Yves here. Even though the object of study is the feckless Democrats, the collapse of Labour in the UK suggests that there is multinational problem of former working-class parties selling out their bases but succeeding in running on brand fumes for a very long time, much to the career and financial advantage of insiders and hanger-on.
It is hard of a piece of this length to do the problem justice. One issue is that the author takes as a given that campaigning is monstrously expensive. It is in the US due to the cost of TV ads and now Citizens United allowing for messaging saturation. I don’t see how we escape this mess in the US ex an actual revolution, but other countries allow candidates for major offices a set amount of free TV time if they pass a certain threshold (like reaching 5% popularity in a recognized poll) and no more than that.
This claim has been repeatedly debunked:
This point is exquisitely exemplified by the first couple of years of the Obama administration, when they held the federal trifecta and still managed to privilege the kleptocratic banksters of the housing crisis and the war criminal gangsters of the W. Bush regime
Matt Stoller saw through Obama from the get-go, when he made his first big appearance at the 2004 national Democrat convention. Stoller was going to be thrown out for the sin of merely writing a mildly skeptical post about the [even then sainted] Obama (I forget the details but the controversy fast became such a bad look that Stoller was allowed to remain). There were tons of op-eds in mainstream publications between the election and Obama’s inauguration advocating for him to make the sort of transformative changes that that the crisis made possible.
From our 2010 post, The Empire Continues to Strike Back: Team Obama Propaganda Campaign Reaches Fever Pitch:
Recall how we got here. Early in 2009, the banking industry was on the ropes. Both the stock and the credit default swaps markets said that many of the big players were at serious risk of failure. Commentators debated whether to nationalize Citibank, Bank of America, and other large, floundering institutions.
The case for bold action was sound. The history of financial crises showed that the least costly approach is to resolve mortally wounded organizations, install new management, set strict guidelines, and separate out the bad loans and investments in order to restructure and sell them. An IMF study of 124 banking crises concluded that regulatory forbearance, the term of art for letting impaired banks soldier on, found:
The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred…
Shuttering sick banks is hardly a radical idea; the FDIC does it on a routine basis. So the difference here was not in the nature of the exercise, but its operational complexity.
This juncture was a crucial window of opportunity. The financial services industry had become systematically predatory. Its victims now extended well beyond precarious, clueless, and sometimes undisciplined consumers who took on too much debt via credit cards with gotcha features that successfully enticed into a treadmill of chronic debt, or now infamous subprime and option-ARM mortgages.
Over twenty years of malfeasance, from the savings and loan crisis (where fraud was a leading cause of bank failures) to a catastrophic set of blow-ups in over the counter derivatives in 1994, which produced total losses of $1.5 trillion, the biggest wipeout since the 1929 crash, through a 1990s subprime meltdown, dot com chicanery, Enron and other accounting scandals, and now the global financial crisis, the industry each time had been able to beat neuter meaningful reform. But this time, the scale of the damage was so great that it extended beyond investors to hapless bystanders, ordinary citizens who were also paying via their taxes and job losses. And unlike the past, where news of financial blow-ups was largely confined to the business section, the public could not miss the scale of the damage and how it came about, and was outraged.
The widespread, vocal opposition to the TARP was evidence that a once complacent populace had been roused. Reform, if proposed with energy and confidence, wasn’t a risk; not only was it badly needed, it was just what voters wanted.
But incoming president Obama failed to act. Whether he failed to see the opportunity, didn’t understand it, or was simply not interested is moot. Rather than bring vested banking interests to heel, the Obama administration instead chose to reconstitute, as much as possible, the very same industry whose reckless pursuit of profit had thrown the world economy off the cliff. There would be no Nixon goes to China moment from the architects of the policies that created the crisis, namely Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and Director of the National Economic Council Larry Summers.
And only later did readers of this humble blog learn why. From a 2012 post, Exclusive: How Obama’s Early Career Success Was Built on Fronting for Chicago Real Estate and Finance:
Barack Obama remains an icon to many on what passes for the left in America despite incontrovertible evidence that he does not represent their interests. There are many contributing factors, including his considerable skills as a speaker and his programmatic effort to neuter liberal critics by getting their funding cut.
