Stop the Democratic Suicide

If the Obama administration doesn’t start to deal with the populist wave headed for Washington, Republicans will tap a reservoir of resentment that could destroy his presidency.

First they came for the bankers. Then they came for the CEOs. Then they came for the liberals. That might be the epitaph of the Democratic Party, if Democrats cannot learn to surf the tsunami of populism created by the economic earthquake.

Already across the world you can hear the rumble. Nations are scrambling to bail out their industries and protect them against foreign competition. The Indian government is slapping restrictions on Chinese imports. In Britain, workers have struck, demanding “British jobs for British workers.” In the US, popular support for “Buy American” provisions is as high as disapproval of the same provisions in the elite press.

As more Americans lose their jobs and their homes, as more businesses crater and banks topple, popular anger is rising like a wall of water over a suddenly quiet beachfront resort. You’d think that the Democrats in Washington would be aware of the danger.

As more Americans lose their jobs and their homes, as more businesses crater and banks topple, popular anger is rising like a wall of water over a suddenly quiet beachfront resort. You’d think that the Democrats in Washington would be aware of the danger. After all, the massive expansion of Great Society spending in the 1960s, followed by the stagflation of the 1970s, allowed the marginal conservative movement to tap populist anger and dominate American politics for a generation. Substitute stimulus for Great Society and years of possible “stag-deflation” for stagflation, and you have a scenario in which the Obama’s overwhelming majority could collapse as quickly as LBJ’s.

To date, however, the Obama administration has seemed more concerned with reassuring Wall Street that it will be protected against Main Street hotheads than in disciplining Wall Street on behalf of Main Street Americans who have lost jobs, homes, and savings. First Obama appointed an economic team dominated by Robert Rubin proteges, like Timothy Geithner, who were considered safe by the Street. Then Geithner put forth a plan which many economists warn might force the public to pay too much for toxic assets held by the banks.

Geithner himself is a lightning rod for populist wrath. Ordinary Americans who fail to pay their taxes can expect strict punishment. When Geithner forgot to pay sizeable sums, he was quickly forgiven and made Treasury secretary. Most Americans cannot afford maids, legal or illegal. Geithner’s violation of US employment laws, in paying an illegal-immigrant maid, was also judged to be a minor indiscretion. After all, he is simply the latest in a series of political appointees with illegal-immigrant maid problems. Let’s be reasonable. Important people can’t be expected to do their own housework, and ten minutes otherwise spent saving the world might be wasted on ascertaining whether their servants are violating US immigration laws or not. As the late Leona Helmsley might have said, immigration laws are for the little people.

Given the opportunity, Republicans can once again tap a reservoir of resentment, some of it justified. For a generation, the white-collar liberals who now dominate the Democratic Party have shown a remarkable ability to dress up their own economic interests in the rhetoric of globalization and anti-racism while attacking the motives and assaulting the characters of Americans who are far less wealthy and privileged. They conveniently forget to pay taxes for their illegal-immigrant maids and nannies, and then they denounce fellow citizens who can’t afford servants as Nazi-like xenophobes for insisting that all immigrants, not just some, obey federal immigration laws. They use their status as alumni of elite universities to get their mediocre children admitted by means of legacy programs (class-based affirmative action), and then they blame racism when working-class and middle-class whites criticize race-based affirmative action. They benefit from a regulated national labor market that effectively restricts the number of lawyers, MBAs and teachers allowed to practice in the US, and then they altruistically offer to sacrifice the livelihoods of American factory workers to help out the Chinese poor and to put American farms out of business to help the African poor. They claim that by living in expensive doorman buildings in fashionable downtowns and using uneconomical, taxpayer-subsidized mass transit they are saving the planet from global warming, and then they criticize working-class Americans with a fraction of their incomes who can only afford to live in exurbs and shop at Sam’s Club as sprawl-creating slobs. And they nod their heads in agreement when the elite editorial pages tell them on a near-daily basis that the greatest threat to America’s future is not ruthlessly nationalistic Asian mercantilism or lawless hedge-fund operations, but the danger that Congress might respond to the frightening number of non-Ivy League graduates in the electorate by enacting Buy American or Hire American policies which might inconvenience IRA investments or make it harder to hire an au pair.

