Productivity rose in the second quarter at an annual rate of 5.7%,

yet unemployment remained stubbornly high. Businesses did not increase

spending on equipment, so their productivity gains didn’t come from

upgraded technology. Instead, I suspect, they squeezed more profits

out of the workforce the old-fashioned way. Middle-managers, afraid

of losing their own jobs, denied bathroom breaks to sales clerks. Benefits

packages were subtly watered down. More socks were reshelved by fewer

people at your neighborhood WalMart.

If the second quarter was a prelude to widespread economic growth that

will soon benefit everyone, fine. But if it represents the new version

of "growth," "productivity" and "recovery,"

who needs those things?

I’m reading all the back issues

of the Higher

Education Exchange, in order to write a mini-report for the editors about

their future strategy for the journal. One generally excellent article is Edward

Royce’s "The Practice of the Public Intellectual" (1999). In passing,

Royce makes a point that I consider very important. He writes: "public intellectuals

can work with those subject to power as well as against those who

exercise power." Working with ordinary people (or with especially

oppressed people) is an entirely different form of engagement from "speaking

truth to power." It requires more listening, more quiet work within institutions

and communities, more development of personal relationships and trust, more building

on local assets—and less dramatic rhetoric. Working against the powerful

is an important role for intellectuals to play. But working "with those

subject to power" seems equally valuable (and interesting).

Terms like "Asset

Based Community Development" and the "developmental

assets" approach to working with adolescents are extremely popular today

in foundations, schools, and social service agencies. One could dismiss such language

as a mere effort to sound positive and uplifting, unconnected to any substantial

change in philosophy or methodology. But I think that would be a mistake. The

"asset-based" approach (for lack of a better term) is being used by

people who come out of the Left, and it represents a real change in their views

and methods.

My favorite example of the old ways is now somewhat out of

date, but I can’t resist using it. In March 2002, ACORN

organized protests against federal welfare policy. The angry crowd that they had

assembled shouted down the sole member of Congress who chose to address them,

Rep. Charles B. Rangel of Harlem, demanding that he answer their questions and

meet with them in New York City. One of the rally’s organizers (a Harvard graduate)

explained: "Most of the crowd are people living with the reality of fairly

extreme poverty in their own lives, and they are rightly angry." A colleague

added that the Administration’s welfare policies "are an attack on poor families

in America."

The organizers of this protest apparently believed that

they could speak for poor people, whose main need was more federal welfare spending.

Their strategy for winning such aid was to parade welfare recipients before Congress

and the press, emphasizing their deprivation and anger. (They also displayed the

political naivety and weakness of these people.) The protest organizers implied

that anyone who did not completely endorse their demands was their enemy. And

of course they failed completely.

An assets-based approach would look quite

different. It would treat the welfare recipients as potentially powerful and skillful

political actors, capable of working as peers with selected allies in Congress.

It would also recognize their capacity to build things of value in their own communities,

regardless of federal welfare policy. Poor people do need outside resources, both

capital and government assistance. However, they are unlikely to get such help

unless they have first organized themselves as a powerful political force. The

best way to organize is to identify, advertise, and build up local assets, even

before powerful outsiders offer aid. If residents are used to working together,

have identified their own assets, are confident and experienced, and have created

their own new institutions, then they can win outside support. They can also handle

the influx of aid without being overwhelmed by corruption or manipulative outsiders.

A letter

in yesterday’s New York Times says:

"Yes to no new

services, and let’s get rid of some of the old ones while we’re at it. We have

had way more than enough "services" for decades! It’s about time that

somebody finally understands!

"I hope to see those bumper stickers

in 2004. Of course, I hope that people would realize what the slogan means: a

cut in services means a cut in expenses means a cut in government intrusion into

our daily lives!

"Isn’t it about time that we rewarded ourselves with

freebdom again?

"Disclaimer: the government has likely refined its

methods of intrusion, so it could feasibly cut back and still intrude more. So

let’s cut the budget even more and not let that happen."

I

think the writer is making a mistake, even granting his own basic values. His

argument is: Quite apart from the pain of paying taxes, government spending is

bad because it buys "intrusion." The parts of the government that he

presumably finds "intrusive" are the offices involved in regulation

and law-enforcement: the FBI, OSHA, EPA, etc. He wants to starve these agencies

as a way to increase personal freedom. But they are not expensive. All of

the discretionary programs outside the Department of Defense, put together, consumed

just 19% of the Federal

Budget in 2002, and that included entirely non-"intrusive" programs

like the Weather Service and medical research. Therefore, deep cuts in federal

spending will have to come out of Social Security (23% of the budget), Medicare

(12%), Medicaid (7%), and other means-tested entitlements (6%). (I assume that

Defense, at 16%, is untouchable; and the remaining 17% is interest payments and

other madatory spending.) If anything, a cash-starved government might resort

to more regulation, because it would need/want to respond to social problems

and it would find regulatory mandates cheaper than spending programs.

It

appears that John Podesta will lead a new American Majority Institute designed

to develop and popularize "progressive" ideas. (The

New York Times story is here.) I think this is great news, even from

a non-partisan and non-ideological perspective, because the

intellectual collapse of the American Left is reducing competition and debate

in US politics.

There are some good idea for broad political movements

that could be adopted by the Left. Here’s one (more will follow in future postings):

Idea

# 1: A strong "good government" program. To attract the Perot-McCain-Bradley

vote in addition to its usual base, either party could propose the following policies:

• Public financing (or at least free broadcast time) for political candidates

  and parties. Politicians always circumvent limits on campaign spending, but direct

  subsidies can make politics accessible to newcomers and increase competition.

  Public financing is available now in several states and major cities.

• Radical

  tax simplification. On a revenue-neutral basis, taxes could be dramatically simplified

  so that the tax form became a single page for everyone. The fairness of the system

  would improve dramatically if this were done right.

• Alternatives to standard

  methods of federal regulation. Administrative agencies generate malleable, complex,

  and inconsistent bodies of law that are always full of loopholes and inefficiencies

  and impossible to understand. Agencies always get "captured" by special

  interests. In each field, there are alternatives to rule-making by administrative

  agencies. Sometimes, Congress can replace an elaborate system of rules with vouchers

  or other simple payments to consumers. Sometimes, Congress can codify the important

  parts of a body of existing regulations into a sweeping new statute. And sometimes,

  administrative agencies can use new methods of rule-making, such as citizen juries

  or Deliberative Polls.

  The overall theme would be a criticism of both regulation and unregulated

  corporate behavior.

• Aggressive efforts to promote diversity, competition,

  and localism in the news media, including support for low-powered radio; aggressive

  antitrust enforcement in the media industry; higher subsides for public television

  and radio; and laws requiring providers of Internet connections to offer neutral

  services so that their customers may freely explore the World Wide Web and easily

  post their own material.

• More federal support for civic

  education and voluntary service, to increase the capacity of the next generation

  to play an active role in politics and community life.