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

by Frank, Thomas

  Not to worry. Like so many of the administration’s high-minded initiatives, this one turned out to be pretty mundane: the Hillary Doctrine was concerned largely with innovation, with foundations and private companies who would partner with us to do things like “improve maternal and child health,” “close the global gender gap in cellular phone ownership,” “persuade men and boys to value their sisters and their daughters,” and “make sure that every girl in the world has a chance to live up to her own dreams and aspirations.”22

  Above all, the Hillary Doctrine was about entrepreneurs. It was women-in-business whose “potential” Hillary Clinton wished to “unleash”; it was their “dreams and innovations” that she longed to see turned into “successful businesses that generate income for themselves and their families.”23

  Let us note in passing that, although the Hillary Doctrine sounded idealistic, it actually represented no great change in U.S. foreign policy. Its most obvious application was as a justification for our endless wars in the Middle East, which had commenced as a response to the terrorism of 9/11 and were now mutating into a campaign against sexism. Indeed, the principals of the Bush administration themselves sometimes cast their war with radical Islam as a feminist crusade, and the Hillary Doctrine merely picked up where the Bush Doctrine left off.24

  But let’s not be too quick to brush the whole thing off as empty propaganda. Among other things, the Hillary Doctrine helps us understand what Hillary really thinks about the all-important issue of income inequality. Women entrepreneurs as the solution for economic backwardness is not a new idea, after all. It comes directly from the microfinance movement, the poverty-fighting strategy that has been pushed by the World Bank since the 1990s, and Hillary’s idea brings with it an entire economic philosophy. For starters, it is closely connected with the World Bank’s larger project of “structural adjustment,” in which countries were required to reform their economies in the familiar market-friendly ways—privatizing, deregulating, and downsizing—and, on the bright side, Western organizations would help those countries’ poor people with microloans.

  It is hard to overstate the attraction of microlending to the liberal class, or at least to that part of it working in the foreign-aid sector. Microlending, such people came to believe, was the magic elixir for the disease of poverty, the financial innovation that would save the third world. Foundations embraced it. Thousands of careers were built on it. Billions of dollars were spent advancing it. The United Nations declared 2005 the “International Year of Microcredit.” Muhammad Yunus, the Bangladeshi economist who popularized microlending, won a Nobel Prize in 2006. Three years later, Barack Obama gave Yunus the Presidential Medal of Freedom.

  It was all so simple. While national leaders busied themselves with the macro-matters of privatizing and deregulating, microlending would bring the science of markets down to the individual. Merely by providing impoverished individuals with a tiny loan of fifty or a hundred dollars, it was thought, you could put them on the road to entrepreneurial self-sufficiency, you could make entire countries prosper, you could bring about economic development itself.

  What was most attractive about microlending was what it was not, what it made unnecessary: any sort of collective action by poor people, coming together in governments or unions. The international development community now knew that such institutions had no real role in human prosperity. Instead, we were to understand poverty in the familiar terms of entrepreneurship and individual merit, as though the hard work of millions of single, unconnected people, plus cellphones, bank accounts, and a little capital, were what was required to remedy the third world’s vast problems. Millions of people would sell one another baskets they had made or coal they had dug out of the trash heap, and suddenly they were entrepreneurs, on their way to the top. The key to development was not doing something to limit the grasp of Western banks, in other words; it was extending Western banking methods to encompass every last individual on earth.25

  Microlending is a perfect expression of Clintonism, bringing together wealthy financial interests with rhetoric that sounds outrageously idealistic. Microlending permits all manner of networking, virtue-seeking, and profit-taking among the lenders while doing nothing to change actual power relations—the ultimate win-win.

  Bill Clinton’s administration made microlending a proud point of emphasis in U.S. foreign policy, and Hillary has been a microlending enthusiast since her first days on the national stage. She promoted it as a form of female empowerment in a famous 1995 speech she made in Beijing and she supported microlending efforts wherever the first family traveled in the 1990s—there’s even an exhibit on the subject at the Clinton Presidential Library that shows Hillary giving a speech in the Gaza Strip in front of a sign that reads, “Women’s Empowerment Through Micro Lending.” In 1997 she cohosted a global Microcredit Summit in Washington, D.C., replete with the usual third-world delegations. Hillary’s own remarks on that occasion were unremarkable, but those of the president of the Citicorp Foundation were well worth remembering. Here is what he said to the assembled saviors of the third world:

  Everyone in this room is a banker, because everyone here is banking on self-employment to help alleviate poverty around the world.

  At the closing session of the summit, bankers joined national leaders singing “We Shall Overcome.”26

  In the decade that followed, the theology of microlending developed a number of doctrinal refinements: the idea that women were better borrowers and better entrepreneurs than men; the belief that poor people needed mentorship and “financial inclusion” in addition to loans; the suggestion that they had to be hooked up to a bank via the Internet; the discovery that it was morally OK to run microlending banks as private, profit-making enterprises—many of the arguments that I had heard at the No Ceilings conference, expressed in the unforgettable tones of international female solidarity.