A central component of the seemingly impenetrable Obama mythology is his personal history: a black man, son of a broken home, who nevertheless got on the fast track to financial success by becoming editor of the Harvard Law Review, but turned instead to working with and later representing a particularly disadvantaged community, the South Side of Chicago.
Even so, this story does not quite add up. Why did Obama not follow the usual, well greased path of becoming a Supreme Court clerk, and seeking to exert influence through the Washington doors that would have opened up to him after that stint?
A remarkable speech by Robert Fitch puts Obama’s early career in a new perspective that explains the man we see now in the Oval Office: one who pretends to befriend ordinary people but sells them out again and again to wealthy, powerful interests – the banks, big Pharma and health insurers, and lately, the fracking-industrial complex.
Fitch, who died last year, was an academic and journalist, well regarded for his forensic and archival work, as described by Doug Henwood in an obituary in the Nation. He is best known for his book Solidarity for Sale, which chronicled corruption in American unions, but his work that is germane to his analysis of Obama is Assassination of New York. In that, he documented the concerted efforts by powerful real estate and financial interests to drive manufacturing and low-income renters out of Manhattan so they could turn it over to office and residential space for high income professionals.
Fitch gave his eye-opening speech before an unlikely audience at an unlikely time: the Harlem Tenants Association in November 2008, hard on the heels of Obama’s electrifying presidential win. The first part contains his prescient prediction: that Obama’s Third Way stance, that we all need to put our differences aside and get along, was tantamount to advocating the interests of the wealthy, since they seldom give anything to the have-nots without a fight.
That discussion alone is reason to read the piece. But the important part is his description of the role that Obama played in the redevelopment of the near South Side of Chicago, and how he and other middle class blacks, including Valerie Jarrett and his wife Michelle, advanced at the expense of poor blacks by aligning themselves with what Fitch calls “friendly FIRE”: powerful real estate players like the Pritzkers and the Crown family, major banks, the University of Chicago, as well as non-profit community developers and real estate reverends.
Don’t take my word for it. Download the speech and read it. And then circulate it widely. And thank Michael Hudson, Fitch’s friend for over 30 years, for making this document available.
Now to the main event.
By Marv Waterstone, professor emeritus in the School of Geography, Development, and Environment at the University of Arizona, and the coauthor most recently with Noam Chomsky of Consequences of Capitalism: Manufacturing Discontent and Resistance. Originally published at Common Dreams
“The Republicans go for the jugular; the Democrats go for the capillaries,”—Kevin Phillips
With the recent release of the long-withheld, but little anticipated Democratic National Committee “autopsy” of the 2024 presidential electoral loss, we’re back to the perennial questions of which issues should receive priority; how should messaging and narrative around those issues be crafted; which wing(s) of the party should be amputated before their rot infects the entire organism, suburban soccer moms or inner city youth; and on and on. All good questions, but ultimately, in present circumstances, unanswerable except in the most platitudinous, hand-waving ways. The most fundamental dilemma resides in the Faustian bargain the party entered beginning in the 1970s, and the result of that bargain is neatly captured in Sheldon Wolin’s 2010 coinage “the inauthentic opposition”:
While the transformed Republican Party reveals what a “party of government” might look like under inverted totalitarianism, the Democrats reveal the fate of opposition politics under inverted totalitarianism. The Democrats’ politics might be described as inauthentic opposition in the era of Superpower [i.e., the US after the fall of the Soviet Union]. Having fended off its reformist elements and disclaimed the label of liberal, it is trapped by new rules of the game which dictate that a party exists to win elections rather than to promote a vision of the good society… Accordingly, the party competes for an apolitical segment of the electorate, “the undecided,” and puzzles how best to woo religious zealots. Should Democrats somehow be elected, corporate sponsors make it politically impossible for the new officeholders to alter significantly the direction of society. [This point is exquisitely exemplified by the first couple of years of the Obama administration, when they held the federal trifecta and still managed to privilege the kleptocratic banksters of the housing crisis and the war criminal gangsters of the W. Bush regime.] The timidity of a Democratic Party mesmerized by centrist precepts points to the crucial fact that, for the poor, minorities, the working class, anticorporatists, pro-environmentalists, and anti-imperialists, there is no opposition party working actively on their behalf.
