14. Weisberg’s article was entitled “Clincest: Washington’s New Ruling Class”; it appeared in The New Republic for April 26, 1993.
4: AGENTS OF CHANGE
1. Carl Bernstein, A Woman in Charge: The Life of Hillary Rodham Clinton (Vintage, 2008). See p. 350, for example.
2. From Clinton’s speech, “Remarks to the Seattle APEC Host Committee,” delivered on November 19, 1993. Read the speech on the website of the American Presidency Project: http://www.presidency.ucsb.edu/ws/?pid=46137
3. This remark from 1995 is found in Walker, The President We Deserve, p. 343. In truth, this sort of reasoning was everywhere in the 1990s. See chapters 6 and 10 of my own Clinton-era book, One Market Under God (Doubleday, 2000), which are filled with the fashionable inevitability-speak of the era.
4. Clinton’s remarks, dated December 8, 1993, are available on the website of the Miller Center at the University of Virginia. The stationery is described in John R. MacArthur’s book, The Selling of “Free Trade”: NAFTA, Washington, and the Subversion of American Democracy (Hill & Wang, 2000), p. 217.
5. MacArthur, The Selling of “Free Trade,” A transcript of Iacocca’s commercial is on p. 223.
6. Ibid. This is MacArthur’s great overarching point.
7. Johnson, “The Free Trade Accord: Workers on Free Trade: A Split Along Class Lines,” New York Times, November 14, 1993. Faux: This is the first anecdote in his 2006 book, The Global Class War: How America’s Bipartisan Elite Lost Our Future—and What It Will Take to Win It Back (Wiley), p. 1.
8. The letter was much discussed during the NAFTA debate. My quote from it is drawn from David Lauter, “283 Top Economists Back Trade Pact, Letter Shows,” the Los Angeles Times, September 4, 1993.
9. See the 1997 study by Kate Bronfenbrenner, “We’ll Close! Plant Closings, Plant-Closing Threats, Union Organizing and NAFTA,” posted online at http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1018&context=cbpubs. The 2010 study is summarized by Robert Scott in “Heading South: U.S.-Mexico trade and job displacement after NAFTA,” an Economic Policy Institute Briefing Paper dated May 3, 2011.
10. See the economist Mark Weisbrot’s article, “NAFTA: 20 Years of Regret for Mexico,” Guardian, January 4, 2014. See also the February 2014 report Weisbrot coauthored with Stephan Lefebvre and Joseph Sammut at the Center for Economic and Policy Research, “Did NAFTA Help Mexico? An Assessment After 20 Years.”
11. One place where Friedman used the phrase “no-brainer” was in his column for April 3, 1997, “Gephardt vs. Gore.” His remarks about CAFTA came on the Tim Russert Show, CNBC, July 29, 2006, transcript from Nexis.
12. See the article by Daniel Maliniak and Ryan Powers, “Is the Public Really Learning to Love Globalization?,” which appeared on the Washington Post’s “Monkey Cage” blog for June 11, 2014.
13. Gergen’s remark was reportedly made on a PBS news program. See “Another Attempt to Begin Again; Clinton Hopes to Reach Out To ‘Forgotten Middle Class,’” Washington Post, December 15, 1994. Ann Devroy, “New Age ‘Guru to the Glitterati’ Advised Clintons,” Washington Post, January 11, 1995.
14. Clinton’s use of the term “counter-scheduling” is described in Jack Germond and Jules Witcover, Mad As Hell: Revolt at the Ballot Box, 1992 (Warner Books, 1992), p. 265.
15. “Clinton planned the confrontation as a defining moment of his campaign, insisting that the future of the Democratic Party could not be left in the hands of the minority vote of the inner cities.” Walker, The President We Deserve, p. 144.
Centrists still call for “Sister Souljah moments” to this day: for example, in a June 16, 2010, column in The Hill, Clinton associate Lanny Davis suggested that Barack Obama stage “Sister Souljah”–style snubs of labor unions and progressive groups that thought Obama wasn’t liberal enough.
16. “Finest hour” was the phrase used by the Democratic Leadership Council to describe Clinton’s NAFTA win in December of 1993 (per Kenneth S. Baer in Reinventing Democrats, p. 218); the phrase was also used in editorials by the Baltimore Sun and various Hearst papers; Thomas Friedman characterized it as Vice President Al Gore’s “finest hour” in his New York Times column for April 3, 1997. Bonus cliché points: He also described it as a “no-brainer” in the same column. “Boldest action” was Walker’s phrase, The President We Deserve, p. 285.
