This month we are re-publishing our conversation with Steven Attewell along with a new written transcript and episode graphic. Attewell is author of the incredible book, People Must Live by Work: Direct Job Creation in America from FDR to Reagan, published in 2018 by University of Pennsylvania Press. The book examines the history of job creation programs in the United States from the Great Depression to the Humphrey-Hawkins Act of 1978.
Unfortunately, Attwell passed away last spring. Yet his work endures as historically robust and eminently humane approach to public policy. We dedicate this re-publication to his legacy.
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Transcript
Billy Saas: Steven Attewell, welcome to Money on the Left.
Steven Attewell: Thank you for having me.
Billy Saas: Would you start off by telling us a little bit about your scholarly background and how you came to write People Must Live by Work?
Steven Attewell: Sure. So I am a rare beast called a policy historian. I sort of got into it because I was interested in political history, but I didn’t want to do the history of great men. I wanted to look at how the government worked. I found that there was this subfield that did the kind of stuff I was interested in. So I started as an undergraduate history major at Columbia, and then there was a history PhD program at UCSB that had a large number of policy historians who I could learn from, as opposed to just one person. I came to write People Must Live by Work, I actually write a little bit about this in the introduction, I was inspired by my experience of reading Arthur Schlesinger’s description of the Civil Works Administration in his classic The Coming of the New Deal, which was like the first history of the New Deal after World War Two. At the same time, while I was watching the Democratic presidential primary debates in 2004. I was listening to all of these candidates talking about the need to create jobs, build jobs, grow jobs, etc, you know, touting their plans. And at the same time, I was reading Schlesinger’s account of how the US government had created more than 4 million jobs in less than three months, at a time at which the most advanced administrative technologies available were the rotary phone and the carbon copy. As a budding policy wonk, I went on to the websites of these, John Edwards, and John Kerry, and Dick Gephardt, and looked at what their plans were. They amounted to little more than these very small pots of money for small business loans or tax credits or stuff like that. The difference in ambition between the past and the present fascinated me. My question was, Why is nobody talking about the Civil Works Administration? Why did no one teach me this in school? Why did I have to stumble across it in the book? That’s what inspired me to start this project.
Maxx Seijo: So as you’re just mentioning there in your book, you foreground what you call the politics of direct job creation, and you trace this throughout the 20th century. We’re wondering if you could perhaps talk about how this history and foregrounding it complicates our historical memory of what’s imaginable?
Steven Attewell: Yeah, that’s a great question. So I think the main thing is we have a vision in our collective political imagination of the way our system of social and economic policy is supposed to work, right? This is social security. This is the welfare state. This is what the federal government does to manage the economy. And there’s this giant missing hole in terms of how everything was supposed to work. For example, one of the things that blew my mind when I started was that direct job creation was built into the Social Security Plan. It was always supposed to have this extra leg to the stool, this extra safety net under the safety net to catch everybody, and it’s not there. And the fact that it’s not there explains a lot. Of the problems in our welfare state, like why people slip through the cracks, why our system is not as generous as it ought to be. Likewise, on the economic policy side, why is it that the United States is, even in its golden age of the 40s through the 70s in terms of the economy, why is it that we had higher unemployment than the rest of Europe, or the whole of Western Europe? It’s because there was this missing part. We had a plan for what the post-war world should look like, and then we didn’t execute it. And as a result, we have this huge vulnerability that when there’s a sudden downturn in the economy and mass unemployment, we have these very indirect tools to deal with it that take a while to go into effect. Whether or not you’ve put enough resources into them, it’s very uncertain. It’s missing this additional lever, and that really kind of complicates our understanding of what the state should look like. The next kind of thing that it complicates to me, which ties into this is, we have this popular conception that World War Two ended the Great Depression, and that the New Deal failed to end the Great Depression. That plays a big part in our historical imagination of, what is the possible? What can the government do and what can’t it do? Why do people say, Oh, the government can’t create jobs or the President can’t really, directly affect the economy. It’s because we have this false impression that we tried these programs and they failed. The reality is, they succeeded enormously. But that really complicates our understanding of the world, because what it gets at, fundamentally, is that unemployment is unnecessary, that we are a rich enough and powerful enough country, that we can have whatever unemployment rate we want. It’s just that for whatever reason, we have decided to just have high levels of unemployment.
Scott Ferguson: So in the book, you trace four main moments in the history of direct job creation politics in the 20th century, the New Deal, the immediate post-World War Two era, the civil rights movement of the early 1960s, and the debate surrounding the Humphrey Hawkins Bill during the 1970s. Can you walk us through these moments? What defines each moment? What carries over from one to the next? What’s lost, what’s gained?
