The Democratic Party’s Death by Identity Politics
The Democratic Party’s Death by Identity Politics
Guest Column by Michael Hudson
Read it. It is superb.
Wall Street First
By Michael Hudson
March 24, 2017 “Information Clearing House” – Nobody yet can
tell whether Donald Trump is an agent of change with a specific policy in mind,
or merely a catalyst heralding an as yet undetermined turning point. His first
month in the White House saw him melting into the Republican mélange of
corporate lobbyists. Having promised to create jobs, his “America First” policy
looks more like “Wall Street First.”
His cabinet of billionaires promoting corporate tax cuts, deregulation
and dismantling Dodd-Frank bank reform repeats the Junk Economics promise that
giving more tax breaks to the richest One Percent may lead them to use their
windfall to invest in creating more jobs. What they usually do, of course, is
simply buy more property and assets already in place.
One of the first reactions to Trump’s election victory was for stocks of
the most crooked financial institutions to soar, hoping for a deregulatory
scythe taken to the public sector. Navient, the Department of Education’s
knee-breaker on student loan collections accused by the Consumer Financial
Protection Bureau (CFPB) of massive fraud and overcharging, rose from $13 to
$18 after it seemed likely that the incoming Republicans would disable the CFPB
and shine a green light for financial fraud.
Foreclosure king Stephen Mnuchin of IndyMac/OneWest (and formerly of
Goldman Sachs for 17 years; later a George Soros partner) is now Treasury
Secretary – and Trump pledged to abolish the CFPB, on the specious logic that
letting fraudsters manage pension savings and other investments will give
consumers and savers “broader choice,” e.g., for the financial equivalent of
junk food.
Secretary of Education Betsy DeVos hopes to privatize public education
into for-profit (and de-unionized) charter schools, breaking the teachers’
unions. This may position Trump to become the Transformational President that
neoliberals have been waiting for.
But not the neocons. His election rhetoric promised to reverse
traditional U.S. interventionist policy abroad. Making an anti-war left run
around the Democrats, he promised to stop backing ISIS/Al Nusra (President
Obama’s “moderate” terrorists supplied with the arms and money that Hillary
looted from Libya), and to reverse the Obama-Clinton administration’s New Cold
War with Russia. But the neocon coterie at the CIA and State Department are
undercutting his proposed rapprochement with Russia by forcing out General
Flynn for starters. It seems doubtful that Trump will clean them out.
Trump has called NATO obsolete, but insists that its members increase
their spending to the stipulated 2% of GDP — producing a windfall worth tens of
billions of dollars for U.S. arms exporters. That is to be the price Europe
must pay if it wants to endorse Germany’s and the Baltics’ confrontation with
Russia.
Trump is sufficiently intuitive to proclaim the euro a disaster, and he
recommends that Greece leave it. He supports the rising nationalist parties in
Britain, France, Italy, Greece and the Netherlands, all of which urge
withdrawal from the eurozone – and reconciliation with Russia instead of
sanctions. In place of the ill-fated TPP and TTIP, Trump advocates
country-by-country trade deals favoring the United States. Toward this end, his
designated ambassador to the European Union, Ted Malloch, urges the EU’s
breakup. The EU is refusing to accept him as ambassador.
Will Trump’s victory break up the Democratic Party?
At the time this volume is going to press, there is no way of knowing
how successful these international reversals will be. What is clearer is
Trump’s political impact at home. His victory – or more accurately, Hillary’s
resounding loss and the way she lost – has encouraged enormous pressure for a
realignment of both parties. Regardless of what President Trump may achieve
vis-à-vis Europe, his actions as celebrity chaos agent may break up U.S.
politics across the political spectrum.
The Democratic Party has lost its ability to pose as the party of labor
and the middle class. Firmly controlled by Wall Street and California
billionaires, the Democratic National Committee (DNC) strategy of identity
politics encourages any identity except that of wage earners. The candidates
backed by the Donor Class have been Blue Dogs who pledged to promote Wall
Street alongside neocons urging a New Cold War with Russia.
They preferred to lose with Hillary than to win behind Bernie Sanders.
So Trump’s electoral victory is their legacy as well as Obama’s. Instead of
Trump’s victory dispelling that strategy, the Democrats are doubling down. It
is as if identity politics is all they have.