17. Hitchens, No One Left to Lie To: The Triangulations of William Jefferson Clinton (Verso, 1999), p. 39.
18. On the evolution of the Democratic platform, see Marc Fisher, “Democratic Party Platform: An Uneven Progression Over the Years,” Washington Post, September 4, 2012. “Upping the ante”: The presidential aides in question were Bruce Reed and Jose Cerda III. They and Biden are quoted in Naomi Murakawa, The First Civil Right: How Liberals Built Prison America (Oxford, 2014, Kindle edition). Murakawa also points out that the 1994 crime bill established 116 new mandatory minimum sentences, considerably more than were established in the Reagan and Bush I administrations put together.
19. Lieberman quoted in Mark Pazniokas, “Tough Stands on Crime May Ignore Reality,” Hartford Courant, October 20, 1994.
20. The crime bill of 1994 authorized the U.S. Sentencing Commission to relitigate the matter of the crack vs. powder cocaine disparity. The commission recommended that the disparity be minimized, and it would have been had not Congress then voted to overturn the commission’s recommendations. Bill Clinton then signed the legislation instead of vetoing it. See his signing statement on that occasion, “Statement on Signing Legislation Rejecting U.S. Sentencing Commission Recommendations,” dated October 30, 1995 and available on the website of the American Presidency Project. See also Ann Devroy, “Clinton Signs Legislation Keeping Stiff Crack Policy,” Houston Chronicle, October 31, 1995. The 88 percent figure comes from an editorial in the Atlanta Journal and Constitution, October 20, 1995.
21. One of the 1994 crime bill’s provisions was to fund “Midnight Basketball” leagues around the country, a program that was derided so widely as typical Democratic pork-barrel spending that it came to eclipse the crime bill’s more important crackdown elements. The chief derider was, of course, radio talker Rush Limbaugh. Among others, see Susan J. Douglas, Listening In: Radio and the American Imagination (Minnesota, 2004), p. 315.
22. Bill Clinton, “How We Ended Welfare, Together,” New York Times, August 22, 2006.
23. From’s remark occurs on p. 229 of his 2013 book, The New Democrats and the Return to Power (St. Martin’s). The Harris quote can be found in his 2005 book, The Survivor: Bill Clinton in the White House (Random House, Kindle edition). The “personal cost” to which Harris refers is the resignation of Clinton’s friend Peter Edelman from the administration. Other accounts I have read seem to take the same perspective: that this was Clinton’s final arrival at the centrist sweet spot. See Steven M. Gillon, The Pact: Bill Clinton, Newt Gingrich, and the Rivalry That Defined a Generation (Oxford, 2008), p. 178, and Joe Klein, The Natural: The Misunderstood Presidency of Bill Clinton (Doubleday, 2002), p. 152.
24. Blumenthal, The Clinton Wars (Farrar, Straus and Giroux, 2003), p. 147.
25. Gillon, The Pact, p. 181.
26. Bob Woodward, The Agenda: Inside the Clinton White House (Simon & Schuster, 1994), p. 240.
27. Ibid., p. 165.
28. Stiglitz uses these words on p. 44 of The Roaring Nineties: A New History of the World’s Most Prosperous Decade (W. W. Norton, 2004), his account of the Clinton years.
Here is my understanding of the peculiar chain of events that Stiglitz describes: By signaling his intention to balance the budget (and then actually balancing it), Clinton encouraged long-term interest rates to drop. Meanwhile, in the aftermath of the S&L crisis, American banks were holding lots of long-term government bonds. The drop in interest rates handed the banks a windfall but made long-term bonds a less attractive investment going forward. T
his prompted the banks, as Stiglitz puts it, to go “back to their real business, which is lending.” And this, in turn, got the economy going again. The Roaring Nineties, pp. 42–44.
29. On Al Gore, see Jeff Faux, “The Next Recession,” American Prospect, August 15, 2000.
30. Thomas Friedman, “Stock Market Diplomacy; Clinton’s Foreign Policy Includes a Regard for How a Move Plays in Global Trading,” New York Times, April 6, 1994.
31. “Strong take over the weak”: The banker in question was Hugh McColl of NationsBank (later Bank of America), who advocated interstate bank deregulation with these words in 1992, according to the Federal Reserve’s history of the Riegle-Neal banking act, available online at http://www.federalreservehistory.org/Events/DetailView/50. Stiglitz: The Roaring Nineties, p. 90.
32. The memo was unearthed by Nomi Prins and is quoted in All the Presidents’ Bankers: The Hidden Alliances that Drive American Power (Nation Books, 2014), p. 371. On the effects of the Riegle-Neal Act, see: Simon Johnson and James Kwak, 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (Pantheon, 2010), p. 84; and the Financial Crisis Inquiry Report (2011), chapter 4.
