The Obama-Clinton Democrats and the Future of the Democratic Party

The policies and electoral strategy of President Obama and Hillary and Bill Clinton have failed. While many look to outside forces to justify political acts and explain defeat, a more significant problem must be addressed: centrist policies and an eagerness to tack right have hollowed out the Democratic Party and its principles. The minimalism of the last eight years coupled with consistent electoral losses have led the Democratic Party into the political wilderness, where it wanders without a compass.

To advance the interests and ideals of Americans and win elections again, the Party needs a new direction. This direction should supplement the cultural and economic equality policies of the mainstream left with a push towards a position of empowering ordinary men and women combined with a commitment to institutional experimentation and transformation.

The Centrists’ Argument

The prevailing conversation over a new direction remains clouded. A mainstream discourse emphasizes the fallacy of the electoral college and asserts the primacy of the popular vote in questioning the legitimacy of results of the election. The Clintons hold thank you dinners for their wealthy donors and float the idea of Chelsea running for office, as if Hillary’s loss carried no message and was but a minor setback.

Of greater force has been Obama’s championing of his Party leadership. In response to a question about a possible leftward drift of the Democratic Party, Obama criticized the British Labour Party under Corbyn for being out of touch, and said that the Democratic Party remains “grounded in fact and reality.” He further asserted that he could have won a third term if he had ran again, because he believed his message of unity and hope would triumph over one of divisiveness and despair.

Perhaps his message would continue to resonate and he would have won. Perhaps his charisma and oratory skills would have succeeded where Clinton failed. Perhaps he could still encourage enough people to put their faith in him and vote for centrist Democrats again.

Obama’s Electoral Failure

The record does not bear out this analysis. What would people vote for if they chose to side again with President Obama? What would they have gotten? Another term of a president who speaks to their interests but shifts right in policy and practice?

Obama was a phenomenon, to be sure. He was twice elected president, even with his name and race working against him. In office, he pushed many admirable policies. His signature achievement of health care, while failing to secure a public option, did enable coverage for millions and ensure that providers could not cancel policies for the sick. The creation of the Consumer Financial Protection Bureau helps protect borrowers and serves as a watchdog on predatory lending practices, as well as to keep overly complicated financial agreements in check. On the environment, he led negotiations on the Paris Climate Agreement, preserved national lands and parks, and established clean energy standards. In his New Year’s address this year, Obama further touted his economic record of staving off a depression and adding millions of jobs; claiming that poverty is falling and incomes rising.

But we must look beyond the man and his rise to the presidency, and see that the Party declined under his leadership. He let the DNC languish and then lose political direction before becoming a factional organization that backed favorites and surreptitiously opposed factional outsiders despite their popularity among Party rank and file. He built the Party around his charisma, and in his negotiations with an obstructionist Congress led the Party to the center in an attempt to appease Republican ideologues. The result was to strip the Democratic Party of an inspiring, progressive policy platform.

These developments resulted in huge losses for Democratic candidates. Obama assumed the presidency in 2008 with Democratic majorities in both Houses and control of over half of governorships and state legislatures, including seventeen trifectas. Rather than mobilizing this political capital and pushing policy that would benefit the broad swath of constituents, who were invested in the message of hope and change, the Obama administration bailed out Wall Street, stuck Main Street with the bill, and retreated into health care legislation that compromised a public option. In the face of such betrayal, the public dealt the Democratic Party staggering losses over the next four elections, turning majorities into minorities in both Houses, and giving over two-thirds of governorships and state legislatures to the Republicans.

When all has been said and done, over the past eight years, the Democratic Party lost over one thousand seats in Congress and state governments, and now the presidency. If Obama had won the presidency again, it would not have been on account of his record.

Neoliberalism and The Direct Line from Clinton-Obama to Trump

A more accurate analysis of the electoral failures of the Democratic Party begins forty years ago. In the 1970s a generation of Democrats, including Bill Clinton, Al Gore, and Gary Hart, began to steer the Party away from manufacturing and macroeconomic policy, and toward a championing of the new economy coupled with principles of less government intervention. They consciously shifted their constituency from organized labor to a professional class of entrepreneurs and investment bankers. The mantra of these self-identifying neoliberals was deregulation, privatization, and globalization.

Under these politicians–especially Presidents Clinton and Obama–the Democratic Party reshaped its orientation from the progressive convictions of the New Deal to an overriding belief in technology, meritocracy, technocratic centrism, and global markets. Policy followed, as the Democrats abandoned industrial workers and ordinary Americans in favor of NAFTA, welfare reform, tough on crime and prison expansion, and even social security cuts. Unions were taken for granted as the Party turned to the professional class for funding and policy-making.