Steven Attewell: Great question. So to start with the New Deal, I think it’s primarily sort of defined by experimentation. So you have this kind of unorthodox group of social workers, amateur social scientists, economists, civil engineers, who are coming up with a new way of doing things on the fly, because the old system has broken. We used to have this old sort of voluntary state and local system of poor relief, and it’s completely collapsed because it can’t handle the demand on it during the Great Depression. At the same time, they’re coming to this sort of more moral ideological position that says, people want work, they don’t want handouts, they don’t want charity. We have to give them what they want. It’s the right thing to do. So they come up with this program of direct job creation where they just say, look, let’s, let’s not worry about public works contracts. Let’s not worry about expanding the civil service or whatever. Let’s just directly hire people. Let’s just go out, give them paychecks, put them to work. Along the way, as they go from the Federal Emergency Relief Administration to the Civil Works Administration to the Works Progress Administration, they’re coming up with economic theories, with a policy regime and an ideology, and then a whole bunch of evidence about what works. Even though we’ve come to think of them as these sort of temporary emergency programs, almost from the beginning, they’re saying, this needs to be permanent. This has to be the way that the US government functions. One of the scholars whose work inspired me, Edwin Amenta, describes this as a jobs and assistance state, as opposed to a welfare state, that it wasn’t just a small program, it was this is fundamentally how you know citizens are going to interact with the government and how the government is going to interact with the economy. And it works for eight years that large numbers of people, big sections of the workforce are hired through these programs and are lifted out of destitution. The economy grows at a very fast pace. Unemployment drops dramatically, and by the end of it, the people who run these programs are absolutely convinced they have a successful experiment on their hands. Then you get this sort of disjuncture with World War Two. Not so much, because World War Two ended the Great Depression. I think it was over before the US entered World War Two. But, basically, the government shifts from directly employing people to build public works to directly employing people to smash fascism.
Scott Ferguson: Can I ask you something about the New Deal moment? In the book, you suggest that there are at least two competing, let’s say, philosophies or schools, that then sort of compete for attention and resources. There’s the camp that’s interested in direct job creation, that is people oriented, and the goal of which, as I understand it, is to find people jobs first and foremost. Whereas the other camp is the traditional public works camp, which seems to privilege projects over people. Can you elaborate?
Steven Attewell: Yeah, I would say it’s not just a competition between those two. It’s a competition between a lot of different ways of doing things, a lot of viewpoints. The New Deal, it wasn’t that it lacked ideology, it just had many, many ideologies that were all competing for control. So, during the Committee on Economic Security, you had a big fight between direct job creation folks and unemployment insurance advocates. Then you had a fight between the direct job creation folks and the Public Works folks. And there, what was really at stake was you have this old tradition since the Progressive Era, of being very suspicious about the fiscal state, that there was this fear that the government was inefficient, that it was corrupt, that it would waste money, that it couldn’t manage things efficiently. And so what you needed to do was, “run government like a business”. Use all of these mechanisms to ensure that the government is getting good value for money. This is our default when we think about public works today. It’s why, during the great recession, we were worried about shovel ready projects. This is where the whole fear about “boondoggles” comes from. What the direct job creation folks did was they sort of turned efficiency on its head. They said, rather than figuring out how much we can produce per person employed, which is the driving mentality for these kinds of very capital machinery intensive ways of doing public works. They said, let’s focus on creating the most number of jobs per dollar, and then see what we can do with that manpower, with that labor power. You had people both within and without the WPA who came to this conclusion. John Kenneth Galbraith, for example, writes a book called The Economic Effects of Public Works in 1943 in which he compares the Public Works Administration with the Works Progress Administration. He says, this DJC stuff is way more efficient when it comes to actually doing what we want it to do, which is produce enough jobs to bring down unemployment and that traditional Public Works has this limiting factor. It’s very slow to get off the ground. Because it’s indirect, because it’s working through these private contractors, you tend to create relatively few new jobs. There’s a lot more jobs going to people who are already working, and the private contractors are trying to make a profit, so they’re trying to keep as much money in their own hands as possible. Thankfully, in 1935, the WPA was able to out hustle the Public Works Administration on a bureaucratic level. They figure out that they’ve got the authority to run projects independently if they’re worth $25,000 or less, so what they do is they just take bigger projects and then subdivide them into $25,000 chunks, and all of a sudden they can just run the whole system by themselves. But they also attack on an intellectual level, and they make these interesting alliances with Keynesians, with people like Lauchlin Currie and Leon Henderson, Marriner Eccles. They’re all sort of saying, all these people who really care about how much consumer demand can we pump out into the economy, and they sort of say, hey, our program is a great way of shunting a lot of consumer demand into the bottom of the economy, the lowest paid people who will go out and spend it immediately. So help us. Help us get more budget, and we will do the work of Keynesianism. So that’s kind of how the conflict shakes out during the New Deal.
Maxx Seijo: So then it sort of proceeds into the transition of World War Two, which I believe you were starting to articulate. Was wondering if you could talk more about that?
