New Deal Coalition Retained III: A New World

The popular Single "Opposites Attract" (release delayed by WWIII preperations until Summer 1993) had a fun upbeat tone that reflected the post-war mood.

 
Labor Troubles of 1994


As it had in WWII, Total War had eliminated unemployment in WWIII, as the nation focused its entire energy towards victory. However, postwar, most of these defense industries would be cut down almost immediately. Rumsfeld, trying to avoid the runaway inflation of 1946 and 1947 (18.1% and 8.1% according to the St. Louis Fed) passed massive defense spending cuts. However, they had the effect of increasing unemployment.


While Iaccoca increased spending on infrastructure both at home and abroad, he couldn’t maintain military spending as a coalition of Progressives and Northeastern Republicans, lead by Ross Perot and Mitt Romney respectively, whittled away at the military budget. Meanwhile, Iaccoca was forced to devalue the US dollar to pay off war debts. This led to inflation and rises in the price of inputs for American manufacturing, agriculture, service industries, etc. Employers were left with two choices: either keep wages down or fire employees. Most major American firms, chose to keep wages down in the meantime, especially as Iaccoca pressured them to wait until reconstruction was completed to enter "normal economic procedures". However, some companies were forced to fire employees all the same. Throughout 1993, there were rumbles of discontent in labor over wages (and in the general public over inflation) but with a precarious situation in Russia, and high-approval ratings for Iaccoca, they were put to rest. However, during the winter of 93-94, they came to a height. Government employees also received a pay freeze. On January 10th 1994, the UAW, UMW, and various teachers’ unions announced a general strike. Confident that a Democratic president would side with them, they coupled some of their more reasonable demands (the UMW demanded compensation for coal miners who had developed black lung disease) with some that were ludicrous in hindsight. The demands were widespread and so numerous that Iaccoca suspected that the unions wanted “a strike for its own sake”. This was not true, except in the minds of a few extremists who had used the war to infiltrate union leadership ranks. Sadly, these few would derail the whole process.



UAW Strike


Iacocca had had good relations with labour during his time at Chrysler, and was famous for his promotion of education for his workers and for inward promotion. However, he had never been one to pay his workers above the minimum competitive salary. Now, as president of a party chaired by the “ancient barbarian thug” (James Stockdale 1994) Jimmy Hoffa, ex-Teamster’s president. Hoffa pleaded with the President to cede to all of labors demands, however, Iacocca was having none of it. He knew that many of the labour leaders knew their demands were largely impossible. This suspicion was confirmed when Iacocca sent an olive branch by passing a bill with emergency compensation for black lung victims through congress at “an insane pace” and the unions didn’t even comment. After Black Monday on February 14th, 1994, the stock market tumbled, from a combination of two factors. The end of the war was one. (It had a double pronged effect, as the large influx of returning veterans meant that there was more people competing for jobs, lowering wages over many industries. The decrease in demand also meant that suddenly factories needed less people to work.) The other had been from the influence of unions, beginning to grind production in areas to a standstill.


There was some success at reaching various bargains, at the state level, through various means. Harris Wofford, governor of Pennsylvania, took the balanced approach. He held roundtable discussions with all the parties involved, and in the end stopped all striking in Pennsylvania in return for a 10 cent raise to the minimum wage to appease the UAW, the elimination of the state corporate income tax to appease management, and the construction of twenty new high schools and a slight raise in salaries to appease the teachers’ unions. The relative peacefulness of the situation was remarkable compared to other states.


Jim Traficant of Ohio, sided completely with the unions. He raised the minimum wage, and massively hiked teachers’ salaries. While business disliked the huge minimum wage hike, the sheer speed with which Traficant handled the issue impressed all, and put pressure on Iacocca to act.



Jim Traficant walking from negotiations

Ted Bundy faced extreme demands that even Jimmy Hoffa labeled “insulting to the Labor Movement” including the mandate that a cap on management salary be instituted and that all past state-to-state university tuition agreements be cancelled. Washington’s traditionally strong labor movement had been hurt, ironically, thanks to pro-worker policies in many Washington State firms which focused on reducing the wage gap between management and the factory floor and work-life balance whilst promoting innovative thinking and employee loyalty, a practice which hadn’t caught on outside of the PNW. In addition, Bundy's Right To Work law that he had rammed through in 1987 had reduced Union membership. This damage to the movement had allowed fringe figures with "nothing to lose" to take hold of union leadership. The drama in Washington State rose to a fever when a rouge Boeing employee threw a Grenade into the Governor’s Mansion dining room during a demonstration that nearly killed the Washington First Lady. Bundy, who was in the middle of a meeting with farm worker representatives and had just agreed to investigate and cull repressive labor conditions (a promise he would fulfill) began infuriated. He decided to deploy the police. Across the state at the various protests, police would break picket lines and crack down. The violence was unheard of. Bundy had already made the state "Right To Work" but pushed further regulations on the power of public unions as well in the midst of the crisis. Soon police discovered who the bomb-thrower had been...He was the son of the head of the Teachers’ Union. Furious, Bundy sent the national guard to bust through a barricade surrounding Lindbergh High School, where the strikes were headquartered, and once there they “captured the ringleaders.” Iacocca threatened to nationalize the national guard to take control of the escalating situation and said to an aide “Bundy oughta get his head checked, I think he’s a psycho”. Thankfully cooler heads prevailed and the teachers unions and the UAW (which represented Boeing Factory Workers) held emergency regional elections to replace old leadership who worked to end the strike.