The effects on ordinary Americans has been as catastrophic as the changes of the electoral map: manufacturing jobs lost, communities hollowed out, opioids abused, and hope and faith in the American dream decimated. Inequality now soars as wealth continues to become concentrated and the absence of life and work opportunities confront many Americans.

It is not surprising, then, that the Obama-Clinton Democratic Party lost the trust and the vote of the working class, and in doing so enabled someone like Trump to rise.

From the beginning, Obama seems to have been invested in the professional class and the neoliberal ideals of the centrist elements of the Democratic Party, rather than the New Deal liberal consensus. The stimulus package he pushed through in his first years in office aimed not at reconfiguring a financial system that had run amok under the tax cuts and deregulation efforts of the Clinton and Bush years, but rather at saving it from its worst excesses. Obama bailed out the banks, slapped the bankers on the wrist, and had his administration go on national television to defend AIG bonuses.

At each stage of the bailout, decisions were made to protect the banks and the executives that gambled away the nation’s economic security at the expense of ordinary Americans. One particularly egregious example was the new administration’s inaction on homeowner bankruptcy. The Democratic Congress put forth a proposal to allow judges to modify homeowner debt enabling people to keep their homes and pay back their mortgages. This would have helped regular homeowners, but it would have meant losses for the investment banks and owners of the mortgages. Rather than pushing this, Obama and his administration did nothing and let it die. His Treasury Secretary, Timothy Geithner, eventually negotiated a plan more favorable to the banks, under the belief that they are the protectors of our economy. (Geithner now runs a private equity fund financed by the banks he bailed out.)

The Obama administration could have acted more forcefully on behalf of ordinary Americans and undermined those who led us into the crisis. They could have fired the bad regulators, including Geithner (or at the very least accepted his resignation), as people like Elizabeth Warren called for. They could have pushed to allow judges to modify mortgages and put zombie banks into receivership. Furthermore, with a controlling stake in the banks, they could have taken decisive action and not only stopped bonuses being paid out, but also fired executives, like Obama did with GM.

Obama and the Democratic Party continued their own demise over the next eight years by failing to act on behalf of middle class interests. On numerous progressive issues, Obama could have used the presidency to act decisively on behalf of ordinary Americans, but he did not. The Employee Free Choice Act would have made it easier for unions to organize and allowed workers to bargain collectively, but under expected opposition from industry and Republicans, Obama said nothing and quietly let it die. Similarly, his administration chose not to enforce antitrust laws, giving free reign to corporations to stack the deck and monopolize markets at the expense of entrepreneurs and consumers. In 1980, for example, there were sixty-five anti-monopoly investigation, in 2009 there were four, and in 2014, none.

Furthermore, where one would expect to see a crackdown on financial fraud, under Obama, Federal white collar crime prosecutions fell to a twenty-year low. Although Obama repeatedly stated that his administration would expand investigations of financial fraud, it did not. In fact, rather than focusing on bank fraud, which was the most prosecuted white collar crime under George W. Bush, the Obama administration turned its efforts to “fraud by wire, radio, or television,” a category that does not pertain to bankers and Wall Street executives.

These are all things that Obama had the power do as president. He did not need Congressional approval, nor bipartisan support to rescue mortgages or prosecute white-collar crime. What he did need, however, was a different vision of the economy that privileged workers and unions over investment bankers and Silicon Valley executives, and he needed the resolve to push it through against the lobby and clamor of moneyed interests.

Instead, the administration pedaled neoliberal policies of deregulation, privatization, and globalization, coupled with a belief that the professionals running finance, technology, and medical industries are the basis of the economy and its future. This is not to say that Obama and the centralist Democrats are evil or anti-worker, only that their priorities are elsewhere. They recognize the changing nature of the economy and the increasing interconnections of technology and capital around the world; but rather than develop inclusive policies to make it work for ordinary people, they embrace the corporate vision of it.

For example, Obama’s signature trade deal proposal, TPP, was advised and designed by Big Pharma and Silicon Valley in order to protect their interests abroad. It would have done this by obstructing trade in generic pharmaceuticals and forcing people to buy expensive name brands, thereby guaranteeing American corporation profits. This would be good for American companies, to be sure, but at the same time, the deal would undermine worker interests in the global economy.

Here the Democratic Party seems to have abandoned the working class in favor of the professional class, and have been content to assuage the liberal conscience with handouts to the downtrodden. Democrats’ policies have benefited tech professionals and investment bankers, but disenfranchised working class Americans.

Such developments have enabled the rise of a demagogue who could explain social ills in divisive terms and promise obscene if not radical solutions. As Ohio community organizer Kirk Noden wrote in the Nation, “Corporate Democrats have never advanced [working-class] interests—and at least Republicans offer a persuasive story about why they are getting screwed.”

