Listen, Liberal: Or, What Ever Happened to the Party of the People?
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Clinton’s wandering political identity fascinated both his admirers and biographers, many of whom chose to explain it as a quest: Bill Clinton had to prove, to himself and the nation, that he was a genuine New Democrat. He had to grow into presidential maturity. And the way he had to do it was by somehow damaging or insulting traditional Democratic groups that represented the party’s tradition of egalitarianism. Then we would know that the New Deal was truly dead. Then we could be sure.
This became such a cherished idea among Clinton’s campaign team that they had a catchphrase for it: “counter-scheduling.” During the 1992 race, as though to compensate for his friend-of-the-little-guy economic theme, Clinton would confront and deliberately antagonize certain elements of the Democratic Party’s traditional base in order to assure voters that “interest groups” would have no say in a New Democrat White House.14 As for those interest groups themselves, Clinton knew he could insult them with impunity. They had nowhere else to go, in the cherished logic of Democratic centrism.
The most famous target of Clinton’s counter-scheduling strategy was the civil rights leader Jesse Jackson, the bête noir of centrists and the living embodiment of the politics the Democratic Leadership Council had set out to extinguish. At a 1992 meeting of Jackson’s Rainbow Coalition, with Jackson sitting to his left, Clinton went out of his way to criticize a controversial rapper called Sister Souljah who had addressed the conference on the previous day. The exact circumstances of Clinton’s insult have long been forgotten, but the fact of it has gone down in the annals of politicking as a stroke of genius, an example of the sort of thing that New Democrats should always be doing in order to discipline their party’s base.15
Once Clinton was in the White House, counter-scheduling mutated from a campaign tactic to a philosophy of governance. At a retreat in the administration’s early days, Bill’s chief political adviser, Hillary Clinton, instructed White House officials how it was going to be done. As Carl Bernstein describes the scene, Hillary announced that the public must be made to understand that Bill was taking them on a “journey” and that he had a “vision” for what the administration was doing, a “story” that distinguished good from evil. The way to dramatize this story, the first lady continued (in Bernstein’s telling), was to pick a fight with supporters.
You show people what you’re willing to fight for, Hillary said, when you fight your friends—by which, in this context, she clearly meant, When you make them your enemy.*
NAFTA would become the first great test of this theory of the presidency, with Clinton defying not only organized labor but much of his own party in Congress. In one sense, it achieved the desired results. For New Democrats and for much of the press, NAFTA was Clinton’s “finest hour,” his “boldest action,” an act befitting a real he-man of a president who showed he could stand up to labor and thereby assure the world that he was not a captive of traditional Democratic interests.16
But there was also an important difference. NAFTA was not symbolism. With this deed, Clinton was not merely insulting an important constituency, as he had done with Jesse Jackson and Sister Souljah. With NAFTA he connived in that constituency’s ruin. He assisted in the destruction of its economic power. He did his part to undermine his party’s greatest ally, to ensure that labor would be too weak to organize workers from that point forward. Clinton made the problems of working people materially worse.
It is possible to regard this deed as fine or brave, as so many New Democrats did, if you understand the struggles of workers as a cliché you’ve grown sick of hearing. However, if you understand those workers as humans—humans who contributed to Bill Clinton’s election—NAFTA starts to appear like betrayal on a grand scale as well as a sizable political blunder. By making it clear to labor, his party’s strongest combatant, that he did not care about them or their issues, Clinton essentially encouraged them to stay home on election days. To this day, for working people, the lesson of NAFTA glares like the headlight of an oncoming locomotive: These affluent Democrats do not give a damn about inequality except as an election-year slogan.
Workers were the first casualties of Bill Clinton’s quest for his New Democratic self. But the journey went on. The next great milestones were his big, first-term legislative accomplishments: the great crime crackdown of 1994 and the welfare reform measure of 1996. Both were intended to swipe traditional Republican issues and to demonstrate Clinton’s independence from the so-called special interests.
