"The Politics of ENE" in PBS's Frontline "BIGGER THAN ENRON"
From: David Brooks
To: Robert Kuttner
Dear Bob,
I'm really amazed at how dead economic liberalism is. You've got all the conditions for a really first-class populist revolt. First, you've got widening income inequality. Then you've got the campaign finance system, which transparently provides political access in exchange for huge political contributions. Then you've got an administration made up of former oil executives, with a former aluminum executive thrown in for good measure. And finally, thanks to Ken Lay, the Arthur Andersen folks, and all the rest, you've got a first-class corporate scandal -- a case of big business malfeasance so egregious it makes the pores on your face pant open. And to top it all off, the biggest scumbag in this scandal is not just anyone. He happens to be one of the biggest donors to the president of the United States.
This is incredible! This is the perfect storm. It would take a party of total idiots not to lead a wildly successful anti-corporate popular upsurge in this climate.
Welcome to the Democratic Party. Despite all these events, the Democratic Party, which is supposed to be the party of the average person against the corporate fatcats, hasn't been able to do anything. Democratic fortunes have not risen a bit since Enron broke. Republican fortunes have not dropped an iota. In poll after poll, the two parties are still basically tied, as they were at the last election, and after the one before that and the one before that.
What's more, President Bush's popularity is still phenomenally high. No Enron effect. Not even much of the normal back-to-earth drift one typically sees after a rally-round-the-flag surge in presidential popularity. Moreover, Enron and the other scandals are playing a very limited role in the congressional elections. The big issues that Democrats are raising remain health care, education, and social security.
In short, Enron has been a big financial scandal, but as a political event it's been a complete dud. It has done almost nothing to change the landscape of American politics.
So it could well be that the Democratic Party is a party of complete nincompoops, unable to take advantage of issues that are just lying there on the table.
Or it could be that the Democrats would like to go down that road but they can't because they know the public wouldn't buy it. It could be that economic populism, even in these amazing circumstances, is the road to political failure. The public just doesn't buy attacks on overweening corporate power. They reject any hint of dramatic government intervention into the economy. They agree that Ken Lay and company are dirtballs, but on the whole, they rather admire American business.
My friends on the left and I have this argument: The lefties say that the reason the corporate scandals -- and income inequality, and so on -- have never become big issues is that the Democrats have never really made them such. If only a real liberal would emerge, then the public would respond.
I say that the Democrats may be stupid, but they are not that stupid. They'd love to run against corporate elites. Al Gore did run a presidential campaign on the slogan, "The People versus the Powerful." It flopped. The historical evidence is clear. The Democrats know that American voters reject economic populism and the liberal fiscal policies it implies. Enron doesn't provide a context for a new political platform.
The fundamental fact is that the New Deal era is over. Once upon a time the Democrats were the party of the poor and the Republicans were the party of the rich. But those days are gone forever. Income is now a terrible predictor of how a person votes. Al Gore carried many of the most affluent parts of the country: Westchester County, Connecticut; the Main Line outside of Philadelphia; Montgomery County, Maryland; the North Shore outside of Chicago; the entire West Coast. Al Gore even won among people who consider themselves upper class. Gore won among people with graduate and professional degrees.
Meanwhile, the Republicans are just as likely to be the party of the average person. George W. Bush won easily among white males with no more than high school degrees. These are the people whose incomes have been stagnating. These are the people for whom Gore's "People versus the Powerful" message was tailored. They are not buying it.
When they look at Ken Lay, they are appalled. But there is no sign from any of the polling data to suggest that most Americans have taken the Enron scandals and generalized them into a broad critique of American capitalism or of the American corporate class.
The interesting fact is that economics is playing a diminishing role in shaping American politics. After the last election, the Pew Foundation sponsored a huge survey to probe the differences between red and blue America. They found that economic views were moving toward the center. Liberals were less likely to want to see an expansion of government. Conservatives were less hostile to government. On economic issue after economic issue, there was convergence.
When I do interviews around the country, even in places where people have seen factories disappear, to be replaced by lower-salary service or warehouse jobs, I'm struck by how little class resentment there is. First, people see no alternative to capitalism. Their distrust of government and university elites is far higher than their distrust of business elites. As for anything that resembles socialism -- forget about it. Second, everyone has absorbed the psychology of the market. People figure that if they are not satisfied with their job and they want to get ahead, they just have to go back to school and get some marketable skills. The University of Phoenix, which is the most important educational institution in the country, provides this service to hundreds of thousands over the Internet.
