Harold Meyerson: "The Civil War Isn't Really Over"

Harold Meyerson at the Washington Post had an interesting article today; however, it was the second half that I want to highlight:

Lesson Two: In matters economic, the Civil War isn't really over.

If Abraham Lincoln were still among the living as he prepared to turn 200 six weeks from now, he might detect in the congressional war over the automaker bailouts a strong echo of the war that defined his presidency. Now as then, the conflict centered on the rival labor systems of North and South. Now as then, the Southerners championed a low-wage, low-benefits system while the North favored a more generous one. And now as then, what sparked the conflict was the North's fear of the Southern system becoming the national norm. Or, as Lincoln put it, a house divided against itself cannot stand.

Over the past century, of course, the conflict between North and South has been between union and non-union labor. The states of the industrial Midwest and the South had common demographics (Appalachian whites and African Americans, though the Northern states also were home to Catholics of Eastern European origin) but developed two distinct economies.

Residents of the unionized north enjoyed higher living standards, both from their paychecks and the higher public outlays on health and education, than did their counterparts in the union-resistant South.

But, just as Lincoln predicted, the United States was bound to have one labor system prevail, and the debate over the General Motors and Chrysler bailout was really a debate over which system -- the United Auto Workers' or the foreign transplant factories' -- that would be. Where the parallel between periods breaks down, of course, is in partisan alignment. Today's congressional Republicans are hardly Lincoln's heirs. If anything, they are descendants of Jefferson Davis's Confederates.

This argument is not completely novel; for example, Kevin Phillips spent a significant chunk of his book American Theology on the influence of the South over American politics (which Richard Nixon exploited in his Southern strategy). This is where it's a necessity to revitalize the Frostbelt's economy and, in particular, to rebuild the infrastructure - not only of the entire United States - but especially of the country's northern tier. The north needs to rally around unionization in order to increase personal income levels and to improve the region's education and health care, as Meyerson points out.

From a political perspective this means that the Democrats must cut through the Republicans' BS and pass the legislation necessary to help stimulate the economy. Monetary policy at this point is nearly useless. Fiscal policy, in the form of government spending, is the only significant tool available to the government in order to speed up the recovery of the American economy and to improve the country's future business competitiveness.