Listen, Liberal: Or, What Ever Happened to the Party of the People?

by Frank, Thomas

  Among this honor roll of innovation Democrats, former Governor Deval Patrick, who presided over the Massachusetts government from 2007 to 2015, takes pride of place. He is typical of liberal-class leaders; you might even say he is their most successful exemplar. Everyone seems to like him, even his opponents. He is a witty and affable public speaker as well as a man of competence, a highly educated technocrat who is comfortable in corporate surroundings. Thanks to his upbringing in a Chicago housing project, he also understands the plight of the poor, and (perhaps best of all) he is an honest politician in a state accustomed to wide-open corruption. Patrick was also the first black governor of Massachusetts and, in some ways, an ideal Democrat for the era of Barack Obama—who, as it happens, is one of his closest political allies.21

  “Our government is incredibly enlightened,” said John Harthorne, the head of the MassChallenge startup incubator, in a 2010 TED talk in which he explained why he chose Massachusetts for his planned entrepreneurial utopia. “I would wager a bet that Deval Patrick could go head-to-head on an intelligence test with any other governor.”22

  Patrick’s oft-told life story follows the classic Democratic trajectory. A young man with loads of intelligence but no money, Patrick was lifted from nowheresville by an academic scholarship to a fancy prep school. A few years after that, he got into Harvard and, in exactly the manner of the Clinton and Obama stories, the doors to a previously unknown world swung open for him.

  He climbed effortlessly through the meritocracy. Law school was also Harvard and, after working for the NAACP for a number of years, Patrick went to Washington and ran the Civil Rights Division of the Justice Department, an important job. In 1994, he won a $54 million settlement in a memorable discrimination suit against Denny’s restaurants—among other things, the chain had once refused service to black members of the president’s Secret Service unit—and shortly afterward Patrick took up a case that had to do with the subprime real estate lender Long Beach Mortgage. The charge this time was discriminatory lending; eventually Patrick settled this case, too, although for a less impressive sum.

  In the Aughts, Deval Patrick became a corporate lawyer, and before long he took the customary next step for Democrats of a certain kind: he went to work for the very corporate outfit he had once sued, taking a seat in 2004 on the board of the parent company of the subprime lender that was now calling itself Ameriquest.

  Yes: Ameriquest. In 2004, the company was the country’s largest subprime lender and, we now know, a pioneer in the kinds of practices that, after being adopted by many others, came close to destroying the world’s financial system.23 For Ameriquest insiders, packaging up “stated-income” loans and sending them down the Wall Street pipeline was a highly profitable business—an “innovative”24 business, even; for everyone else on the planet, it was like chugging arsenic. Bankers profited and the world paid—the world is still paying. Any politician associated with this sleazy outfit should have had his career terminated immediately and unconditionally.

  Patrick dodged that particular bullet, however. He was elected governor of Massachusetts in November of 2006, the year before the first tremors of the coming economic earthquake would be felt. The controversies arising from his service on Ameriquest’s board were easily contained.

  As governor, Patrick became a kind of missionary for the innovation cult. “The Massachusetts economy is an innovation economy,” he liked to declare, and he made similar comments countless times, slightly varying the order of the optimistic keywords: “Innovation is a centerpiece of the Massachusetts economy,” et cetera.25 The governor opened “innovation schools,” a species of ramped-up charter school. He signed the “Social Innovation Compact,” which had something to do with meeting “the private sector’s need for skilled entry-level professional talent.”26 In a 2009 speech called “The Innovation Economy,” Patrick elaborated the political theory of innovation in greater detail, telling an audience of corporate types in Silicon Valley about Massachusetts’s “high concentration of brainpower” and “world-class” universities, and how “we in government are actively partnering with the private sector and the universities, to strengthen our innovation industries.”27

  What did all of this inno-talk mean? Much of the time, it was pure applesauce—standard-issue platitudes to be rolled out every time some pharmaceutical company opened an office building somewhere in the state.

