Democracy Journal JAN. 31, 2017
Center-left parties in America and Europe are struggling. They are struggling for three reasons: First, they have failed to offer a credible response to the period of prolonged income stagnation and growing inequality; second, they have become part of the political-business-elite accommodation that the public views as corrupt; and third, they have been indifferent to the disruptive effects of globalization and loath to show immigration needs to be controlled.
Donald Trump’s improbable and tragic victory has now shown painfully and unnecessarily how important are those factors in the United States too. It would have been better had we been spared this American experiment, but we can at least learn from it, and quickly.
Hillary Clinton lost steam in the closing weeks and days because her campaign chose not to contest the economy or the undue influence of the few over government. They chose not to attack Trump for cheating workers and small contractors and for using cheap Chinese steel and undocumented immigrants. They chose not to contrast Trump’s massive trickle down tax cuts for billionaires with Clinton’s tax cuts for the middle class. They decided not to tantalize voters with her promise of bold reforms to make the economy work for all, not just those at the top.
WikiLeaks published some of my emails to the campaign’s chair, and he invited me after the FBI’s late interjection to share my findings on the power of closing on the economy, but Clinton’s top manager and advisors pushed back, saying, “We can’t win the economic argument.”
Instead, she appealed for unity over division, hope over hate, and experience over bad temperament. She promised an era of unrivaled opportunity for all groups, and to build on Barack Obama’s economic progress. After all, “America is already great.”
The campaign came to that assessment despite Clinton achieving her biggest margins in the race after uniting with Bernie Sanders and Elizabeth Warren and embracing their case for economic change; after her convention speech, when she called for a fair, inclusive economy; and after the debates, wherein she articulated her bold economic plans, prosecuted Trump mercilessly for his “Trumped-up trickle down” tax cuts for billionaires and repeatedly promised to raise taxes on the rich, because they’ve reaped all the gains and “that’s where the money is.”
Secretary Clinton invited me to weigh in on her economic speeches and message, and the result was most evident in the debates. After they aired, just weeks before Election Day, Clinton achieved parity with Trump on who could best handle the economy, the number one issue to be decided on Election Day, according to exit polling, and the top concern for 60 percent of her own voters. Clinton voters, even more than Trump’s, were angry at corporate abuse. Yet Clinton went silent on the economy, corporate irresponsibility, and undue special interest influence.
As a result of that choice, she lost the struggling white working class, particularly the women who broke for Trump at the end. She also lost ground with the progressive base voters, who disappointed on turnout and vote share. Millennials, Sanders voters, single women, and minorities were struggling financially, and they were the voters most determined to disrupt the nexus of Wall Street and Washington. Secretary Clinton was acutely conscious of the pain so many families were experiencing, but, she told me, she couldn’t be seen to be critical of President Obama’s economy in any way.
Iadmire what Obama achieved as President, but he, like so many other center-left leaders who led their countries’ passage through the financial crisis, have been nearly silent on the new economic reality of long-term income stagnation, jobs that don’t pay enough to live on, and the richest 1 percent taking virtually all the new income and wealth gains. Few have championed plausible plans bold enough to produce a more broadly shared prosperity.
Obama faced an economy in free fall and acted boldly to keep it from heading into a depression. The economic project of his whole presidency, accordingly, was getting the economy to a full recovery. That started with restoring the financial health of the big banks. The long-term stagnation of wages and inequality was not part of that project. Obama also declined to be an educative President who spent time and capital explaining his initiatives, even the economic policies and the Affordable Care Act that had the middle class as the main beneficiary. Obama believed that the progress and positive changes on the ground—the “facts”—would ultimately become evident to the people. He would thereby be vindicated and his opponents rejected.
As a result, his economic recovery effort came to be seen as “bailouts.” One year after the passage of the economic recovery program, most thought the big banks, not the middle class, were the main beneficiaries of Obama and the Democrats’ heroic efforts. TARP remains a searing event in the consciousness of a citizenry who think the elites, joined by Obama, rushed to bail out the irresponsible and protect their executive bonuses while doing nothing about home foreclosures or the lost wealth that hit the Hispanic and black communities particularly hard.