Steven Attewell: Sure. So the major thing that happened during World War Two is that first of all, you have the US’s first and kind of only experience with real full employment, where unemployment is below 3% it’s hovering around 1-1.5%. This builds a certain kind of confidence within the government that they know how to do this now, and especially a confidence in a kind of economic planning. It’s very Keynesian. It’s very sort of technical. It’s about statistics and modeling. Then there’s this kind of utopian, good government vision that this will somehow move beyond political conflict. That these New Deal programs were broadly successful, but they involve political fights. You had to get appropriations through Congress. You had to make sure that there were projects in every single county in America, so that incumbents would fight for their districts. They thought, wouldn’t it be cleaner and better if we just allowed the executive branch and experts in the executive branch to do things like modulate tax withholding rates or modulate the budget without interference from Congress, and that that will allow us to have full employment without conflict. What you have happened is there’s this bill, originally the Full Employment bill. It eventually becomes the Maximum Employment bill, and eventually just the Employment Act, which is a plan to establish full employment as the economic policy of the United States. This is paralleled by bills that are happening, you know, across the rest of the Western world. But what they do is they got the enforcement mechanics. All the employment bill becomes is a vehicle for creating a presidential report, making recommendations to Congress that a special committee will look into. But there’s no teeth to it. What astonished me about this, when I dug into the archives, is its liberals doing this. It’s not conservatives killing the bill. It is people like Senator Robert Wagner of New York. The guy who wrote half of the New Deal, basically, and they’re coming out with these reports saying this is not going to be another WPA. We’re not going to have a literal right to a job. We are going to create enough job openings that people can have work, and we’re going to do this through this planning method. And so this sort of whole legacy of the New Deal gets ripped out. As a result, when the full employment bill gets watered down, and watered down, and watered down, what you have is this sort of general commitment that the federal government has a responsibility to make sure that unemployment doesn’t get too high, but no real direct mechanism for doing that. So when you then get to the War on Poverty…
Maxx Seijio: Before you get there, I just wanted to ask about a specific point. As you probably know and familiar with, Alan Brinkley argues that the reason for this liberal support of watering down the New Deal and into the war, is that there starts to be a sort of mirror by which American liberals look across the pond into Europe and see Nazi fascism as a sort of State Employment Guarantee. So I was wondering what you thought of that, and if you thought that contributed to this sort of shift and transition away from rights based employment?
Steven Attewell: I mean, I admire Alan Brinkley’s work, but I think he’s wrong on this point. So, for example, one of the great social Keynesians, Alvin Hansen, called the American Keynes, really wants Keynesianism to work through these big public investments, right? Healthcare, housing, education, science, public infrastructure, you name it. He comes up with a full employment plan himself. He’s very influential in advising the people drafting the Employment Act. But I’ve seen memos in which he basically says, You know what, why don’t we just gut all of this social, Keynesian stuff from the bill? He’s talking about eliminating his own work, and he’s not doing it because he says, Oh, I’m worried that we’ll become fascist. He says, Well, we can just do it later. What it really comes down to, for me, is this overconfidence in technical expertise within the executive branch, that all they thought they needed to get right was the process, and then they could take over and do the rest later. Once you had the Council of Economic Advisors up and running, they would come out with the correct social Keynesian plan, so it didn’t need to be spelled out in the bill. Lo and behold, when the bill passes and the Council of Economic Advisers gets going, there’s no way to actually get the social Keynesian thing that they wanted. In some ways, they’d voluntarily disarmed because they thought they’d already won.
Billy Saas: Then you take us into the civil rights movement, what happened then?
Steven Attewell: This is where the “what is lost and what is gained and what is carried over?” is really important. In the 1960s, the federal government was relearning this from scratch, the New Deal agencies were gone. There’s no transmission of information to the future. What you instead have is that memory is preserved within the sort of social democratic wing of the civil rights movement, people like Philip Randolph, Bayard Rustin. It’s not a coincidence that when they’re putting together the freedom budget, they’re working very closely with Leon Keyserling, who was a young New Dealer. He was the guy who wrote most of Wagner’s legislation and helped to write the Employment Act of 1946. He’s sort of come around a little bit on direct job creation, although he’s more of an old school social Keynesian. The problem is, there’s no synthesis between these two groups. In the Labor Department under Willard Wirtz, you’ve got people who are starting to work their way towards this idea that job training isn’t enough. We have a very discriminatory labor market. The federal government’s gonna need to give Black people jobs to bring down the racial gap in unemployment. Likewise, in the Office of Economic Opportunity, the War on Poverty agency, where they initially are very gung ho on the idea of: the problem with the poor is that they’re politically disempowered, so we’ll create these community action programs, and that will mobilize the poor to demand a fair share, and that’s how they stop being poor. Well, shit, that’s very politically controversial. Stop that. Don’t want to do that anymore. Then they also have this idea that the problem with the poor is that they are culturally deprived, or educationally deprived, or that they lack skills. So we’ll just give them a huge amount of job training programs and education programs to equalize this, and they run into a couple big problems. One of which is, they’re training people, and then there’s no jobs on the end of it, or they’re providing a lot of education. But the problem is, education takes decades to show any effect, right? You start Head Start. It’s a great program, right? But you’re not going to know whether you know that’s going to make a real difference in someone’s life 10-15 years later. So they’re starting to come around on this idea that there’s this thing called the poverty gap. It’s how much money would you need to give the poor of America to bring them above the poverty line? So now they’re really starting to think fighting poverty requires redistribution of material resources. And one of the things that they end up with, the OEO, is they say, let’s just create a jobs program. But those two agencies never have a synthesis with the folks in the civil rights movement who’ve already worked this out decades earlier and are trying to get them to do this thing. Then, as you start to get into the mid to late 60s, you start to get a problem, which is inflation. That Keynesians had gained control of the levers of power in the 1960s by demonstrating that they had mastery of the economy. They’d done the tax cut, the tax cut had worked, the economy boomed. But now, between the domestic boom and Vietnam, you’ve got overheating of the economy, you’ve got inflation, and that means you can’t have more spending, right? Because that’s going to fight against your attempts to keep inflation in check. It also means that the Keynesians switch from wanting a tax cut to wanting a tax increase, because they want to cool down domestic demand, and they know that the quid pro quo from Congress is going to be: you want us to raise taxes? You’re gonna have to cut the War on Poverty spending. So the problem with the 60s, the way that I think about this moment, is that there is this disjuncture between the policy learning that’s going on and the realm of political possibility. That there is this window from, really, 1964 to 1966, or really, maybe just late 65 but anyway, before the midterm elections of 1966, where you could perhaps do something on direct job creation, and by the time that they figured out that’s what they want to do, the moment is lost. They don’t have a working majority in Congress anymore. The support that they might have had out there for jobs has been squandered by anti-Vietnam sentiment and a backlash against the New Left and the civil rights movement. You hit a wall in the late 60s, especially because once Nixon becomes president, you’re not going to go anywhere. And that’s what leads us to the 70s.
