The Democrats’ “Great Un-awokening” is a Giant Political Diversion

Friends,

Apologies for the length of today’s letter, but this is vitally important.

Some leading Democrats are now engaged in what’s being called the “Great Un-awokening.”

Former Ambassador to Japan Rahm Emanuel calls Democrats “weak and woke.”

Democratic Maryland Gov. Wes Moore, who is Black, vetoes a bill passed by his Democratic-dominated state legislature that took steps toward reparations.

Democratic California Gov. Gavin Newsom calls it “unfair” to allow transgender athletes to participate in female college and youth sports.

Michigan’s Democratic Senator Elissa Slotkin says the party needs more “alpha energy.”

Former Transportation Secretary Pete Buttigieg removes his pronouns from his social media bio.

Hello?

None of this gives the Democrats a message for the future. None responds to the central issues Americans care about.

The largest force in American politics is antiestablishment fury at a rigged system. There is no longer a big-government left or a small-government right or a moderate “center” in between.

There’s only right-wing cultural populism — taking aim at immigrants, transgender people, the “deep state,” “DEI,” “woke-ism”, “socialism,” critical race theory, and other Trump Republican bogeymen.

Or economic populism — aiming at the real causes of the nation’s soaring inequality and the legalized bribery of politicians: large corporations that insist on regulatory rollbacks, their fat-cat CEOs (now earning 350 times their typical employees) who want bigger tax loopholes, and other hugely wealthy Americans who are demanding larger tax cuts.

Democrats cannot win by giving in to Republican cultural populism. They must hammer economic populism.

We are at a time in the nation’s history when inequality has soared to record highs, when big money from large corporations and the rich has engulfed our politics, when CEOs are raking in record compensation compared to average workers, when a president has surrounded himself with billionaires and pledged a huge tax cut that will mainly benefit the rich at the expense of programs on which the poor and working class depend, and when American democracy is in imminent danger of succumbing to a dictatorship.

Democrats must move the national conversation to the terrain they occupied the last time inequality and corruption exploded in America.

1. The era of the Democrats’ economic populism

In the early 20th century, Americans reclaimed the economy and democracy from the robber barons of the first Gilded Age.

The Progressive Era, as it was called, emerged because millions of Americans saw that wealth and power concentrated at the top was undermining democracy and stacking the economic deck.

Wisconsin’s “Fighting Bob” La Follette instituted the nation’s first minimum-wage law. Presidential candidate William Jennings Bryan attacked the big railroads, giant banks, and insurance companies. Ohio’s Senator John Sherman led the way to America’s first antitrust legislation.

President Theodore Roosevelt used that legislation to bust up the giant trusts. Suffragists like Susan B. Anthony helped secure women the right to vote. Reformers like Jane Addams successfully pushed for laws protecting children and the public’s health. Organizers like Mary Harris “Mother” Jones spearheaded labor unions.

In 1910, Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power” could destroy American democracy. Roosevelt’s answer was to tax wealth. The estate tax was enacted in 1916 and the capital gains tax in 1922.

Teddy Roosevelt’s fifth cousin, Franklin D. Roosevelt, saw in the 1929 crash an opportunity to renegotiate the relationship between capitalism and democracy. He attacked corporate and financial power by giving workers the right to unionize, the 40-hour workweek, unemployment insurance, and Social Security.

FDR also instituted a high marginal income tax on the wealthy — those making more than $5 million a year were taxed up to 75 percent — and regulated finance.

Accepting nomination for reelection as president in 1936, FDR spoke of the need to redeem American democracy from the despotism of concentrated economic power. He reviewed what had led to the Great Crash:

Through new uses of corporations, banks and securities, [an] industrial dictatorship [now] reached out for control over Government itself . . .[T]he political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor — other people’s lives. . . . Against economic tyranny such as this, the American citizen could appeal only to the organized power of Government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people’s mandate to end it.

Roosevelt warned the nation against the “economic royalists” who had pressed the whole of society into service. “The hours men and women worked, the wages they received, the conditions of their labor . . . these had passed beyond the control of the people, and were imposed by this new industrial dictatorship,” he thundered. What was at stake, he said, was nothing less that the “survival of democracy.”

On the eve of his 1936 reelection, FDR told the American people that big business and finance were determined to unseat him. He said that during his first term of office:

We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.

2. Why the Democratic Party gave up economic populism

By the 1950s, the Democratic Party had given up economic populism. Gone from their presidential campaigns were tales of greedy businessmen and unscrupulous financiers.

