>Now I think that new deal programs are still a pretty powerful engine of
>income redistribution. And I think that deciding that "the state" (which I
>understand to mean unemployment insurance, food stamps, TANF, and a
>progressive income tax) is no longer worth defending leaves open a lot of
>territory in which Hoover and Cato can wreak a lot of damage...
What I take Ehrenreich to be saying is that maybe, just maybe the left's energy would be better spent building institutions at the sub-governmental and international levels. That is, around - above and below - the Federal level seeing as how corporate forces are now dominating there and the public seems to have bought into the "big government is evil" line. The privatization of Social Security seems to be on hold because of the stock market fluctuations. And as you suggest, no matter what the left does, Cato et al. are probably gearing up to eliminate the last remnants of the New Deal. They just need to get Clinton, that last bastion of socialism, out of the way.
Difficult as it is, she suggests, international organization needs to counter transnational corporations - an analogy would be when many years ago corporations grew too big for state governments to handle, the Federal government was built up in order to regulate and combat interstate corporations - and at the local level Ehrenreich in her Nation piece says: "More controversially, I propose that we put greater emphasis on projects that both give people concrete assistance and serve as springboards for further political activism. Examples might include squats, cooperatives of various kinds, community currency projects and some of the less costly types of "alternative services," like those offering information, contacts, referrals and a place for people to gather. Such projects can't provide a substitute for government services since, numerically speaking, their impact is only a drop in the bucket, but they can serve as a "cultural core," in Frances Fox Piven's phrase, of a movement that may eventually be strong enough to win services that are tax-funded and distributed as a matter of right. The feminist health centers, for example, that flourished in the seventies and are still in operation in a number of cities around the country cannot make up for the lack of national health insurance. But they have given many thousands of women the subversive idea that low-cost, high-quality health care is a right--while at the same time serving as organizing centers for the defense of reproductive rights.
There are several reasons for an emphasis on projects that create alternatives. First, they may be necessary for organizing low-income workers, who are often dispersed among many small employment sites that are almost impossible to organize one by one. Such workers may be easier to reach through neighborhood-based centers offering, for example, employment counseling along with information on workers' rights and unions--as some organizers of workfare recipients are currently proposing. Second and more generally, bold and visible alternatives may help break through the hopelessness and passivity engendered by years of right-wing campaigning against public services. Successful projects might inspire the kind of can-do spirit that is so lacking today: If government won't do it, then let government get out of the way, because we're not waiting around!"