Scott Ferguson: So a lot of your narrative, which is very rich and informative, a lot of your narrative is about sort of the inner policy circles and fractures and fights. But I wonder if you could trace back through some of this history and shine a bit more light on social movements and calls for or the lack of calls for, direct job creation from the 30s into the late 1960s and maybe highlight a few important moments along the way. Like, I think our listeners might like to hear a little bit more about something you mentioned in passing, the Freedom Budget.
Steven Attewell: Sure. So starting with the 30s, the person who’s really done the best work on sort of social movements and jobs in the 30s, is Chad Alan Goldberg, who looks at left wing social movements of the unemployed in the 1930s, some of which were associated with the Communist Party, some of which were associated with the Socialist Party, some of which were associated with the CIO unions. They were a very strong presence for direct job creation. They wanted jobs. They made protests in favor of jobs. What’s interesting in the 30s is that you get this kind of inside, outside politics. So for example, direct job creation workers, like WPA workers, were organized into unions. There were two of them. In fact, there was one called the Workers Alliance, which was a popular front, communist-socialist party, joint. Then there was the UAW, which organized its own New Deal Workers Union, because so many of their members get laid off from the auto industry and then go to work for the WPA. So they just sort of follow them into the WPA. You get this interesting dynamic where these unions and social movements will protest. They say, We want higher wages, we want more jobs. This isn’t good enough. And then agency officials like Aubrey Williams, for example, will come out and say, You’re right. Help us lobby Congress to get more money so that we can do those things. There’s a useful collaboration going on, but at the same time, it is at somewhat arm’s length. The New Deal doesn’t formally recognize these unions, informally it will. There’s a lot of going back and forth on prevailing wages is something that they’re always negotiating with the labor movement. Then when you get to the 60s, direct job creation is seen by the civil rights movement, or I should say, by many sections of the civil rights movement, as necessary for a whole bunch of reasons. One, it’s necessary for achieving the material ambitions of the civil rights movement. Martin Luther King has this great statement where he says, people have to be able to buy the sandwich at the lunch counter that they’ve just won the right to sit down at. One of the things that is being fought for by the civil rights movement is jobs and higher wages. It’s the reason why, in the March on Washington in 1963 the title of the March is a March for Jobs and Freedom. Because even, as you know, there’s a good economy in the 60s, rates of unemployment for African Americans were way higher than for whites. It’s also seen as important for breaking the triangle of segregation, the triangle of jobs, housing, and education. Even if you now legally, de jure, can buy a house in a white neighborhood, you can’t afford it because your job isn’t good enough. And your job isn’t good enough because you don’t have the formal qualifications to get a good job. But in order to get the formal qualifications, I need to go to a good school. Well, the good schools are good because they’re in high property value neighborhoods that are putting more money into schools. So the idea is, well, jobs is one of the ways that you can break that triangle. That you can give people good paying jobs, then not only will their neighborhoods get better, but maybe they can move into better neighborhoods and get a better education for their kids and so on and so forth. And then finally, it’s seen as important for building across racial working class coalition because a lot of people in the civil rights movement, even before the trouble signs in the economy are really visible, realize that if there’s going to be a conflict between white workers and Black workers over a limited pool of jobs, then white workers are going to go and vote for the racists. So the idea is, if we can use direct job creation to create enough jobs for everybody, and this is the vision of the Freedom Budget, that if there’s enough jobs for everybody, then you can have fair employment without anybody losing. You can have affirmative action, that you can help all of these people who’ve been kept out of the labor market and kept out of good jobs without freaking out white working class voters who are like, clinging to their toehold on the on the national economy, and getting them to go vote for George Wallace.