Seattle Police breaking up riots in a park in Seattle, note the Powder-Blue Uniforms, a style brought over from Chicago by the Seattle Municipal Head of Police


Four days later, Iacocca finally agreed to raise the federal minimum wage by $1. However, Republicans blocked proposals to raise social security benefits for auto-works. So the ever creative Iacocca worked in reverse. In order to help Auto sales, Iacocca completely eliminated the gas tax and profit windfalls tax whilst raising tariffs on imported vehicles. While this proposal would increase the already ballooning deficit, the elimination of the Gas Tax appealed heavily to Oil-Money funded Republicans. Meanwhile, Iacocca agreed to fund the construction of more high schools and small colleges in areas with heavy Native American Populations (where teachers were eligible for higher pay), which won the support of Progressives. However, ever so close to ending the strikes, Iacocca secretly de-thorned Jimmy Hoffa as DNC Chairman, instead putting a young Bill Clinton, who was known for picking-sides in favor of the UAW over the Teamsters (after helping bring major Ford Plants to Arkansas), in the role. This infuriated the Teamsters, who had been silent, and they now pledged to March on Washington immediately, in defiance of the Taft-Hartley Law. Iacocca, tried to walk balk this appointment, but then angered the UAW. The economy began to enter a short but steep recession, as prices ballooned and the President’s approval ratings tumbled. After Iacocca secretly threatened over the phone with labor leadership to work with the Republicans to end “that damn boondoggle AmCare” the last strikers finally went back to work. The economy slowly recovered, as did Iacocca's poll numbers...




Lee Iaccoca TV Ad pushing support for his gas tax cut/auto tariff hike

Labor Unions had had high approval ratings, as did nearly all socio-economic institutions at this time. However, this approval would tumble. Instead of being an institution universally liked across the political spectrum, they became a polarizing institution. Thus, attempts to diminish union power became more common in states unfriendly to labor whilst pro-labor states began working around/diminishing Taft-Hartley. These moves only lead towards more polarization, which was remarkable given the cultural consensus at the time.


Meanwhile, Iacocca, and his domestic reforms, were attacked on the emerging media platforms of radio and cable TV as failing to achieve the “national mission of “winning the peace” (quote from Iaccoca’s Inaugural). Communonationalism endorsed policies favoring “Big Government, Big Labour, and Big Business” as a way to preserve social order/unanimity and thus achieve prosperity. Labor riots, the following polarization on the labor issue, and a decrease in the trust in certain institutions (which had been in the 80-90% range post-war) began to undermine this message. One famous man-on-the-street on CBS noted that that "when these labor leaders constantly switch between presenting a unified front and focusing on their own UAW, UMW, whatever, goals, it makes me wonder how effective they really are". One sign of the crack in trust in institutions was the conspiracy theory that George Wallace, not Iaccoca, was the one making the decisions in the White House. To say that Americans lived in a low-trust society would be false. It was precisely the fact that most trust in other institutions, like the Church, Government, etc. was so high that relative distrust in unions, management, etc. seemed pitiful.



In contrast to other sectors, the migrant farm workers community was rewarded for their peacefulness and willingness to negotiate by having 90% of their demands met, according to later studies of the crisis, and high praise from politicians from the main two political parties*


Ironically, if it hadn’t been for the remarkable post-war stability, many of the “useless” cultural fights over sports, labor, etc. would never have emerged. In his book “The Futility of Prosperity”, Professor Fukuyama described America as “so successful” that “after a period of prosperity, family strength, and unity, the people seek conflict to satisfy an animalistic desire for excitement.” A future foreword to this work writes “The times showed a rosy façade, like the world would be forever at peace, but readers obviously know what happened next…”
Footnote

*The Progressives would remain rather quiet as Perot tried to court monetary support from Big Agriculture. This infuriated left-wing progressives like Patsy Mink, who would defy Perot's "tyrannical rule" from time to time.

[A/N:

The P.A. state Corporate Income Tax is quite low ITL to begin with. The Governor will have to deal with this in the future, but ITL I didn't see it as a major source of revenue, and thus something the Gov could bargain with.

With such a weird political setup as far as congressional control, whatever "solutions" got through Congress besides the obvious were gonna be hideous and politically motivated. I'm not pro-Tarrif IRL, but it was pretty well established earlier that the Communonationalists (and their union supporters) were, see the Wallace section in part 1. Its written earlier that Iaccoca had campaigned on auto tarrifs on the 92' trail.

As far as gas taxes are concerned, it may correlate relatively well to road use (even then above 1/3 of gas tax funds go to non-highway infrastructure) but it is a really really regressive tax the Republicans needed something juicy to get them to sign onto UAW tariff demands. If you remember earlier, Republicans have maneuvered themselves against corporate supports (like Ag. subsidies) as "against the little guy". As part of this, tax cuts in regressive taxes fit the mold of a party goal. As such, they bite the bullet on tariffs, in part becuase they really, really want the strikes to end and aren't gonna get a better deal.

