[...]

So we have gone from the notion of a service economy taking over from manufacturing and an industrial base. Now it turns out that globalization can outsource anything that you can do with a computer. So it's the lawyers' jobs who are being outsourced, it's the accountants jobs that are being outsourced, the market research jobs that are being outsourced, all the kinds of jobs that these kids who are now graduating from college with twenty, thirty, forty thousand dollars worth of debt thought they would have.

So we're looking at an era in front of us, Paul, where the twentysomethings who work at Apple for $12 an hour—and if you ask them, they'll say, well, this is just temporary; I'm waiting for, you know, something to come along so I can get back on a professional career path, waiting for the recovery. Well, the twentysomethings are going to turn into thirtysomethings and fortysomethings with dead-end jobs, because the policy of both parties at this point—and it's a little better under the Democrats than it is under the Republicans, but the basic policy is the same, and that is America is going to compete in the world on the basis of lower and lower wages.

[...]

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

There's been some debate amongst the American governing elite about America's place in the world and its declining power. Barack Obama went to Australia not long ago and declared that America will continue to be an Asia-Pacific power. And the issue of the Brzezinskian grand chessboard is still very much on their mind. But what does this maintaining America's position in the world mean for ordinary Americans? Who's going to pay for all this? When it comes to competitiveness, it really means wages, although that word doesn't get talked about very much, not in the mainstream press or in the halls of Congress.

Well, it does get talked about in a piece written by Jeff Faux, and he's now joining us. Jeff is a founder and distinguished fellow of the Economic Policy Institute in Washington, D.C. He's an activist, economist, and writer. He's written extensively on issues from globalization to neighborhood development, and his latest book is The Servant Economy: Where America's Elite is Sending the Middle Class. Thanks very much for joining us, Jeff.

JEFF FAUX, AUTHOR: Oh, it's great to be here, Paul. Thank you.

JAY: So, I mean, clearly we are dealing with a different world. And it's not just that it's militarily different, in the sense that China's now somewhat of a power, so is Russia and—back somewhat of a power—I mean, nothing on the scale of the United States, but the geopolitics and chessboard has changed somewhat. But where it's changed a lot more is with this massive industrial capacity in areas of the world where 20, 30 years ago there was nothing like it—advanced technology, high-quality production, very low wages. And America wants to maintain its competitiveness in all of this. So talk a bit about that and what that might mean for ordinary Americans, and maybe what the word competitiveness means.

FAUX: Well, I think—start from what I think is the basic assumption, and that is the United States can no longer satisfy the three great dreams that have driven American politics over the last decades. The first dream is the dream of Wall Street and business for unregulated access to speculative profits. The second dream is the dream of the military and foreign-policy elite and the military-industrial complex for global hegemony. The third dream is the dream of ordinary Americans for a rising living standard.

Now, we can have one out of three, certainly. Two out of three, maybe. Three out of three? No way. So in effect the decision is being made right now—or has been made—by this country's elite.

There's a lot of talk in Washington, as you know, about the grand bargain between Republicans and Democrats over budgets and taxes. But the real deal has already been cut. The average American income in real wages is going to decline over the next 10 years, 15 years, as far into the future as we can see. Now, this has been coming for a long time. It's not just about the recession and it's not temporary. As you probably know, for the last 30 years we've had stagnant wages in America. After wages rise steadily since World War II, they flattened out after 1979 and essentially have been flat.

So the question is: if wages were flat, how come everything looked so good? That is, people went to shopping centers and bought cars and houses during those 30 years that ended in 2008. And the reason is two. One, family incomes kept up because we sent more members of the family to work, usually the wife. Now there are more women than men in the labor force so that that strategy for most people is exhausted. The second is debt. People weren't getting raises, but they were getting access to cheaper and accessible credit. That has evaporated with the collapse of the financial sector.

