Second, I apologize in advance for taking so much of your time with this novella-sized response below, but it's important that I'm clear, and so I hope that you read all of it, and follow the links that I provide to source my claims. Sometimes it just has to be this long, I'm sorry.
So, you ask "what makes you think they don't desire high unemployment rates?", and that's a question I'd love to answer.
But before I do that, let me address your sense that the sort of "Third Way vs Conservative, Center vs Right" stuff I'm asking folks to consider is basically a meaningless taxonomic exercise ("how many angels dance on pins").
As I'm sure you're well aware, Ian, we movement liberals are getting our asses kicked down here, politically speaking.
Our liberal Democrat representatives --the ones who aren't merely machine pols-- seem to be in a miserable state, unable to withstand virtually any pressure applied to them, or to effectively respond to messaging directed against them. And, when I say they seem incompetent at resisting "pressure" or "messaging," I mean that it looks like they're the Polish cavalry up against the Wehrmacht of the establishment political press corps, Democratic leadership and the White House. The Polish Army at least knew that they were being blitzed; liberal Democrats don't even seem to know that there's a campaign being waged against them. Not that I'm a huge fan of Dennis Kucinich, but when he votes for the PPACA because, as he says (http://www.esquire.com/the-side/qa/dennis-kucinich-health-care-bill-032210#ixzz19XuublLS) "I had a higher responsibility to my constituents, to the nation, to my president and his presidency," that's a big indication of how fucked we are. This guy, the supposed paragon of liberal "purity" wouldn't say "My president" about Bush, but he'll say that about the Larry Summers-appointing, Petraeus-lionizing, "government can't create jobs"-proclaiming, New Democrat Obama, and that's a huge problem for us --and America.
But there's a bigger problem, Ian, even bigger than the one you pointed to in your excellent post from July of this year (http://www.ianwelsh.net/netroots-schizo/), entitled "Netroots Schizo," in which you described two camps of attendees at this year's Netroots Nation, one being a disparate faction of non-Obama loyalists (in which you and I fall), and the other being:
"the folks who would characterize themselves, in general, as hard nosed pragmatists and “realists”. These range from the “Obama is the greatest liberal president since FDR” types, who think that the Obama is just wonderful and those progressives and liberals who don’t agree are simply delusional to those who feel that a lot of what he’s done has been watered down pap in general but that it’s certainly better than nothing and that those who are disappointed are unrealistic idealists who simply don’t understand the constraints Obama and Congressional Democrats are working under.
The second side is angry at what they parody as fairy tale thinking and deeply unrealistic. “Obama couldn’t fix everything, but he’s better than the Republicans will be if they get back in power” is their mantra, ranging from “really, he’s wonderful and you’re insane for thinking otherwise” to “well, yes he sucks but he sucks less than what the Republicans will do when they get in power.” Either way, they see the attacks from what they consider the “purists” as deeply damaging. Democrats may or may not be a ton better than Republicans, but either way, they are better, and there is a moral case to be made for sucking it up one more time and working hard to elect, as the old progressive battle cry runs, “better Democrats”. This is a two party state, with those parties having an unbreakable oligopoly on power. Dissing Democrats just helps the even worse party win, at which point they will do even worse things. So get over your problems, whether they are with economic policy or Obama’s continued shredding of fundamental civil liberties like Habeas Corpus, jump back into the trenches with your bowie knife or bayonet and fight for Democrats, not against them because by constantly bad mouthing Dems all you do is make it more likely that Republicans will win, and if they win, well, that will be baaaaddddd. Very, very baaaaaddddd."
That bigger problem is that the latter group you've identified, the ones who hold the opinions with which you and I disagree, actually represent the vast majority (79%) of those who self-identify to Gallup as liberals (http://www.gallup.com/poll/145268/Obama-Approval-Slipping-Among-Liberal-Democrats.aspx?utm_source=tagrss&utm_medium=rss&utm_campaign=syndication&utm_term=Presidential%20Job%20Approval), down in the tax deal December from November's obscenely high 88% approval amongst liberals.