Back in 1992 Clinton had briefly departed the campaign trail to return to Arkansas and be visibly present while his state went about executing one Ricky Ray Rector, a convicted killer who was so mentally damaged he had no idea what was happening to him or why. Clinton’s design was to signal his toughness and thus avoid the fate of Michael Dukakis, whose presidential run had been done in by TV commercials suggesting he was too much of a wuss to keep dangerous black men behind bars. In the precise words of Christopher Hitchens, Rector was a “human sacrifice” for Clinton’s presidential ambition.17
The reasoning that led Clinton to turn the Rector execution into a ritual appeasement of the electoral gods brought him, in 1994, to call for and then sign his name to the most sweeping police-state bill that modern-day America has seen. Among other things, the measure provided for the construction of countless new prisons, it established over a hundred new mandatory minimum sentences, it allowed prosecutors to charge thirteen-year-olds as adults in some cases, and it coerced the states into minimizing parole. It also increased the number of federal death penalties from three to sixty, including some for nonlethal offenses—and this from a political party that in 1972 had called for the abolition of capital punishment in its national platform. Clinton’s aides referred to this bid for mass imprisonment as “upping the ante,” as though it were a poker game with the Republicans. Winning that game was the subject of boasting for Democrats. Said Joe Biden, then a Democratic senator from Delaware, during the debate on the bill:
The liberal wing of the Democratic Party is now for 60 new death penalties. That is what is in this bill. The liberal wing of the Democratic Party has 70 enhanced penalties.… The liberal wing of the Democratic Party is for 100,000 cops. The liberal wing of the Democratic Party is for 125,000 new State prison cells.18
None of this happened because of an increase in crime, by the way—violent crime had actually crested several years before—but rather to demonstrate Clinton’s hard-heartedness. “The one way Bill Clinton defined himself as a different Democrat was his tough position on crime,” said Senator Joe Lieberman on the occasion of the bill’s passage. “And he has redeemed that promise.”19
In an ugly coda that was delayed by about a year, the ’94 law also required President Clinton personally to sign off on the infamous 100-to-1 sentencing disparity between crack and powder cocaine. The former drug was thought to be the scourge of the planet—and 88 percent of the people arrested for it were black—while the latter, even though it was essentially the same thing, was regarded as just another harmless yuppie crime. Handing down prison sentences of many decades for one drug but not the other was both racist and insanely cruel. But Clinton went out of his way to ensure that this practice continued. The number of young black citizens who, in this manner, lost years of their lives to advance Bill Clinton’s journey to political manhood will probably never be known. Let a thousand Ricky Ray Rectors burn, but please God, get this man reelected.20
Unfortunately, building the greatest gulag in the world was not enough to demonstrate Bill Clinton’s disregard for the lives of the poor. The right wing actually mocked his crime bill as a kind of government handout to the poor.21 He would have to do more.
Which brings us to the 1996 welfare reform act, one of the proudest deeds of the Clinton presidency. It is difficult to overstate the level of genius that punditry and political science used to attribute to this measure. An act of highest bipartisanship, it was said. Joe Klein wrote that Clinton “made work pay,” a bewildering but
nevertheless common description of the statute. To say that welfare reform succeeded, in the sense that there are now fewer people on welfare, is also a well-worn cliché; Clinton himself made this point on the op-ed pages of the New York Times in 2006.22
The story, in brief, was as follows. The country’s welfare system was deeply unpopular in the 1990s. Its centerpiece was a 1935 program called Aid to Families with Dependent Children (AFDC) that dispensed cash assistance to impoverished single mothers. AFDC was one of the basic guarantees of the American welfare state, but it was also a program hated both by resentful taxpayers as well as by the poor themselves, because it made no provision for employment or training. The hate was also racialized. In a cover story calling for Clinton to do away with the program, the New Republic magazine, the voice of the professional class, illustrated its message with a crass “welfare queen” stereotype: a photo of a black mother, having an insouciant smoke, under the words “Day of Reckoning.” Instead of fixing the system or defending it against conservative attacks, Clinton signed a 1996 Republican bill that deleted it once and for all. AFDC was replaced with a program called Temporary Assistance to Needy Families (TANF) that leaves welfare up to the states—and gives the states plenty of incentive to kick people off the rolls.
