HOW DEMOCRATS LOST THE WORKING CLASS
Have you ever wondered what happened to The New Deal? I did. And it wasn’t until I read Matt Stoller’s book, Goliath, that I found out.
It goes back to my Boomer generation entering Congress in 1975.
Here they encountered old-time populists like Wright Patman. He was Chairman of the Banking Committee. He had never gone to college, although he had been a crusading economic populist during the Great Depression. But what made Patman unappealing to the newbies was his support of segregation and the Vietnam War. Whereas the young Boomers had been weaned on campus politics, television, and affluence.
“The populism of the 1930s doesn’t really apply to the 1970s,” argued Pete Stark, a California member.
For more than a decade, Patman had represented a Democratic political tradition stretching back to Thomas Jefferson, an alliance of the agrarian South and the West against Northeastern capital.
For decades, Patman had sought to hold financial power in check, investigating corporate monopolies, high interest rates, the Federal Reserve, and big banks. But the banking allies on the committee had had enough of Patman’s hostility to Wall Street.
Patman “committed one cardinal sin as chairman. ... He wants to investigate the big bankers.”
According to Stoller, not all on the left were swayed. Barbara Jordan, the renowned representative from Texas, spoke eloquently in Patman’s defense. Ralph Nader raged at the betrayal of a warrior against corporate power. And California’s Henry Waxman, one of the few populist Boomers, broke with his class, puzzled by all the liberals who opposed Patman’s chairmanship. Still, Patman was out. Of the three chairmen who were forced out, Patman lost by the biggest margin.
Since that time, a majority of Democrat Boomers became pro-bank. This was seen again with Hillary Clinton’s cozy relationship with Goldman Sachs, as well as numerous banks that contributed to her campaign.
In 1968, there was a great debate about the future of the Democratic Party. Robert F. Kennedy sought to win the primary with a “black-blue” coalition of black “have-nots” and working-class whites. He sought continuity in the policies of protecting independent farmers, shopkeepers, and workers, all of which formed the heart of the New Deal—yet he also wanted to end the war in Vietnam and expand racial justice. But Kennedy’s strategy to merge these ideas disappeared when he was assassinated.
Democratic strategist Fred Dutton, forged a new coalition. By quietly cutting back the influence of unions, Dutton sought to eject the white working class from the Democratic Party, which he saw as “a major redoubt of traditional Americanism and of the antinegro, anti-youth vote.” The future, he argued, lay in a coalition of African Americans, feminists, and affluent, young, college-educated whites.
With key intellectuals in the Democratic Party increasingly agreeing with Republican thought leaders on the virtues of corporate concentration, the political economic debate changed drastically. Henceforth, the economic leadership of the two parties would increasingly argue not over whether concentrations of wealth were threats to democracy or to the economy, but over whether concentrations of wealth would be centrally directed through the public sector or managed through the private sector—a big-government redistributionist party versus a small-government libertarian party.
“The Neoliberal Club” emerged. Disciples like Gary Hart, Bill Bradley, Bill Clinton, Bruce Babbitt, Richard Gephardt, Michael Dukakis, Al Gore, Paul Tsongas, and Tim Wirth were all essentially representatives of the Baby Boom generation. Most Democratic presidential candidates for the next 25 years came from this pool of leaders.
Meanwhile, when Reagan came into office, one of his most extreme acts was to eliminate the New Deal anti-monopoly framework. He continued Carter’s deregulation of finance, but Reagan also stopped a major antitrust case against IBM and adopted Robert Bork’s view of antitrust as policy. The result was a massive merger boom and massive concentration in the private sector.
Later, Bill Clinton stripped antitrust out of the Democratic platform; it was the first time a reference to monopoly power was not in the platform since 1880. He also championed the repeal of the Glass-Steagall Act that separated commercial banking from investment banking.