That situation is what allows Progressive Policy Institute's (formerly the DLC's) Ed Kilgore to fatuously proclaim (http://www.thedemocraticstrategist.org/strategist/2010/06/agony_of_the_liberals_versus_o.php) in "Agony of the Liberals Versus Obama's Liberal Approval Ratings"
"Sure, you can find elite opinion on the Left that's been souring on Obama steadily as we head towards the midterm elections. But it's a useful reality check to note that when it comes to actual voting Americans of the liberal persuasion, if there's any "agony" over Obama, it is mostly derived from anger at the president's opponents."
That's the Third Way ideologue Kilgore exulting over the fact that the very rhetorical position from which movement liberals would prefer to argue, i.e. representing popular small-d democratic reform against neo-liberal elite consensus, has been effectively denied to us. The message that Obama's opponents from the left are "elites" is also in play, which is another triumph for the New Democrats, one of which they probably had to have been aware when they chose Obama to be their representative: "elites" is code for "white limousine liberals whose pseudo-intellectual disaffection masks unreconstructed racism." There's no shortage of those willing to employ arguments like those found in Tim Wise's Daily Kos diary "With Friends Like These, Who Needs Glenn Beck? Racism and White Privilege on the Liberal-Left" (http://www.dailykos.com/story/2010/8/18/894176/-With-Friends-Like-These,-Who-Needs-Glenn-Beck-Racism-and-White-Privilege-on-the-Liberal-Left) for partisan ends:
"Class-Based Reductionism on the Left
Perhaps the most common way in which folks on the left sometimes perpetuate racism is by a vulgar form of class reductionism, in which they advance the notion that racism is a secondary issue to the class system, and that what leftists and radicals should be doing is spending more time focusing on the fight for dramatic and transformative economic change (whether reformist or revolutionary), rather than engaging in what they derisively term "identity politics." The problem, say these voices, are corporations, the rich, the elite, etc., and to get sidetracked into a discussion of white supremacy is to ignore this fact and weaken the movement for radical change."
Even worse, the folks in that latter category you identify are essentially echoing what those with all the messaging power of the establishment are repeating every single day. Very few people exposed to politics hear anything other than this message. The "rank n' file", therefore are virtually indistinguishable in this regard from those with the biggest, most repetitive, most strategic and most expensive megaphones, the New Democrats'. Liberal Democratic voters by a nearly 8 in 10 majority, believe a fundamental lie they're told about Obama and the Democrats who hold all of the Party cards in the capital: he's a "progressive" like them.
If you were to speak to fellow movement liberals in the States about Obama and the Democrats, and you told them that Obama was indistinguishable from Bush on the things that matter, you would receive one of a number of fact-based arguments in return, any of which seem intuitively true, correspond highly with received common knowledge, and are therefore understandable to and repeatable by even the least informed. Obama did appoint Sotomayor, Bush appointed Constitution-In-Exilist "Sc-alito." Obama did repeal DADT, Bush would never have signed that law. Bush did invade Iraq, Obama would not have --even if we can reasonably argue that he probably would have voted for both AUMFs, had he been in the Senate at the time. The Democrats did pass "Health Care Reform," the Republicans unanimously opposed it. The Democrats did pass a nominally Keynesian "stimulus package," the Republicans unanimously opposed it. The modern GOP is still the party of the Southern Strategy, and the Democratic President of the United States is Barack Hussein Obama. Over and over again, any liberal Democrat in this country with even a cursory understanding of current politics will mostly likely make the case that the policies of the Democrats are vastly different than the policies of the Republicans. Most Liberal Democrats know who Sarah Palin is, and they hate her worse than anything. Many Liberal Democrats know who Ralph Nader is, and they hate him, too. They've won.
Like I said, we're getting our asses kicked down here, Ian.
Your arguments, however useful in many contexts, seem to be of questionable practical value in addressing this ass-kicking, especially because the latter folks you wrote about have heard them a million times, can therefore predict them, and some have already spent decent money strategizing and implementing powerful messaging to counteract and discredit your position. They rarely hear the kind of arguments I am advancing, and tend not to understand them when they do. They will be slow to react to this new kind of rhetoric from movement liberals, and when they do, it will probably be ineffective and predictable.
The previously-mentioned DLC swell Ed Kilgore warned his New Democrat Network counterparts last year in The New Republic piece “Taking Ideological Differences Seriously” (http://www.tnr.com/blog/the-plank/taking-ideological-differences-seriously) that the center's strategy may have revealed an ideology-based weakness :
“on a widening range of issues, Obama’s critics to the right say he’s engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector. They can’t both be right, of course, and these critics would take the country in completely different directions if given a chance. But the tactical convergence is there if they choose to pursue it.
