Nine months ago, this Naked Democracy blog provoked some lively chatter when I announced the crackup of the Republican Party. Now I want to add the Democratic Party to the endangered-species list. This doesn’t mean Hillary Clinton will lose in November (though she might). I want to explain why the party once known for its brave liberal reforms is hung up on an identity crisis of its own.
In this season of political chaos, the party led by Hillary Clinton is holding on to the familiar past it knows—the glory days when New Democrats were the brilliant winners.
Confused and alarmed by the current Republican breakup, the Clinton machine has responded with crab-like caution, maybe hoping to have it both ways. Clinton-Obama veterans agreed early on that 2016 would be Hillary’s turn. She would bring her own assets and could run on her husband’s reputation as the popular, pragmatic centrist. Events did not cooperate. In this season of change, HRC’s new agenda sounds a lot like the same old, same old.
In 1992, Mr. Bill’s winning slogan was “putting people first.” This year Hillary’s is “putting families first.” Bill promised to create lots of good jobs with his plans for major public works. Hillary’s job plan is big spending on “infrastructure.”
Bill Clinton didn’t deliver on jobs. After his election, he turned right, embracing the GOP agenda for free-trade agreements that ratified US multinationals’ desire to globalize their production—that is, move factories out of the United States and replace our high-wage American workers with low-wage workers in poorer countries.
Clinton had promised organized labor he would protect American workers with a strong side agreement for NAFTA. That never happened, another broken promise. Washington think tanks pumped out bogus economic studies claiming that NAFTA and subsequent trade agreements would bring the United States great waves of new jobs. The opposite occurred.
In political terms, organized labor lost big. It was permanently displaced by Wall Street finance as the most influential constituency of the Clinton-Obama presidencies. The working class has not forgotten this brutal betrayal (pundits scold the losers, urging them to get over it). In fact, desperate working familes are still getting hammered by the ugly consequences.
Millions of high-wage manufacturing jobs were destroyed by cheap labor competition, just as the major corporations had intended. Did Bill Clinton know what he was doing? He’s a shrewd guy, and it’s impossible to believe he was unaware of the domestic destruction he was authorizing. Did Hillary Clinton know? Her silence on the subject is not reassuring.
Political reporters and op-ed economists in the prestigious newspapers continue to dismiss angry workers as deluded or just plain stupid. The tortured denials of what ordinary people know to be true in their own lives drip with class condescension, talking down to people with economic abstractions when their human losses are about real pain. These establishment commentaries typically have two omissions: The reporters seldom talk with the people actually victimized, and the opinion pieces almost never mention what happened to wages.
Cutting high-wage manufacturing jobs out of the US economy deadened the wage structure far beyond factories. Stagnation and worse spread broadly through surrounding towns and cities, where independent businesses and skilled craftsmen depended on the manufacturing core to maintain wage levels. A Democratic president authorized wage depression for their sectors, and the losers were typically portrayed as Luddites trying to stop progress.
Globalization’s cheerleaders still did not seem to understand that busting down US wages was not unavoidable, like a change in the weather (as some prominent economists claimed). Smashing labor incomes was an essential strategic goal of the American multinationals. Corporate leaders didn’t talk about it, for obvious reasons—they would have sounded unpatriotic. But the fact is that America’s best and biggest enterprises were allowed to harvest profit from the misery of other Americans.
Labor unions described free-market globalization as “the road to the bottom,” and they were right about the decline of middle-American prosperity. Governing elites brushed aside their complaints. The influential newspapers did not explore the matter, since it seemed self-evident that expert economists would know more than assembly-line workers. It was only long after the fact that some corporate execs began to admit that wage destruction was their objective.
“We did a lot of violence to the expectations of the American workforce,” Frank Doyle, General Electric’s former executive vice president, confessed at an economic forum. GE was a leader in the offshoring of production. It tripled its profits during the 1980s and ’90s, as it eliminated more than 100,000 US employees.
Jeffrey Immelt, GE’s current CEO, recently explained the company’s logic to an audience of fellow CEOs. “In the 1980s,” Immelt said, “US labor was expensive and materials were cheap for probably the first 20 years of my career. This did not generally help good labor-management relations. As a result, most of us saw it as our task to outsource manufacturing, to move it to low-wage countries. Today materials are expensive and labor is relatively inexpensive.”
After the financial crash in 2008, Immelt began to sing a different song. Cheaper US labor, he said, should now make it possible for companies to bring home some of their offshored production. President Obama, who liked that message, appointed Immelt to chair the President’s Council on Jobs and Competitiveness. GE got several federal grants to develop new technologies for US products.
Perhaps in innocent ignorance, Obama described Immelt as “my jobs czar.” It was an embarrassing gesture, since Immelt’s GE was still dumping American jobs. Subsequent reports to shareholders made it clear that in the Obama era, GE continued to move more jobs offshore than it added at home. By 2014, the company told stockholders, it had only 136,000 US employees, down from 165,000 a decade earlier. Its 169,000 foreign workers were now the majority, up from 142,000 in 2004. As an employer, one could say, General Electric has become a foreign corporation.
I recite these facts to demonstrate how distant the Democratic Party establishment has drifted from the everyday realities of working stiffs. Dem strategists and Clinton advisers, who were cheering progress, didn’t see jobs as an explosive issue for Election 2016. The official unemployment rate was grossly misleading, but it was good fodder or the campaign. The Clinton betrayal was forgotten long ago. Wrong again.
The events of 2016 derailed such optimistic expectations. HRC’s advantage succeeded in scaring off potential competitors for the nomination—all but Vermont socialist Bernie Sanders. Not to worry; the Clinton machine would brush him aside. But Bernie’s eye was on something much bigger than winning the White House (always unlikely for him). Senator Sanders aspired to encourage a “political revolution” that would restore democracy for the people and, not coincidentally, liberate the money-bound Democratic Party from its patrons. Clintonistas never seemed to understand that Bernie meant it. He still does. His clarity and conviction stole the show from HRC.
The senator’s stunning popularity, especially among young people, ought to have told the party of FDR and LBJ that it was missing something. The so-called New Democrats have now become old Dems and are struggling to hang on.
HRC’s dilemma looks like this: To vigorously confront the angry zeitgeist of 2016, the new party of Hillary Clinton would have to turn on the old party of Bill Clinton. To seek ownership of this year’s fed-up rebellion, HRC would have to speak for the anger instead of smothering it with platitudes. She would also need to acknowledge (gently) that vast destruction flowed from her husband’s presidency, but that things are different now.
Clinton’s new approach to globalization, job creation, multinational corporations, and other fundamentals would be concretely different, she could say, because the American condition now demands it.
Don’t hold your breath. To execute such a hard-nosed leap, the Clinton machine would have to do a back flip that abandons not just Mr. Bill but also the Wall Street power brokers whom she trusts. Given HRC’s natural caution, it doesn’t seem likely she could ever make that break, especially since she’s still surrounded by Clinton veterans who are dreaming of a blowout election victory in November.
What was going to be Hillary’s best asset has turned into an awkward millstone. People will still ask what she really thinks about the family legacy. The GOP will demand an answer. Hillary’s avoidance doesn’t cut it. If Americans wind up choosing Donald Trump as their president, the faint-hearted Democratic Party will have to share the blame.