  These ideas were the core of the Hillary Doctrine. Hillary’s ambassador-at-large for global women’s issues, Melanne Verveer, declared in 2011 that “financial inclusion is a top priority for the U.S. government” and announced her terrible chagrin that “3 billion people in the world remain unbanked; the majority of them are women.” Hillary’s undersecretary for democracy and global affairs, Maria Otero, came to State from one of the biggest American microlending institutions; in her official U.S. government capacity, she expressed her joy at how microfinance had evolved “from subsidized microloans to a focus on self-sufficiency, to an emphasis on savings, to a full suite of financial products delivered by commercial regulated banks” and how all this had “affirmed the capacity of the poor to become economic actors in their own right.” Hillary herself proudly recalls in her memoirs how the State Department rebuilt Afghanistan by handing out “more than 100,000 small personal loans” to the women of that country.27

  These are fine, sterling sentiments, but they suffer from one big problem: microlending doesn’t work. As strategies for ending poverty go, microlending appears to be among the worst that has ever been tried, just one step up from doing nothing to help the poor at all. In a carefully researched 2010 book called Why Doesn’t Microfinance Work?, the development consultant Milford Bateman debunks virtually every aspect of the microlending gospel. It doesn’t empower women, Bateman writes; it makes them into debtors. It encourages people to take up small, futile enterprises that have no chance of growing or employing others. Sometimes microborrowers don’t even start businesses at all; they just spend the loan on whatever. Even worse: the expert studies that originally sparked the microlending boom turn out, upon reexamination, to have been badly flawed.

  Nearly every country where microlending has been an important development strategy for the last few decades, Bateman writes, is now a disaster zone of indebtedness and economic backwardness. When the author tells us that

  the increasing dominance of the microfinance model in developing countries is causally associated with their progressive deindustrialization and infa
ntilization

  he is being polite. The terrible implication of the facts he has uncovered is that what microlending achieves is the opposite of development. Even Communism, with its Five Year Plans, worked better than this strategy does, as Bateman shows in a tragic look at microloan-saturated Bosnia.28

  There’s a second reason the liberal class loves microfinance, and it’s extremely simple: microlending is profitable. Lending to the poor, as every subprime mortgage originator knows, can be a lucrative business. Mixed with international feminist self-righteousness, it is also a bulletproof business, immune to criticism. The million-dollar paydays it has brought certain microlenders are the wages of virtue. This combination is the real reason the international goodness community believes that empowering poor women by lending to them at usurious interest rates is a fine thing all around.29

  GLOBALIZED COMPASSION MARKETS

  The only entrepreneur who really matters here—Hillary herself—did extremely well by doing so much good. Companies needing a stiff shot of whitewash fell over one another to enlist in her State Department’s crusade for “Solutions for Good.”30 The investment bank Goldman Sachs “partnered” with the State Department in 2011 to give out business school scholarships to women entrepreneurs from Latin America. The following year, Clinton’s old friends at the low-wage retailer Wal-Mart announced a $1.5 million gift to State’s Women Entrepreneurship in the Americas program (“the effort will support the dreams of up to 55,000 potential women entrepreneurs,” the company boasted).31 Exxon was on board, too, helping State to register women-owned businesses in Mexico.

  The figure of the female third-world entrepreneur, rescued from her “unbanked” state by Wall Street–backed organizations, mentored by her friends in the American professional class, expressing herself through social media—to this day it remains among the most cherished daydreams in the land of money. Everyone is infatuated with her—the foundations, the State Department, the corporations. Everyone wants to have his picture taken with her. Everyone wants to partner with everyone else to advance her interests and loan her money.

  The professionals’ fantasies blend seamlessly one into another. The ideas promoted by the Goldman Sachs “10,000 Women Project,” for example, are not really different from those of Hillary’s own Vital Voices Foundation or Coca-Cola’s “#5by20” initiative or even the conscientious statements you find in State Department press releases. People move from one node of this right-thinking world to another and no one really notices, because the relocation signifies no meaningful change. They give one another grants and prizes and named chairs; they extol one another’s ideas and books; they appear together with their banker pals on panel discussions in Bali or maybe Davos; and they all come together to fix Haiti, and then to fix Haiti again, and then to fix Haiti yet again.

  Hillary herself eventually moved from State to the Clinton Foundation, where she presided over a dizzying program of awards for the usual people, grants for some genuinely good causes, and the organizing of great spectacles of virtue like the one I attended in New York, a costly praise-o-rama featuring many of the very same people who worked for her in government.

  What I concluded from observing all this is that there is a global commerce in compassion, an international virtue-circuit featuring people of unquestionable moral achievement, like Bono, Malala, Sting, Yunus, Angelina Jolie, and Bishop Tutu; figures who travel the world, collecting and radiating goodness. They come into contact with the other participants in this market: the politicians and billionaires and bankers who warm themselves at the incandescent virtue of the world-traveling moral superstars.32

  What drives this market are the buyers. Like Wal-Mart and Goldman Sachs “partnering” with the State Department, what these virtue-consumers are doing is purchasing liberalism offsets, an ideological version of the carbon offsets that are sometimes bought by polluters in order to compensate for the smog they churn out.

