The Party's Not Over: A New Vision for the Democrats.

• Author: Buell, John

The upcoming elections present a distressing spectacle. The Democratic standard bearer, traditionally the champion of the working class, argues that our fortunes will improve if we stay the course of fiscal austerity and keep up the quest for business competitiveness in international markets. The Republican candidate, a traditional champion of business, offers tax breaks for the rich.

How did we get in this mess? Are these our only alternatives? Jeff Faux, the president of the Economic Policy Institute in Washington, has written a readable and provocative work that answers both questions.

Faux points out that Clinton in 1992 campaigned largely as a Democrat committed to governmental initiatives on behalf of the working class. But the President soon became a born-again budget slasher. Job and wage growth remained sluggish. During the entire 1991-1995 "recovery," real wages fell for 80 percent of working men and 70 percent of working women. For this President to sing "Happy Days Are Here Again" is absurd, and perhaps politically dangerous. Faux notes that Republican gains in the 1994 elections were due in part to "the decline in real wages and opportunities for the vast majority of those who made up the traditional Democratic coalition." Clinton has never offered these workers a convincing explanation for their pain or a plausible scenario to relieve it.

Faux quickly dispenses with Clinton's claim that free trade along with educational initiatives will position American workers for eventual prosperity in the world economy. Economic internationalization has gone on for some time now without positive gains. Competition with economies like Mexico (where wages are less than a tenth of those in the United States but where worker productivity often rivals ours) only yields job loss or wage erosion here. Education cannot stem these losses if the number of good jobs declines and the number of workers seeking education here and elsewhere grows. Faux also notes that this policy takes a psychological toll: "The prospect of a life spent on a constant treadmill of retraining in a world that continually threatens you with obsolescence might seem exhilarating for the highly educated and confident policy intellectuals in Washington, but it is frightening for most people."

The free-market rostrums of today don't hold up to analysis, Faux writes. He emphasizes the lessons of both the Gilded Age and the 1920s. Unregulated market economies don't produce smooth...