However, in 2000, the American people didn’t reward the Democrats with majorities in Congress or an Oval Office victory. In particular, the rural parts of the country in the South, which had been a traditional area of Democratic strength up until the 1970s, were strongly opposed to this new Democratic Party. White working-class people did not perceive the benefits of the “greatest economy ever.”
It turns out, according to a McKinsey study, that a disproportionately large amount of the productivity gains from the remarkable computerization of the economy were the result of just one company: Walmart, the new A&P. The mega store’s economic influence “reached levels not seen by a single company since the 19th-century.”
The gains of the 1990s, it turns out, were not structural, but illusory. Early in Bush’s term, the stock-market bubble burst and wages collapsed. A few years later, a global banking crisis, induced by a financial sector that had steadily gained power for 40 years, erupted. Concentration of power in the private sector, it turned out, had its downsides.
By 2008, the ideas that took hold in the 1970s had been Democratic orthodoxy for two generations. “Left-wing” meant opposing war, supporting social tolerance, advocating environmentalism, and accepting corporatism and big finance while also seeking redistribution via taxes. The Obama administration was ideologically consistent with the rejection of the old populism.
In the last seven years, another massive merger boom has occurred, with concentrations accruing in the hospital, airline, telecommunications, and technology industries. This is the world of the Democrat Boomers and the libertarian and statist thinkers who shaped their intellectual understanding of it.
Trump’s emergence would not be a surprise to someone like Patman, or to most New Dealers. They would note that the real-estate mogul’s authoritarianism is not new in American culture; it is ubiquitous. It is consistent with how the commercial sphere has developed since the 1970s. Americans feel a lack of control: They are at the mercy of distant forces, their livelihoods dependent on the arbitrary whims of power. Patman once attacked chain stores as un-American, saying, “We, the American people, want no part of monopolistic dictatorship in … American business.” Having yielded to monopolies in business, the nation must now face the un-American threat to democracy Patman warned they would sow.
=========
Matt Stollers’s Book, Goliath
https://www.goodreads.com/book/show/4...
Companion book by Thomas Frank
https://www.goodreads.com/book/show/2...
It goes back to my Boomer generation entering Congress in 1975.
Here they encountered old-time populists like Wright Patman. He was Chairman of the Banking Committee. He had never gone to college, although he had been a crusading economic populist during the Great Depression. But what made Patman unappealing to the newbies was his support of segregation and the Vietnam War. Whereas the young Boomers had been weaned on campus politics, television, and affluence.
“The populism of the 1930s doesn’t really apply to the 1970s,” argued Pete Stark, a California member.
For more than a decade, Patman had represented a Democratic political tradition stretching back to Thomas Jefferson, an alliance of the agrarian South and the West against Northeastern capital.
For decades, Patman had sought to hold financial power in check, investigating corporate monopolies, high interest rates, the Federal Reserve, and big banks. But the banking allies on the committee had had enough of Patman’s hostility to Wall Street.
Patman “committed one cardinal sin as chairman. ... He wants to investigate the big bankers.”
According to Stoller, not all on the left were swayed. Barbara Jordan, the renowned representative from Texas, spoke eloquently in Patman’s defense. Ralph Nader raged at the betrayal of a warrior against corporate power. And California’s Henry Waxman, one of the few populist Boomers, broke with his class, puzzled by all the liberals who opposed Patman’s chairmanship. Still, Patman was out. Of the three chairmen who were forced out, Patman lost by the biggest margin.
Since that time, a majority of Democrat Boomers became pro-bank. This was seen again with Hillary Clinton’s cozy relationship with Goldman Sachs, as well as numerous banks that contributed to her campaign.
In 1968, there was a great debate about the future of the Democratic Party. Robert F. Kennedy sought to win the primary with a “black-blue” coalition of black “have-nots” and working-class whites. He sought continuity in the policies of protecting independent farmers, shopkeepers, and workers, all of which formed the heart of the New Deal—yet he also wanted to end the war in Vietnam and expand racial justice. But Kennedy’s strategy to merge these ideas disappeared when he was assassinated.