JAY: Jeff, before you continue, let me ask: so if this process more or less began in the '70s, why? What happened? Why? If you could—you know, to some extent one could say that third dream of ordinary Americans, you know, to own a house, send the kids to college, not to be terrified of losing their job, to some extent that's—dream was still possible, at least in the early '60s.

FAUX: Oh, yeah. And the reason—.

JAY: So what happens?

FAUX: Yeah. There are three things that happened since the end of the '70s. The data starts from 1979; the kink in the curve starts from 1979. One was globalization, and by that I mean, essentially, exposing American workers to a very brutal and competitive global labor market before they were prepared.

Second, the weakening of the bargaining position of the average American worker. A lot of that had to do with the decline of unions. But it affected union members and nonunion members. The second thing that happened was the weakening of the bargaining position of the average American worker. This was not just about weaker unions, but weaker unions played a key role, not just for union members, but for people who aren't union members. Because unions were strong—or certainly stronger than they are now—the threat of unionization kept the bosses and kept the employers from cutting wages too much, cutting pensions too much, even though they would have liked to. So weaker unions, weaker bargaining positions [crosstalk]

JAY: And is weaker unions and bargaining positions linked to number one, which is globalization and the threat of moving offshore?

FAUX: That's right, certainly linked to number one. And number three, later, was the shredding of the safety net, the real value of the minimum wage, and the kinds of New Deal protections for labor that have been frayed away over the last 10 or 15 years.

But on the first, on globalization, there's something very important here to remember, and that is it not only affected working people, but it changed the culture of the American elite. You know, if you go back to the early part of the 20th century, labor and capital were in fierce struggles. But both labor and capital knew that they needed each other and were stuck in the same country. So, you know, when Henry Ford raised the wages of his Ford employees to $5 a day, the Wall Street guys said, Henry, what are you doing here? I mean, you can't pay—you're spoiling these people, you're paying them too much. And Henry Ford, who was a SOB union buster, said, look, I've got to pay them enough to come in to make the cars, but I also need to pay them enough to buy the cars. So it was an economy in which, while there were labor and capital disputes, we were all in it together.

What happened—what's happened since the 1980s is that globalization, the deregulation of trade and investment, has allowed the American commercial and economic elite to roam the world in search of lower wages, in search of government subsidies by Third World countries, etc.

JAY: Yeah, so you now have a situation where they saved GM and Chrysler, but workers'—starting worker wages go from, what, $26 to $14 an hour, and you probably couldn't buy a new car at $14 an hour.

FAUX: Exactly. And unlike Henry Ford, the people who run the Ford Motor Company today, you know, have other people they can use to sell their cars to. And so high wages, which we sort of learned after the 1930s were good for the economy because it created consumer demand and consumers bought the goods that were being produced, high wages in America are no longer what they were. They're now a threat to multinational corporations who still produce and sell things. And that's been a critical change.

JAY: They also seem to no longer think they need an educated workforce. I used to—in the '50s and '60s, all this talk about, you know, America will compete because it's going to be the most educated working class and this and that, they don't seem to care anymore. The public school system can go to hell and they don't seem to care.

FAUX: They don't care. But that's sort of the last excuse of the political governing class. I mean, whether it's, you know, Barack Obama, George Bush, Bill Clinton, they're all the so-called education presidents, and their answer to this decline in living standards and wages is not to worry, just go get an education. Barack Obama was in Florida about a year ago touring the country, saying the way we're going to compete in the world is to out-educate everyone.

Well, first what's obvious: that we're shrinking the schools, we're laying off teachers, kids can't go to college because it costs too much. But second, which is really important, we are not creating jobs for educated young people. You go into Apple, in the Apple Store, there is the future. And it's not the technology. It's in all those smart college-educated kids working as retail clerks for $10, $12 an hour. The Bureau of Labour Statistics—government agency—projects that between 2010-2020, the largest, fastest-growing occupations in this country, of the ten largest and fastest-growing, only one requires a college education.

