The past month, trying to explain why I think Der Furor won the election, I have referred people a number of times to Matt Stoller’s article in The Atlantic, How Democrats Killed Their Populist Soul.
I just searched for Stoller’s name on DailyKos, and was shocked to find that no one has posted a diary devoted to the article. Well, I suppose that’s understandable: the article is a bit long, and it has some rather unpleasant history for those who have made a living as functionaries and leaders of the Democratic Party. But, I really think it is important that as many people as possible read it. And it’s the weekend, so I wanted to urge people once again to read How Democrats Killed Their Populist Soul.
Stoller begins with the arrival of the new Democrats who in 1975 were given control of Congress in the public’s reaction against the Republicans’ Watergate scandal. These new Democrats immediately attacked the existing power structure of the Democratic Party, and largely won. But, Stoller writes, doing so, they also ousted some key Congressmen who had remembered the battles of the New Deal against economic privilege and power, such as Texas Representative Wright Patman.
Indeed, a revolution had occurred. But the contours of that revolution would not be clear for decades. In 1974, young liberals did not perceive financial power as a threat, having grown up in a world where banks and big business were largely kept under control. It was the government—through Vietnam, Nixon, and executive power—that organized the political spectrum. By 1975, liberalism meant, as Carr put it, “where you were on issues like civil rights and the war in Vietnam.” With the exception of a few new members, like Miller and Waxman, suspicion of finance as a part of liberalism had vanished.
Over the next 40 years, this Democratic generation fundamentally altered American politics. They restructured “campaign finance, party nominations, government transparency, and congressional organization.” They took on domestic violence, homophobia, discrimination against the disabled, and sexual harassment. They jettisoned many racially and culturally authoritarian traditions. They produced Bill Clinton’s presidency directly, and in many ways, they shaped President Barack Obama’s.
The result today is a paradox. At the same time that the nation has achieved perhaps the most tolerant culture in U.S. history, the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century… The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump.
Without realizing it, these new Democrats were destroying the very foundation of American economic prosperity. Carefully consider this important observation by Stoller:
Modern liberals tend to confuse a broad social-welfare state and redistribution of resources in the form of tax-and-spend policies with the New Deal. In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy. The New Deal divided power, pitting faction against other faction, a classic Jefferson-Madison approach to controlling power (think Federalist Paper No. 10).
Stoller identifies a key inflection point to be Lester Thurow’s 1980 book The Zero-Sum Society, which repackaged the ideas of conservative economics to make them more palatable for Democrats.
Thurow proposed that all government and business activities were simply zero-sum contests over resources and incomes, ignoring the arguments of New Dealers that concentration was a political problem and led to tyranny….
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. Democrats and Republicans disagreed on the purpose of concentrated power, but everyone agreed on its inevitability. By the late 1970s, the populist Brandeisian anti-monopoly tradition—protecting communities by breaking up concentrations of power—had been air-brushed out of the debate. And in doing so, America’s fundamental political vision transformed: from protecting citizen sovereignty to maximizing consumer welfare.
Stoller shows us the path that has led us to the electoral disasters we have suffered. We now have Democratic Party elites who believe in the supremacy of the market over government action. I want o point again to Hamilton Nolan’s devastating critique of the recent two-day Summit on Technology and Opportunity anti-poverty conference cohosted by the White House, Stanford University, and Mark Zuckerberg’s charity. In Poverty Doesn't Need Technology. It Needs Politics, Nolan writes, “We do not need a nation that turns to its tech-enriched kings and begs them to solve poverty. We need a nation that acts collectively to build an economy in which our wealth is shared.”
Poverty and wealth are inextricably linked. The economy is not a zero-sum game, but the fruits of the economic growth that creates and fuels wealthy nations like ours are hoarded to a shocking extent by a tiny group at the top, which warps our political system, starves our economy of demand, and fuels poverty both directly and indirectly. Philanthropy is fine and dandy. Show me a good charity, though, and I’ll show you an idea that could be practiced on much larger scale by a government. (One of the world’s most effective anti-poverty charities does nothing but send money directly to poor people. Hello, redistribution of wealth.) Fighting poverty—and making our nation more economically fair—is not a mystifying riddle waiting for a technological breakthrough. It is a question of political will. If we want to push more wealth down the economic chain, we will.