Trying to ride on Barack Obama’s coattails didn’t work. Promising “hope
and change,” he won by posing as a transformational president, leading the
Democrats to control of the White House, Senate and Congress in 2008. Swept
into office by a national reaction against the George Bush’s Iraq Oil War and
the junk-mortgage crisis that left the economy debt-ridden, they had free rein
to pass whatever new laws they chose – even a Public Option in health care if
they had wanted, or make Wall Street banks absorb the losses from their bad and
often fraudulent loans.
But it turned out that Obama’s role was to prevent the changes that
voters hoped to see, and indeed that the economy needed to recover: financial
reform, debt writedowns to bring junk mortgages in line with fair market
prices, and throwing crooked bankers in jail. Obama rescued the banks, not the
economy, and turned over the Justice Department and regulatory agencies to his
Wall Street campaign contributors. He did not even pull back from war in the
Near East, but extended it to Libya and Syria, blundering into the Ukrainian
coup as well.
Having dashed the hopes of his followers, Obama then praised his chosen
successor Hillary Clinton as his “Third Term.” Enjoying this kiss of death,
Hillary promised to keep up Obama’s policies.
The straw that pushed voters over the edge was when she asked voters,
“Aren’t you better off today than you were eight years ago?” Who were they
going to believe: their eyes, or Hillary’s? National income statistics showed
that only the top 5 percent of the population were better off. All the growth
in Gross Domestic Product (GDP) during Obama’s tenure went to them – the Donor
Class that had gained control of the Democratic Party leadership.
Real incomes have fallen for the remaining 95 percent. Household budgets
have been further eroded by soaring charges for health insurance. (The
Democratic leadership in Congress fought tooth and nail to block Dennis
Kucinich from introducing his Single Payer proposal.)
No wonder most of the geographic United States voted for change – except
for where the top 5 percent is concentrated: in New York (Wall Street) and
California (Silicon Valley and the military-industrial complex). Making fun of
the Obama Administration’s slogan of “hope and change,” Trump characterized
Hillary’s policy of continuing the economy’s shrinkage for the 95% as “no hope
and no change.”
Identity Politics as anti-labor politics
A new term was introduced to the English language: Identity Politics.
Its aim is for voters to think of themselves as separatist minorities – women,
LGBTQ, Blacks and Hispanics. The Democrats thought they could beat Trump by
organizing Women for Wall Street (and a New Cold War), LGBTQ for Wall Street
(and a New Cold War), and Blacks and Hispanics for Wall Street (and a New Cold
War). Each identity cohort was headed by a billionaire or hedge fund donor.
The identity that is conspicuously excluded is the working class.
Identity politics strips away thinking of one’s interest in terms of having to
work for a living. It excludes voter protests against having their monthly
paycheck stripped to pay more for health insurance, housing and mortgage
charges or education, better working conditions or consumer protection – not to
speak of protecting debtors.
Identity politics used to be about three major categories: workers and
unionization, anti-war protests and civil rights marches against racist Jim
Crow laws. These were the three objectives of the many nationwide
demonstrations. That ended when these movements got co-opted into the
Democratic Party. Their reappearance in Bernie Sanders’ campaign in fact
threatens to tear the Democratic coalition apart. As soon as the primaries were
over (duly stacked against Sanders), his followers were made to feel unwelcome.
Hillary sought Republican support by denouncing Sanders as being as radical as
Putin’s Republican leadership.
In contrast to Sanders’ attempt to convince diverse groups that they had
a common denominator in needing jobs with decent pay – and, to achieve that,
opposing Wall Street’s replacing the government as central planner – the
Democrats depict every identity constituency as being victimized by every
other, setting themselves at each other’s heels. Clinton strategist John
Podesta, for instance, encouraged Blacks to accuse Sanders supporters of
distracting attention from racism. Pushing a common economic interest between
whites, Blacks, Hispanics and LGBTQ always has been the neoliberals’ nightmare.
No wonder they tried so hard to stop Bernie Sanders, and are maneuvering
to keep his supporters from gaining influence in their party.