For those of us whose primary interest is progressive unity and political success for the Democratic Party, it’s very tempting to downplay or even ignore this potential fault-line and the left-right convergence it makes possible. “
What may seem like a Scholastic theological argument about the angelic capacity of pinheads to you is an attempt to address that fundamental lie, by exposing the vast ideological differences between movement liberals and Third Way Democrats, instead of continuing to argue the policy regime similarities between Obama and establishment conservatives. Movement liberals' failure to make that case have allowed New Democrats "whose primary interest is progressive unity and political success for the Democratic Party" victory after victory. Maybe it's time for us to do something about that.
They will do and say things in accordance with certain ideological tendencies. I argue that it is possible to predict what they will do and say, and so it is possible to wage successful political war against them, which is what I’m advocating, since they are currently waging successful political war against us. Because of their victories against movement liberalism, we currently have no political power to stop them from ruining peoples’ lives, and the country’s future.
It's not that I'm wrong and misguided about the donor class and its interests, Ian, it's that I'm correct on the facts about what the Third Way is and who New Democrats are, and I'm trying to do something different with those facts than you are.
Help me out, man. It might work --maybe, probably not in time, but who knows? It's my country we're talking about, and because I truly love my country, I have to ask for you to at least honestly consider that, in addition to being venal, stupid, morally corrupt, other-directed, coward politicians, they might also be in the grip of another horrendously wrong ideology. I'm not asking you to deny what you know, I'm asking you to consider that this explanation may fit at certain times, and therefore it may help our understanding --so that we can win, one of these days.
Finally, to answer your question, "what makes you think they don't desire high unemployment rates," I would point out two things
1. when Third Way ideologues believe they aren't speaking to a mass audience, they're far more honest about what they actually think about anything, including unemployment
2. based on my reading of what position papers these people put out year after year, it's not that they desire high unemployment, it's that they don't care as much about it as neo-New Dealers do
You're absolutely right about their aversion to wage rate increases, that's absolutely true, although less "stuck" wages is how they'd put it. Their occasional advocacy of the repeal of Davis-Bacon, the New Deal-era prevailing wage laws (here's PPI circa 2002 blaming Davis-Bacon for schools not being built http://www.ppionline.org/ndol/print.cfm?contentid=250999) is evidence of that.
But they do consider themselves "New Keynesians," and, to the extent that Third Way policy people find high unemployment to be an unacceptably unproductive use of human capital, they don't seem to favor Neo-Classical attempts to get back to an employment equilibrium via wage decrease. They adhere to this brand of economics-speak they call "The New Growth Economics," which posits that high growth is more important than high unemployment rates, as Robert Atkinson lays out here in "The New Growth Economics: How to Boost Living Standards through Technology, Skills, Innovation, and Competition" circa 2001 (http://www.dlc.org/ndol_ci.cfm?kaid=107&subid=123&contentid=2992):
"As the Progressive Policy Institute has articulated in its New Economy Index, the New Economy is more global, more knowledge-driven, more entrepreneurial and dynamic, and driven by digital technologies. In this New Economy, neither Keynesianism nor supply-side economics provide the right answers because today's economy is fundamentally different than the one of even 15 years ago. The Clinton Administration moved toward a new conception of economic policy. It's time to build upon that and fully embrace growth economics
This means placing the focus of economic policy squarely on boosting per-capita incomes, and that means focusing on productivity. As Paul Romer states, "the most important economic policy question facing the advanced countries of the world is how to increase the trend rate of growth of output per capita."
It may seem obvious that productivity growth should be the object of our economic policies, but strikingly, both liberal and conservative economic doctrines want to take a shortcut to growth, focusing not on productivity but on redistribution. Conservatives want to raise after-tax income by cutting taxes -- taking from public expenditures to boost private incomes. Liberals want to tax the rich more, dramatically increase the minimum wage, and spend much of the surplus to funnel the proceeds to programs to benefit "working families." Neither approach recognizes that the only long-term answer to improving the economic well-being of Americans is to focus on productivity.
