The conservative backlash rapidly accelerated under the Reagan administration as unions were viciously attacked and regulations on finance capital and corporations were steadily reduced or eliminated entirely. It was during the Reagan years that the positive correlation between wages and productivity growth was finally ruptured. From that point on, further productivity growth did not end up in worker’s paychecks but was funneled ever upward to the corporate bosses and the owners of capital. As a consequence, wage growth has been remarkably flat over the last 30 years.
Up to this point much of the impetus had come from the right, with the Republican Party the primary moving force for such deregulation and union busting. However, after the political defeats of the Reagan era, the Democratic Party, led primarily by Bill Clinton and the Democratic Leadership Council (the so-called New Democrats) embarked on a significant tack to the right and began seeking a substantial amount of corporate and financial industry funding to finance their campaigns and political activities. While this strategy led to some electoral successes, this courting of corporate donors did not come without a price. The banks, Wall Street firms and major corporations providing this largesse did not do it out of altruistic intentions, but, like good capitalists, for return on investment, and returns they received. This included the eventual repeal of the Glass - Steagall act which had placed a fire wall between commercial and private banking, continuing cuts to corporate taxes, the effective ending of “welfare as we know it,” as well as other financial services deregulation. All this had the effect of further distancing the Democratic Party leadership from the interests of their principal New Deal constituency, that being, primarily, working people.
The deregulation frenzy and attacks on any government regulations also fueled a media consolidation bonanza. Large media outlets were now in fewer and fewer hands, and with the ending of any substantive regulation of their content in the context of public service, they could now use their media platforms basically as profit making ventures alone. This further removed the needs and concerns of working people from public and political discourse and simply allowed for more rapid escalation of corporate control of the economy and political system. As the “gloves came off,” and labor was left more and more impotent, the corporate class could increasingly do as it pleased, and of course it pleased to enrich itself above all else. With no other opposing forces in place, income inequality accelerated to where, at present, it is at a level above even that present prior to the Great Depression. The almost total lack of financial regulations and controls led eventually to the fraud and speculation in mortgage-backed financial derivatives and so-called “consolidated debt obligations” (CDOs) that brought on the Financial Crisis of late 2007 (The Great Recession), just prior to the start of the first Obama administration. It’s worth remembering that at the time millions of Americans were facing mortgage foreclosure and the loss of their homes due to massive bank fraud, speculation and malfeasance. Also recall that Obama had been elected with the aid of substantial grass-roots coalitions expecting “Change We can Believe In.”
What did Obama do? He effectively neutered these movements and brought in a cabinet made up largely of bankers and Wall Street retreads. Notable among these were Treasury Secretary Timothy Geithner, a former Goldman Sachs official (and protege of another Clinton era Wall Street icon, Robert Rubin), and Lawrence Summers, a neoliberal banking industry favorite. The rest is history. The banks were bailed-out with the government providing essentially a 12 trillion dollar blank check, and millions of American homeowners were left adrift and lost their homes. To add insult to injury, when the dust had settled scarcely a single financial figure had faced prosecution or any meaningful accountability. This further abandonment of working class Americans, including a significant fraction of Black homeowners, by a Democratic administration further eroded the remaining Democratic coalition and, by Obama’s second term, had set the stage for majority Republican control of Congress. By this time America’s political democracy essentially comprised two wings of a single Party, the Corporate Party if you will. While there are indeed significant differences between the Republican and Democratic Parties, these are principally regarding social and cultural issues, not political ones. Politically, they are both strongly capitalist parties. Democratic Party “politics” by this point was not really politics at all, but the identity politics epitomized by the famous Clintonian “triangulation,” focusing on social and cultural issues to try and carve out just enough of a majority to maintain electoral control, while not diverting a smidgen from their primarily capitalist political program.
The voices and interests of working people had been increasingly marginalized from the democratic process. Income inequality continued to explode and a virtual oligarchy was now in place. Both Parties are beholden to wealthy, largely corporate interests, and a steady plague of economic stagnation and misery for the masses had descended on the country. Manufacturing jobs had long ago been shipped overseas, wages were effectively flat or dropping in real terms and a majority of the country were virtually living from paycheck to paycheck. Add to this the inability to find good-paying jobs and the more affordable health care they may come with, left large numbers of Americans with no health insurance, no savings and no prospects for maintaining a middle class existence. Also, because of media consolidation and corporate control, the plight of this “forgotten” working class America is not prominently discussed in elite media. By the end of Obama’s second term these stark economic conditions provided a fertile field for a fascistic populism to take root. This is the circumstance that Donald Trump and the Republican Party were able to cultivate and effectively exploit. As with most fascist movements they were also able to appeal to the deeply-rooted racism still endemic in the country. This coalition of disaffected white Americans, Christian fundamentalists, racists and nativists, and more “traditional” Republican elites was able to narrowly defeat the now sufficiently decimated Democratic coalition, represented by Hillary Clinton.