JAY: Well, Jeff, we're going to pick this up in part two, and what I'll be asking in part two is it seems to me while this may make sense for Apple and it may make sense for a lot of individual companies to drive wages down and have more and more service jobs, as an economy somebody's got to be making money to buy all this stuff, and that seems to be where the rub is. So join us for part two of our series of interviews with Jeff Faux on The Real News Network.

PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay in Baltimore.

This is part two of our series of interviews with Jeff Faux about where exactly is the American governing elite leading the American middle class—or some might say American working class, which seems to me to make more sense, because if there's a middle, there's an upper and a lower. And I don't know where all that leads. But, anyway, where are we being led?

Now joining us from our D.C. studios is Jeff Faux. He's a founder and now distinguished fellow of the Economic Policy Institute in Washington, D.C. He's an activist, economist, a writer who's written extensively on globalization and neighborhood development. And his latest book is The Servant Economy: Where America's Elite Is Sending the Middle Class. And just we're going to also post underneath this or in our column section a piece that Jeff wrote called "The Hunger Games Economy", which is a pretty good summation of many of the things we're talking about. Anyway, thanks for joining us, Jeff.

JEFF FAUX, AUTHOR: Great to be here.

JAY: So we left off the last discussion. Essentially you have this service economy being developed, and even in the industrial economy, too, except for a few privileged—very privileged sectors, and those privileged sectors seem to be disappearing. What I mean by that is the really higher-paid industrial wage—I mean, it's not that the whole economy's becoming service, because where there is industrial production, they are breaking the back of unions and wages and they are continuing to have industrial jobs. They just don't pay much anymore, whether it's the auto industry or in Wisconsin, places like Harley-Davidson and others, this trend across the country of two-tier contracts, where the older workers kind of can keep their wage, but they get rid of them as fast as they can and hire new people at half the rates. So one way or the other, the wages are going down, demand is going down. So who's supposed to buy all this stuff?

FAUX: Well, they don't—they're not worried about the U.S. consumer as much as they were before. Ford, GM, General Electric, IBM, Microsoft, Apple, their long-term projections and their long-term interests are in the rest of the world. But there's still a lot of business here. The difference is they don't feel any responsibility for making sure that wages are enough for Americans to buy. Their experience over the last 30 years is that Americans will go into debt in order to buy their goods so they don't have to pay the wages that are enough to support a family.

JAY: But that only goes so far. Like, you had the subprime mortgage thing. You know, they are able to get, you know, hundreds of thousands of people, mostly African-Americans in poor cities who had never really had credit before, they were able to embroil them in credit and draw them into the system. But there's a point where it crashes because they can't pay the loans off. So, like, there's no long-term gain there.

FAUX: Yes. Well, that's only if you think that they're concerned about the long term of their institution. For the most part, the people at the top are interested in getting their money back and getting their profits in as short a period as they can. You know, again, in the old days, Henry Ford worried about what the Ford Motor Company was going to be like 10 or 15 years down the road. These guys don't. By that time, they will be retired. They have gotten their bonuses, they will have gotten their high salaries, and, you know, let somebody else worry about it.

The change in the culture of the governing class, the business part of the governing class, has really been quite dramatic in the last 30 years. The short-term focus now pervades American business, which is why you had this crash in 2008 and 2009, $12 trillion lost, and you still see the people who did it doing very well. I mean, they know they're going to be bailed out by the U.S. government, whether it's Obama or Romney, and so they don't have the long-term concern that they used to have.

JAY: Okay. Now, in the first segment, you talked about the three American dreams: the dreams of Wall Street to have unregulated speculative profits (and they're—seem to be fulfilling that dream pretty well); the dream of those people who control the industrial-military complex to make maximum return on their capital (and of course there's lots of overlap between that and finance anyway); and then the third dream, of ordinary Americans, to have a, you know, relatively stable life and maybe a house and kids and college and stuff. And you point out in your article, well, two out of three maybe, but the deal's done, the third is going to be sacrificed. So talk about that.