The origins of this current malaise date back to the mid 1970s, and followed the actions taken by business class elites responding to the exhortations contained in the now-famous Powell Memorandum. This was a secret 1971 memo from then-corporate lawyer Lewis Powell to the Secretary of the US Chamber of Commerce. The memo wasn’t revealed to the public until well after Powell had been appointed to the Supreme Court, where he continued to wage his ideological battle in defense of capitalism and corporate power (including, of course, free speech rights articulated in cash). In the memo Powell argued that:
The US Chamber of Commerce should lead an assault upon the major institutions, universities, schools, the media, publishing, the courts, in order to change how individuals think about the corporation, the law, culture, and the individual.
US businesses, Powell suggested, did not lack the resources for such an effort, particularly if they were pooled. That is, if people started to think together as a class rather than as individual firms and corporations. The US Chamber of Commerce took up this challenge in a very dramatic way. It expanded its base from around 60,000 firms in 1972 to about a quarter of a million just a decade later. Other elite organizational forms also began to coalesce around this core following the advice of the memo. These included think tanks (e.g., the Heritage Foundation, established 1973 by Adolph Coors), as well as corporate money pumps to operationalize the memo’s chief objectives.
One of the most prominent of these organizations was the Business Roundtable, founded in 1972, and comprising CEOs whose corporations at the time accounted for about half of the US gross national product. During this period, through political action committees, the Roundtable was spending about $900 million annually on political matters, a very significant sum at the time. These newly emerging entities provided a mechanism for corporations to contribute substantial funds to political campaigns and candidates, authorized in large measure through a number of Supreme Court rulings, several written by Powell himself.
These PACs, which were just beginning to have a political presence (there were 89 PACs in 1974, and around 1,500 by 1982) gave to both parties largely in equal measure in the 70s, but began leaning heavily toward the Republicans, who had little difficulty aligning their platforms with capital corporate interests. This was also the moment that the traditional political base of the Republican Party began to merge with the Christian Right and with white working classes, who were persuaded that they had been left behind by affirmative action and other “illegitimate” policies (now, of course, cloaked as DEI and “wokeness”).
The problem for anyone struggling to get by, as this alliance portrayed it, was not capitalism and the neoliberalization of the society and economy. The real problem was liberals, who had used excessive state power to provide for special groups. The prevalent narrative, more pertinent now than ever, was the idea of unworthy “others” cutting in line ahead of worthy citizens: “You’ve worked hard. You’ve played by the rules. You’re not getting ahead. Well, it’s not that the system is stacked against you. It’s that these people, who are undeserving, are getting more advantages than you get.” The Republican political base (and now most particularly MAGAnites) could be energized through positive mobilizations of things like religion and cultural nationalism, but it could also be turned out through very negative, though coded, though I would say increasingly less coded if not blatant, racism (e.g., President Richard Nixon’s “southern strategy”), xenophobia, homophobia, and anti-feminism.
Democrats, seemingly, were more conflicted, at least at that time, between support for their base and the need to pursue big money. That ambivalence, at least within the ranks of the Democratic Party establishment in its current manifestation, has now all but disappeared and constitutes the irreconcilable contradiction that plagues the party now. To return for a moment to Wolin:
By ignoring dissent and by assuming that the dissenters have no alternative, the party serves an important, if ironical, stabilizing function and in effect marginalizes any possible threat to the corporate allies of the Republicans.
According to critical geographer David Harvey, the structure that emerged out of this political realignment was as simple as it was predictable and durable. The Republican Party could, and still can, marshal massive financial resources and mobilize its popular base to vote against its own material interests on cultural or religious grounds, while simultaneously advancing the capital accumulation policies (ongoing war and arms sales, lowered taxation, massive deregulation, privatization of public goods and services) of their elite masters.
The Democratic Party, conversely, could not, and still cannot, afford to attend to the material needs (e.g., a national healthcare system, affordable housing, environmental and consumer protection, financial and anti-trust regulation, a peace dividend) of its traditional popular base because it was and is terrified of offending its donor class. Given the asymmetry, the political hegemony of the Republican Party became more sure over this period, and has relegated the Democrats, even when in power, to their current position of inauthenticity. If and until this most fundamental contradiction can be resolved, the policies and messaging will remain flaccid, impotent, and unsatisfying. Under these circumstances we can aptly paraphrase Phillips, to wit: So now the Democrats also go for the jugular. Unfortunately, it’s too often their own.