Third, they are satisfied with their own lives. Around 90 percent of Americans tell pollsters they are satisfied with their jobs. Fourth, they overestimate their own income. Most people think they are above average. And finally, when they do see class barriers in society, they tend to resent social inequality more than economic inequality.
If there is resentment, it is directed toward coastal university, PBS/NPR tote-bag types. Business leaders, on the other hand, hunt, love college football and NASCAR, and go to church, just like regular folks. Why should working-class Americans resent people who share their values when there are all these other privileged people around who do not? The best predictor of voting patterns in America today is not income, it's church attendance. If you go to church regularly the odds are good that you vote Republican. If you never go, the odds are good that you vote Democratic.
So while many of my friends are greatly exercised about Enron and see it as a symptom of overweening corporate power, I can't really blame the Democratic Party for not hopping on the bandwagon and riding economic populism. It's the road to permanent minority-party status.
Best,
David
From: Robert Kuttner
To: David Brooks
Dear David,
Well, you're certainly right that corporate America is a mess; and we surely agree that Democrats are failing to make the most of a political moment in which corporate capitalism is again disgracing itself. But I disagree with your contention that there is not potentially a majority politics here. It's clear that, once again, it is up to liberals to save capitalism from its own most self-cannibalizing tendencies, as liberals last did in the 1930s. It's evident that Republicans and conservatives clearly won't.
Your thesis seems to be either that Democrats are nincompoops to fail to exploit this moment, or, more likely, that the moment is unexploitable because Americans are basically happy with their lives and confident about the economy. Besides, you say, populism no longer is associated with the Democrats; Gore carried the upscale suburbs.
My own take is that Democrats are seriously compromised because many of them are in bed with the same corrupt corporate interests who are now putting capitalism itself at risk. Joe Lieberman, until he was reborm as the scourge of Enron, was among those leading the charge to hobble the SEC. The Democratic Leadership Conference is one-part principled centrism and one-part corporate money-raising machine. Terry McAuliffe is not a grand strategist with a consistent ideology or message. He's a money guy. So liberal Democrats, who want to rescue our democracy and our economy from corrupt corporate domination are constrained in ways that their Republican opposite numbers are not.
The Republican party and its corporate allies have a consistent ideology and a consistent message. Markets work, government doesn't. Yes there are splits between libertarians and "national greatness" conservatives, and between nativists and internationalists, and between gay conservatives and fundamentalists, but these are minor compared to the corporate neutering of many Democrats.
But the weakness of the Democratic in the face of the greatest threat to capitalism since 1929 is by no means proof that the threat isn't real. Look at the stock market. Even though the real economy is in some kind of recovery, investors don't trust corporate balance sheets. This is potentially far more serious than it seems because U.S. capital markets need to import trillions of dollars from foreigners to cover our domestic capital shortfall that is the flipside of our trade deficit. The dollar has begun to fall, and this could feed on itself.
There is a bizarre disconnect between different wings of the American elite. People like Paul Volcker and Warren Buffett are seriously worried, and begging Congress for real reform. But the Bush administration is too busy toadying to its corporate cronies and its giddy libertarian ideologues who think that markets regulate themseves. There is a fairness argument for taming this beast -- the thugs in the suites at Enron should not make off with billions while ordinary employees lose their pensons -- but there is also an argument about the risks to the system. Volcker gets it even if you and Karl Rove don't. And Kevin Phillips, writing in the new issue of The American Prospect, thinks that corporate excess could be to the Republicans in this decade what cultural radicalism was to Democrats in the aftermath of the 1960s.
Volcker, of course, is the absolute antithesis of a populist. There have been times in American history when the populist backlash against the excesses of American capitalism came together with a prudendial backlash. The New Deal and Great Society were such eras. At other times, patrician stewards took the play away from populists, as in the progressive era when safe conservatives such as Senator Carter Glass took away the "money issue' and stabilized a rocky financial system with the Federal Reserve, if only for a generation.
Polls are beside the point; leadership occurs not when a politican follows the polls but when he acts to move public opinion in his direction, as Reagan and Roosevelt, not to mention Lincoln did. The trouble with politics today is that it's far too poll-driven.
There are plenty of populist grievances, such as the failure of Americans to have health security, but neither party is currently their champion, so ordinary people are disconnected from politics. Nor is either party currently willing to step up and rescue capitalism from its own excesses. But I hope you are ultmately wrong about the Democrats, for it is clear that the right is not about to clean up the abuses of capitalism; once again, only the liberals can, one hopes before the rot deepens.
Bob
To be continued...
Part 2 of this exchange will be posted on Friday, June 21. |