FAUX: Yeah. If you look at the economics literature and what the economists who work for the administration and the big companies are saying, they're waiting for—they're telling us to wait for the recovery. Well, we've been in this recovery for about three years now, and it turns out that this is the recovery. Eight percent, 9 percent unemployment, that is the recovery in this new era that we're in. And it reflects the decision at the top not to come to the rescue of the American middle class but to come to the rescue of Wall Street, number one, and number two, to keep its own dream of America being the global policeman.

So we have gone from the notion of a service economy taking over from manufacturing and an industrial base. Now it turns out that globalization can outsource anything that you can do with a computer. So it's the lawyers' jobs who are being outsourced, it's the accountants jobs that are being outsourced, the market research jobs that are being outsourced, all the kinds of jobs that these kids who are now graduating from college with twenty, thirty, forty thousand dollars worth of debt thought they would have.

So we're looking at an era in front of us, Paul, where the twentysomethings who work at Apple for $12 an hour—and if you ask them, they'll say, well, this is just temporary; I'm waiting for, you know, something to come along so I can get back on a professional career path, waiting for the recovery. Well, the twentysomethings are going to turn into thirtysomethings and fortysomethings with dead-end jobs, because the policy of both parties at this point—and it's a little better under the Democrats than it is under the Republicans, but the basic policy is the same, and that is America is going to compete in the world on the basis of lower and lower wages.

JAY: Now, the issue of wages never gets talked about. And it's not like they don't understand it. It was interesting at the Toronto G-20, the final statement. At The Real News we did a lot of reporting on both the police violence at Toronto G-20 but also the substance of what was decided there. And the final document, it's very clear they understand the need for demand and higher wages. They just want it to happen in China. They don't want it here. There was nothing about raising demand in Europe and North America. It's Asia that's supposed to raise wages. So it's not like they don't get it.

FAUX: Right. And, in fact, the Chinese can't do it all themselves. So it goes back to this question of who is responsible for the long term. And the answer is: nobody. It's not like this system—they've figured out how to keep this system going. They don't care if it goes forever. All they care about is if it goes enough for them to pile up what they need—retire or quit and they'll be okay. I have talked to people on Wall Street who would just express that. You know, the long-term demand, what's—you know, the growth of the American economy, the competitiveness, that's not their business. But they are the ones who make this decision.

And I think there's a—in a sense what happened after Reagan, who was elected in the '80s, is that the sense of the future disappeared from American politics. I mean, in my book I go on to the history of this, how in the 1970s when the energy crisis broke and it was clear to many people that this was a signal that the United States was no longer automatically king of economic hill, so they were discussions, there were proposals for long-term planning agencies, there were—issues of energy, of course, were a big deal. And it was not only among elites. Around the time of the bicentennial celebration, 200 years of the American Revolution, there were cities and towns, states all over the country who were starting to think about the future and having a politics of that. And there were debates and there were commissions about—seems quaint now, but how—what their town or what their state would look like in the year 2000. So there was a sense in the 1970s that this was all starting to fall apart, and people were getting concerned about it and looking towards the future.

But the future disappeared from politics after Reagan got elected. You remember, Reagan came in and he ripped out the solar panels that Jimmy Carter had put into the White House. The future would not be shaped by democratic government; the future would be shaped by the market. And that's what we've got now. And we're still under Reagan's shadow. Obama and Clinton are under Reagan's shadow.

JAY: Alright. In the next segment of our interview we're going to talk more about President Obama and Mitt Romney and the U.S. presidential elections and what vision either of them have, if any, for the American economy. Thanks for joining us on The Real News Network.

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

We're continuing our series of discussions about where the American governing elite is leading us all. Now joining us from our D.C. studio is Jeff Faux. He's the founder and now distinguished fellow of the Economic Policy Institute in Washington, D.C., an activist, economist, a writer. His latest book is The Servant Economy: Where America's Elite Is Sending the Middle Class. Thanks for joining us again, Jeff.