The Future of the Democratic Party

Given this existing situation, three paths are now open for the Democratic Party. The first path is to misinterpret the failure of the Obama-Clinton Democrats and continue to push a neoliberal agenda. It is to accuse the Republicans of being obstructionist, blame Comey for electoral defeat, and divert attention to Russian hacking. It is to accept Obama’s narrative of accomplishment and reduce the Party to an electoral strategy of mobilizing minority voters under a charismatic leader who offers sugar but not enough substance.

This path pushes a program of deregulation, globalization, and balanced budgets. It champions a particular form of the market that gives primacy to private enterprise and allows self-regulation of prices and competition. It uses state planning to direct resources to firms and corporations, and picks winners in private industry. It promotes technocrats and experts as masters of policy and the economy.

The logic of this program says that regulation and deficits take money out of private industry and hinder investment and innovation, while deregulation and balanced budgets lead to low interest rates, corporate profits, higher productivity, and thus prosperity. The policies of the two Democratic administrations who have adhered to this ideology have been to deregulate industries such as telecommunications and energy, and to promote the free trade of goods and capital.

This program led not to innovation and prosperity, as claimed, but to monopoly building, decreasing opportunity, and financial collapse. In the case of telecom deregulation, for example, it meant an end to local radio and TV programming; and energy deregulation resulted in Enron. This program gave us cuts to capital gains tax, which increased inequality, and a repeal of Glass-Steagall, which led to the 2008 financial crisis. It calls for free trade that explicitly denies the free movement of labor, and has manifest in deals like NAFTA and the ill-fated TPP.

This program has failed to serve the interests of the majority of Americans and brought our economy to the brink of collapse. It has compromised the Democratic Party.

The second path is that of the recalcitrant left. This future champions economic equality and social justice. At its core is a commitment to use state power, not markets, to alleviate inequalities and injustices created by the market. It mobilizes the state for public interest against private greed. The constituents for this path are not financiers and Silicon Valley entrepreneurs, but rather the working and middle classes.

The recalcitrant left looks to the program of the New Deal for inspiration. It invests in welfare programs that protect ordinary Americans and promote the interests of workers and unions. It calls for public works projects and state-run employment programs in order to help realize full employment. In its current manifestation, it has a social democratic program that pushes for progressive taxation, single payer health care, and financial and environmental regulation. Proponents further demand not just to save but expand social security and medicare. They call for greater income support, and fight for to increase benefits and the minimum wage.

Although this path puts workers and ordinary Americans at the center of policy and seeks to empower unions, it is wedded to a vision of work as wage labor, where the corporation remains the foundation of the economy. Rather than restructure relations between labor and capital, it seeks to alleviate the inimical relationship between the two and intervene decisively on behalf of the former. The short terms policies of this path speak directly to the needs of the day, but the long-term future is unsustainable.

The third path is inclusive producerism (articulated elsewhere in a slightly different form as productive democracy). Rather than merely provide and protect people, as with the recalcitrant left, producerism seeks to empower them, both individually and communally. It aims to lift people up by creating more economic and educational opportunities, and by democratizing the market through universal financing programs.

The goals of this path are not only equality, but individual and national greatness. Although it supports many of the policies of the recalcitrant left, it does not take them as an end in themselves, whereby wealth attenuation, health care, and education are demanded and given as rights. Rather, producerists see these things as a means to enable people to achieve greater ends. The producerist vision is a society where no one must toil for wages that are given or taken by a capitalist, but instead advances self employment and higher forms of cooperation. In this way, inclusive producerism fights to restructure relations between capital and labor.

The program of this vision develops a comprehensive set of policies to equip individuals, strengthen communities, open the economy, and revitalize democracy. For individual equipment, it prescribes free lifelong education and open access to financing and lines of credit. To strengthen communities, it advocates community cooperatives and organizations, which would counterbalance corporate and state power, as well as the development of a caring economy, whereby citizens would engage in activities of caring for others, such as the example of the mentally ill in Geel, Belgium.

To democratize the market, it seeks to use the state to not only provide loans and credit for entrepreneurship, but also help coordinate technology transfer and cooperation among firms. It would also end monopolies and cronyism, and encourage broad economic diversity and experimentation. To revitalize our democracy, the program upholds removing the corrupting influence of money from politics and increasing popular engagement at every level, from community projects to running for office. It also encourages local and sector experimentation, whereby states or municipalities could pursue alternative forms of social and economic arrangements.

This third path seeks to radically alter the broken and corrupted arrangements of the existing political and economic order by opening it to greater participation and intervention. The result would not only be a more equal and just world, but more importantly, a world that affords more life.

This third path is the path of the Democratic Alternative. It is a progressive future for the Democratic Party that repudiates the neoliberal practices and policies, and at once incorporates and moves beyond the recalcitrant path. It is a program that combines a vision of empowering ordinary men and women with a commitment to institutional transformation.