Democratic strategist Fred Dutton, forged a new coalition. By quietly cutting back the influence of unions, Dutton sought to eject the white working class from the Democratic Party, which he saw as “a major redoubt of traditional Americanism and of the antinegro, anti-youth vote.” The future, he argued, lay in a coalition of African Americans, feminists, and affluent, young, college-educated whites.
With key intellectuals in the Democratic Party increasingly agreeing with Republican thought leaders on the virtues of corporate concentration, the political economic debate changed drastically. Henceforth, the economic leadership of the two parties would increasingly argue not over whether concentrations of wealth were threats to democracy or to the economy, but over whether concentrations of wealth would be centrally directed through the public sector or managed through the private sector—a big-government redistributionist party versus a small-government libertarian party.
“The Neoliberal Club” emerged. Disciples like Gary Hart, Bill Bradley, Bill Clinton, Bruce Babbitt, Richard Gephardt, Michael Dukakis, Al Gore, Paul Tsongas, and Tim Wirth were all essentially representatives of the Baby Boom generation. Most Democratic presidential candidates for the next 25 years came from this pool of leaders.
Meanwhile, when Reagan came into office, one of his most extreme acts was to eliminate the New Deal anti-monopoly framework. He continued Carter’s deregulation of finance, but Reagan also stopped a major antitrust case against IBM and adopted Robert Bork’s view of antitrust as policy. The result was a massive merger boom and massive concentration in the private sector.
Later, Bill Clinton stripped antitrust out of the Democratic platform; it was the first time a reference to monopoly power was not in the platform since 1880. He also championed the repeal of the Glass-Steagall Act that separated commercial banking from investment banking.
However, in 2000, the American people didn’t reward the Democrats with majorities in Congress or an Oval Office victory. In particular, the rural parts of the country in the South, which had been a traditional area of Democratic strength up until the 1970s, were strongly opposed to this new Democratic Party. White working-class people did not perceive the benefits of the “greatest economy ever.”
It turns out, according to a McKinsey study, that a disproportionately large amount of the productivity gains from the remarkable computerization of the economy were the result of just one company: Walmart, the new A&P. The mega store’s economic influence “reached levels not seen by a single company since the 19th-century.”
The gains of the 1990s, it turns out, were not structural, but illusory. Early in Bush’s term, the stock-market bubble burst and wages collapsed. A few years later, a global banking crisis, induced by a financial sector that had steadily gained power for 40 years, erupted. Concentration of power in the private sector, it turned out, had its downsides.
By 2008, the ideas that took hold in the 1970s had been Democratic orthodoxy for two generations. “Left-wing” meant opposing war, supporting social tolerance, advocating environmentalism, and accepting corporatism and big finance while also seeking redistribution via taxes. The Obama administration was ideologically consistent with the rejection of the old populism.
In the last seven years, another massive merger boom has occurred, with concentrations accruing in the hospital, airline, telecommunications, and technology industries. This is the world of the Democrat Boomers and the libertarian and statist thinkers who shaped their intellectual understanding of it.
Trump’s emergence would not be a surprise to someone like Patman, or to most New Dealers. They would note that the real-estate mogul’s authoritarianism is not new in American culture; it is ubiquitous. It is consistent with how the commercial sphere has developed since the 1970s. Americans feel a lack of control: They are at the mercy of distant forces, their livelihoods dependent on the arbitrary whims of power. Patman once attacked chain stores as un-American, saying, “We, the American people, want no part of monopolistic dictatorship in … American business.” Having yielded to monopolies in business, the nation must now face the un-American threat to democracy Patman warned they would sow.
=========
Matt Stollers’s Book, Goliath
https://www.goodreads.com/book/show/4...
Companion book by Thomas Frank
https://www.goodreads.com/book/show/2...
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