Everyone today wants to explain the what this election meant. I see a number of “centrists” like Paul Begala and Mark Penn (yes, that Mark Penn) are already claiming that the lesson of the election is that the Democratic Party needs to move further to the mythical center, as if Barack Obama had pursued some extreme leftist agenda over the last few years.
I call Bullshit.
Mark Penn believes the center requires Democrats to throw everyone under the bus in the Democratic party who doesn’t believe in free trade. Mark Penn was Hilary Clinton;s campaign manager. He bungled her campaign by ignoring the concerns of the Democratic base. Ultimately he left because he as a member of his lobbyist firm he met with a Colombian government representative to promote a free trade deal at the height of the campaign when Hilary was still trying to woo Union support.
Paul Begala is a well known former Clinton staffer, Democratic Leadership Council hack, media pundit and all around concern troll.
Guess what? Free trade is the primary factor that caused the loss of millions of well-paying jobs in America over the last thirty years. Free traders are the people who Naomi Klein, in her book The Shock Doctrine, rightly labeled Disaster Capitalists. As members of the Clinton administration they pushed through deregulation of Telecommunication sector of our economy which has resulted in the massive consolidation of of that industry into a few monolithic mega-corpations with extremely deleterious effects on our economy.
They also enabled deregulation of the energy and pharmaceutical industries with their Republican allies in Congress. Phil Gramm’s success at dismantling the last vestiges of the financial regulatory scheme FDR (the Glass Steagall Act) put in place back in the 1930’s, the Graham-Biley bill repealing it would not have been possible without their “centrist” support. And we all know how that turned out:
(cont.)
ROBERT WEISSMAN [Ed. Note – Author of Sold Out: How Wall Street and Washington Betrayed America ]: Well, we saw over the last decade and really the last three decades, with both parties in power in Congress and the executive branch, this long series of deregulatory moves. And as you go step-by-step through them, you see that those are the things that really paved the way for the current financial collapse.
Perhaps the signature move was the 1999 repeal of the Glass-Steagall Act, which had prevented co-ownership of commercial banks and securities firms, investment banks. That was precipitated by and directly authorized the creation of Citigroup, which is now sucking so much public taxpayer money and has really been at the cutting edge of driving the financial crisis we’re now in.
You can go forward another year and see that Congress, with the Clinton administration authorization, prohibited the executive branch agencies from regulating financial derivatives, the instruments that no one can really understand or get a handle on but which have multiplied the problem from the housing crash many-fold over. So we now have $600 trillion in financial derivatives being traded around the world, with no one having a handle on what they are, who owes whom, and all of this requiring us to pour tens of billions of more dollars more every day, it seems, into AIG.
You can step forward and look at the failure to enforce rules against predatory lending, beginning with the Clinton administration, but really accelerating in a really terrifying way with the Bush administration, so that there were about three actions taken by federal regulators in the peak period of predatory lending—three—against some of the commercial lenders and mortgage brokers who were undertaking some of the most abusive predatory lending activities. And on and on it goes.
These are the people now advising the Democrats to follow their so-called “centrist” advice. The same advice that led to George W. Bush’s victories in 2000 and 2004, the massive outsourcing of jobs from America to foreign nations and the current massive influence of multinational corporations, with its attendant corruption, on our electoral politics.
The truth is that the obsession with “centrism” by a certain faction of the Democratic Party over the last three decades was a significant factor in America’s economic decline, particularly the decline of our middle class. Democratic Centrism led to the diminution of the Unions, one of the principal pillars of the party;s base. Democratic Centrists pushed for policies that led to lost jobs, income inequality the likes we have not seen since the Great Depression, a crumbling infrastructure, and the dumbing down of our political discourse. Their failure to use government as a force for good helped create the crisis of our public educational system, helped create a growing and permanent underclass, led to the growth of the Prison Industrial Complex, and most of all let the lobbyists of K Street assume control of our Democracy.
Most of all the free trade ideologues in both parties helped assist the technological rise of China and our own decline as an economic power. Other nations not beholden to this kind of “centrism” view free trade as only as a means to take advantage of America’s obsession with destroying its own middle class while growing their own economies at our expense.