Now, after four disastrous years of Donald Trump has the Democratic Party leadership learned any of the necessary lessons sketched above to avoid a repeat of this process as we move forward with the Biden administration? The initial signals are not very encouraging. The Republican Party has moved so far right that many of its key constituents are openly fascistic. They no longer even hold any pretense to respecting a true democratic process. They seek power for themselves only, and are not willing to consider that others outside their tribe are even Americans. They see no reason to respect the rights of anyone who does not swear fealty to their ideology. All others are enemies, to be bullied, or scapegoated. After four years of Trump this conditioning is now strongly entrenched in perhaps 1/4 to 1/3 of the population, judging from recent vote totals in the 2020 election. By any reckoning this is a frightening proposition. This conditioning is evident in Trump’s refusal to accept the results of any election he does not win, and his rhetoric around “legal” and “illegal” votes. This should be understood that, in the mind of Trump and perhaps a majority of Republicans, “legal” votes are those for Trump, votes for Biden are, by definition, illegal. Also, in the recent election Republicans supported Trump even more consistently than they did four years ago, and this was after catastrophic mismanagement of a global pandemic. Biden and the corporate wing of the Democratic Party sank huge resources into trying to sway white, so-called “suburban” Republicans. This was a fools errand, as the numbers indicated that there was no substantial flip of such voters to the Biden ticket. By contrast, multi-racial coalitions and organizing, epitomized by the spectacular work of Black-led movements like Black Lives Matter, energized voting constituencies in many cities, arguably providing the key votes to elect Biden. Accommodation or attempted bipartisanship with the Republican leadership is a dead end as well. There can be no accommodation at this point that would result in any significant shift away from the corporate friendly, small government policies that have exploded income equality and impoverished half the population. Conditions would simply continue to deteriorate, further fueling a fascist populism.
The only plausible path forward for the Democratic Party is to, effectively, rebuild a multi-racial New Deal coalition. This means it must refocus its politics around the needs and conditions of working people. It must, in short, go back to real politics. It must address and reverse the structural and regulatory conditions that give free rein to capital and marginalize labor. It must reestablish regulatory and tax policy that dramatically reduces the influence of money on the political system. It must reassert public control and regulation over the banking and financial sectors. It must end legal impunity for the ruling elite and wealthy, and eliminate the enormous racial disparities present in the justice system. It must drastically reduce military expenditures and redirect such resources to human needs. These are by no means simple tasks but the evidence from polling as well as the recent election suggests that these are primarily majority-supported goals, and with the proper leadership it is entirely possible to organize a broad coalition around the long-ignored needs of working people, of all backgrounds. More specific programs that show broad public support along these lines include, Medicare for All, student loan debt forgiveness and loan reform, free higher education, the $15 dollar an hour (or higher!) minimum wage, strengthening of unions and labor laws, financial transaction taxes and readjustment to a much fairer and more progressive taxation policy, such that extreme wealth accumulation is strongly limited.
Are Democratic Party leaders onboard with such a program? The answer at present would appear to be almost certainly not. Leaders like House Speaker Nancy Pelosi and Majority Whip Jim Clyburn, even with the smoke still settling from the election, were “punching left,” blaming the progressive wing of the Party for the very poor performance of down-ballot candidates. The Democrats will lose seats in the House when all the votes are counted, for example. However, as is typical these days, Pelosi has it completely backwards. Progressive candidates strongly outperformed milquetoast moderates and centrists in the Party who are perceived as standing with the status quo, or worse, for nothing at all. Senate Minority Leader Chuck Schumer was catastrophic in his leadership of the Democratic Senate Campaign Committee, and all of the centrist candidates he chose and threw boat loads of money at were defeated handily. The huge amount of funds that the DSCC essentially set on fire could have supported more progressive candidates, or at least a mix of such. Moreover, it is more than four years since the absolute debacle that ushered in Trump and nearly ushered in an authoritarian government, and still, there has been no serious reckoning by Democratic Party leaders of their failures in that process. This is completely unacceptable. There must be accountability moving forward or any hope of a return to true democracy is doomed. There does appear to be some recognition that working class needs must be addressed, as Biden has publicly called for supporting some of the above working class agenda. For this the Party largely has Bernie Sanders and his movement to thank. Typically, the leadership has been dismissive of Sanders’s importance in this, and it would be disastrous to further alienate the progressive wing of the Party. A strong signal that the Party is serious and that there would be some accountability moving forward would be for both Pelosi and Schumer to step down from their leadership positions. It’s time for new blood. If these two had any self awareness, they would realize that this would be in the interests of building the coalition needed to defeat the present day Republican fascists, and moving away from the unsustainable status quo. But, I wouldn’t count on this kind of introspection from either one.
In addition to securing the White House, the Democrats now also have a chance to take a majority in the Senate if they can win the Georgia runoff polls. In the midst of a pandemic, and with polling suggesting +70% approval for Medicare for All, it would seem a no-brainer for the Democrats to shift behind this position strongly and run on this, as well as other working class issues, in the Georgia elections. I think we will be able to judge the likelihood of future Democratic success by the outcomes in Georgia. If the Democrats center a strong working class agenda for these elections, then they have a strong chance to win the Senate. That would be a good sign that there is some hope. If they run away from Medicare for All, for example, and lose the runoffs, then I think we can expect too much incrementalism, effectively reinforcing the status quo. If that happens, it will be too late, and the stage will be set for mid-term losses under Biden, and then the chances of a competent, Trump-like authoritarian sweeping to power in 2024 will become frighteningly real. There really is not much time left.
