Since the election, I’ve been trying to figure out when the Democratic Party separated from working men and women. This is the sixth post in a series. Previous posts can be found at the following links.
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This has been a story of two generations.
The generation that built the unions was born to the Great Depression and WWII. They had seen how badly predatory capitalism could fail and how much a government focused on the welfare of its citizens could help. They knew that a fight between capital and labor would end in tyranny or in violence without such a government. They also had seen how isolationism could fail and that deterrence was less bloody than liberation. As Roosevelt put it,
“There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny.”
The ’60s generation that broke with the unions had their own war. Vietnam was an unpopular war waged by an unresponsive government. Part of that generation also saw a myriad of social injustices sanctioned by government, often to benefit corporations. They became the New Left, which, inside the Democratic Party, would evolve into today’s “identity politics.”
Another part of that generation was neither anti-establishment nor anti-corporation. Among these were Democratic politicians that would come to power a decade later, in the late ‘70s and early ‘80s. They rejected fifty years of liberal economic thought in favor of libertarian economic theories. To them, government regulation and anti-monopoly safeguards were the danger. These Democrats would give birth to neoliberalism.
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The term “neoliberalism” has a long pedigree. Within the Democratic Party, though, neoliberalism was a movement that grew out of the stagflation of the late 1970s.
In 1982, Esquire ran a cover story titled “The Neoliberal Club.” It described a new “viewpoint of economic power within the Democratic Party.” Key players were names older Democrats know: Gary Hart, Bill Bradley, Bill Clinton, Bruce Babbitt, Richard Gephardt, Michael Dukakis, Al Gore, and others.
In 1983, Charles Peters, a lawyer, journalist, and founder of The Washington Monthly magazine, published “A Neoliberal’s Manifesto.” He defined Neoliberals as those who were mostly liberal (as opposed to neoconservatives) but “no longer automatically favor unions and big government or oppose the military and big business.”
Peters has stances that liberals would recognize, and the Manifesto gives an accurate appraisal of the excesses of liberalism, of unions, and of government. But this was a call not to rein in excesses but to replace liberalism. Compare that to Roosevelt again, from the same speech:
“Better the occasional faults of a Government that lives in a spirit of charity than the consistent omissions of a Government frozen in the ice of its own indifference.”
By this time, though, Peters was describing a fait accompli. The Watergate Babies had “realigned American politics, rejecting the party’s traditional commitments. They released monopoly power by relaxing antitrust laws, eliminating rules against financial concentration, and lifting price regulations.”
Neoliberals had correctly diagnosed the problem: the economy needed to grow if it was to sustain both social policies and the military build-ups demanded during the ‘70s and ‘80s. Their answer, though, was to abandon the politics that had overseen the greatest and most sustained period of growth and prosperity in history.
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In late November of 1984, 20 financiers, “a select group of money men,” met to plot a path to “move the [Democratic] party toward their business-oriented, centrist viewpoints.” Days later, the Committee for a Democratic Majority held its own meeting. Bruce Babbitt, the Democratic Governor of Arizona and a wealthy rancher, “launched a sweeping attack on the New Deal principles…. Old Democratic convictions “that big business can only be checked by the countervailing power of big labor and big government” said Babbitt were obsolete ….” Babbitt had endorsed Ronald Reagan’s tax plan and would serve in Bill Clinton’s cabinet.
Charles Robb, the Democratic governor of Virginia, said of Democrats, “We are the party of fairness. We are the party of the poor. We are the party of the worker, of the small farmer, of the urban dweller, of the renter.” He was not bragging. He was lobbying for a “party of business leaders, doctors, pharmacists, stockbrokers, and other professional.”
The party had moved to the left in the late ‘60s, leaving unions behind. Now, it was being pulled hard and far to the right. Unions did not figure in that, either. Corey Robin relates that, though poverty had emerged as a cause in Lyndon Johnson’s Great society, “In the hands of neoliberalism, it became fashionable to pit the interests of the poor not against the power of the wealthy but against the working class that had been made into a middle class by America’s unions.”
There was little use for the FDR coalition in neoliberalism. That was due, in part, to its libertarian economic theories and, in part, to Reagan envy. Both were ascendant among the Democratic elite. To much of the rank and file, though, neoliberalism was what they always had opposed: privatization, fiscal austerity, and deregulation.
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Stoller notes that
“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 Left, neoconservatives, the Watergate Babies, and neoliberals all missed this point. Their new Democratic establishment overturned the “anti-monopoly and anti-bank tradition in the Democratic Party,” clearing the way “for the greatest concentration of economic power in a century,” not to mention a near repeat of the Great Depression.
This corporate oriented, small-government movement would culminate in the Democratic Leadership Council (DLC), which I consider next.