This article will appear in the Summer 2016 issue of The American Prospect magazine. Subscribe here.
Two years ago, a pollster for Democratic candidates told me he’d begun advising his clients to cease emphasizing “the middle class” when speaking of those Americans whose interests they were defending. Many Americans who once thought of themselves as middle-class, he argued, no longer did.
Last year, a Pew Research Center survey confirmed those Americans’ assessment. The share of income going to middle-class Americans declined from 62 percent in 1970 to 43 percent in 2014, while the share going to upper-income households rose from 29 percent to 49 percent.
The erosion of middle-class America has been afoot for 40 years, but it was the financial crisis of 2008 and the tepid recovery that followed it that have shaken American politics to its foundations. Post-collapse, the debt that millions of families amassed to maintain their living standards was called in. Working Americans over 50 who lost their jobs found few comparable opportunities available, while younger Americans found that making a living—one that enabled them to move out of mom and pop’s place—was no easy task.
Economic upheavals shake up nations’ politics. So does demographic change—racial, religious, cultural. While the crash came in 2008, it’s only in the years since that we’ve grasped just how profound are its ensuing economic dislocations. Our understanding of its political implications has lagged even further behind. Virtually no one foresaw that Donald Trump would win the Republican nomination for president, or that Bernie Sanders, the one and only democratic socialist even visible in contemporary politics, would win more than 40 percent of the Democratic primary vote.
What explains this collective failure to understand that the 2008 crash and its aftermath might have an effect similar to that of the 1929 crash and its aftermath, both in the United States and Europe? To be sure, neither the economics nor politics of the 1930s have re-emerged full-blown today: In 2009, unlike 1929, governments did just enough to keep the world economy from toppling into the abyss. But the disruptions and dashed expectations that followed the collapse were deep enough to push both the Democratic and Republican Parties into uncharted waters. As in the 1930s, a new generation of Democrats moved their party leftward, challenging many of the practices and some of the tenets of capitalism. For their part, Republicans who had faithfully served the interests of big business while stoking the ire of their white working-class constituents against minorities and immigrants discovered that those downwardly mobile working-class whites had had it with the catering to big business. Instead, they harkened to the one candidate who voiced their rage at the multiracial nation they saw supplanting white America.
With their conventions approaching, both parties now confront definitional—perhaps even existential—challenges. Will the Democrats, as they did between 1928 and 1936, and again in 1964 and 1965, redefine their fundamental mission? Will the Republicans become, overtly and primarily, a white nationalist party? It will take years for the parties to answer these questions fully, but how they respond during the upcoming weeks and months should tell us a lot.
One way to gauge the future of a political party is to watch the ways in which its leading political figures change their positions in the course of an intra-party campaign. This year, Hillary Clinton clearly moved left on a range of economic issues: Reversing her support for the Trans-Pacific Partnership and her earlier positive stance toward the Keystone XL Pipeline; moving from a position of limiting the increase of Social Security benefits to supporting their expansion (an evolution she shares with President Obama); and backing a higher standard for the federal minimum wage (also in tandem with Obama). She also put forth a range of financial regulations that go beyond those in Dodd-Frank, although—as with all these moves leftward—they don’t go as far as those proposed by Sanders.
Sanders, by contrast, looked at first glance to be the immovable object of American politics. His analysis of, proposals for, and rhetoric about our economic and political system stayed the same throughout his campaign. On closer examination, however, the class warrior from nearly all-white Vermont increasingly zeroed in on racial as well as economic inequality. By the California primary, he even peppered his speeches with moving evocations of the pain that our official hostility to immigrants brings to divided families on the U.S.-Mexican border, recounting how he’d seen family members reach through the fence to touch loved ones on the other side.
Supporters of Democratic presidential candidate Senator Bernie Sanders cheer at a rally in Washington, D.C., on June 9, 2016.