33. Gross, Bull Run, p. 96. Rubin himself later wrote that he organized the bailout to prevent the “market-based” model imposed by NAFTA from being discredited, which is slightly less self-interested, I suppose. See Rubin’s memoir (with Jacob Weisberg), In an Uncertain World: Tough Choices from Wall Street to Washington (Random House, 2003), p. 5.
34. Rubin testified to this effect before the House Committee on Banking in May 1995. His words are quoted in Nomi Prins, It Takes a Pillage (Wiley, 2009), p. 141.
35. “Infamous”: See “These Gambling Activities,” a retrospective on Glass-Steagall published in The Region, a publication of the Federal Reserve Bank of Minneapolis, March 2000, available online at https://www.minneapolisfed.org/publications/the-region/issues/3-2000. “Almost everybody agreed”: See Keith Bradsher, “No New Deal for Banking; Efforts to Drop Depression-Era Barriers Stall, Again,” November 2, 1995.
36. Quoted in Stephen Labaton, “Agreement Reached on Overhaul of U.S. Financial System,” New York Times, October 23, 1999.
37. The story was written by Joshua Cooper Ramo and ran in Time’s edition for February 14, 1999. The individual quoted in the comment about Rubin’s Treasury Department is none other than future Treasury Secretary Tim Geithner.
38. On this subject, see “The Real Danger of ‘One Big Regulator,’” my column in the Wall Street Journal for November 11, 2009.
39. Stiglitz, The Roaring Nineties, p. 180.
5: IT TAKES A DEMOCRAT
1. This is a theme I discussed at much greater length in One Market Under God: Extreme Capitalism, Market Populism and the End of Economic Democracy (Doubleday, 2000), chapter one. The quote comes from page 17.
2. Gillon, The Pact, p. xiv.
3. Ibid., p. 209.
4. Ibid., p. 213.
5. Ibid., pp. xvi, 217, 218–19.
6. See Christopher Glazek, “Raise the Crime Rate,” n +1, Winter 2012. Glazek’s finding is controversial, but the numbers he uses for his comparison are not contested. See also “More Men are Raped in the US than Women, Figures on Prison Assaults Reveal,” London Daily Mail, October 3, 2013.
7. The First Civil Right: How Liberals Built Prison America (Oxford, 2014), p. 148.
8. During the eight years of Bill Clinton’s presidency, the prison population grew by 673,000. This is significantly more than the second-place record holder, Ronald Reagan, and far more than what George W. Bush achieved. See Greg Krikorian, “Federal and State Prison Populations Soared Under Clinton, Report Finds,” Los Angeles Times, February 19, 2001.
9. Michelle Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness (New Press, 2013), p. 56.
10. 1991: This line appears in Clinton’s speech to the DLC convention in that year. 1995: This line is from remarks delivered at the University of Texas, as reported by the Washington Post, October 17. Clinton signed the crack/cocaine legislation on October 30. 2000: The Rolling Stone interview is from December 28. 2008: See DeWayne Wickham, “Clinton Admits ‘Regret’ on Crack Cocaine Sentencing,” USA Today, March 4.
11. Bruce Reed, “The Work Decade,” Blueprint, September/October 2001.
12. Hitchens, No One Left to Lie To, p. 65.
13. See Peter Edelman, So Rich, So Poor (New Press, 2012), chapter 5, and the policy brief, “Extreme Poverty in the United States, 1996 to 2011,” issued by the National Poverty Center in February 2012. The food stamp program is now called Supplemental Nutrition Assistance Program; recipients are counted by the Food and Nutrition Service of the United States Department of Agriculture.
14. See the National Vital Statistics Report, “Nonmarital Childbearing in the United States, 1940–99,” dated October 18, 2000, table 1. http://files.eric.ed.gov/fulltext/ED446210.pdf.
15. Wacquant, Punishing the Poor: The Neoliberal Government of Social Insecurity (Duke, 2009, Kindle edition).
16. On financialization, see Dylan Matthews, “The Clinton Economy, In Charts,” Washington Post, September 5, 2012. On CEO compensation, see Alyssa Davis and Lawrence Mishel, “CEO Pay Continues to Rise as Typical Workers Are Paid Less,” a paper dated June 12, 2014, on the website of the Economic Policy Institute.
17. Yergin and Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World (Simon & Schuster, 1998), p. 381. This book was later made into a PBS documentary with the same title.