Yet this was the President’s message from the beginning, pursued also in the midterm elections of 2010 and 2014 and the general election of 2016: The country is making progress and the economy is recovering and you should punish the Republicans who want us to fail. In his final weekend speech before the 2010 election, he scorned the Republicans who had driven our economy “into a ditch” and were now doing everything possible to impede us, and argued that the car was “pointing in the right direction.”
The President used this refrain again in 2014, a second off-year shellacking, and in his closing weekend appeal in 2016: “We’ve seen America turn recession into recovery” and have created 15.5 million new jobs. Pointedly, he said, “Incomes are rising. Poverty is falling.” So get out and vote because “we now have the chance to elect a forty-fifth president who will build on our progress.”
Obama closed his presidency uncharacteristcially, campaigning publicly and lobbying Congress intently to win passage of the Trans-Pacific Partnership, a proposed trade deal with 12 Pacific Rim countries, encompassing 40 percent of the global economy. He argued that it would grow the U.S. economy, raise labor and environmental standards, and block China’s strategic advance. He won the acclaim of editorial writers, but TPP lost public support as opponents argued that it was actually shaped in secret by hundreds of industry lobbyists and would allow foreign corporations to sue our government and overturn consumer protections. Finally, they argued that it would cost U.S. jobs and push down wages; that was the final straw for many working-class voters who opposed the agreement intensely. This was at the heart of Trump’s campaign in the Rust Belt states and subsequent attacks on Clinton.
Voters already viewed Obama’s economic commentary incredulously and his approval ratings fell dramatically in 2010 in Maine, New Hampshire, Pennsylvania, Iowa, Minnesota, and Wisconsin and in 2014 in Iowa, Michigan, North Carolina, Ohio and Pennsylvania. On the eve of the 2016 general election, Obama’s approval hovered near 40 percent in many of these states.
The discontent was also evident very early on within the progressive base. In both the 2010 and 2014 midterm election years, 40 percent of the new American majority of minorities, unmarried women, and millennial voters disapproved of how the President was handling his job, and many chose not to vote. These were the voters most burdened by new lower-paying jobs, foreclosures, lost house value, and student debt.
As a result, Obama struggled with working-class voters and millennials in his own re-election. In 2012, few commentators and strategists commented on Obama’s millennial vote, which had dropped from 69 to 60 percent, while Romney carried white millennials by seven points. Perhaps millennials were the canary in the coal mine.
And while the Obama Administration was scrupulous in avoiding personal scandal and self-dealing, voters quickly concluded our government favored Wall Street over Main Street, with the way smoothed, they assumed, by lobbyists and big donors. Voters grew ever more skeptical about the massive growth of campaign spending, lobbying, SuperPACs, and dark, secret contributions during Obama’s period in office. Yet the Democratic Administration never prioritized reforming the role of money in politics. Indeed, Obama raised billions outside the system of public financing.
Bernie Sanders, by contrast, declared that he prioritized getting money out of politics over any other policy, since breaking that corrupt bond would liberate government and allow it to work for the middle and working classes. He attacked Hillary Clinton’s SuperPAC and Wall Street contributions and said, “You’re not going to have a government that represents all of us, so long as you have candidates like Secretary Clinton being dependent on big money interests.” Senator Sanders won 72 percent of the millennial vote in the primary.
Many middle Americans believed they were seeing the real Obama when he told his big donors that white workers “cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations” in tough economic times; or the real Mitt Romney when he described the 47 percent who “are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it”; or the real Hillary Clinton when she described half of Trump’s voters as belonging in “the basket of deplorables.” Together, they offer a powerful imagery of our elected leaders from both parties hanging out and catering to the economic and cultural elites, while analyzing and patronizing America’s working people.
Those elites and the great majority of Americans with a four-year college degree are comfortable with globalization, growing international trade, and immigration. They do not fully understand that most working people of all races believe government and elected leaders have an obligation to control immigration. Six-in-ten voters believe immigrants strengthen our country, but they also think borders should be real and citizens should matter more than non-citizens. They worry somewhat about competition for jobs, but even more about access to schools, housing, and health care, all desperately short of resources.