Whether that was the right thing to do with poor moms and impoverished children was of little interest in Washington. What thrilled the pundit class was the sheer counter-scheduling genius of it all. Welfare reform was the glorious moment when Bill Clinton arrived at the end of his long search for himself; when he and the world knew for sure that he was a New Democrat and he was announcing it, loud and proud. “When he signed the bill, the final cornerstone of our Clinton revolution was in place,” rejoiced DLC chieftain Al From. “There would never again be a doubt that he was a different kind of Democrat.” John Harris, the founder of Politico, interpreted it in the same way: “With his signature Clinton had proven that he was indeed an authentic New Democrat, ready to break with old liberalism, even at personal cost.”23
It had all the elements of the magic formula. Welfare reform “triangulated” between the positions of the two parties, to use the term made famous by Clinton’s advisers. It erased one of the fundamental achievements of the New Deal. It harmed an important constituency of Clinton’s party, meaning the poor, and simultaneously it negated one of the GOP’s most potent issues, thus allowing the president, as his aide Sidney Blumenthal put it, to “undercut the Republicans and begin transforming politics.”24
Some would say he had transformed politics quite a bit already. As a result of the many flanking maneuvers Clinton had pulled on his own party, Americans now had two conservative presidential candidates to choose from. In the 1996 election, which happened just a few months later, Americans resoundingly chose the friendly young conservative Bill Clinton over the dour old conservative Bob Dole.
I jest, but I probably shouldn’t. We are dealing here with the raw material of the Clinton myth: The Democrat won a second term, and that is all that matters. What he had to do to purchase that victory is irrelevant. Within the confines of the two-party system, Clinton was a veritable acrobat: He leaped and pirouetted and triangulated all around; he undermined his allies; he signed his enemies’ legislation; he got himself elected twice, and he even avoided being kicked out of the White House after his impeachment. Clinton was “The Survivor,” as per John Harris’s book title; he was “The Natural,” as per Joe Klein’s. Some believe he was even greater than those honorifics imply. Presidential historian Steven Gillon, for example, writes of Clinton’s royal progress to the 1996 Democratic Convention in Chicago as a kind of generational redemption:
By crushing Gingrich [meaning, blaming him for the government shutdown], scaling back the Republican Revolution, and returning to his New Democrat roots, [Clinton] hoped to complete the unfulfilled mission of Robert F. Kennedy. He had devoted his public life to repairing the party’s tattered political fabric. Now he was leading the party back to Chicago, to the place where it all came apart, to show that a new party could emerge from the ashes of the old.25
But celebrating this achievement feels a little like cheering for yesterday’s bump in the share price of Novartis or the victory of the Valencia soccer team: Our stake in the win is far from obvious.
LUCKY MISTAKES
If Clinton’s posture toward the Democratic Party’s base was frosty, his attitude toward Wall Street, his party’s onetime archenemy, was the opposite: a combination of enthusiastic support and practiced obsequiousness.
Clinton didn’t learn this stance easily, but he certainly learned it well. According to the version of the story made famous by Bob Woodward in The Agenda, it wasn’t until after the 1992 election was over that Clinton was advised that the deficit he would inherit from the Republicans was going to negate his planned program of stimulus spending. The bond market simply did not trust politicians, he was told, and therefore if Clinton wanted interest rates to come down—the only way to make the economy bounce back, everyone said—he would have to persuade investment bankers he was serious about taking on the federal deficit. There was to be no clever counter-scheduling of this group; no act of triangulation that could exile them to the outer political darkness. They had to be seduced, not tricked or disciplined; their confidence was critical.
They were, in short, too big to criticize. A famous passage in The Agenda has Clinton aide Robert Rubin, the former co-head of Goldman Sachs, facing off against the populist consultant Paul Begala over the subject of what to say about “the rich”: “‘Look,’ Rubin said impatiently, ‘they’re running the economy and they make the decisions about the economy. And so if you attack them, you wind up hurting the economy and wind up hurting the president.’”26 History records that Rubin got his way, not merely on the immediate matter of presidential messaging, but on the direction of political history itself.