When Trump was inaugurated on Friday, January 20, there was no pro-jobs
or anti-war demonstration. That presumably would have attracted pro-Trump
supporters in an ecumenical show of force. Instead, the Women’s March on
Saturday led even the pro-Democrat New York Times to write a front-page article
reporting that white women were complaining that they did not feel welcome in
the demonstration. The message to anti-war advocates, students and Bernie
supporters was that their economic cause was a distraction.
The march was typically Democratic in that its ideology did not threaten
the Donor Class. As Yves Smith wrote on Naked Capitalism:
“the track record of non-issue-oriented marches, no matter how large
scale, is poor, and the status of this march as officially sanctioned (blanket
media coverage when other marches of hundreds of thousands of people have been
minimized, police not tricked out in their usual riot gear) also indicates that
the officialdom does not see it as a threat to the status quo.”[1]
Hillary’s loss was not blamed on her neoliberal support for TPP or her
pro-war neocon stance, but on the revelations of the e-mails by her operative
Podesta discussing his dirty tricks against Bernie Sanders (claimed to be given
to Wikileaks by Russian hackers, not a domestic DNC leaker as Wikileaks
claimed) and the FBI investigation of her e-mail abuses at the State
Department. Backing her supporters’ attempt to brazen it out, the Democratic
Party has doubled down on its identity politics, despite the fact that an
estimated 52 percent of white women voted for Trump. After all, women do work
for wages. And that also is what Blacks and Hispanics want – in addition to
banking that serves their needs, not those of Wall Street, and health care that
serves their needs, not those of the health-insurance and pharmaceuticals
monopolies.
Bernie did not choose to run on a third-party ticket. Evidently he
feared being accused of throwing the election to Trump. The question is now
whether he can remake the Democratic Party as a democratic socialist party, or
create a new party if the Donor Class retains its neoliberal control. It seems
that he will not make a break until he concludes that a Socialist Party can
leave the Democrats as far back in the dust as the Republicans left the Whigs
after 1854. He may have underestimated his chance in 2016.
Trump’s effect on U.S. political party realignment
During Trump’s rise to the 2016 Republican nomination it seemed that he
was more likely to break up the Republican Party. Its leading candidates and
gurus warned that his populist victory in the primaries would tear the party
apart. The polls in May and June showed him defeating Hillary Clinton easily
(but losing to Bernie Sanders). But Republican leaders worried that he would
not support what they believed in: namely, whatever corporate lobbyists put in
their hands to enact and privatize.
The May/June polls showed Trump and Clinton were the country’s two most
unpopular presidential candidates. But whereas the Democrats maneuvered Bernie
out of the way, the Republican Clown Car was unable to do the same to Trump. In
the end they chose to win behind him, expecting to control him. As for the DNC,
its Wall Street donors preferred to lose with Hillary than to win with Bernie.
They wanted to keep control of their party and continue the bargain they
had made with the Republicans: The latter would move further and further to the
right, leaving room for Democratic neoliberals and neocons to follow them
closely, yet still pose as the “lesser evil.” That “centrism” is the essence of
the Clintons’ “triangulation” strategy. It actually has been going on for a
half-century. “As Tanzanian President Julius Nyerere quipped in the 1960s, when
he was accused by the US of running a one-party state, ‘The United States is
also a one-party state but, with typical American extravagance, they have two
of them’.”[2]
By 2017, voters had caught on to this two-step game. But Hillary’s team
paid pollsters over $1 billion to tell her (“Mirror, mirror on the wall …”)
that she was the most popular of all. It was hubris to imagine that she could
convince the 95 Percent of the people who were worse off under Obama to love
her as much as her East-West Coast donors did. It was politically unrealistic –
and a reflection of her cynicism – to imagine that raising enough money to buy
television ads would convince working-class Republicans to vote for her,
succumbing to a Stockholm Syndrome by thinking of themselves as part of the 5
Percent who had benefited from Obama’s pro-Wall Street policies.
Hillary’s election strategy was to make a right-wing run around Trump.
While characterizing the working class as white racist “deplorables,” allegedly
intolerant of LBGTQ or assertive women, she resurrected the ghost of Joe
McCarthy and accused Trump of being “Putin’s poodle” for proposing peace with
Russia. Among the most liberal Democrats, Paul Krugman still leads a biweekly
charge at The New York Times that President Trump is following Moscow’s orders.