President Obama and Democrats gained majority support in the country for comprehensive immigration reform because their plan involved increased enforcement on the border and in workplaces along with giving the law-abiding, taxpaying undocumented a path to citizenship after paying a fine and learning English. This reform allowed the Administration to manage immigration and build a framework for increasing entry numbers in the future, but they also showed that they were serious about border control and citizenship. President Obama did not allow undocumented immigrants to gain subsidies under Obamacare, and he deported more undocumented immigrants than any other President. He took a lot of heat from activists, but the Democratic Party was probably the only center-left party in the advanced world trusted to address immigration, and that is probably still true today.
During the campaign, Hillary Clinton differed with that approach. She promised to end deportations for all but violent criminals and terrorists and declared, “I’m introducing comprehensive immigration reform within the first 100 days with the path to citizenship.” Her focus was not on managing immigration, but on enforcing immigration laws “humanely” and respecting the rights of immigrants. She paid a price for that, I believe. The biggest hope of the independents and Democrats who voted for Trump was that “he will get immigration under control and deport those here illegally.”
Voters made clear they want an economy, society, and government that works for them. Obama left office with a rising approval rating in the same range as Ronald Reagan, with an economy nearing full employment, and real wages climbing up. Still, half of voters in the last election said the economy was the top priority in their voting choice. These voters were sending a very clear message: They want more than just a recovery. Trump mercilessly exploited that; he won because he offered change and American jobs, vowed to take on disloyal American companies and their corrupt deals with the Washington elite on immigration and trade; Clinton, in the end, engaged on none of them.
Before America gave us Donald Trump, Great Britain, for many of the same reasons, gave us the Conservative Party’s surprise victory in 2015 and, of course, Brexit.
But Hillary Clinton can at least be satisfied with the fact that she won the popular vote by almost 3 million votes, a 2.1-point margin over Trump. The British Labour Party, on the other hand, is struggling today to reach 30 percent of the vote, and the Conservatives hold a double-digit lead.
I myself once worked as a pollster and strategic advisor to Tony Blair when he and Gordon Brown helped create New Labour. They were tough on crime and on its causes and wanted to reward hard work; they showed independence from trade unions so they could, instead, govern for all. Labour attacked Conservative boom-and-bust economic incompetence. They promised limited spending and no rise in income taxes so that voters could trust them to invest, renew, and reform the public services, particularly the National Health Service and schools. They were reelected under the banner, “Schools and Hospitals First!” They introduced a minimum wage and EU work guarantees and aggressively used tax credits to make sure most families saw incomes rise and poverty fall throughout the government’s first decade in power. Labour won the working class and middle class alike, including landslide majorities in two general elections and a respectable majority in the third.
But Blair’s New Labour project did not have much to offer working-class voters. Consequently, the election of 1997 saw a 6.3 point drop in turnout, reaching historic lows, while 2001 saw a further drop of 12 points, the lowest since 1918. The turnout crash was greatest in older industrial Labour seats, among unskilled manual workers and younger blue-collar workers.
I tried to focus the prime minister and Labour party’s attention on that disengagement, but Blair was much more interested in Labour winning comparable levels of support among all classes, and he resisted talking about “hardworking families,” a two-tier Britain, or attacking the Tories for only caring about the few. His New Labour project was more about community, unity, and One Nation, ideas that seemed disconnected from the emerging economic challenges in Britain.
Blair was right to weaken the ability of trade union leaders to dictate the party’s policies and leaders and thus, make Labour electable again, but he also moved toward a new level of accommodation with business and the City, the most dynamic part of the economy. That accommodation, however, also included visible association with very rich donors who helped fund the party and campaigns. And when the expenses scandal rocked the reputation of many MPs, Labour politicians struggled, more than ever, not to look like they were just in it for the money.
But at least, at that time, Blair’s government was associated with stable growth and a broadly shared prosperity. That was not the case when Gordon Brown lost his election in 2010. Incomes had stagnated for the four years before the financial crash. Labour policies were not producing a rising prosperity for those in the middle, yet the party continued to argue for its economic competence and successes.