Billy Saas: Help us put going to the 70s off as long as possible. Sort of circle back a little bit and ask you to comment on a little bit more about the role of, like, political economic orthodoxy and kind of shaping the decisions of these policymakers and these people in the positions of making decisions about direct job creation. Keynesianism, neoclassical economics, institutionalism, what’s going on?
Steven Attewell: So one of the things that’s really interesting when I was looking at direct job creation is that it was very mutable as an economic philosophy, mutable in political economic terms. They could speak the language of Keynesians. They could say Hey, we’re all about demand. We understand that the problem with the economy is deficient consumption. Our program has the best marginal propensity to consume, and blah, blah, blah, blah, blah, right? And try to get their support. But they could also go over to the Institutionalists and say, Hey, man, you talk about administered prices and monopoly. What about monopsony? Right? That we’ve got these massive corporations that are depressing wages because they control whether or not you get a job. So if the public sector can break open that monopsony and restore competition for wages, then all of a sudden, you’re gonna get enough demand out there for these overly rigid prices. By the way, they could even flirt with the production for use people in the 1930s, the quasi-socialists, and say, Hey, we employ all of these people. Who says, it all has to be public works? Why can’t we make clothes for people? Why can’t we can food and distribute it to people? Why can’t we build housing? They have this sort of mutability. But then, if you look from the 30s to the 70s, Keynesianism especially plays a changing role. That in the 1930s the two groups are simpatico, right? Because Keynesians are all about pushing more spending, and this is a great vehicle for pushing more spending. Then, in the 1940s, they got very confident and thought, we don’t need these people anymore. We can just do this directly through manipulating the budget, manipulating the tax code. So they sort of kick them to the curb. And then in the 60s, you know, because they’re doing their own thing, they start to see them as hostile, like you’re screwing up our budgets, you’re screwing up our tax plans. Then, the real thing is in the 70s. Because the 70s is when the centerpiece of the neoclassical synthesis of Keynesianism and neoclassical economics, the Phillips Curve, breaks down. There’s no longer a stable relationship between inflation and unemployment that would allow a government to just pick a point and adjust interest rates, and you’d get the sort of hands free economic planning that you wanted. They’re increasingly in the 70s, under threat from neoconservative economists like Milton Friedman, who are saying you can’t do any of this, right? There is this thing called NAIRU. It means that you can’t have full employment, that any kind of government activism is going to fail. Because he had, “predicted” the breakdown of the Phillips Curve, had “predicted” stagflation, these Keynesians are really unsure. They lose their confidence. So what you see in the 1970s, especially in these hearings over the Humphrey Hawkins Act, is that Keynesians kind of Splinter as an expert community. You have some of them who say, the Humphrey Hawkins Act is what we need, inflation is not that big a deal, unemployment is more important. You’ve got other people who say any attempt to bring down unemployment is going to cause hyperinflation. We can’t rock the boat. We don’t know what’s going to happen. So just back away from full employment as an objective. As a result, the Humphrey Hawkins Act was not passed in 1976. Now, it was going to get vetoed by Gerald Ford anyway, but it sort of interrupted the process of consensus building around this piece of legislation. Then, unfortunately, one of the biggest kinds of “right wing Keynesians”, this guy called Charles Schultz, becomes Carter’s head of the CEA. When the Carter administration has to deal with the Humphrey Hawkins act, he’s the lead negotiator, and he’s like, totally in opposition.
Scott Ferguson: So you’ve walked us back to Humphrey Hawkins. So what I’d like us to do now is to sort of take a wider shot and tell our listeners, who are less familiar with the Humphrey Hawkins bill and the fight and the gutting of the bill, what is this? What is this legislation? Where did it come from? How did it transform over time? Go.
