A TOP NEO-LIBERAL TURNS TO PRO-LABOR POPULISM; A TREND? ROBERT REICH, ONCE CLINTON'S CHAMPION OF UPLIFT POLICIES, EMBRACES BIG GOVERNMENT, BIG LABOR.

THE BALTIMORE SUN

In "Primary Colors," journalist Joe Klein's Anonymous novel of the 1992 presidential campaign, the character based on Bill Clinton addresses New Hampshire shipyard workers in their union hall. Wounded by alleged sex scandals, he is emboldened to utter what Klein clearly believes are difficult truths:

"No politician can bring these shipyard jobs back. Or make your union strong again ... Because we're living in a new world, a world without borders - economically, that is. Guy can push a button in New York and move a billion dollars to Tokyo before you can blink ...

"Muscle jobs are gonna go where muscle labor is cheap - and that's not here. So if you all want to compete and do better, you're gonna have to exercise a different set of muscles, the ones behind your ears. ... This whole country is gonna have to go back to school."

This analysis isn't Klein's or even Clinton's. It's a simplified version of the views of political economist Robert Reich, who served as labor secretary during Clinton's first term.

Reich's viewpoint - or at least this crude summary - is conventional wisdom from mainstream pundits to moderates from both parties. And it still captivates Clinton, whose sole surviving domestic initiative is appealing to the states to raise educational standards.

But now Reich himself has repudiated the elite's easy assumption that there's nothing wrong with the condition of working Americans that more training can't cure. Instead, Reich, who was one of the first neo-liberals, embraces ideas more often associated with pro-labor populists. He writes that, in addition to opportunities for education and training, working Americans need strong institutions in their corner, from activist government to a revived union movement.

Reich unlocks his new views on page 280 of "Locked in the Cabinet," his lively memoir of his years with Clinton (Knopf, 388 pages, $25). After addressing a labor rally against sweatshops in New York's garment district, he concludes: "I came to Washington thinking the answer was simply to provide people in the bottom half with access to the education and skills they need to qualify for better jobs. But it's more than that. Without power, they can't get ... safe workplaces, maintain a livable minimum wage, or prevent sweatshops from re-emerging."

This memoir is valuable for reasons beyond those for which it is being - deservedly - praised. Yes, it is an engaging account of how Reich's proposed public investments, especially education and training, were mostly scuttled by Clinton, under pressure from the bond market, banking interests and budget hawks. And, yes, it has hilarious anecdotes, such as the drug test he had to take in a basement bathroom at the Labor Department and a "Tonight Show" appearance where comedian Dana Carvey first razzed Reich, then groveled before him.

But it is most valuable for revealing how one of the liveliest minds of our times responds to the decade of downsizing. Insiders saw Reich's views evolving in his Labor Day speeches, from 1993, when he criticized NAFTA foes for practicing "the politics of preservation," to 1994, when he sympathized with "the anxious class" whose wages were frozen even during an economic recovery. Now, the reading public can see how a close Clinton confidant and confirmed free-trader eloquently argues that attention must be paid to those who have been cast adrift by the new economy.

In seven books since the early '80s, Reich's views have kept evolving, but his purpose is commendably consistent: re-establishing the link between economic prosperity and social justice.

In 1982, in "Minding America's Business," co-written with Ira Magaziner, the architect of Clinton's ill-fated health plan, Reich advocated "industrial policy." He favored what he later called "a partnership between American business and government which would hasten the movement of capital and labor into the industries of the future, and ease the adjustment out of older industries." He offered similar views in "The Next American Frontier," "Tales of a New America" and "The Resurgent Liberal."

Defining irrelevancy

Then, in 1991, in "The Work of Nations," Reich presented the views with which he is most closely identified. Industrial policy had "become irrelevant" because American companies had gone global, abandoning their commitments to workforces, communities and consumer markets in this country. Footloose multinational investment seeks the areas with the most skilled workers. The winners are the talented 20 percent of the workforce Reich called "symbolic analysts" - computer specialists, media experts, architects, executives, engineers and other well-educated professionals and managers. And the best way for government to promote prosperity is to invest in education and training for young people and mature workers.

While Reich's analysis appealed to Clinton, it attracted skepticism from some liberals. Some compared his emphasis on training to the watchword of the movie "Field of Dreams": If we offer a skilled workforce, good jobs will come. The late social critic Christopher Lasch wrote: "The starstruck Rhodes scholar Robert Reich, prophet of the new world of 'abstraction, systematic thinking, experimentation, and collaboration,' joins the Clinton administration in the incongruous capacity of Secretary of Labor, administrator, in other words, of the one category of employment ('routine production') that has no future at all (according to his own account)..."

Had Lasch lived, Reich might have won him over. The Harvard academic indefatigably urged Clinton to support "one-stop career centers," where jobless workers could find information about training and job opportunities. While Reich's proposals joined many of Clinton's 1992 promises on the cutting-room floor, he made the Labor Department more effective, from cracking down on sweatshops to "profiling" applicants for unemployment insurance and steering those on permanent layoffs to retraining programs.

But Reich will be remembered most for focusing media attention on the "anxious class." By 1994, as his programs were scuttled and he visited with hardpressed workers across the country, Reich had become a professorial populist.

In a series of speeches beginning on the Labor Day weekend in 1994, Reich warned that workers' earnings lag even as a modest recovery reduces unemployment. After Clinton staggered from defeat in the congressional elections, Reich urged him to cut "corporate welfare" - special subsidies and tax breaks for business interests - and use the savings to pay for job training. And, after a profitable AT&T; announced 40,000 layoffs in January, 1995, Reich called for national discussion of "corporate responsibility."

Reich helped convince Clinton to push through an increase in the minimum wage. But, otherwise, Reich's resurgent liberalism lost out to the cynical centrism of political consultant Dick Morris, who urged happy-talk on the economy and placebo policies on social issues. Clinton appears in Reich's memoir as a Kafkaesque "B" (for the first name by which he can no longer call his old friend, the president), caught between the pull of his conscience and the power of capital. Reich repeatedly writes that "the most powerful man in America" is Alan Greenspan, chairman of the Federal Reserve Board.

Gripping drama

This diary's most gripping drama takes place in Reich's mind. After meeting a single mother who works in an Oregon lumber mill and must choose whether to attend night school or spend the evenings with her young children, Reich learns that retraining can be dicey. Dealing with the Japanese owners of Bridgestone/Firestone - who replaced striking workers and closed an Oklahoma plant rather than comply with safety standards - he realizes that it may matter whether American or foreign interests control companies. And, debating CEO cut-throat Albert "Chainsaw" Dunlap, who baits him even after the TV cameras are off, Reich sees why corporate power must be tamed.

After his journey from Harvard Square to the garment district, Reich's latest challenge is to tell mainstream opinion-leaders why working Americans need more strength, as well as more skills. If anyone can educate these "symbolic analysts" to look beyond their yuppie-euphoria, it's the gifted explainer who first celebrated them.

David Kusnet was chief speechwriter for President Clinton from 1992 through 1994. He is the author of "Speaking American: How the Democrats Can Win in the Nineties" and a visiting fellow at the Economic Policy Institute.

Pub Date: 4/27/97

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