The support of affluent liberals with attitudes like these helped Barack Obama to defeat his (somewhat) more populist rivals in the Democratic primaries. In his unguarded remarks to rich Californian donors in April 2008, Obama made his “bitter” gaffe about people from “these small towns” who lose their jobs and “cling to guns or religion or antipathy to people who aren't like them” that Republicans undoubtedly have ready to roll out again on a feedback loop on talk radio. Obama’s “bitter” remarks echoed the “status anxiety” theory of populism promoted in the 1950s and 1960s by liberal scholars that looked out (and down) at populist Americans and saw, not Lockean-Jeffersonian democratic republicans with legitimate grievances struggling to preserve their independence against corporations and plutocrats, but crypto-fascist Central Europeans who might vote an American Hitler into power. The caricature of American populists by mid-century liberal professors was the grandest misunderstanding of American political culture since Leon Trotsky, visiting the US, began a speech: “Workers and peasants of the Bronx!” And yet as the farmer-labor component of the Democratic Party has dwindled, stereotypes about working-class and rural Americans have grown even stronger among the liberal intelligentsia.

At least Obama, with his appeals to national unity and post-racial rhetoric, recognizes the need to get away from the rote white-male bashing that contributed to creating a generation of conservative Republican hegemony in Washington between Richard Nixon and George W. Bush. The majority of Americans, even during the conservative years, were never against big government; they were against big government that provides special treatment whether to minorities, illegal immigrants, or the CEOs and shareholders of Wall Street firms that are too big to fail. What wrecked the Democratic Party was the public’s perception of double standards.

Amazingly, some prominent Democrats have yet to figure this out. In testimony to Congress on January 7, former Clinton Labor Secretary Robert Reich worried that too many stimulus jobs would go to “white male construction workers...I have nothing against white male construction workers, I’m just saying there are other people who have needs as well.” The conservative blogosphere has picked up on Reich’s comments, interpreting them as a call for race and gender quotas in stimulus spending. If the Right succeeds in defining the stimulus package as a giveaway to minorities and women at the expense of unemployed working-class white men (and their wives and their children), then conservatives have half the populist script written for them. The other half is provided by the bailout, if that is perceived as a massive subsidy to financiers with political clout in Washington. The acolytes of Lee Atwater and Karl Rove will find it easy to write a campaign ad in 2010 or 2012 portraying the Democrats as an alliance of the top and the bottom against the middle—a classic populist theme.

To hurt the Democrats, middle American populism does not have to be channeled through the Republican Party. A third-party presidential candidate in 2012 like Ross Perot might rob Obama of re-election, by winning or, more likely, by draining off enough disaffected Democrats to give the White House back to the Republicans. Lou Dobbs—tanned, rested and ready?

Two factors, however, might help blunt the damage to the Democrats when the populist waves come rolling over the beach. One might be the division of the Republicans between social-issue populists like Mike Huckabee and free-market libertarians like those of the Club for Growth.

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Another is the presence in the Democratic Party of populist liberals, many of whom defeated incumbent Republicans in 2006, including Ohio Senator Sherrod Brown and Virginia Senator Jim Webb. The Democrats owe their majorities in both houses of Congress in part to politicians like these, whose criticism of US trade policies alarms the Rubinesque neoliberals around Obama and whose hard line toward illegal immigration upsets the liberal left. Absent these politically incorrect populists, however, the Democratic Party would be a coalition of socially liberal fiscal conservatives and pro-welfare social democrats with little appeal to the socially conservative, economically liberal white working class.

At the very least, the majority Democrats, while waiting for the tsunami to hit, can refrain from committing suicide in advance of the wave's landfall. Obama should drop all talk about “bipartisan entitlement reform,” a code word for gutting Social Security, a program popular with the majority of Americans if not the IRA-supported overclass. Social Security is not in as dire fiscal peril as deficit hawks claim, says Peter Orszag, Obama's budget director. As Orzsag has pointed out, it is health care that is busting the budget and requires reform.

While liberals oppose Social Security cuts, they favor a policy equally hated by populists, amnesty for illegal immigrants. There is no democracy in the world with rising unemployment where amnesties for foreign workers who disobey national laws would not be a form of political hara-kiri.

Above all, Obama and the Democratic Congress must refute the idea being spread by Republicans that the trillions of dollars that the federal government will spend are really disguised subsidies for particular Democratic constituencies, from environmentalists to minorities. By stigmatizing Great Society programs as special-interest giveaways, the Republicans built an alliance of conservatives and populists that marginalized liberalism and governed America for a generation. Don’t think that they can’t do it again.

Michael Lind is the Whitehead senior fellow at the New America Foundation.