In a sense, Clinton was inching toward where the Democratic Party needs to go, while Sanders was catching up with where the party has been. Since the mid-1960s—almost since the day Sanders attended the 1963 March on Washington—the Democrats have been the party of America’s out-groups: initially, racial minorities and women; more recently, immigrants, gays, lesbians, and transgender people. Since the 2008 crash and its aftermath, however, the party has moved left on economic issues. Last November, 56 percent of Democrats (including 52 percent of Hillary Clinton supporters) told New York Times pollsters that they had a favorable view of socialism, while Gallup has documented that the share of Democrats who call themselves liberal increased from 29 percent in 2000 to 45 percent in 2015.
The Democrats’ left turn on matters economic has been particularly pronounced among the young. A Harvard Institute of Politics poll of millennials this spring revealed that a narrow majority didn’t support capitalism. It also showed a clear generational preference for Sanders.
Indeed, in no previous election that I know of has age been so determinative of candidate preference. A Wall Street Journal aggregation of exit polls in early June showed Sanders had won 71.6 percent support from voters 29 and younger, while Clinton had won 71.3 percent support from voters 65 and older. The age difference bisects minority communities as well. A USC Dornsife poll of California voters taken on the eve of that state’s primary (there were no exit polls, and USC Dornsife was the one pre-primary poll that had Clinton winning the state by what turned out to be her actual margin) showed that minority voters under 50 preferred Sanders over Clinton by a 59 percent to 32 percent margin, while those over 50 preferred Clinton over Sanders by a 64 percent to 20 percent margin.
Why this huge generation gap? The likely answer is that the experience of millennials in the wake of the 2008 crash has been as distinct and defining as that of the young people who went through the Great Depression and thereafter formed the base of the New Deal coalition. Consider, for instance, the recent Pew survey that found that the percentage of Americans ages 18 to 34 who live with their parents (32.1 percent) exceeds for the first time in recorded history (the Census Bureau started measuring this in 1880) the percentage who live with a partner or spouse (31.6 percent) or with friends or by themselves. Consider the recent finding by economists Lawrence Katz and Alan Krueger that the number of traditional full-time employee positions created since the recovery began has actually declined, even as the total number of nontraditional jobs—contingent, subcontracted, temp, independent contractor (whether correctly labeled or not), on-demand, gig—has increased. Those are the jobs, or gigs, whose levels of pay and security have left record numbers of millennials living with their parents. Many of those who have managed to escape still struggle under the burden of student debt.
From this perspective, it shouldn’t be surprising that Sanders’s call for public funding for tuition at state colleges and universities resonated with the young. Millennials’ antipathy to a capitalist system that fails to offer them the opportunities it once afforded boomers shouldn’t be a surprise, either. Their preference for Sanders over Clinton is due in part to the fact that he confronts the system head-on in his critique, even if his remedies are 97 parts Franklin Roosevelt to 3 parts Karl Marx.
Thus a challenge for the Democrats generally, and for Clinton in particular: How far, if at all, will they distance themselves from current-day capitalism, with its heightened rewards for investors at the expense of workers and its greater risks of economic collapse? How far will Democrats go to change the workings of the economy itself?
Twice before in the past hundred years, Democrats have redefined themselves by changing their answers to these questions.
The FDR Legacy and Its Limits
In the 1920s, with the Progressive Movement exhausted and dispersed, the Democrats largely acquiesced in the laissez-faire economics of the time. Rent not by economic questions but by the culture war between native-born Protestants and immigrant Catholics, the party ended up anointing Wall Street lawyer John W. Davis as their 1924 presidential nominee. (Thirteen years later, Davis argued business’s case against the National Labor Relations Act before the Supreme Court. He lost.) In 1928, New York Governor Al Smith, the de facto tribune for the whole second wave of non-Protestant immigrants, was the Democrats’ presidential nominee, but he drew few demarcations on economic policy between himself and the GOP nominee, Herbert Hoover. The party’s national chairman in those years was John J. Raskob, the former chairman of General Motors’ finance committee, and all-around consigliere to the Du Pont family, who were GM’s largest shareholders.