Meanwhile, the Progs have been set up as free trade absolutists (As their predecessors the Western Progressives of the Burton K Wheeler Mold were), so they are gonna be unwilling to sign such a package. They do get more schools for Native Americans thoguh, which ends national troubles with the teachers unions.

As far as the economic effects, the 94 midterms are coming soon...]



 
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the elimination of the state corporate income tax
In order to help Auto sales, Iacocca completely eliminated the gas tax and profit windfalls tax whilst raising tariffs on imported vehicles.
I'm no expert on how economics work, but wouldn't Iacocca need something more substantial than tariffs to make up for the loss of revenue from the abolishing of these taxes? I can't imagine the tariffs would be all that substantial. And for the abolition of the State Corporation Income tax, the same issue but for the PA governor.
 
I'm no expert on how economics work, but wouldn't Iacocca need something more substantial than tariffs to make up for the loss of revenue from the abolishing of these taxes? I can't imagine the tariffs would be all that substantial. And for the abolition of the State Corporation Income tax, the same issue but for the PA governor.
The P.A. state Corporate Income Tax is quite low ITL to begin with. The Governor will have to deal with this in the future, but ITL I didn't see it as a major source of revenue, and thus something the Gov could bargain with.

And yes replacing the Gas Tax with a Tarriff would lead to a loss of revenue for the government but not for the automakers or the autoworkers who both stand to benefit. The hope is that increased success of American Auto Companies (who are pretty highly taxed through the Corporate Income Tax) will make up for this. Whether that happens, remains to be seen...

Not that Iaccoca is a budget hawk by any means anyways.

The main reason for this is to get the UAW to stop protesting through something that the Republican-Minority lead senate will agree to and for Iaccoca to finally get the automobile tariffs he promised on the campaign trail (see the congressional update)
 
I suppose in the long run Iaccoca made the right call, I personally just think that cutting taxes when you're trying to a big government and high spending approach isn't the wisest course of action.
 
Perot needs to be smart about this. Calling for a more robust welfare state could win over labor unions and possibly push 96 in the progressive's favor.

Looking forward to the 94 midterms...expecting progressive and GOP gains.
 
Perot needs to be smart about this. Calling for a more robust welfare state could win over labor unions and possibly push 96 in the progressive's favor.

Looking forward to the 94 midterms...expecting progressive and GOP gains.
FYI the Welfare State is pretty robust, an update coming soon will explain Iaccoa's "Domestic Reform" will explain this in more detail...

Thanks for commenting
 
In order to help Auto sales, Iacocca completely eliminated the gas tax and profit windfalls tax whilst raising tariffs on imported vehicles.
As someone who was going to college for Business Finance, this is going to go exactly the opposite of how it was intended. Congratulations, the US might be getting to the point where it might have absolute advantage in cars and other civilian automobiles. However, this is going to hurt way, way more outside of that market. Either a.) the military budget is slashed (like what you said in the post) to help finance the nixing of that tax, and thus the MASSIVE market of gasoline to be used in military vehicles since the DLA buys oil and gas from major business and then provides it to military vehicles and with the military budget slashed so will the immense profit coming from this market, especially considering that many oil companies are still trying to adjust to WWIII being over, or b.) infrastructure is nixed, which means that the transportation of gasoline and etc is significantly more difficult as wear and tear builds up on roads. Plus, increasing tarrifs on imported vehicles is going to cause other nations to respond in kind (as they have OTL) unless there's been a bunch of CIA coups and etc that make a significant amount of the largest economies on earth US puppets, in which case, also as per otl, only the elite can really afford to buy American cars.

Overall, it just kinda sounds like a great way to make gas 5-8 dollars a gallon.
 
[QUOTE="Aqua817, post: 17471580, member: 80056"

Overall, it just kinda sounds like a great way to make gas 5-8 dollars a gallon.[/QUOTE]

Note: the "solutions" I write in any/all my posts aren't necessarily what I believe would work (some are and some aren't). If that were true all my writing would be ideological wanks. This would be especially bad in a group TL that I didn't even start.

I have my own TL planned for later which gives me more freedom to suggest what I would believe. Even then, however, I have things happening/working which I would abhor, because it fits the narrative and figures used. (I'm currently mappin my TL out fyi).

Also, with such a divided government, conventional liberal/conservative solutions are impossible. Heck, moderate solutions are tough with 3 parties. Lots of radical centrism going around.

Without Watergate and post Watergate reforms interest groups remain powerfull. With 3 parties, who are often divided inside themselves, there are a lot of favors to hand out and receive. See the 92 Congress update.

Also, with the rest of the world destroyed and being rebuilt, a trade war is tough to fight.

Also, thanks to George Wallace and communonationalism the US is not the John the Baptist of Free Trade it is/was OTL.

Regardless, the rest of the world will remember those tarrifs and not in a positive light (stay tuned)...

Lastly, we have yet to see whether Iaccoca's solutions even work...

Thanks for commenting!
 
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