Wayne O'Leary

The Election’s Real Winner

As things turned out, neither major political party “won” the 2020 election. The Republicans didn’t win it; loser (yes, loser) Donald Trump became only the fourth elected president in the past 100 years to fail at re-election despite enjoying huge structural advantages. The Democrats didn’t win it either; they couldn’t gain seats in Congress or the statehouses despite a raging pandemic and a rampaging recession on the opposition’s watch.

Not only did neither party win, both came out of the contest in probably worse shape than they entered it. Analyst Nicholas Lemann persuasively argues (in The New Yorker, 11/2/20) that the GOP’s two dominant wings, the evangelical and the libertarian, fused together since the Cold War by spit and chewing gum in an uneasy anticommunist alliance between Christian right and business establishment, can be expected to come apart in the wake of Trump’s defeat.

Lemann sees three possible paths of future renewal for Republicans: (1) a Remnant scenario of angry populist nationalism consisting of continued anti-liberal attacks and defense of rightist Trumpian social and economic values, led by Donald Trump Jr. and/or Sens. Tom Cotton (R-Ark.) and Josh Hawley (R-Mo.); (2) a Restoration scenario based on revived conventional business Republicanism and rekindled internationalism, overlaid with optimistic Reaganesque freedom-and-enterprise rhetoric and most likely led by Nikki Haley, ex-governor of South Carolina, or perhaps Vice President Mike Pence; and (3) a Reversal scenario in which Republicans change traditional places with Democrats, becoming a working-class party of the people, economically liberal (against free trade and Wall Street) but socially conservative, and led by someone like Sen. Marco Rubio (R-Fla.).

Which of these scenarios might emerge from the rubble of a splintered post-Trump GOP is the question. If the party hews too closely to its elitist corporate donors, it risks antagonizing its anti-elitist religious base, and vice versa. Meanwhile, the Democrats, dealing with the reality that defeating Trump did not deliver the anticipated political nirvana, are also in flux and casting about for answers. Their epic failure at the congressional level exposed the long-simmering split between progressives and so-called moderates, and a circular firing squad has begun to form. As with Republicans, the internal Democratic divisions were held in abeyance by the Cold War, but the original rationale for submerging ideological differences has long since disappeared. The centrifugal forces tending toward factional discord are now front and center.

The Democratic split actually pre-dates that of the GOP. It began with the Clinton administration, which declared the era of big government, a product of the New Deal-Fair Deal-Great Society consensus, was over. It would be replaced by an acceptance of corporate preeminence and a shift of the Democratic Party toward the political center. This rightward movement was slowed by the financial crash of 2008 and the Great Recession that followed, necessitating a public-sector response under Barack Obama. But by Obama’s second term, it became obvious to progressives that he was not quite the left-liberal champion they expected or wanted, particularly on economic policy, kicking off the current era of Democratic restiveness.

That’s where things have stood since roughly 2015 with the rise of the Berniecrats and left-leaning Sanders-style populism, the mirror opposite of emergent Trump-style populism on the right stimulated by the Tea Party revolt. Both major parties have been rearranging themselves in response to corporate-led economic globalization and its attendant dislocations, such as domestic deindustrialization and mass migration.

Under Trump, Republicans have gone full populist (as the term is improperly understood and defined), creating a neofascist response incorporating aggressive nationalism abroad and racist-tinged, anti-democratic illiberalism at home. In 2016 and again in 2020, insurgent Democrats under Bernie Sanders attempted to establish a more open-minded and generous democratic populism of their own, modeled on historical movements of the same name. Electorally, Republican “populism” succeeded; Democratic populism, burdened by a rhetorical association with democratic socialism, failed.

For Democrats, the internal party upheaval ironically produced Joe Biden, a nostalgic figure from the anti-populist past, as their knight-errant. Chosen mainly as the candidate most likely to defeat Donald Trump, he’s now charged with holding both branches of a fissured party together, somehow accommodating an idealistic populist progressivism half of it wants and half of it doesn’t.

Exactly who Biden is after a half-century in the political trenches is the question of the hour. Here’s the old Biden of the pre-populist Obama era: “Rich people are just as patriotic as poor people. … I don’t think 500 billionaires are the reason we’re in trouble.” And here’s the newly minted populist Biden of 2020: “I want you to know I’m a union guy. Unions are going to have increased power.” The Wall Street branch of corporate America appears confident the old Biden remains the real Biden. They heard liberal-activist talk, remember, from candidates Bill Clinton and Barack Obama, both of whom governed as centrists when push came to shove.

Wall Street’s equanimity regarding the incoming Biden administration derives partly from the many Wall Streeters that funded the Biden campaign and are poised to join it in appointed positions. The New York Times identified well over a dozen financial professionals among the president-elect’s early supporters and donors, including representatives of such investment firms as Bain Capital, Beacon Capital, the Carlyle Group, the Blackstone Group, Avenue Capital and Centerview Partners, several of them hedge-fund managers.

In addition, there are some 40 current and former corporate lobbyists on the Biden transition team, as well as prominent Wall Streeters who have the president-elect’s ear on economic policy. The latter include Clinton Treasury Secretary Robert Rubin and Obama Treasury Secretary Jacob Lew, both Citigroup alums, Obama Commerce Secretary (and billionaire) Penny Pritzker, and Goldman Sachs associate and Clinton-Obama National Economic Council Director Gene Sperling.

Wall Street is reassured, most of all, by the likelihood that political gridlock resulting from the probable return of Mitch McConnell as Senate majority leader will stymie any truly progressive Biden proposals targeting corporate interests or the wealthy. A public option on health insurance is probably off the table. The 2017 Tax Cuts and Jobs Act will remain largely unchanged. There will be no new capital-gains or wealth levies. Big Tech, bulwark of the stock market, will escape any serious regulation.

In short, the hands-down winner of the 2020 election was (wait for it) Wall Street!

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, January 1-15, 2021

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