Steven Attewell: Great. The broader context is that in 1973 you had the worst recession since the Great Depression, right? It lasts from ’73-’75, unemployment goes up to like 10%, 11%, everyone’s freaking out. One of the responses to this is the creation of CETA, the Comprehensive Employment and Training Act, which creates about three quarters of a million jobs. So direct job creation now, once again, is in power. It’s in the government. It is the biggest function of the Labor Department. So now, it’s not just some people in the civil rights movement or a few wonks in a few agencies. This is the biggest thing that the Labor Department does is employ people directly. That is the context for the Humphrey Hawkins Act because now that they’ve built this capacity, they want to go further and create a right to a job to actually deal with the mass unemployment, because 750,000 jobs is not bad, but there’s 7 million people who are unemployed. It’s not dealing with the bulk of the problem. So the Humphrey Hawkins Act is a compromise between two different perspectives. One of them is from Congressman Augustus Hawkins, who is the founder of the Congressional Black Caucus. He is an old school, New Deal Democrat from South Central Los Angeles, and his version of this is based on Scandinavian social democracy. That envisions a system in which people have a legal right to a job. The way that is enforced is that you have local planning councils who come up with a shelf of programs. Then you have what’s called a job guarantee office, which replaces the unemployment office. If you don’t have a job, you go into this, and you apply for a job, and they’re then coordinating with the Labor Department and the executive and say, Okay, we have this many unemployed people. We need projects that will put them to work. So they take projects off the shelf, and they send people to what’s called the standby Job Corps, which is like a new WPA, basically. So it’s this kind of nice little tripartite system, but it’s very statist, right? All of this is happening pretty much on the public side, and it’s like very militantly backed by the right to sue the government. That if you need a job and the government won’t give you a job, you can go in and sue the federal government, and the courts will force them to give you a job. The other version of this is Hubert Humphrey. Hubert Humphrey had run for president in 1968. He’d lost, but he’s still a senator, or he gets back into the Senate, I should say, because he’d been the vice president. He starts working with our old friend, Leon Keyserling, who’s still around, who had been a major supporter of his in 1968. He had written a lot of speeches for him. What Humphrey wants to do is to amend the 1946 Employment Act and put numerical teeth into it to say it’s not enough that the President transmits a report to Congress about the economy. It’s not enough that we have a Council of Economic Advisors. You have to transmit a budget to the Congress that says that unemployment will be brought down to 3% or less. So they merge these two bills. Keyserling isn’t as much into the direct job creation stuff. He wants Hawkins to accept more of this kind of Keynesian economic planning stuff, but he accepts there’s going to be some role for direct job creation. They get into a big fight with Keynesians in 1976 where Hubert Humphrey and Hawkins are pushing this bill through the Congress, Keyserling is testifying before Congress, and he’s getting into a bunch of fights with economists who are saying we got to be worried about inflation. Keyserling has this very interesting perspective where he says, it’s not that full employment causes inflation; unemployment causes inflation because if you don’t have full utilization of the economy, then you’ve got bottlenecks and increasing prices for parts and raw materials and stuff like that, and that increases the prices of manufactured goods. So if you have full, full employment, prices will actually decrease, because those inputs will be cheaper. But this is like a big fight that you know they don’t agree with. So after the 1976 elections, they think they’re in a good position, that the Humphrey Hawkins Act was endorsed in the Democratic platform of 1976. Tip O’Neill likes and he’s running the house. They even get Jimmy Carter to sign on to it, even though it’s very tepid. And then the weirdest thing happens. This is a very similar story to what happens with healthcare under Carter, which is Carter having endorsed this stuff now says “I have my own plan”, and since he’s the president, everyone sort of stops and lets him do his plan. His plan is called the Program for Better Jobs and Income, PBJI. It’s not a great acronym. PBJI tries to do everything. It tries to say, Okay, we want to deal with poverty, we want to deal with unemployment, and we want to deal with welfare all in one go. So what it would do is, if you were unemployed and were able to work, there would be direct job creation. If you were employed but still poor, there would basically be a guaranteed above poverty wage through an expansion of the earned income tax credit. And if you were poor and couldn’t work, they would create a national welfare benefit. This is a very tortuous process. It goes on for nine months where you have people in the Department of Health, Education and Welfare who are only interested in the welfare side of things. You have people in the Labor Department who are only interested in the jobs side of things. Then you’ve got all of the economic departments, the CEA, the Treasury, Commerce, the Fed, who are like, this is terrible. We don’t want any of this. And Charles Schultz goes to Carter to say, Hey, remember how you also promise not to raise the deficit? And Carter says, Okay, fine. Give me a version of the PBJI that doesn’t increase spending. The people running it say that’s impossible. You can’t deal with unemployment, poverty, welfare and not spend any new money. So the plan cracks up. It goes nowhere in Congress. Everyone involved hates it, but it’s delayed dealing with the Humphrey Hawkins act for nine months, and then they start negotiating. The Carter administration starts negotiating with Senator Humphrey and Congressman Hawkins over the Humphrey Hawkins act, and Carter, in his infinite wisdom, appoints Charles Schultz to be the lead negotiator. This guy testified against the bill in 1976. Schultz fights this thing tooth and nail. He goes round and round and round. Ironically, on political economy. He’s like, No, but inflation, Phillips curve, this stuff I believe in, I’m gonna fight for it. I don’t want binding targets for unemployment. I don’t want direct job creation. What I found in the archives, is that at the same time that he’s grinding this whole thing to a halt, he’s also going to people in Congress and saying, hey, I want you to sabotage this bill. He’s literally stabbing them in the back. Almost a year goes by. This is why the Humphrey Hawkins act gets passed in late 78 instead of immediately, and by this point, it’s been cut to ribbons. What astonishes me is even after they have completely defanged this bill to the point where it’s essentially a paper tiger, just like the Employment Act of 1946, even after that, you’ve still got people in the Carter administration figuring out ways to not enforce this. They’re soliciting opinions from the Office of Legal Counsel, saying, can we ignore this law? Can we not enforce it? This contributes to this sort of breakup between Carter and the left of the Democratic Party. That culminates in Teddy Kennedy running against him in 1980 and Carter losing the presidency in 1980.
Maxx Seijo: That’s a whirlwind of the history of this breakup of the last real bill that we’ve seen to raise the potential of a jobs guarantee in this country. I was wondering, because you do cite in your description of Humphrey Hawkins, one of the main problems is that Jimmy Carter sort of tried to smash all these things together into one bill that preceded Humphrey Hawkins on the debate schedule, and one of the principal issues was that he didn’t want to raise spending. That sort of made me think, because we are the Money on the Left Podcast, I was wondering if you could talk about at what point in this project you arrived or came to MMT, and how that informs the way you think about these moments.
