There was a big dust-up in the Democratic Party last week, triggered by a somewhat incoherent op-ed in the
Wall Street Journal from
the leaders of a Wall Street-funded "think tank"/lobbying group called
Third Way. Many of the responses dealt with the op-ed's attack on Sen.
Elizabeth Warren, but don't be distracted by that. As Sen. Warren would
undoubtedly agree, the issues involved are much more important than the
personalities.
As politicians affiliated with Third Way hasten to distance
themselves from the op-ed, the question remains: Why are Democrats
affiliated with a group which works so strenuously to gut Democratic
programs? Voters deserve more than platitudes from these politicians.
They deserve clear answers about the issues.
This is not an "inside baseball" story about politics. It's a battle
for party control whose outcome could affect every household in the
country. If this quarrel is to be remembered -- and it's incumbent upon
genuine progressives to make sure that it is -- it should be remembered
as an attempt by a the corporate class to retain control of the
Democratic Party and limit the leftmost limits of political and economic
debate.
In our two-party system, this struggle could determine whether voters
are offered a genuinely democratic and equitable economic agenda
anytime in the near future.
Out of hand.
Clearly
Jonathan Cowan and Jim Kessler
blundered in writing this editorial. It's badly written and its
arguments are poorly constructed -- unlike other, much slicker Third Way
materials. Worse, it's misleading. (We discussed the content
here. Michael Hiltzik of the Los Angeles
Times did an excellent
analysis.)
At times the op-ed descends into vituperation and becomes, as Rep. Keith Ellison
noted,
"out of line" and "really ugly." We said there seemed to be "an almost
palpable air of desperation" to it as well. That suspicion seems to be
borne out in later remarks by co-author Jim Kessler, who
said they wrote it because of Sen. Warren's support for a bill to expand Social Security. Said Kessler:
"She
is a very compelling elected official and national figure. Her
involvement in that particular bill, we just looked at it and said
'okay, this seems to be starting to get out of hand.'"
"Out of hand" is a telling phrase for a corporate-backed faction which has tried to keep the leftmost limits of debate very much
in hand
and under tight control. It has done so with striking success for
decades, thanks in large part to its ability to influence politicians
like Presidents Bill Clinton and Barack Obama.
Cui bono?
One of this faction's key goals is to roll back three of the
Democratic Party's signature achievements: Social Security, Medicare,
and Medicaid. It is a measure of their power and influence that they've
been able to get so many Democratic politicians to support Social
Security cuts when public opinion is so strongly against them. (
This poll even shows that large majorities would pay more in payroll taxes in return for stronger Social Security benefits.)
In the words of a Latin phrase beloved by district attorneys everywhere,
Cui bono? Who benefits?
There are only two populations in the United States who clearly stand
to benefit from these cuts - high earners, who would avoid paying more
taxes if the payroll tax cap is raised, and the Wall Street banks which
would become even more profitable if they were able to manage more
retirement funds.
Third Way is very much a creature of Wall Street (as is documented
here.)
Its banking connections help explain these positions. They also explain
why the self-described "think tank" is constantly raising the alarm
about Medicare costs without mentioning the recent slowdown in
healthcare cost increases -- or, more tellingly, the negative effect
private investors like those backing Third Way are having on our
healthcare economy.
(For more on the effect of private investment on health care costs, see
here.)
Comeback kids.
"That Social Security plan was the final moment for us," said Kessler
of Sen. Warren. "Final moment" is a telling turn of phrase. Polls show
that the public wants more genuinely progressive policies than those it
is receiving from the Democratic Party leadership. Sen. Warren's
popularity seems like a harbinger of that party's potential moved to the
left -- a move that would render the "have it both ways" cynicism of
the Third Way crowd obsolete.
Economically they're already obsolete. The Clinton/Third Way/DLC
ideology -- which typically markets itself as "centrism," even though
its economic policies are far to the right of public opinion -- was
thoroughly discredited by the financial crisis of 2008. That crisis was
caused in large part by Wall Street deregulation which they pushed, and
it exacerbated the growing wage inequality and loss of social mobility
which has devastated middle class and lower-income Americans.
And yet, their brand of Wall Street-friendly "centrism" made a
remarkable comeback after 2008, thanks in large part to the Obama White
House's influence on the Democratic Party -- and to corporate money's
influence on the political process. Five years after the crisis, the
entire nation is still seeing the disastrous effects of their economic
policies on our nation's most intractable issues: unemployment, wage
stagnation, and the lack of opportunity for most Americans.
Lip service.
Even corporate Democrats are beginning to recognize that our
society's increasingly unjust economy is becoming a political liability.
It has become fashionable for them to talk about "inequality" (while
remaining cautious and/or evasive when it comes to solutions). In one
sense, at least, that's a step in the right direction. At least it's
being discussed in the corridors of power -- although it will only
become meaningful when it's backed up by concrete policies.
Until then, it's clearly
de rigueur to at least pay lip
service to principles which Cowan and Kessler sneeringly dismissed in
their op-ed as "economic populism." (One can only imagine the phone
calls they received after it was published.)