Realizing the predicament he was in is what set off Clinton’s famous explosion in the Oval Office one day in early 1993, which we also know about from Woodward:
“I hope you’re all aware we’re all Eisenhower Republicans,” he said, his voice dripping with sarcasm. “We’re Eisenhower Republicans here, and we are fighting the Reagan Republicans. We stand for lower deficits and free trade and the bond market. Isn’t that great?”27
Here we get a rare glimpse of the Bill Clinton that might have been. But the president was a quick study. He abandoned stimulus and reconciled himself to austerity with remarkable speed. He then convinced himself that puffing up the confidence of financiers was just as good, just as populist, as pushing some old-fashioned Democratic spending program through Congress. According to Woodward, the rationalization came easily: When markets prospered, the president told himself, all Americans benefited. So when Clinton made deficit reduction the centerpiece of his economic program, Woodward recounted, “He was not trying just to help the bond market, he claimed. The bond market was just the vehicle for helping the middle class.”*
This was in the aftermath of the sharp recession that got Clinton elected, remember. Bringing down the federal deficit, however, is not ordinarily the Keynesian strategy for encouraging economic recovery in hard times; in fact, it’s the opposite of what most Keynesian economists would recommend. Thanks to the peculiar and complicated circumstances of 1993, however, it worked for Bill Clinton this one time. Joseph Stiglitz, the economist who chaired Clinton’s Council of Economic Advisers, actually calls this sequence of deficit reduction and recovery an “inadvertent effect,” a “lucky mistake.”28
“Lucky” is a kind word for it, I suppose; a more accurate one would be “deceptive” or “treacherous.” Assuming an attitude of meek deference toward Wall Street, Bill Clinton hacked away at the federal deficit; for unrelated reasons, the economy proceeded to boom. Everyone who was watching learned the obvious but wrong lesson from Clinton’s apparent success: austerity is the right policy for hard times. Running for president in 2000, Clinton’s vice president, Al Gore,
actually promised he would reduce federal spending in the event of a recession.29
This is how the party of Jefferson, Bryan, and Roosevelt became its opposite—the party of the bankers.* Clinton had made an early offering to the gods of the market by choosing Robert Rubin and Roger Altman, two prominent investment bankers, to fill high positions in his administration. Before long there were numerous others, many of them protégés of Rubin from his days at Goldman Sachs. Twice did Clinton go on to reappoint Wall Street’s favorite libertarian, Alan Greenspan, to chair the Federal Reserve. By April 1994, according to the New York Times, the president was even taking the stability of financial markets into account in foreign policy decisions.30
Whatever was required to gratify the markets was done. Interstate banking was deregulated in 1994 in order to “let the strong take over the weak so that we can move forward,” as one prominent banker put it. There was a memorable capital-gains tax cut in 1997, causing the One Percent to leap for joy. There was telecommunications deregulation in 1996 and a big if incomplete push for electricity dereg as well. There were high-profile decisions not to rein in corporate practices that were clearly out of control, like granting executives stock options in lieu of pay. Again, the brilliant political logic of counter-scheduling was at work. “The New Democrats wanted to differentiate themselves from the Old Democrats, who were seen as pro-regulation and anti-business,” writes Stiglitz in The Roaring Nineties, his account of the Clinton years. “They wanted to earn their pro-business stripes by pushing deregulation still farther than it had gone before.”31
Each of the bold endeavors I just mentioned eventually ended in disaster. The day the president signed the bill deregulating interstate banking, a memo went around the White House crowing that Clinton “has accomplished what had eluded the Carter, Reagan and Bush administrations.” What a proud moment for a Democrat. Unfortunately, what the Clinton team had actually done was to doom local and regional banks and transform the financial system into an oligopoly dominated by a handful of enormous players—the familiar Citis, Chases, Wells Fargos and Bank of Americas—none of which were really accountable to state legal systems any longer. The smaller banks Clinton was pushing toward extinction (i.e., “the weak”) tended to be much more prudent lenders than their giant cousins (“the strong”), which before long were issuing mortgages to anyone who wanted one. After the orgy of insane lending climaxed in catastrophe a decade later, of course, “the strong” had to be bailed out. They were “too big to fail” by then.32