  On other occasions, Patrick’s favorite buzzword came with a gigantic price tag, like the billion dollars in subsidies and tax breaks that the governor authorized in 2008 to encourage pharmaceutical and biotech companies to do business in Massachusetts. Lesser achievements included the million dollars Patrick spent “to provide assistance, mentoring and advice to startups and innovation companies” and the other million-and-a-half spent to support startups at the University of Massachusetts at Lowell.28

  On still other occasions, favoring inno has meant bulldozing the people in its path—for instance, the taxi drivers whose livelihoods are being usurped by ridesharing apps like Uber. When these workers staged a variety of protests in the Boston area, Patrick intervened decisively on the side of the distant software company; apparently convenience for the people who ride in taxis was more important than good pay for people who drive those taxis. It probably didn’t hurt that Uber had hired a former Patrick aide as a lobbyist, but the real point was, of course, innovation: Uber was the future, the taxi drivers were the past, and the path for Massachusetts was obvious.

  No surprise, then, that the first recipient of the Deval Patrick Commonwealth Innovation Award was none other than Deval Patrick. The prize was bestowed on him in 2014 by MassChallenge’s Harthorne, joined by the CEO of Uber, Travis Kalanick, who showed up in order to add some entrepreneurial gravitas to the moment. “I wanted to be here to thank the governor for his leadership, his vision around innovation, around technology, and creating that innovative spirit here in Massachusetts,” Kalanick said on that solemn occasion.29

  Eric Schmidt, the chairman of Google, was also on hand to salute Massachusetts for an “explosion of startups.” “We need more entrepreneurs because they create jobs, they solve every known problem,” he intoned.

  That was a bold claim to make for any social cohort, but John Harthorne went even further: “MassChallenge is an attempt to remind us and refocus as a community and a society on creating value,” he declared. “We designed it to help entrepreneurs win because entrepreneurs are the value creators of society.”30

  This was not a political event, strictly speaking, but that last comment was most definitely a political statement, as blunt a justification of class hierarchy as anything I’ve heard this side of the Tea Party movement.

  Three months after the prize ceremony, the Democrat Deval Patrick’s second term as governor came to an end. A short while later, he won an even bigger prize: a job as a managing director of Bain Capital, the private equity firm founded by Mitt Romney—and that had been so powerfully denounced by Democrats during the 2012 election. Patrick spoke about the job like it was just another startup: “It was a happy and timely coincidence I was interested in building a business that Bain was also interested in building,” he told the Wall Street Journal. Romney reportedly phoned him with congratulations.31

  ENTREPRENEURS FIRST

  Another thing that Google’s Eric Schmidt said on the occasion of the Deval Patrick Commonwealth Innovation Award was that “if you want to solve the economic problems of the U.S., create more entrepreneurs.” That sort of sums up the ideology in this corporate commonwealth. But how has such a doctrine become holy writ in a party dedicated to the welfare of the common man? And how has all this come to pass in the liberal state of Massachusetts?

  The answer is that I’ve got the wrong liberalism. The kind of liberalism that has dominated Massachusetts for the last few decades isn’t the stuff of Franklin Roosevelt or the United Auto Workers; it’s the Route 128/suburban-professionals variety. Professional-class liberals aren’t really
alarmed by oversized rewards for society’s winners; on the contrary, this seems natural to them—because they are society’s winners. The liberalism of professionals just does not extend to matters of inequality; this is the area where soft hearts abruptly turn hard.

  While Massachusetts is a liberal place—the state that sent Elizabeth Warren to the Senate even—equality issues do not necessarily go over smoothly here. The state’s income tax, to mention a particularly egregious example, is a flat tax, with the same rate paid by rich and poor alike. When the Massachusetts legislature raised the minimum wage in 2014, it was only after a huge grassroots campaign made it clear that the issue would soon pass as a ballot initiative anyway. In 2012, the legislature enacted a three-strikes mandatory sentencing law a full twenty years after violent crime peaked in America. And when the legislature limited collective bargaining rights for public employees in 2011, causing columnists across the country to compare Massachusetts to Scott Walker’s Wisconsin, Governor Deval Patrick eventually signed on. It was something the state had to do in order to cut costs, people said.