Postwar prosperity had created the largest middle class in the history of the world and reduced the gap between rich and poor. By the mid-1950s, a third of all private-sector employees were unionized, and blue-collar workers regularly received generous wage and benefit increases.

Keynesianism had become a widely accepted antidote to economic downturns — substituting the management of aggregate demand for class antagonism. Even Richard Nixon purportedly claimed “we’re all Keynesians now.” Who needed economic populism when fiscal and monetary policy could even out the business cycle, and when the rewards of growth were so widely shared?

Postwar fears of Soviet communism also put a damper on the older Democratic class politics.

Then the civil rights and anti-Vietnam War movements spawned an antiestablishment, anti-authoritarian New Left that distrusted government as much as it distrusted Wall Street and big business, if not more. The split eventually gave rise to a struggle within the Democratic Party between Bernie Sanders’s populists and Hillary Clinton’s mainstream Democrats.

As Democratic pollster Stanley Greenberg concluded after the 2016 election, “Democrats don’t have a ‘white working-class’ problem. They have a ‘working-class problem’ which progressives have been reluctant to address honestly or boldly. The fact is that Democrats have lost support with all working-class voters across the electorate.”

Before Trump’s election in 2016, Democrats had occupied the White House for 16 out of 24 years. During the first two years of the Clinton and Obama administrations, Democrats controlled both houses of Congress.

They scored some important victories for working families, including the Affordable Care Act, an expanded Earned Income Tax Credit, and the Family and Medical Leave Act.

I’m proud of having been part of a Democratic administration during that time.

But I was also terribly frustrated during those years by the New Democrat political operatives who focused on suburban swing voters and ignored the old Democratic working class, and the corporate Democrats in Congress who refused to do more for average workers and who failed to see that if the middle class continued to shrink, authoritarianism would only grow.

Bill Clinton used his political capital to pass free trade agreements without providing millions of blue-collar workers who consequently lost their jobs the means of getting new ones that paid at least as well. His North American Free Trade Agreement and acquiescence to China’s joining the World Trade Organization undermined the wages and economic security of manufacturing workers across the nation, hollowing out the Rust Belt.

Both Clinton and Obama stood by as corporations busted trade unions, the backbone of the working class. Neither Clinton nor Obama spent any political capital to reform labor laws by allowing workers to form unions with a simple up-or-down majority vote, or even to impose meaningful penalties on companies that fired workers for trying to form unions.

During the 2008 campaign, Obama was instructed to not even use the words “labor union,” since most workers were not members and unions were thought to be unpopular.

Labor unions don’t just give workers more bargaining leverage to get higher wages and benefits. They also used to be a political counterweight to the power of large corporations and Wall Street.

Yet under Clinton and Obama, corporate power continued to rise and union membership to fall as a portion of the workforce. Antitrust enforcement continued to ossify.

Both Clinton and Obama depended on big money from corporations and the wealthy. Both turned their backs on campaign finance reform. In 2008, Obama was the first presidential nominee since Richard Nixon to reject public financing in his primary and general election campaigns, yet he never followed up on his reelection promise to pursue a constitutional amendment to overturn the Citizens United v. FEC decision.

3. The Republican Party’s embrace of cultural populism

The Democrats’ failure to embrace economic populism as they did under FDR enabled Republican cultural populism to fill the void, offering Americans who have been losing ground an explanation for what’s gone wrong and a set of villains to blame for what’s happened to them.

Richard Nixon and his protégé Pat Buchanan saw in cultural populism a means of destroying the New Deal coalition and attracting the white working class to the Republican Party.

Reagan deployed cultural populism in claiming that Washington insiders and arrogant bureaucrats had stifled the economy and hobbled individual achievement. The rot at the top of America was a cultural elite out of touch with average working Americans, and who coddled the poor — including “welfare queens,” Reagan’s racist dog-whistle.

In the 2004 presidential election, Republicans described Democrats as an effete group of “latte-drinking, sushi-eating, Volvo-driving, New York Times–reading, body-piercing [and] Hollywood-loving” jerks out of touch with the real America.

Meanwhile, big money poured into the American political system. By the 2016 election, the richest 100th of 1 percent of Americans — 24,949 extraordinarily wealthy people — accounted for a record-breaking 40 percent of all campaign contributions flowing to both parties. That same year, corporations flooded the presidential, Senate, and House elections with $3.4 billion in donations.

Labor unions no longer provided any countervailing power, contributing only $213 million.

By the 2020s, Republicans saw the culture wars as the central struggle of American public life.

Enter Trump.