article

01.01.10

Obama's Secret Power Base

As his first year in the White House ends, both liberals and conservatives are angry with Obama. But he’s got a completely different group of people to answer to.

Looking back at President Obama’s first year in office, this much is clear: Obama first enraged the right wing by seeming to veer far left, then turned off the left by seemingly to abandon them. Even as Fox News fundamentalists rail against “socialism,” self-styled progressives like Naomi Klein scream about a “blown” opportunity to lead the nation from the swamp of darkest capitalism.

Both right- and left-wing critics fail to consider the fundamental nature of the Obama regime. This presidency represents not a traditional ideology but a new politics that mirrors the rise of a new, and potentially hegemonic class, one for which Obama is a near-perfect representative.

This presidency represents not a traditional ideology but a new politics that mirrors the rise of a new, and potentially hegemonic class, one for which Obama is a near-perfect representative.

Every president and political movement, of course, brings to power an often-hoary group of grasping interest groups. Under the conservatives and George W. Bush, the favored classes included standbys like the fossil-fuel energy companies, Big Agriculture, suburban homebuilders, and the defense industry.

Rather than the “good old boys,” Obama’s core group hails from what may be best described as the “creative class”—the cognitive elite, or, to borrow from the Daniel Bell’s The Coming of Postindustrial Society, the “the hierophants of the new society.” They come not from traditional productive industry, but the self-conscious “knowledge” sectors—such as financial services, the software industry, and academia.

From early on, Barack Obama attracted big-money people like George Soros, Warren Buffett, and JP Morgan’s Jamie Dimon far more effectively than his opponents in either party. As The New York Times' Andrew Sorkin put it back in April, "Mr. Obama might be struggling with the blue-collar vote in Pennsylvania, but he has nailed the hedge-fund vote.”

Other bastions of support could be found in Silicon Valley, where Google Chairman Eric Schmidt and venture capitalist John Doerr were all early backers. Obama, the former law school professor, also did exceedingly well with academics, and many of his pivotal wins in the Midwest rested heavily on both votes and volunteers from college constituencies.

Finally Obama gained the early support of public-sector unions, now arguably the dominant power within the Democratic Party. Together, these groups now enjoy the lion’s share of influence inside the administration.

In contrast, the representatives of traditional Democratic sectors such as industrial labor unions, Latinos, or even many African Americans were slow to join the Obama bandwagon. Even after they joined his electoral coalition, they have received little in the way of succor from the president and the administration.

Indeed, for most of these voters, the past year has been an awful one. Unemployment for Latinos, blacks, and blue-collar workers has skyrocketed, particularly among males. For them, Obama’s economic plan has done very little—unsurprising given its primary focus on sustaining public-sector employment and large financial institutions.

In contrast, the core Obama constituencies appear to have ridden out the recession in fine shape. Mega-patron George Soros, for example, has boasted openly about how he was having “a very good crisis.” Much the same can be said of the largely pro-Obama hedge funds and investment bankers, for whom Paulson to Bernanke to Geithner has provided a double-play combination for the ages.

Academia has also emerged as a big winner. This administration is crammed with professors from Science Adviser John Holdren and Energy Secretary Steven Chu to former Harvard President Larry Summers, the director of the National Economic Council. More broadly, academics have reaped massive windfalls from the stimulus, both in terms of direct support for universities and funding for research projects.

One place where the priorities and class interests of the cognitive elite coalesce most has been on “climate change.” In contrast to manufacturers, farmers, or fossil-fuel firms, investment bankers, software companies, and university professors have little to fear from the rash of “green” policy initiatives.

In fact, for these groups, “climate change” often means a once-in-a-lifetime bonanza. Wall Street sees the administration’s “cap and trade” proposals as opening a whole new frontier to enjoy yet more profit. University researchers—particularly those with the right spin on the climate issue—have been big winners in the tens of billions of dollars being handed out by the Chu-led Energy Department and other federal agencies.

Overall, subsidized “alternative energy”—largely excluding both nuclear power and natural gas—also provides Silicon Valley with federal backing for dodgy ventures in everything from luxury electric cars and dodgy geothermal developments to “smart” energy grids. And, of course, all this increased federal spending also plays into the public-sector unions, for whom an ever-expanding government represents the ultimate growth industry.

In the short term, Obama’s loyalties have gained him political credit even in hard times. Support from Wall Street and Silicon Valley assures access to big-money sources and influences the upper echelons of the establishment press, particularly in New York. Meanwhile, the academy and the public bureaucracy provides a cadre of political shock troops who may be needed to rouse an increasingly disaffected Democratic base in the 2010 elections.

But Obama’s class strategy also poses considerable longer-term risks. The cognitive elites—clustered in places like Washington, New York, Boston, or Silicon Valley—tend to only talk to and listen to each other. This often makes them slow to recognize shifts in grassroots opinion on such issues as the health plan or global warming.

That risks continued erosion of support from many hard-pressed middle-class voters around the country more concerned with economic growth and holding onto their home than saving the planet. These are precisely the voters, not the tea party activists or their lefist analogues, who likely will determine the political winners in 2010 and beyond.

Joel Kotkin is Distinguished Presidential Fellow in Urban Futures at Chapman University in Orange, California, and an adjunct fellow with the Legatum Institute in London. He is the author of the forthcoming The Next Hundred Million: America in 2050 out from Penguin in early February.