  Innovation liberalism is “a liberalism of the rich,” to use the straightforward phrase of local labor leader Harris Gruman. This doctrine has no patience with the idea that everyone should share in society’s wealth. What Massachusetts liberals pine for, by and large, is a more perfect meritocracy—a system where everyone gets an equal chance and the truly talented get to rise. Once that requirement is satisfied—once diversity has been achieved and the brilliant people of all races and genders have been identified and credentialed—this species of liberal can’t really conceive of any further grievance against the system. The demands of ordinary working-class people, Gruman says, are unpersuasive to them: “Janitors, fast-food servers, home care or child care providers—most of whom are women and people of color—they don’t have college degrees.”

  And if you don’t have a college degree in Boston—brother, you’ve got no one to blame but yourself.

  This chapter owes a big debt to John Summers, who encouraged me to explore this subject and who wrote a groundbreaking essay on the innovation cult in Cambridge, Massachusetts, called “The People’s Republic of Zuckerstan.” See Baffler 24 (2014).

  10

  The Innovation Class

  In his 2011 State of the Union Address, President Obama addressed the plight of the country’s working people—of Americans who used to be able to get a “job for life” without having a college degree. The president gave a powerful description of what had happened to them with deindustrialization: their shattered towns, their ruined lives, their piddling paychecks.

  Ordinarily, this is the point where a Democrat would start laying out his plans to reverse this disaster—a public works program, an end to the exodus of manufacturing, and so on. But not this Democrat. Instead, using the following words, he told those working people that nothing could be done for them: “So yes, the world has changed. The competition for jobs is real.” What has happened to working people was simply “real.” It was reality. What you do about reality is you get used to it.

  But then, a few moments later, Obama pivoted to a happier subject. It was 2011, the recession was technically over, his signature health care proposal had been enshrined in law, and it was time for him to outline the positive economic program that would define the rest of his presidency.

  You guessed it: innovation was what we needed more of. “The first step in winning the future,” Obama announced, “is encouraging American innovation.” On this matter the president showed no trace of fatalism or resignation before an unalterable reality. On this matter, government could act without any problem. We needed to subsidize innovators, he said, and generously, in order “to spur on more success stories.” Since everyone knows that innovation is connected to higher learning, Obama called on students to study harder and for more people to go to college.

  I remember listening to him talk about “innovation,” and just tuning it out. At the time I thought of innovation as a cliché, a generic faith in progress. But Obama was serious about this stuff. Encouraging innovation was to be his great economic vision, his liberal utopia. Bill Clinton had become identified with the dot-com New Economy by accident; Barack Obama was going to do it deliberately. A month after that State of the Union speech, the White House made it official. “America’s future economic growth and international competitiveness depend on our capacity to innovate,” a policy document declared. “To win the future, we must out-innovate, out-educate, and out-build the rest of the world.”1

  WHAT’S GOOD FOR GOOGLE

  I have described Barack Obama’s commitment to traditional Democratic concerns as falling somewhere between indifferent and icy. The financial industry, however, has seen him as a red-hot radical since his first days in office. In 2008, they had sided with Obama over John McCain, but by 2012 Wall Street stood solid behind the Republican Romney.