JEFF FAUX, AUTHOR: Great to be here, Paul.

JAY: So if you haven't watched part one or part two, then you should, because we're going to just pick up the discussion from where we left off. So first we're going to talk about the U.S. presidential elections. We'll start with President Obama. If we need another segment, then we'll do Romney. Or we'll fit them both in here. We'll see how it goes.

But let's just start from this. When President Obama ran in 2008, he seemed to understand what a rational economic policy would be in order not to kind of continue this spiral of lack of demand, low wages, no infrastructure, and so on. And now, four years later, there's still some of that rhetoric, but I don't think we saw a heck of a lot of it. We saw him make a commitment to the Employee Free Choice Act, EFCA, that would allow more unionization, which in theory would have led to higher wages. And they gave up on that, it seems to me, from day of the inauguration. Anyway, so let's talk about President Obama's vision and actual practice in terms of where this economy's going.

FAUX: Yeah, I agree that when he ran and in the initial few months of his term he did seem to understand it, and I have to give him the benefit of the doubt and assume he did. And he was often quite eloquent about it. I thought in his inaugural speech, when he used that biblical quotation—he said, now we must put away childish things—I thought that was a brilliant image. And after that he kept talking about we need to—we can't rebuild the economy on a pile of sand; we need to build it on a foundation of rock, etc. And he, I think, or at least some of the people around him, if you had a few beers and the press wasn't there, would admit that they know what to do. And knowing what to do is investing in infrastructure and education and research and development; it's having a trade and investment policy that's aimed at the interests of the American worker, not the American foreign investor; shrinking Wall Street. All of this stuff, you know, they know has been written a number of times. I've written a couple of books on this myself. By now it's clear what we need to do.

But Obama gets in, and suddenly the world of the elite, financial elite especially, closes in. He picks the advisers who were part of the Clinton team—Summers and Geithner, who's a Wall Street—they're all Wall Street people. So if you put these people in charge of the economy, it is no surprise that you're going to get what we got, which was subsidies and a lifeboat for Wall Street, and drowning for a whole lot of other Americans.

JAY: Right. I mean, you'd have to think this is mostly campaign rhetoric, then. It's not like he didn't know what Wall Street wanted. To a large extent his candidacy began on Wall Street. These guys were raising money for him on Wall Street years ahead of time, and he knew how much of his campaign depended on that. And clearly he's hearing—and you can see from the team he appointed it was the—you know, as you said, it was the Wall Street economic team. So it makes you think this is all just—you know, it's not like he doesn't know, but he uses it to campaign, not to govern.

FAUX: Yeah, yeah. I was—if I can say this, I was inspired to write this book by a book that the American historian Barbara Tuchman wrote in 1984. It was called The March of Folly. And it's a sort of a history of political folly over the last 2000 years. And she defines folly as not stupidity, but looking at the evidence, knowing what is the right thing to do, and going ahead and doing what you wanted to do anyway, and to the result with the destruction of your institution, your country, etc.

JAY: Yeah, look at World War I and World War II.

FAUX: That's—exactly. So this is something that we see in history. It's got a historic context.

So Obama, in my view, is Clinton II. I mean, we saw it for eight years in Bill Clinton, the rhetoric, the "I feel your pain," a little populism, a better program than the Republicans (there's no question about that), but not enough to solve the problem of the average American working family. With Obama it is the same.

And, you know, you can make the case—and I think it's right—that Romney and the Republican right would be a complete disaster. So it's a defensive decision here, voting for Obama to avoid something worse.

But it's very hard to convince yourself that over the next four years, should he be reelected, we're going to see anything dramatically different from the last four years. I can tell you, the day after election day they're going to be sitting around in the White House and saying not, oh my gosh, we're going to have to—you know, it was the labor unions that elected us, it was the middle class people angry about the economy who elected us; we're going to have to do something about that. They're going to be sitting around and saying, boss, we obviously did the right thing for the first four years, because we got reelected. And that—.