  At the apex of all this idealism stands the Clinton Foundation, a veritable market-maker in the world’s vast, swirling virtue-trade. The former president who stands at its head is “the world’s leading philanthropic dealmaker,” according to a book on the subject.33 Under his watchful eye all the concerned parties are brought together: the moral superstars, the billionaires, and of course the professionals, who organize, intone, and advise. Virtue changes hands. Good causes are funded. Compassion is radiated and absorbed.

  This is modern liberalism in action: an unregulated virtue-exchange in which representatives of one class of humanity ritually forgive the sins of another class, all of it convened and facilitated by a vast army of well-graduated American professionals, their reassuring expertise propped up by bogus social science, while the unfortunate objects of their high and noble compassion sink slowly back into a preindustrial state.

  WHAT’S MISSING FROM THIS PICTURE?

  One of the motifs of that Clinton Foundation event I attended on International Women’s Day in 2015 was the phrase “Not There,” a reference to the women who aren’t present in the councils of state or the senior management of powerful corporations. The foundation raised awareness of this problem by producing visuals in which fashion models disappeared from the covers of popular magazines like Vogue, Glamour, SELF, and Allure. According to a New York Times story on the subject, the Clinton people had gone to a hip advertising agency to develop this concept, so that we would all understand that women were missing from the high-ranking places where they deserved to be.

  There was an even grander act of erasure going on here, but no clever adman will ever be hired to play it up. International Women’s Day, I discovered when I looked it up, began as a socialist holiday, a sort of second Labor Day on which you were supposed to commemorate the efforts of female workers and the sacrifices of female strikers. It is a vestige of an old form of feminism that didn’t especially focus on the problems experienced by women trying to be corporate officers or the views of some mega-billionaire’s wife.

  However, one of the things we were there in New York to consider was how unjust it was that women were underrepresented in the C-suites of the Fortune 500—and, by implication, how lamentable it was that the United States had not yet elected a woman president.

  There was no consideration—I mean, zero—of the situation of women who work on the shop floors of the Fortune 500—for Wal-Mart or Amazon or any of the countless low-wage employers who make that list sparkle. Working-class American women were simply … not there. In this festival of inclusiveness and sweet affirmation, their problems were not considered, their voices were not heard.

  Now, Hillary Clinton is not a callous or haughty woman. She has much to recommend her for the nation’s highest office—for one thing, her knowledge of Washington; for another, the Republican vendetta against her, which is so vindictive and so unfair that I myself might vote for her in November just to show what I think of it. A third: her completely average Midwestern suburban upbringing, an appealing political story that is the opposite of her technocratic image. And she has, after all, made a great effort in the course of the last year to impress voters with her feelings for working people.

  But it’s hard, given her record, not to feel that this was only under pressure from primary opponents to her left. Absent such political force, Hillary tends to gravitate back to a version of feminism that is a straight synonym of “meritocracy,” that is concerned almost exclusively with the struggle of professional women to rise as high as their talents will take them. No ceilings!

  As I sat there in the Best Buy theater, however, I kept thinking about the infinitely greater problem of no floors. On the train to New York that morning I had been reading a book by Peter Edelman, one of the country’s leading experts on welfare and a former friend of the Clintons. Edelman’s aim was to document the effect that the Clintons’ welfare reform measure had on poor people—specifically on poor women, because that’s who used to receive welfare payments in the days before the program was terminated.

/>   Edelman was not a fan of the old, pre-1996 welfare system, because it did nothing to prepare women for employment or to solve the problem of daycare. But under the old system, at least our society had a legal obligation to do something for these people, the weakest and most vulnerable among us. Today, thanks to Hillary and her husband, that obligation has been cancelled and we do almost nothing. The result, Edelman maintains, has been exactly what you’d expect: extreme poverty has increased dramatically in this country since Bill Clinton signed welfare reform in 1996.

  For poor and working-class American women, the floor was pulled up and hauled off to the landfill some twenty years ago. There is no State Department somewhere to pay for their cellphones or pick up their daycare expenses. And one of the people who helped to work this deed was the very woman I watched present herself as the champion of the world’s downtrodden femininity.

  Sitting there in gilded Manhattan, I thought of all the abandoned factories and postindustrial desolation that surround this city, and I mused on how, in such places, the old Democratic Party was receding into terminal insignificance. It had virtually nothing to say to the people who inhabit that land of waste and futility.

  But for the faithful liberals at the Clinton Foundation gathering in New York, none of that mattered. The party’s deficit in relevance to average citizens was more than made up by its massive surplus in moral virtue. Here, inside the theater, the big foundations and the great fashion magazines were staging a pageant of goodness unquestionable, and the liberal class was swimming happily in its home element.

  They knew which things were necessary to make up a liberal movement, and all of the ingredients were present: well-meaning billionaires; grant makers and grant recipients; Hollywood stars who talked about social media; female entrepreneurs from the third world; and, of course, a trucked-in audience of hundreds who clapped and cheered enthusiastically every time one of their well-graduated leaders wandered across the screen of the Jumbotron. The performance of liberalism was so realistic one could almost believe it lived.