised that the tax bill passed, given the fact that it seems to be the exact opposite of the policies that would benefit most Americans?

Lee: Not really. The basic hypocrisy at the core of the Republican Party is that they give a hoot about the deficit—that there’s any kind of fiscal responsibility. When you have that kind of Republican control of the House, the Senate, and Presidency, and they failed to do everything else they were trying to do, the stakes were so high for the Republican Party that they would have passed almost anything. This particular bill is so egregious, so bad for the economy, so bad for the middle class, so bad for workers, that the key question now is whether that can be made relevant in the next election.

Splinter: How much of the rise of inequality in America is a result of a political agenda, and how much of it is us being at the mercy of broader global trends like technological change and globalization?

Lee: I think it’s definitely the outcome of a very clear political agenda of disempowering and undermining workers. Through the attacks on unions, “right to work” in Wisconsin and Michigan and other key states, failure to increase the minimum wage, taxes and so on. That’s real. Things have gone together, and are part of a single package. The kind of corporate dominated globalization that the United States has engaged in over the past couple of decades, through both Democratic and Republican administrations, is a key part of that—a key part of undermining the bargaining power of workers by giving multinational corporations massive mobility, massive flexibility, and political power, and leaving workers stranded.

Splinter: How much confidence to you have in the Democratic Party to counteract some of these trends?

Lee: It’s an open question. Democrats need to be strong in advocating a progressive, worker-centered policy agenda over the next election cycles. And they can do that, they’re capable of doing that, there’s plenty of strong voices in the Democratic Party. But ultimately it will be decided by the grass roots.

Splinter: What are the most important policy changes that need to be made on behalf of the working class?

Lee: A full employment macroeconomic policy is essential. And achievable. You need an understanding that you have to lift up worker rights, and labor standards, and labor protections, because workers are more vulnerable than they’ve been in recent memory… And I do think that having a serious infrastructure plan is something that’s long overdue, would create a lot of great jobs, and is something that would be unifying for the country.

Splinter: My impression is that the average American voter is economically illiterate. Do you think that’s true?

Lee: It can go both directions. On the one hand, people have a basic instinct around fairness and their own economic situation. People know they aren’t doing as well as their parents did, and their kids aren’t doing as well as they did. I think People are smart about those kinds of basic facts. On taxes, what we see is that people aren’t paying that much attention, and maybe they aren’t aware… and that’s why it’s important for progressives to keep hammering and keep messaging around this tax bill. We won the first round. We lost the vote, but the polls show that a pretty strong majority of Americans see this tax bill as bad for the middle class and good for rich people and corporations. And that is accurate…

We’re trying to do the research and do the analysis and package it and put it into people’s hands in a way they can use it immediately—they can write a letter to the editor, they can argue with their barber, they can pound the table at Uncle Charlie at Thanksgiving dinner, and feel confident that their instincts are right. That they are getting screwed, and this is who screwed them.

Splinter: Is it really possible for a group like EPI to get your message heard widely at a time when the media environment is so polarized politically?

Lee: All we can do is to stay strong and to stay true to our voices and what we believe, and hope that people recognize after a while that there are lies that are told over and over again and have never come true. Taxes are one of the biggest areas. You start with Ronald Reagan, and George W. Bush, and Kansas, and every other time that this same phone narrative has been put forward: that if we cut taxes, then business will be so successful, and they’ll bring jobs home, and they’ll pay their workers more. There has not been a time in history where that has worked out as promised. At some point maybe people will stop falling for the same cheap rhetoric.

Splinter: Is there anything you’re hopeful about in the near term, or are we just in for three bad years?

Lee: I think there’s a lot of room for progressives to put forward a powerful set of pro-worker policies that will be attractive and that are needed and wanted right now. We’ve had a year of the Trump administration’s broken promises and fake populism. It really has failed on so many different fronts. This is our opportunity to show what international solidarity looks like, what a non-racist, non-xenophobic, non-sexist, non-divisive real populism looks like. There’s a hunger for it.