The failure of the Democrats in this election cycle can be laid directly at the feet of centrists like Tim Geithner and Larry Summers who helped “centrist” Republicans and Democrats reduce the size of the stimulus package to at least half of what we really needed, and prefer tax cuts to investment in infrastructure at a time when we could have borrow money at extremely low rates and used it to generate jobs and through those jobs more revenue for the government. Centrists supported the privatization of Government functions, offshore drilling, and as little health care reform as possible (though we know a more bold approach such as a public option or — gasp — single payer health care would have been cheaper and more efficient than the current system).
In short, Democratic Centrists preferred profits for their corporate donors over economic benefits for ordinary Americans. Their unholy adoption of a “Big Business First” agenda helped set the table for the radicalism of the right.
Now where are they? Did those corporate donors they avidly pursued continue to support Democrats this last election cycle, grateful for the support of centrists like Mary Landrieu and Ben Nelson who helped water down the legislation pushed by President Obama and Nancy Pelosi in order to benefit their corporate masters? Did the Blue Dogs in Congress benefit from corporate donations for helping rein in Obama’s “socialist” and “anti-capiatlist” agenda?
Of course not. First chance these wealthy conservatives and multinational corporations got they poured hundreds of millions of dollars into defeating those same “centrist” Democrats aided and abetted by the Supreme Court’s conservative majority decision in Citizen’s United. To claim that “centrism” of the kind Mark Penn and Paul Begala are advocating is what the Democratic Party needs right now is not only foolhardy for the party, but for the nation as well.
Yesterday, America elected the most radical group of politicians to ever hold control of the House of Representatives. And even the less radical Republicans elected to the House yesterday have to be looking over their shoulder after seeing what happened to Republican incumbents who were given the Tea Party treatment in Republican primaries this year despite their rigid adherence to the obstructionism of everything Obama and the Democrats proposed, even when those proposals included policies Republicans and conservatives had previously supported.
What will these radical right wing Tea Party Republicans (and any GOPer afraid of being primaried out of their job) do now that they have the power of the purse? We know what they say they will do: that they will to shut down government if necessary to de-fund the programs the Congress passed over the last 21 months and will keep the government shut down until they get their way. They are on a mission to destroy President Obama and the Democratic Party.
Now explain to me how Democrats moving to “the center” is going to change that? Unless by “center” you mean giving in to whatever Rand Paul, Jim Demint and all the crazies in the House will demand from Democrats in order to keep any semblance of a federal government operating, that is.
Begala and Penn are delusional if they think they can woo back the Corporate Deep Pockets they so avidly served during the Clinton years. Big Money doesn’t need them anymore. They just saw the effect their tidal wave of cash spent on electing Republicans did, no matter how insane the ideas or corrupt the professional and personal lives of those candidates were. Moving the Democratic Party farther to the right will not bring them back to drop money on Democratic candidates in 2012. Quite the contrary.
The inconvenient truth is that “Centrism” and the “Third Way” has been an Epic Fail for any Democrat not named Bill Clinton. And even he could not succeed in the current political climate. The political world has changed. Democrats lost this election because they had no effective message other than we are not as crazy as THOSE PEOPLE OVER THERE. That message didn’t work, my friends. Republican Lite never has.
Obama won in 2008 because people believed he would take the bold steps to change our government, restore our Democracy and do whatever was necessary to end the economic crisis for the middle class. When that didn’t happen (in large part thanks to “Democratic Centrists”) he got stuck with the blame. Did his race play a role? Most assuredly, but it wasn’t the only factor. It just amplified the other factors that led to the Democrats’ defeat: high unemployment, high foreclosure rates and a stagnant economy for anyone not working on Wall Street or employed as a Senior Executive at a multinational company.
The anger at the failure of the Democrats to address those fundamental concerns because of insufficient government intervention was used by cynical opportunists on the right to blame Obama for the economic problems that George W. Bush and all his Republican predecessors had created.