  No matter. By that time, the place once filled by finance in the Democratic imagination had begun giving way to Silicon Valley, a different “creative-class” industry with billions to give in campaign contributions. Changes in the administration’s personnel paralleled the money story: at the beginning of the Obama years, the government’s revolving doors had all connected to Wall Street; within a few years, the people spinning them were either coming from or heading toward the West Coast. In 2014, David Plouffe, the architect of Obama’s inspiring first presidential campaign, began to work his political magic for Uber. Jay Carney, the president’s former press secretary, hired on at Amazon the following year. Larry Summers, for his part, became an adviser for an outfit called OpenGov. Back in Washington, meanwhile, the president established a special federal unit that used Silicon Valley techniques and personnel to revolutionize the government’s web presence; starstruck tech journalists call it “Obama’s stealth startup.”2

  The mutual attraction between the president and Silicon Valley had actually begun during Obama’s first campaign, when he famously used Facebook to connect with the young; his reelection effort was the first to use big data and microtargeting to find swing voters. Some observers like to imagine the Obama campaigns as triumphant social movements; others see them as triumphs of quite a different nature: as electronic victories demonstrating the irresistible power of digital networks.

  For people who take the latter view, the Obama presidency is another triumphant iteration of the story Silicon Valley loves to tell itself, the tale of the brilliant startup challenging the slow-moving incumbent, of the scrappy underdog who takes on the conservative dinosaur. Obama is thus said to be, in a typical bit of liberal-class narcissism, “the first tech president.” The tech people themselves go further: a prominent Silicon Valley venture capitalist calls him “the greatest president of my lifetime.” This is virtually the last surviving form of Obama idealism out there, still going strong in the president’s final year in office.*

  The administration’s relationship with Silicon Valley has never caused the kind of controversy that his former closeness with Wall Street did—probably because Silicon Valley has never contrived to toss the world economy into a wood chipper. Also, it is hard to hate this industry, regardless of what they do. An aura of youthful lightheartedness seems to envelop every interaction between the president and the techies. After all, one notable manifestation of Obama’s outreach to this powerful industry was his farcical 2015 interview with YouTube comedienne GloZell Green. Another was this famous exchange with Mark Zuckerberg, in the course of a “town hall” meeting at Facebook headquarters during which Obama proposed that the rich should pay higher taxes than they currently do:

  Zuckerberg: “I’m cool with that.”

  Obama: “I know you’re OK with that.”3

  In the 1980s and ’90s, Silicon Valley was not a particularly Democratic industry. Its libertarianism was well-known and the subject of endless fascination; its leaders were among the richest people in the world; and its great chronicler and booster at the time, Geo
rge Gilder, was a prominent conservative intellectual whose works had been influential in the Reagan administration. Gilder’s take on Silicon Valley’s politics went far beyond the partisan preferences of its leading figures; the primacy of market economics, Gilder said, was actually inscribed in the structure of the microchip itself. By its very architecture, tech was supposed to work against economic authority of the taxing and regulating kind.

  Not anymore. Today, Silicon Valley’s prosperity is supposed to be the ultimate demonstration of the worthiness of the liberal class. Just look at how the postindustrial society has singled out the educated and the creative, the engineers and the scientists; see how it has showered them with economic rewards beyond imagining. History itself has elevated this one industry over all others, and with it the Democrats have prospered as well, since they long ago positioned themselves as the party of the modern world’s winners. You may be drowning, but the rising tide is lifting their boat very nicely.

  When Democrats talk about tech, sooner or later they always go back to the search-engine giant Google. In The Audacity of Hope, Barack Obama tells how he made a pilgrimage to the company’s headquarters as a senator, and as president, according to a Wall Street Journal story from 2015, he went on to name-check Google in fully half of his State of the Union speeches. Google employees made up the third-largest group of contributors to Obama’s 2012 campaign, and Eric Schmidt pops up in the annals of modern liberalism with a curious regularity. He served on Obama’s Transition Economic Advisory Board, for example, and even stood on stage with the president-elect and his economic advisers during Obama’s news conference three days after the 2008 election. During the 2012 race, Schmidt advised Obama’s team on its famous big-data strategy. In 2015 Schmidt launched a “political technology startup” that is supposed to deliver the latest techniques in digital voter identification to the Hillary Clinton presidential campaign.4 He is the liberal class’s favorite billionaire.