In addition, neither liberals nor conservatives embrace fiscal discipline. Conservatives would see the surplus go to tax cuts, not paying off the debt. Some have even recently begun preaching supply-side Keynesianism, arguing that large tax cuts are needed to spur consumer demand. Many liberals continue to believe that because government spending boosts consumer demand it leads to more jobs and in turn higher wages (but lower profits or higher inflation since higher wages would have to result from increased bargaining power by workers, not higher productivity). As a result, they attacked efforts by the Clinton administration to pay off the debt, calling it Calvin Coolidge economics. Yet, with full employment, cranking up large new spending programs or tax cuts would only produce inflation and efforts by the Federal Reserve to counteract the stimulative effect.
Growth economics also challenges the mistaken notion of natural limits to growth. Until last year, most economists postulated that the economy could not grow faster than 2 percent to 2.5 percent per year without sparking inflation. Growth economics recognizes that the economy can grow much faster without inflation, as long as productivity grows as fast. In fact, the new administration should set a goal to double living standards for American workers within 30 years. This would require maintaining an annual productivity growth rate of 2.5 percent -- even less than the 2.7 percent productivity growth rate the country has seen since 1996.
Embracing growth economics does not mean ignoring past economic policy goals, such as job creation and inflation control. While these still matter, they are no longer central. The information technology revolution, as well as a highly competent Federal Reserve policy, has led to the longest expansion in economic history. Because globalization, increased market competition, and the technology revolution have reduced the threat of inflation, the Federal Reserve does not need to induce anti-inflationary recessions as much as it used to."
Listen, I'm truly sorry to have to make you read through that dreck, Ian, but that's the policy that these people advocate, when they're so certain that nobody in the public is listening that they can afford to admit that the Fed actually creates recessions to inhibit inflation, something that virtually no politician will ever say (and if they do, they'll be ignored by the political press corps).
They don't desire unemployment as a means to keep wages low to enrich their donors, they desire high productivity as a means to enrich their donors, which they then believe will also enrich the nation. While they don't advocate abandoning "past economic policy goals, such as job creation," they don't ultimately believe the government should knock itself out addressing them, since, while policies that put large amounts of people back to work "still matter, they are no longer central."
This is what they say:
"Under the old economic policy model, it was not clear that there was a role for government in economic policy beyond managing the business cycle and protecting intellectual property rights. Growth economics makes it clear that government policies can boost long-term income growth. It recognizes the conservative insight that free markets, competition, and innovation boost growth. But it also recognizes the liberal insight that government investments, particularly in science, technology, education, and skills, can provide a foundation upon which productivity growth depends. And finally, growth economics recognizes that fiscal discipline underlies all of this."
That's austerity speaking, in February, 2001, but not the market fundamentalist variety, not the GOP variety, and certainly not the popular conservative variety.
That's the Third Way. They've been looking for an opportunity like this economic crisis we have in the States for years. It's what they do. They're better than us at this.
And having read reams and reams of this kind of stuff, positions and strategies that orgs like PPI have been putting out repetitively for the past sixteen years, and then having watched the Obama Administration and New Democrats in Congress pass as much of it as they possibly could (given conservative opposition), I think they're telling the truth in these policy papers, Ian. I started reading their "Health Care Reform" proposals from over the past ten years during the Democratic primaries, and then I watched those awful policies actually become law two years later --and watched liberal Democrats vote and ultimately clap louder for the DLC's premier think tank's flagship policy.
That's why I don't think they desire high unemployment, despite the obvious logic of their donor class benefiting. It's not high enough growth policy for these people. It's by definition unproductive, under-utilized capacity, which their economists seem to abhor, although (laughably) they tend to view unemployment in the context of the current crisis as structural, and therefore out of the bounds of counter-cyclical policy, anyway. In this way, much like the way Project for a New American Century had the recent opportunity to prove they are elite idiots and ideologues, they're wrong as wrong can be, but will never admit it.
I hope that answers the question of why I think the way that I do at least somewhat satisfactorily, Ian, thanks so much for reading and considering all of this.
Maybe someday we'll get a chance to speak together about this on Jay Ackroyd's "Virtually Speaking." I've listened to you on that program, and have tried to honestly paraphrase your arguments when Marcy Wheeler and I were panelists this December (here's the relevant segment of my appearance on YouTube: http://www.youtube.com/watch?v=BaBKmdW3tos ).