Saturday Night Live, Bill Maher and MSNBC produce weekly skits that
Trump and General Flynn are Russian puppets. A large proportion of Democrats
have bought into the fairy tale that Trump didn’t really win the election, but
that Russian hackers manipulated the voting machines. No wonder George Orwell’s
1984 soared to the top of America’s best-seller lists in February 2017 as
Donald Trump was taking his oath of office.
This propaganda paid off on February 13, when neocon public relations
succeeded in forcing the resignation of General Flynn, whom Trump had appointed
to clean out the neocons at the NSA and CIA. His foreign policy initiative
based on rapprochement with Russia to create a common front against ISIS/Al
Nusra seems to be collapsing.
Tabula Rasa Celebrity Politics
U.S. presidential elections are no longer much about policy. Like Obama
before him, Trump campaigned as a rasa tabla, a vehicle for everyone to project
their hopes and fancies. What has all but disappeared is the past century’s
idea of politics as a struggle between labor and capital, democracy vs.
oligarchy.
Who would have expected even half a century ago that American politics
would become so post-modern that the idea of class conflict has all but
disappeared. Classical economic discourse has been drowned out by junk
economics.
There is a covert economic program, to be sure, and it is bipartisan. It
is to make elections about just which celebrities will introduce neoliberal
economic policies with the most convincing patter talk. That is the essence of
rasa tabla politics.
Can the Democrats lose again in 2020?
Trump’s November victory showed that voters found him to be the Lesser
Evil, but all that voters really could express was “throw out the bums” and get
a new set of lobbyists for the FIRE sector and corporate monopolists. Both
candidates represented Goldman Sachs and Wall Street. No wonder voter turnout
has continued to plunge.
Although the Democrats’ Lesser Evil argument lost to the Republicans in
2016, the neoliberals in control of the DNC found the absence of a progressive
economic program to be less threatening to their interests than the critique of
Wall Street and neocon interventionism coming from the Sanders camp. So the
Democrat will continue to pose as the Lesser Evil party not really in terms of
policy, but simply ad hominum. They will merely repeat Hillary’s campaign
stance: They are not Trump.
Their parades and street demonstrations since his inauguration have not
come out for any economic policy.
On Friday, February 10, the party’s Democratic Policy group held a
retreat for its members in Baltimore. Third Way “centrists” (Republicans
running as Democrats) dominated, with Hillary operatives in charge. The
conclusion was that no party policy was needed at all.
“President Trump is a better recruitment tool for us than a central
campaign issue,’ said Washington Rep. Denny Heck, who is leading recruitment
for the Democratic Congressional Campaign Committee (DCCC).”[3]
But what does their party leadership have to offer women, Blacks and
Hispanics in the way of employment, more affordable health care, housing or
education and better pay? Where are the New Deal pro-labor, pro-regulatory
roots of bygone days? The party leadership is unwilling to admit that Trump’s
message about protecting jobs and opposing the TPP played a role in his
election. Hillary was suspected of supporting it as “the gold standard” of
trade deals, and Obama had made the Trans-Pacific Partnership the centerpiece
of his presidency – the free-trade TPP and TTIP that would have taken economic
regulatory policy out of the hands of government and given it to corporations.
Instead of accepting even Sanders’ centrist-left stance, the Democrats’
strategy was to tar Trump as pro-Russian, insisting his aides had committed
impeachable offenses, and mount one parade after another. “Rep. Marcia Fudge of
Ohio told reporters she was wary of focusing solely on an “economic message”
aimed at voters whom Trump won over in 2016, because, in her view, Trump did
not win on an economic message. “What Donald Trump did was address them at a
very different level — an emotional level, a racial level, a fear level,” she
said. “If all we talk about is the economic message, we’re not going to
win.”[4]
This stance led Sanders supporters to walk out of a meeting organized by
the “centrist” Third Way think tank on Wednesday, February 8.
By now this is an old story. Fifty years ago, socialists such as Michael
Harrington asked why union members and progressives still imagined that they
had to work through the Democratic Party. It has taken the rest of the country
half a century to see that Democrats are not the party of the working class,
unions, middle class, farmers or debtors. They are the party of Wall Street
privatizers, bank deregulators, neocons and the military-industrial complex.