JAY: Which is what the fundamental, primary mission was, to get reelected.

FAUX: That's right. That's right. And, you know, you can sort of step back and say the Republican Party wants to drag us back to the 19th century, the Democratic Party at its best wants to keep the gains that were made in the 20th century. But neither of them are seriously looking at what this country needs to do in order to be prosperous and survive and have the middle class survive in the 21st century.

As I said before, we abandoned future in our politics back in the Reagan years, and we haven't put it back together. Now, where is the vision? Now, people—you know, that's a misused word. But, again, back in the 1970s, people were thinking about what America should look like 20 years from now. You know, there's an old saying that if you don't know where you're going, any road will get you there. Well, any road is getting us where we're going, because there's no sense of what this country should be like 20 years from now.

JAY: Except there is a vision, in a sense, I think you could say, both developed in European elite and the American elite and Canadian elite, which is what's happening. The vision is: we don't need to give—we don't need a compromise—the New Deal compromise anymore because we have so much pressure and leverage against European and North American workers now that the vision is what we're seeing. We can have a low-wage economy. We're going to still make a killing because there's so much money to be made in the rest of the world. And that's the vision.

FAUX: Yeah. There is no—there's nothing after the day after tomorrow, because, as I said before, they really do not see that as their job or their interest. What they see is the opportunity to get quick—and quick is very, very important—to get quick returns now. What happens five years from now, ten years from now, they're gone. You know, they're in the south of France. They're going to be doing what the rich and powerful always do [crosstalk]

JAY: Okay. Let me just go back to one point, 'cause we spend a lot of time on The Real News Network being very, very critical of the Obama administration. And, of course, we're very critical of Romney and the Republicans. But you made a point, and I don't think we explore that point enough on The Real News, which is that you said the Democrats are a little better, that the Republicans will be a complete disaster. So in terms of the Democrats being a little better, what are some examples of that?

And let me just add one thing, which is partly a comment and a question. I guess it's in the interests of that section of the American elite whose electoral alliance is based on unions and urban workers—they got to do something or they lose their base, where the Republican allies in the population or the right wing of the working class, rural people and such, they don't have to do the same things to get elected. So it's within that section of the American elites' interest to do something. And so what's the something that makes them a little better?

FAUX: Yeah. Not very much. I think the something is a little better on social services. The something is much better—the Democrats are much better on social issues that the big money doesn't care about. They don't care about gay marriage, they don't care about things like that. So on those issues the Democrats have more room.

But on the economic question, you ask yourself—when Obama got elected, you could've asked him just that same question: well, what are you going to do for the people who elected you, so that four years later they will be enthusiastic about you? And the answer was to ignore that. In a way, the Republicans are more attentive to their working-class supporters, that is, the people who care about gay rights and guns and things of that sort, than the Democrats are. There is no excuse for—and there's no political logic for a Democratic Party that depends so much on trade unions to have stiffed them the way Clinton did and stiffed them, as you just mentioned, the way Obama did.

So you're asking yourself: so who is it that they're responsive to? And they're clearly responsive to the money. And money in—the big money in politics is now—I don't have to tell your listeners—is now rampant. We were at the edge of a plutocracy perhaps a few years ago. Now we are in it. And, you know, money doesn't—is not the total answer here, but it is most of the answer. So the Democratic Party comes out at election time and rolls out the populism, but the people who are bankrolling them—and labor can't match business anymore—the people who are bankrolling them and the people who will get the jobs as assistant secretaries and undersecretaries and secretaries all are coming from the big-money sector.

JAY: Okay. Next segment of the interview, we're going to talk about Mitt Romney and the Republican bid for the presidency. Please join us for the next segment of this series of interviews on The Real News Network.

