The Proof That Centrism is Dead

The Proof That Centrism is Dead

Every story that centrists told about the recession turned out to be wrong.


I come to bury centrism, not to praise it. Discussions of the economy during the 2016 campaign will look very different from those of the past two elections, because centrism as an ideological force has collapsed.

An optical illusion has shielded centrism from critique. Centrists position themselves as anti-ideology, representing a responsible compromise between liberals and conservatives. The word conjures sobriety and restraint, caution and moderation—all of which sound compelling in uncertain economic times.

But institutionalized centrism is more than that: It’s an elite group of thinkers and writers, popular in Washington, DC, and favorable to business leaders, who told a very specific story about what was happening during the Great Recession. They populate the opinion pages of The Washington Post and think tanks like the Bipartisan Policy Center, and they influenced officials like former Office of Management and Budget director Peter Orszag. Circa 2010, they argued for a “sensible” response to the Great Recession: reduce the deficit to fix the short-term jobs crisis, privatize Medicare, and focus on the long-term economy—since, they claimed, working Americans would eventually bounce back during the recovery. Democratic candidates took these positions seriously. Yet each element of the centrist story has turned out to be absolutely false.

Former senator Alan Simpson, who was treated as a centrist oracle on the deficit and the economy, testified in 2011 that we’d have another economic crisis and soaring interest rates “before two years” if we didn’t drastically cut social-insurance programs to reduce the long-term deficit. Today, however, borrowing costs for the government are lower than they were in 2011. With inflation falling, the government faces a crisis of consistently weak demand, as opposed to a crisis of too much debt.

Centrists also predicted that the only way to control federal healthcare costs was personal responsibility. Centrist groups, such as a task force formed by former Republican senator Pete Domenici and former CBO director Alice Rivlin, sought to replace Medicare with a coupon for the elderly to buy their own private insurance, known by the anodyne term “premium support.” Yet it turns out the government is good at providing social insurance: Instead of exploding, healthcare costs have remained flat. Mass privatization, as called for by centrism, would have been a terrible decision in retrospect.

Centrists have also read our current economic malaise as a temporary blip. The weak recovery required a few short-term fixes, they argued, but reducing long-term spending and restoring business confidence were equally important. As Orszag wrote in 2010, centrists believed “the current antagonism” existing “between business and government” was a major factor in the weak recovery. Workers, they argued, were being left behind because of weak skills and education, deficiencies that would be rectified in the long run.

Yet six years into the recovery, wages are still down for most workers. Since 2000, median family income has dropped by 7 percent. Workers have never been more educated, but the result is just fiercer fighting for jobs. Corporate profits have skyrocketed, and 76 percent of the recovery has gone to the top 1 percent. How can centrists continue to focus on the long term and business confidence when all the fruits go to such a small group?

This failure explains why liberal politicians will sound more confidently liberal in 2016: The dominant ideology pulling them toward business interests has failed. Thus, liberals can analyze the economy within a structural framework that isn’t muddled by a commitment to wrongheaded corporate prerogatives.

The last, and arguably most insidious, thing about centrism is the implicit idea that there’s no real difference between the parties—just good and bad administration of the centrist common sense. President Obama, who thought he could transcend party differences through personality, suffered from the centrist orthodoxy. The GOP, caring far more about privatization and lowering taxes on the rich than about deficits, benefited. However, 2016 will point up the real differences between the two parties, and this time the Democrats have a shot at getting it right.

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