Obama showed his hand – and that of his party – in his passionate attempt to
ram through the corporatist TPP treaty that would have enabled corporations to
sue governments for any costs imposed by public consumer protection,
environmental protection or other protection of the population against
financialized corporate monopolies.
Against this backdrop, Trump’s promises and indeed his worldview seem
quixotic. The picture of America’s future he has painted seems unattainable
within the foreseeable future. It is too late to bring manufacturing back to
the United States, because corporations already have shifted their supply nodes
abroad, and too much U.S. infrastructure has been dismantled.
There can’t be a high-speed railroad, because it would take more than
four years to get the right-of-way and create a route without crossing gates or
sharp curves. In any case, the role of railroads and other transportation has
been to increase real estate prices along the routes. But in this case, real
estate would be torn down – and having a high-speed rail does not increase land
values.
The
stock market has soared to new heights, anticipating lower taxes on corporate
profits and a deregulation of consumer, labor and environmental protection.
Trump may end up as America’s Boris Yeltsin, protecting U.S. oligarchs (not
that Hillary would have been different, merely cloaked in a more colorful
identity rainbow). The U.S. economy is in for Shock Therapy. Voters should look
to Greece to get a taste of the future in this scenario.
Without a coherent response to neoliberalism, Trump’s billionaire
cabinet may do to the United States what neoliberals in the Clinton
administration did to Russia after 1991: tear out all the checks and balances,
and turn public wealth over to insiders and oligarchs. So Trump’s best chance
to be transformative is simply to be America’s Yeltsin for his party’s
oligarchic backers, putting the class war back in business.
What a truly transformative president would do/would have done
No administration can create a sound U.S. recovery without dealing with
the problem that caused the 2008 crisis in the first place: over-indebtedness.
The only way to restore growth, raise living standards and make the economy
competitive again is a debt writedown. But that is not yet on the political
horizon. Obama’s doublecross of his voters in 2009 prevented the needed policy
from occurring. Having missed this chance in the last financial crisis, a
progressive policy must await yet another crisis. But so far, no political
party is preparing a program to juxtapose the Republican-Democratic austerity
and scale-back of Social Security, Medicare and social spending programs.
Also no longer on the horizon is a more progressive income tax, or a
public option for health care – or for banking, or consumer protection against
financial fraud, or for a $15-an-hour minimum wage, or for a revived protection
of labor’s right to unionize. Or environmental regulations.
It seems that only a new party can achieve these aims. At the time these
essays are going to press, Sanders has committed himself to working within the
Democratic Party. But that stance is based on his assumption that somehow he
can recruit enough activists to take over the party from Its Donor Class.
I suspect he will fail. In any case, it is easier to begin afresh than
to try to re-design a party (or any institution) dominated by resistance to
change, and whose idea of economic growth is a pastiche of tax cuts and
deregulation. Both U.S. parties are committed to this neoliberal program – and
seek to blame foreign enemies for the fact that its effect is to continue
squeezing living standards and bloating the financial sector.
If this slow but inexorable crash does lead to a political crisis, it
looks like the Republicans may succeed in convening a new Constitutional
Convention (many states already have approved this) to lock the United States
into a corporatist neoliberal world. Its slogan will be that of Margaret
Thatcher: TINA – There Is No Alternative.
And who is to disagree? As Trotsky said, fascism is the result of the
failure of the left to provide an alternative.
Michael Hudson is President of The Institute for the Study of Long-Term
Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished
Research Professor of Economics at the University of Missouri, Kansas City and
author of J is Junk Economics (2017), Killing the Host (2015), The
Bubble and Beyond (2012), Super-Imperialism: The Economic Strategy of American
Empire (1968 & 2003), Trade, Development and Foreign Debt (1992 & 2009)
and of The Myth of Aid (1971), amongst many others.
Footnotes
[1] Yves Smith, “Women Skeptical of the Women’s March,” Naked Capitalism, February
10, 2017.
[2] Radhika Desai, “Decoding Trump,” Counterpunch, February 10, 2017.
[3] “Pelosi denies Democrats are divided on strategy for 2018,” Yahoo News,
February 10, 2018.
[4] ibid
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