At the same time, Labour barely spoke above a whisper about immigration, even though immigration from the Commonwealth and expanding EU rose dramatically under Blair and Brown’s watch. The Labour government scarcely acknowledged that asylum seekers and immigrants affected the availability of council housing and increased pressure on the schools and NHS. Blair was not willing to press his party for reform, and Brown viewed these working-class frustrations as racist, most notoriously when a TV microphone that he thought had been switched off caught him calling Rochdale pensioner Gillian Duffy “just a sort of bigoted woman” after she had expressed concerns to him about Eastern European immigration at a campaign event.
Indeed, it could be said that the biggest doubt about the Labour government when it lost power was its failure to get immigration under control. Ed Miliband as Labour’s new leader resisted speaking about the issue or advocating for greater control until the general election neared.
With Labour’s credibility shredded on spending and debt, the party barely challenged the economic policies of the Conservative-led coalition government under David Cameron. It claimed that the Tories were cutting spending “too far, too fast,” but did not challenge deficit reduction as the first task of economic policy. And it did not make the case for long-term investment, growth, and shared prosperity.
Labour’s manifesto for the 2015 general election promised that every policy would be paid for, that the party would “cut the deficit every year,” accelerate the increase of the minimum wage, end zero-hour contracts, guarantee apprenticeships for all those coming out of high school, reduce university fees, freeze energy bills, raise the top tax rate from 45 to 50 percent, but not VAT or income tax, and launch an “all-out assault” on tax avoidance. It felt like fingers in a dike rather than an economic offer to produce rising incomes again.
Over the last two decades, Labour lost votes to abstention, to the Tories, and to the anti-Europe and anti-immigration UK Independence Party.
Ed Miliband reached his highest level of support when he challenged Rupert Murdoch and the tabloids that had illegally hacked phones to produce sensational stories. It seemed then that he was willing to break with the elite “establishment” and call out the cozy arrangement of business and government. He also improved his support and raised Labour’s poll numbers when he committed to freeze energy bills, a policy dismissed derisively by the big utility companies. But those gains were episodic and insufficient for the working class, and Labour lost badly in the general election; it later lost many Labour constituencies to Brexit.
Well, the center-left parties now all across Europe are struggling and losing ground to anti-establishment and anti-immigrant parties. The U.K. Labour Party is even more marginalized under its current leader, Jeremy Corbyn, who questions whether Britain is obligated to respond militarily to a Russian attack on a NATO member and speculates publicly about a nationwide pay cap to address inequality. The party is deeply fractured on immigration and on the free movement of labor from the EU.
In Austria, the anti-immigrant and anti-Islamic Freedom Party candidate Norbert Hofer won 46 percent of the vote in the election for president.
Italian Prime Minister Matteo Renzi resigned after the “No” campaign won almost 60 percent of the vote in the referendum of constitutional reforms that Renzi was pushing. Although this defeat could be explained in a number of ways, Italy is a country where disposable income declined since Renzi formed his Democratic Party government and where 60 percent of the public believes immigration and diversity are a threat to the country—one of the highest levels in Europe.
Donald Trump’s win has given heart to the anti-establishment and anti-immigration parties everywhere, but it also taught us a lot. To start, center-left parties must:
- Put working-class economics front and center.
- See the country’s challenges through the lives of working people and be skeptical of conventional wisdom emanating from the elites in metropolitan center.
- Acknowledge frontally that immigration needs to be better controlled and people are right to want a framework that includes real borders, new migrants contributing through taxes and learning the country’s language, and a framework where citizens receive greater benefits than non-citizens.
- Take on the elite, big money special interests that play too big a role and are the prime drivers of economic and social inequality.
- Offer much bigger economic vision and policies.
Obviously, many of these will be hard to do. One cannot simply pull economic policies bold enough to shift the distribution of income and wealth off the shelf. Our leaders live and breathe the air and culture of our metropolitan centers. Business donors are very real. And accepting the legitimacy of immigration worries will be most controversial and challenging for progressives who embrace multiculturalism and must also fight Donald Trump, Nigel Farage, and Marine Le Pen’s outrageous and racist polices.
The left can still regain the momentum they need to push through bold reforms if they are honest about the past and bold about the future.