Steven Attewell: Ah, it’s a great question. So I came to MMT sometime in graduate school. I was reading a lot of political economy, fairly widely. I was reading Vickrey, I was reading a lot of Minsky, and then I ran across, where is it I actually have my copy on my desk? Yeah, I ran across Understanding Modern Money by L. Randall Wray. It kind of made me rethink a lot of stuff. Because in addition to writing this book, I had been doing a lot of blogging about direct job creation and trying to come up with my own plan, and trying to figure out how much it would cost, and how would you pay for it. I had been working on this kind of dodge where I said, Look, because I had noticed, during the Great Recession, the Federal Reserve had just created $7 trillion out of nowhere, and it didn’t create hyperinflation. I was like, Huh, why don’t we set up a system where, like, we’ll have direct job creation fund that’ll be financed with a payroll tax or something like that, but it can borrow from the Fed, so that when you have a recession, instead of having to support itself with its own revenue, it can take out a theoretically infinite zero interest loan from the Fed and then eventually pay it back. Then I read L. Randall Wray, and I was like, Oh, I’ve kind of backdoored my way into this. Or we could just tell the Fed to write the government a check. That would be a simpler way to do this. It kind of changed my thinking about this. I mean, I’m still fairly new to MMT. I’m still trying to sort of work my way through some questions about, Okay, how do we figure out how much money we can create relative to the real productive capacity of the economy? How do you operationalize that? To what extent are back doors useful if credit is all about faith, right? How do you work the magic of convincing people that money is real and liberate this power for public good? Because that’s the thing that L. Randall Wray’s work, and then, later, when I’ve read more MMT, have really gotten me to think about is this enormous power that is monetary power that we only use for the interest of a very powerful, but small industry, right? We created $7 trillion for the financial sector. We didn’t create $7 trillion for people whose houses were getting foreclosed on, or people who are going unemployed, or people who didn’t have health insurance. I was like, why don’t we use this power for everybody, not just for the people who are actually doing the best.
Billy Saas: So one of the more exciting developments coming out of the MMT world now is the talk about not just a jobs guarantee, but a Green New Deal. There’s heavy borrowing from the rhetoric around the New Deal that you cover throughout your book. Could you maybe talk about and comment on or just join us in wonder at the Sunrise Movement and the call for the Green New Deal?
Steven Attewell: Yeah, so I’m absolutely fascinated by the Green New Deal. I think it’s like one of the smartest things that the left has come up with since Medicare for All. It’s not so much that it’s incredibly technically complicated on its own, although it will be, but just the way of thinking about it, right? When I was talking about, how do you sell people on the faith of this, on the dream of this? What really got to me about the Green New Deal is, I wrote about this at Lawyers, Guns and Money, is it’s a way of doing everything that the left cares about. It’s about job guarantee. It’s about education and training. It’s about the fight for 15. It’s about environmental justice, it’s about racial justice, it’s about universal health care. It’s about child care, it’s about unions, but it’s in one vision that we can then talk to people about. It’s not a 50 point plan for every single issue. It is the vehicle through which everything else flows. And I think it’s goddamn brilliant. It’s one of those things that people really, really like. If you pull people on the Green New Deal, they like it. It’s even more popular than job guarantee, full stop, because it combines everything that people like about the job guarantee with all of the stuff that they care about on a whole host of other issues.
Billy Saas: It’s got a much better ring than PBJI.
Steven Attewell: Oh, absolutely, absolutely. Let us never follow the Carter administration on anything having to do with branding and public relations, please,
Billy Saas: Or fiscal policy, or much else.
Scott Ferguson: So from the point of view of your new book, what are the key lessons that we should be drawing for not just the fight for a job guarantee, but more expansively, this Green New Deal?