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

We're continuing our series of interviews about the American governing elite and where they're leading all of us. The U.S. presidential elections we're focusing in on. And in this segment, we're going to talk about Mitt Romney and the Republican Party with Jeff Faux, who now joins us from our studio in D.C. He's a distinguished fellow at the Economic Policy Institute in Washington, D.C. He's written extensively on the economy and neighborhood development and globalization. And his latest book is The Servant Economy: Where America's Elite Is Sending the Middle Class. Thanks for joining us again, Jeff.

JEFF FAUX, AUTHOR: Good to be here, Paul.

JAY: So, once again, if you haven't watched the other parts, you should, 'cause we're just going to pick up the discussion. In the last segment, we talked about President Obama's vision. And now—or lack thereof or lack of implementing thereof. And now we're going to talk about Mitt Romney and his economic vision. And I expect he would probably do a little better at implementing the vision he articulates then President Obama did. So kick us off with what Romney is saying and what you make of it.

FAUX: Well, you know, Romney, like his opponent, is saying what he thinks he needs to do to be reelected, but of course his basic proposition is dissolve the New Deal, bring us back to where we were sometime in the past, which is romanticized, where business decisions determine the future. I don't think Romney is going to be quite as draconian as some of the people in the House of Representatives, but who knows?

You know, it's not that you're voting—you're really not voting so much for a person as you're voting for a group. And in Romney's case, the death of the liberal Republicans in the Republican Party means that all the people who are going to take the jobs in a Romney administration are going to come from the extreme right. And, you know, I wouldn't be surprised if Romney turns his back on some of the most extreme cost-cutting, budget-cutting proposals of the Republican right. But it is going to be an age of super austerity. Presumably, Romney comes in with a Republican majority. It's going to be, in a way, the George Bush economic program, which was to give away what was—what's left of the government treasury to the business community. So it's pretty reactionary.

Labor unions in particular are going to do a lot worse under Romney than they did under Obama. The Democrats are not against labor unions. They're kind of for them. But they haven't been doing much to help them, even though they depend on it. The Republicans, on the other hand, clearly are against the unions.

JAY: Alright. So Romney's thesis is get the private—unfetter the private sector, stop all this money being tied up by governments, so the same amount of capital, supposedly, is now going to be available to the private sector to invest, and it's going to be better for workers 'cause there'll be more jobs and all of this. And so what is your sense of that? And how will ordinary workers with jobs—and also those without jobs—how will they do under all of this?

FAUX: Well, under Romney the lowering and the decline of real incomes and wages is going to be accelerated. I mean, the social safety net, which is very important to bolster workers' bargaining position, is going to be lowered drastically; if not, it's going to disappear. Unions are going to be under attack. I mean, they're already under attack. And the Obama people can be helpful in specific kinds of instances. Without that, the trade unions are going to be up against the wall. And if you have four years or eight years of this kind of reactionary Republican regime, you can kiss trade unionism in America goodbye. Now, I happen to feel like in the long run unions are inevitable. They'll come back. But it could be your grandchildren who will finally form the labor union after eight years of Romney.

It's not like—the position of the United States is a lot more vulnerable than it was under George Bush. You know, we saw what happened under Bush. The crash of 2008, the crash of 2009 is an inevitable result of that kind of social Darwinist economics.

JAY: And what do you make of, you know, the section of the working class that should know better? And I don't mean necessarily workers in small towns and rural areas that traditionally have, you know, been a little more Republican for various reasons, but there seems to be some inroads being made in the urban working class, which should know better and are still—there's sections seem to be considering voting for Romney. And, you know, some of these votes are so close between Obama and Romney that it kind of boggles my mind what is going through the heads of these people. As much as I'm critical of Obama, like you've mentioned, Romney will be a disaster. And what is going through the—why is Romney having some success with these people?

FAUX: Yeah. Well, we'll see how much success he has. But I think to the degree that he has, it's, one, because people—the working class in urban areas has not seen the recovery, has not seen the improvements. Wages have declined, and we still have high unemployment among all segments of the working class, which is 80 percent of our population, so that they haven't seen that.

