How We Got Here

Politically, it was "another fine mess," as Oliver Hardy might have told Stan Laurel. And, like Laurel, inhabitants of the center-left in American politics are contorting their faces, trying to hold back tears of regret. Of course, the midterm election was not quite the Democratic disaster that the media, eager for a story line and following its herd instinct, has portrayed it; the balance shifted by only a handful of seats in the Senate and House, and Democrats did reasonably well in governorships. Nevertheless, if not a mandate, it was a solid Bush-Republican win.

The good news is that almost all of the tightly contested Senate seats going Republican were in the so-called red states comprising the rural and culturally conservative heartland that voted for the GOP in 2000; the two-thirds of Senate seats not up this year included most of Al Gore's more populous and largely bicoastal "blue states," which almost certainly would have remained Democratic in 2002. Still, considering the state of the economy, Democrats should have done much better, and the fact remains they didn't. Why not?

The most obvious answer is 9/11 and its aftermath, which provided George W. Bush with what Bushes congenitally yearn for: war and the chance to play commander in chief. There was no way for Democrats to counter the president's (and, by extension, the Republicans') advantage on the issue of countering terrorism, obviously a more important concern to red-state voters than anything else, including their pocketbooks. But Iraq did offer Democrats an opening by giving them the opportunity to differentiate themselves on foreign policy and oppose what polls showed was an unpopular presidential preference for preemptive unilateralism -- in lay terms, for going it alone and making the military option the first option. In a colossal miscalculation, Democratic congressional leaders prevented their party from playing out what was a winning foreign-policy hand; they paid the price, and it was a price they deserved to pay.

The strategic theory, as everyone knows by now, was to sweep Iraq under the rug and concentrate on the struggling economy, where Republicans were presumably vulnerable. This would perhaps have made sense if Democrats had anything to say on the economy, but they didn't, and they still don't. As a party, the Democrats have been negligently missing in action on economic issues. Moreover, their incoherence on the subject is nothing new; it's been a generation in the making.

The problems began in the Carter administration. Jimmy Carter is in many respects a great man -- certainly a great ex-president; he unquestionably deserved his recent Nobel Prize, and his environmental record as president, as well as his peace and human-rights initiatives, are beyond reproach. But that's only part of the Carter legacy. On the minus side is his role in the transformation of the Democratic Party from one that was economically liberal when he took office to one that today is nearly as economically conservative as the GOP. Largely forgotten is how the Carter administration revived the fetish of a balanced national budget and started the country on its quarter-century-old romance with free markets and monetarism by removing federal price controls on oil and natural gas, deregulating transportation (especially airlines), and appointing tight-money advocate Paul Volcker to the Federal Reserve Board chairmanship. Knowingly or not, these actions paved the way for Ronald Reagan's right-wing political economy of the 1980s.

The Democratic Party's abandonment of its longstanding regulatory and Keynesian approach to economics was accelerated by Bill Clinton, whose "It's the economy, stupid" political premise reinvigorated his party until it discovered what that phrase actually meant in practice. Under Clinton, the Democrats became the nation's second party of business and its newest defender of accumulated wealth. Clinton's 1993 pact with the Devil (in the guise of Fed Chairman Alan Greenspan) brought continued high interest rates throughout the 1990s and a Democratic agreement to cut government social spending, balance the budget, and keep hands off Wall Street in exchange for continued "investor confidence" and the creation of jobs, however menial; this, in turn, brought a stock-market boom, then a bubble, and eventually a bust, which we are now paying for in spades.

The Clinton years witnessed the reappointment of an unabashed conservative Republican (Greenspan) to the nation's top economic job, head of the Federal Reserve. They likewise saw the adoption by a Democratic administration of Republican free-trade policies inimical to Democratic constituencies. And they saw as well the Democratic Party further committed to the deregulation of corporate America, with the basic removal of anti-trust enforcement and government oversight from the telecommunications, financial services, and electrical-energy sectors, thereby laying the groundwork for much of the business corruption and consumer abuse that emerged a few years later.

As things turned out, it was, indeed, the economy, stupid: the economy of the dot-com implosion and the corporate accounting scandals; it was also the political economy of government operating for the benefit of business interests, as Democrats joined Republicans in pledging fealty to corporations willing to fund their party's election campaigns. All of this meant that, as a Democratic president left office at the end of 2000, his party fully shared in the responsibility for a 1920s-style economy poised for a 1930s-style collapse. And when things began to unravel in 2001-02, Democrats were in no position to criticize conservative policies; they were as tied to the Bush laissez-faire economy as was Bush himself.

The historical pattern had evolved differently during prior periods of Democratic ascendancy. When Presidents Roosevelt and Kennedy assumed power in 1933 and 1961, respectively, they each did so after a decade of liberal critiques had exposed the flaws of failed conservative economic policies and readied the public for progressive change. Carter and Clinton, by contrast, emerged from predominantly conservative political milieus and arrived in office already predisposed toward so-called market solutions. To the extent they weren't, they were quickly co-opted by the then-fashionable academic theories and programs of the economic right: deregulation, privatization, unrestricted trade, flatter taxes, and smaller government. This presidential acceptance of the nostrums of conservative economists indirectly implicated the entire Democratic party in the ideologically rigid policies that gradually created the conditions plaguing us today: financial corruption, a casino stock market, vast class disparities in wealth, the deindustrialization of the nation, and so forth.

The upshot, which manifested itself last election day, is that Democrats have lost the normal out-party advantage of being critics of the status quo on such economic issues as, for example, taxation; years of me-too behavior have crippled them as a credible opposition. The way back is obvious, but difficult. Democrats will have to disenthrall themselves from their recent past (including the Clinton interlude), separate themselves from the Bush Republicans on a whole host of issues -- mainly economic, but also in foreign policy -- and reaffirm their neglected liberal-populist roots. There are no more strategic excuses; the only road out of the wilderness is the one bearing left.

Wayne O'Leary is a writer in Orono, Maine.

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