Steven Attewell: So, yeah, this is something I was thinking about recently, and I’m actually working on a paper, hopefully that’ll be co written between myself and Phil Harvey, about what are these lessons? At the moment, I think there are three main ones. I don’t know if everyone’s going to agree on this, but this is what I’ve come to the conclusion on. Number one, I think methods of organization really matter. That it matters that direct job creation is public and not private. I don’t think it’s going to work if we try to do this through things like tax credits and subsidies to private employers, right? That’s the Ro Khanna model. It matters that it’s federal and not state or local. This is where I actually differ from people like the CBP’s plan, and the Levy Institute’s plan, so Wray and Sandy Darity, and also Cory Booker’s proposal, which is, if you look through the whole history of like American social and economic policy, one of the key flaws that we’ve always had to deal with is federalism. That anytime you introduce a role for the states, you introduce this enormous capacity for regional variation. That is a polite way of saying racial discrimination. The best example of this is the Affordable Care Act, right? If it hadn’t been for Justice Roberts saying that the Medicaid expansion was voluntary, there would be millions of people in Texas and Florida and all throughout the deep South who would have health insurance right now. The reason they don’t is because those states are fundamentally opposed to the idea of Black people getting any help from the government. The same thing will happen with the job guarantee. We can see this from the civil rights movement and the War on Poverty. The War on Poverty was deeply disliked in the South because it gave poor Black people an alternative to the white controlled labor market. In Mississippi, that was absolutely hated. So I think the federal government needs to run this. It’s not that the state and local governments and NGOs can’t be like sponsors, can’t propose projects and help out with money and give people a place to slot into, but the federal government has to be in the driver’s seat. Second thing, scale and scope matters. Direct job creation has to be large enough in relation to the size of the problem to have a real impact. So for example, the Cory Booker experimental model, I don’t think it’ll work now. Granted, right now, unemployment is super low, but it’s not going to stay that way forever. So in the future, if we need DJC to actually step up and bring unemployment rates down, it’s got to be big enough to do that. It’s got to have a big enough impact on the economy. The second part of that is how you organize the work matters. Like, what kind of stuff are you doing? We’ve already talked about the way that the greenness really matters, because it energizes people who really care about climate change, and the fact that this planet is going to be unlivable in 12 years if we don’t do something, that if we don’t do anything in the next 12 years, the world will become unlivable. But also things like, for example, light versus heavy construction. If we’re going to build stuff, do we rely on a model that says, let’s buy or rent as many cranes and backhoes and steamrollers as is possible to bring down the number of workers we need to the smallest number. Or do we say, we’ve got a lot of unemployed people, their labor is valuable. Let’s give them tools and put them to work. Let’s be labor intensive. That’s a good thing, not a bad thing. Finally, under that point, the mix of infrastructure and services matters. One of the things that people have been worried about is that if all of this work is in construction, it’s going to be very heavily tilted towards men and leave a lot of women behind, or just people who aren’t suited to construction work, like people with disabilities, like myself. So in the 1970s like one of the real advances, CETA had a lot of problems, but one of the things it did right was it created what was called public service employment jobs. There’s all kinds of services that people need, whether it’s healthcare, whether it’s childcare, whether it’s education, whether it’s elder care or whether it’s just making the rest of the government work more efficiently. Put enough people into the DMV that the line takes five minutes. It’s that kind of stuff that legitimately touches people. The third thing is, there’s gonna be conflict within the broader left slash center left, like the Democratic Party, family, whatever you want to call it, and we need to be ready for it. On the one hand, direct job creation scares the hell out of some people for a couple different reasons. It is more statist. It is the government employing people. It involves more spending. It bypasses a lot of traditional stakeholders, like private contractors, state and local governments. Although, you know, as I said, I think there’s a role for state and local governments. It also challenges powerful, sometimes semi-conscious ideas about the necessity of unemployment and the worth of unemployed workers, that there’s this assumption that people who are unemployed are non-productive, are not worthwhile, are lazy or stupid or whatever, and so they have no value. The reality is, unemployed workers have this enormous value that is constantly being lost, right? There’s no way of preserving the labor power of someone who’s not working. Another thing is that given that direct job creation is only going to happen if and when Democrats control all three branches of government, one of the biggest problems we’re gonna have to deal with is not so much the right. They’re gonna hate this idea, but either we beat them or it never happens. But it’s people on the left to center left. We’re gonna have to deal with budget hawks. We’re gonna have to deal with other centrists who are crazy worried about deficits, and we’re also going to have to deal with other leftists, like universal basic income enthusiasts, who see direct job creation as a competitor for budget dollars and political oxygen. Then the fourth thing I’ll say is that visibility really matters. I think one of the ways that we kind of missed a trick when it came to the American Recovery and Reinvestment Act of 2009 is that we tried to make things hidden. I think the best example of this is the payroll tax credit that no one realized they got. I was thinking back to when the Bush tax cuts happened, and they sent out mail to everyone in America with a picture of George Bush’s face and saying, Hey, we got you a tax cut. We should do stuff like that. The WPA had these big red, white and blue posters on all of their job sites, so that everyone knew where the WPA project in their community was. When it came to ARRA, there were these kinds of ugly orange signs. But unless you were driving, you couldn’t really see them. There needs to be a mix of projects, and we have to be a little bit crassly political about this. We need to make sure that there are projects in every congressional district in America, and we need to make them very, very visible. My thing that I’m nuts about is I believe very strongly in giving people cards. You get a social security card, right? That’s something in your wallet that you can look at, and it’s a tangible connection between you and the government. If it were up to me, I would say, okay, Green New Deal, awesome. The job guarantee part of it, or the income guarantee part of it, or the living wage part of it. Everyone needs a card in their wallet, a laminated piece of plastic that they can sort of say, even if it’s only a symbolic function, to say this is something you have from the government. This is a right that you now have, that you can exercise. You have a protection that you don’t have already.
Maxx Seijo: Well with that Stephen Attewell, thank you so much for coming on Money on the Left.
Steven Attewell: My pleasure. Thank you very much for having me. If you’re interested in this stuff, Public at Work is available through the University of Pennsylvania Press or on Amazon.com.
Maxx Seijo: Perfect.
* Thanks to the Money on the Left production team: William Saas (audio editor), Mike Lewis (transcription), & Robert Rusch (graphic art)