18. Walker, The President We Deserve, pp. 333, 332.
19. Quoted in Gillon, The Pact, p. 268.
20. DeWayne Davis and Jeff Lemieux, “Closing the Income Gap,” Blueprint, Summer 2000.
6: THE HIPSTER AND THE BANKER SHOULD BE FRIENDS
1. See Reagan’s 1988 speech at Moscow State University; it is reprinted, among other places, on the website of the Miller Center at the University of Virginia. The conservative author George Gilder, one of Reagan’s favorites, wrote one of the earliest and most forceful accounts of the New Economy ideology in his 1989 book Microcosm.
2. The DLC’s think tank was the Progressive Policy Institute; their 1999 report was called “The State New Economy Index.” Other installments were issued periodically throughout the decade to come. Later on, authorship of the index was taken over by the Ewing Kauffman Foundation and the Information Technology & Innovation Foundation, a Washington think tank. The coauthor of the 2007 State New Economy Index, Daniel Correa, later became President Obama’s Senior Adviser for Innovation Policy.
3. This passage can be found in Chapter 1 of Cluetrain; it is signed by Christopher Locke (the author of Gonzo Marketing) and available online at http://www.cluetrain.com/book/apocalypso.html.
4. Pritzker once chaired the board at Superior Bank of Chicago, a securitizer of subprime real estate loans that closed in 2001. See David Moberg, “3 Troubling Things to Know about Penny Pritzker,” In These Times, May 3, 2013. According to her bio on a government website, Lee formerly worked as Head of Patents and Patent Strategy for Google. See http://www.uspto.gov/about-us/executive-biographies/michelle-k-lee.
5. Gross, Bull Run, p. 83.
6. Steven Gaines, Hamptons author, quoted in the New York Observer, August 3, 1998, quoted in turn in Gross, Bull Run, p. 142.
7. Gross, Bull Run, p. 103.
8. Matt Bai, “Wiring the Vast Left-Wing Conspiracy,” New York Times Magazine, July 25, 2004.
9. Fortune. July 9, 2007. A Financial Times story about Mack’s fund-raiser appeared on July 15.
10. Svea Herbst-Bayliss, “Hedge Fund Managers Throw Weight Behind Obama,” July 11.
11. Callahan, Fortunes of Change, p. 66.
12. The Great Divide: Retro vs. Metro America (PoliPoint, 2004),
pp. xvii, 5, 64, 75, 91.
13. Florida, The Rise of the Creative Class (Basic Books), pp. xxix, 5 (italics in original), 21.
14. Florida, “How the Crash Will Reshape America,” Atlantic, March 2009. See also Alec MacGillis, “Richard Florida, Mr. Creative Class, Is Now Mr. Rust Belt,” New Republic, December 18, 2013.
15. “Creative Class War,” Washington Monthly, January/February 2004.
16. Peter Culshaw, “Barack Obama: Power to the New Creatives,” Telegraph (London), June 14, 2008.
7: HOW THE CRISIS WENT TO WASTE
1. Scholars who have studied them: Elizabeth McKenna and Hahrie Han, Groundbreakers: How Obama’s 2.2 Million Volunteers Transformed Campaigning in America (Oxford, 2015), p. 44. Crowd sizes: See Jackie Calmes, “Obama Drawing Big Crowds, but Not Like in ’08,” New York Times, August 9, 2012.
2. Both of these examples, plucked from dozens more, are given by William Leuchtenburg in In the Shadow of FDR, chapter 10. Obama appeared on 60 Minutes on November 16, 2008.
3. Weisberg, “The Brilliant Brain Trust,” Newsweek, November 14, 2008.
4. Alter, The Promise, p. 64. McCaskill: Quoted in Alec MacGillis, “Obama Assembles an Ivy-Tinged League,” Washington Post, December 7, 2008. The Nobelist was Energy Secretary Steven Chu; the Pulitzer winner was Samantha Power; the MacArthur genius was Jane Lubchenco, Obama’s administrator of the National Oceanic and Atmospheric Administration. Among Obama’s Rhodes Scholars were Nancy-Ann De Parle and Susan Rice.
5. Quoted in Ron Suskind, Confidence Men: Wall Street, Washington, and the Education of a President (Harper, 2011), pp. 196–97.
6. Summers allowed that the bonuses were “outrageous” but then said nothing could be done, according to a recap of his TV appearance in the New York Times: “‘We are a country of law,’ said Mr. Summers, one of several economic officials to hit the Sunday-morning talk show circuit. ‘There are contracts. The government cannot just abrogate contracts.’” Edmund Andrews and Peter Baker, “Bonus Money at Troubled A.I.G. Draws Heavy Criticism,” March 15, 2009.
Listen, Liberal: Or, What Ever Happened to the Party of the People? Page 25