The Third Way Two come across like choir members singing from last
year's hymnal. Today's corporate Democrats are expected to at least sing
populism's praises. Corporate Dems now seek to co-opt, rather than
alienate, the many Americans who support Sen. Warren and the agenda she
represents.
Musical co-chairs.
This shift in political emphasis is one of the reasons why many corporate Democrats
hastily distanced themselves from Third Way's op-ed.
The Progressive Change Campaign Committee (
PCCC)
quickly called upon Rep. Allyson Schwartz, a Pennsylvania candidate for
governor and "co-chair" of Third Way, to resign from the group.
Schwartz declined to do that, but she called the op-ed "outrageous" and
hastily announced her support for the Social Security increases which
had sparked Cowan and Kessler's ire against Warren in the first place.
Rep. Joe Crowley responded to progressive pressure by saying he
disagreed with Third Way on Social Security but would "continue to work
with them." Rep. Ron Kind objected to the singling out of Warren by name
and said he disagreed with the idea that "economic populism is dead."
Rep. Jared Polis said "I like Elizabeth Warren. I like Third Way. I hope
they can learn to get along better,"
They are engaging in a kind of misdirection when they make this
controversy about Elizabeth Warren and "getting along better." This is a
question of policy, not personalities. Schwartz and the other Democrats
associated with Third Way need to be asked precisely where they stand
on that group's policy prescriptions -- not because everything funded by
the wealthy is bad, but because corporate money and influence is
corrupting the political process.
The agenda.
By lending their names to the Third Way letterhead, these politicians
are endorsing its agenda -- not in part, but in full -- presumably
because this affiliation gives them access to money and power. If that's
not the reason then the public deserves an explanation, especially
considering the following: Third Way is largely funded by members of an
industry with a well-documented record of fraud; that industry has
enjoyed enormous government favors and its members have not been legally
called to account for their misdeeds; and Third Way promotes policies
which are beneficial to its patrons and hurtful to the middle class.
(And it does so while claiming to be "progressive" -- a term which is quickly losing its meaning.)
Democrats who choose to be publicly affiliated with a group like that
should therefore expect to be asked: How can we count on you to vote in
the public's interest when it clashes with Wall Street's?
Questions.
Third Way has taken a number of strong and specific policy stands.
It's not enough to denounce an op-ed. Democrats who affiliate themselves
with Third Way need to answer some questions for the voters, such as:
- Do they agree with Third Way's support for
the Trans-Pacific Partnership, a job-killing "free trade" deal which
also gives corporations and the nationals of other countries
unprecedented control of US regulations and courts?
- Do they agree that it's "soaking the rich"
to raise the top marginal tax rate for billionaires to 49.5 percent (it
was 93 percent under Eisenhower), or that increasing taxes for the
wealthy is a "purely ideological fix"?
- Do they support Third Way's pro-fracking and pro-nuclear industry positions?
There are those in our nation's capital who argue that it is a "witch
hunt" to ask these questions. Only in Washington is it considered a
form of persecution to ask an elected official where they stand on the
issues.
Fault lines.
We're living through tough economic times -- well, most of us are,
anyway. In the bubble-fueled Clinton economy of the 1990s, it was easier
to obscure the economic divisions that have been carrying this country
apart for decades. Unfortunately for the Third Way crowd, nowadays the
fault lines are much clearer.
The president quickly abandoned his Third Way-ish habit of claiming
that "Wall Street and Main Street rise and fall together" as it became
increasingly clear that in most cases the opposite is true. The "old
myths" -- to use a presidential phrase -- were shattered in the 2008
crisis.
Wall Street deregulation shattered the economy. The banks are now
bigger and more concentrated than they were before the crisis. You can't
stand with them, support corporate-friendly tax and trade policies,
push for "entitlement" cuts with cynical and misleading arguments -- and
still claim to be a "progressive" who opposes wealth inequality.
Final moments.
The preferred solutions of the Democratic corporate class --
continued deregulation and under-regulation of finance and industry,
job-killing trade agreements, and the Social Security, Medicare and
Medicaid cuts they've been pushing relentlessly for 20 years -- are
disliked by American majorities. They are economically disastrous for
most Americans. And yet, Big Money's stranglehold on the political
process has left the voters bereft of alternatives.
Washington operators like Jonathan Cowan and Jim Kessler aren't
really afraid of Sen. Warren. They're afraid of what she represents,
both politically and economically.
They're right to worry. This isn't a fight about Cowan and Kessler,
or about Elizabeth Warren, or about whether the Democratic Party is a
"big enough tent" to hold people of varying opinions. It's a fight to
determine whether that party will represent the public's interests
unsparingly in the years to come, or will continue to be swayed by
corporate interests.
For too long the public has been deprived of the chance to vote for a
party which wholeheartedly represents its economic interests. When
voters come to understand the Third Way agenda and what it stands for,
the resulting political shift could lead to corporate centrism's "final
moment" as the dominant faction of the Democratic Party.
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