The Republicans and the Tea Party monster they formed touted Obama’s “socialist” and “radical agenda,” called him a Muslim, and threw every coded racial attack at him they could. But it worked in large part because of the timidity of the centrists to take the necessary steps to reduce unemployment.
Without that high unemployment rate and the fear it generated in white middle class families across the nation, the Tea Party would never have been able to generate the anger and rage against Obama and the Dems that they did. In effect, centrists in Obama’s own party killed any hope that Democrats could retain control of Congress when they limited the stimulus package to half of what it should have been.
Perhaps nobody’s task was more important than Romer’s. She had drafted a crucial section of the memo which included an economic forecast and projections about the impact of a fiscal stimulus. Romer was well suited for the job; an economic historian, she was a close student of Washington policymaking during downturns. One of her key papers as an economist at the University of California at Berkeley, where she had spent the previous twenty years, showed that, contrary to popular belief, Franklin D. Roosevelt’s spending programs hadn’t pulled America out of the Depression. (She found that monetary policy was the key factor.) Conservatives had seized on the paper to disprove the efficacy of fiscal stimulus, but Romer’s point wasn’t that Roosevelt had spent too much to no purpose; it was that he hadn’t spent enough. When faced with a severe recession, she believed in overwhelming force.
Summers has been working in Presidential politics for two decades, but Romer was entering government for the first time. “I’m the quintessential outsider here,” she told me. But she was a “giant supporter of the President, probably since 2004.” She said, “On a bad day, my husband would find me at home clicking on the Democratic Convention speech, saying, ‘I want this man to be President.’ ” At the December meeting, it was Romer’s job to explain just how bad the economy was likely to get. “David Axelrod said we have to have a ‘holy-shit moment,’ ” she began. “Well, Mr. President, this is your ‘holy-shit moment.’ It’s worse than we thought.” She gave a short tutorial about what happens to an economy during a depression, what happened during previous severe recessions, and what could happen if the Administration didn’t act. She showed PowerPoint slides emphasizing that the situation would require a bold government response. The purpose of a stimulus is to fill the hole left during a recession by the difference between the economy’s potential and what it’s actually producing—what economists call the “output gap.” She explained the impact of different types of stimulus, giving a lesson on “fiscal multipliers”—the term economists use to describe the economic impact of every dollar of stimulus. For instance, she explained, a dollar of government spending raised the G.D.P. by about a dollar fifty, while every dollar of tax cuts, which are partially saved, generally returned about a dollar or less.
Axelrod told me, “The basic message was that, if we didn’t act quickly to replace the output we were losing, unemployment could skyrocket.” Romer mentioned that employers had dropped more than half a million workers from the payrolls in November, the biggest cut in more than three decades. “The conditions are grim, and deteriorating rapidly,” she told the President.
The most important question facing Obama that day was how large the stimulus should be. Since the election, as the economy continued to worsen, the consensus among economists kept rising. A hundred-billion-dollar stimulus had seemed prudent earlier in the year. Congress now appeared receptive to something on the order of five hundred billion. Joseph Stiglitz, the Nobel laureate, was calling for a trillion. Romer had run simulations of the effects of stimulus packages of varying sizes: six hundred billion dollars, eight hundred billion dollars, and $1.2 trillion. The best estimate for the output gap was some two trillion dollars over 2009 and 2010. Because of the multiplier effect, filling that gap didn’t require two trillion dollars of government spending, but Romer’s analysis, deeply informed by her work on the Depression, suggested that the package should probably be more than $1.2 trillion. The memo to Obama, however, detailed only two packages: a five-hundred-and-fifty-billion-dollar stimulus and an eight-hundred-and-ninety-billion-dollar stimulus. Summers did not include Romer’s $1.2-trillion projection. The memo argued that the stimulus should not be used to fill the entire output gap; rather, it was “an insurance package against catastrophic failure.” At the meeting, according to one participant, “there was no serious discussion to going above a trillion dollars.”
So thank you no, Messrs. Penn and Begala. I don’t want to buy the perfumed centrist (i.e., keep moving to the right) horse manure you’re peddling. And if President Obama and the Democrats are smart, they won’t either.