I don't think, by and large, the average American spends a lot of time thinking about economic policies. What they sort of get quickly on the TV is here's one guy; and the press says, well, that's his argument: here's the other guy; the press says, that's his argument.

Trade union workers will still vote Democratic.

But there's something else going on, I think, in among the average American voter, and that is there's some denial. If you ask—the polls have shown, if you ask the average American, do you think the next generation is going to be worse off than this generation, you get overwhelming majorities yes. But then if you ask, do you think you personally are going to be worse off, the answer is, oh, I'm going to be okay, my kids are going to be okay. There's a disconnect that's going on, and I think in part it's because they haven't been inspired by anything political, and they're sort of coming back and internalizing all of this and hoping that whatever happens, they're going to be okay. This is a common psychological, you know, problem of denial.

JAY: They also seem to have had some success in getting sections of private sector workers in on blaming public sector workers, and then that also has electorial implications.

FAUX: Yes. Jay Gould, who was the robber baron of the late 19th century, once said he could pay half of the working class to kill the other half of the working class. Now, I don't think that's quite true, but there is a—the sophisticated Republican conservative program that we know has been—being operated since that famous memo of Lewis Powell to the Chamber of Commerce in the early 1970s, the propaganda about the world which pits private sector employees against public sector employees and have as—trade unionists in New York, for example, backing cuts to pensions for public workers. That's what happens. When you undercut the trade union movement, you isolate it and fragment it, you get internal conflict.

JAY: There's another part of it, is there not, that as well, President Obama and the leading Democrats, you know, they fight somewhat in defense of this idea of government and public sector, and in the campaigns there's some of that kind of language used. But during this last four years, the Democrats—certainly under Clinton, too—they buy into some of the underlying assumptions that they actually share with the Republicans, which gives it a kind of credibility. And then what are people left with? Then it's just, okay, I like this guy or that guy, you failed, let's try him. I mean, nobody has any ideological moorings anymore.

FAUX: Right. I think one of the great tragedies and failures of the Democratic Party is that ever since Clinton—and, quite frankly, even at the end of the Carter administration they bought into the propaganda campaign against government. And so you have Obama repeatedly saying, well, we're not for big government. You got the disaster of that health care plan, when you and I and most Americans know that the only way to deliver health care and get those insurance costs down and the prescription drug costs down is to have a single-payer program for this country. That's clear. And if Barack Obama and you and I were sitting in a bar, I believe that's what he would tell us. Instead, in order to avoid the big government issue and not confront it and not deal with it, instead they develop this sort of Clintonesque, complicated piece of legislation that no one can understand, and it becomes terribly, terribly vulnerable.

This is a big country. We have big problems. We need big government to solve them. The idea that we could solve these problems that face the American middle class with a government the size of Honduras's is insane. And yet that is the ideology that the Democrats themselves keep reinforcing.

JAY: Which opens up a whole 'nother line of questioning on the democratization of this government, 'cause if it's going to be big government that plays a role and government at all kinds of levels that is a big piece of the answer to all of this, then, of course, so is democratization of all of this, because right now big government can also mean big bailouts for banks—it may not mean anything good for ordinary people.

Anyway, we're going to continue this discussion. There—not right away, but Jeff is going to come back soon, and we're going to pick up another series of talks. We're also going to, if Jeff agrees—and I think if I do this while we're live, he's going to agree—he'll come back for maybe some live Q&A with viewers.

FAUX: Ah. Sure. I'd love to do that.

JAY: Okay. So we'll—maybe the next time you come in, we'll let everybody know, and we'll take people's questions, and we'll make that part of format.

At any rate, if you want us to keep doing this, don't forget there's a "Donate" button somewhere around this video player. And if you don't click on that "Donate" button, we can't keep doing this. Thanks again for joining us on The Real News Network.