Between 1929 and 1936, of course, the Depression changed American politics—and, more slowly than many realize, the Democratic Party. In his first two years in office, Roosevelt supported cartelizing much of the American economy in order to revive it—an approach that many corporate executives welcomed. Only gradually did Roosevelt come to sign the several laws regulating Wall Street; not until 1935, prompted by a wave of strikes and the rise of a left that stretched from Upton Sinclair to Huey Long, did he sign the bills legalizing collective bargaining and creating Social Security.
President Franklin D. Roosevelt signs the Social Security Act in 1935.
In 1935 and 1936, Roosevelt’s rhetoric took on an anti-big-business tone never before (or since) heard from an American president. Many of the previous generation of party leaders were appalled. Smith and Raskob formed the Liberty League, where they campaigned against Roosevelt’s re-election, inveighing against what they saw as FDR’s dangerously anti-capitalist initiatives. Despite their efforts, Roosevelt’s 1936 victory remains the most sweeping in U.S. history. His left turn greatly expanded the electorate, bringing record numbers of manufacturing workers, Catholic immigrants, and their children to the polls.
Just as the strikes and unrest of the 1930s helped prompt the Democrats’ left turn in 1935 and 1936, so the civil-rights demonstrations of the 1950s and early 1960s helped prompt the epochal shift in the Democrats’ mission in 1964 and 1965. By the early 1960s, the workings of the world-bestriding American economy—with its booming manufacturing, its relatively small and tightly regulated financial sector, and its broadly shared prosperity—were a marvel to behold. Convinced there was no further need to tinker with the structure of the economy, the Democrats—President Lyndon Johnson in particular—turned their attention to those left out of the bounty: African Americans and the poor. The Civil Rights Act, the Voting Rights Act, and the various measures (such as Head Start) that constituted the War on Poverty expanded rights and opportunities to groups of Americans that had long been denied them.
As Vanderbilt University historian Jefferson Cowie writes in his important new book, The Great Exception, “The Great Society was built on the premise that the New Deal generation had solved the [economy’s] major structural problems and that the New Deal order would persist. … The federal government’s focus on limited welfare arrangements was intended simply to fill in the gaps for those outside of the well-organized and well-remunerated sectors of the economy.”
The most collectively oriented programs of the Great Society, the ones that most resembled those of the New Deal—Medicare and Medicaid—were directed at the minority of Americans outside the mainstream job market, who lacked access to the employer-provided health insurance that unions had been able to win for workers and their families. “Great Society policymakers,” Cowie writes, “presumed that the main sectors of the economy would remain unionized indefinitely.”
In the years following the Great Society’s heyday, Democrats focused on expanding access to individual rights within the market economy. Meanwhile, however, the private-sector economy on which their policies were premised was turning sharply against the workers whose well-being the Democrats believed they had ensured long before.
Just as their 1930s shift to New Deal policies had both cost the Democrats some longtime supporters and gained them new ones, so their 1960s shift to championing minority rights reshuffled electoral alignments. Not only, as Johnson remarked to an aide, did support for civil rights cost the party the allegiance of its most longstanding constituency, the white South, but in time, Northern working-class whites saw their living standards stagnate and those voters, too, drifted away. At the same time, Democrats won the allegiance of the growing number of blacks, Asians, and Latinos; and, as the GOP took on more and more of the cultural provincialism of the white South, Democrats also increased their votes among socially liberal and moderate white professionals.
In the wake of this year’s primaries, it should be clear that another Democratic redefinition is in order. The support that young women and minorities have given to Sanders over Clinton means that the party’s longstanding battle for legal and social equality for America’s historically disadvantaged, while just as important as ever, can no longer in itself compel young voters’ allegiance or enthusiasm. For the millennial generation, greater economic opportunity and equality has become as important as it was to the generation that came of age in the 1930s.
It’s not as if mainstream Democrats have been indifferent to these concerns. President Obama’s successful campaign for the Affordable Care Act, the recent spate of executive orders bolstering workers’ rights, and the enactment by Democrats at the city and state level of wage hikes and paid sick leave show the party focusing, as it had not in many decades, on remedying the inequities of the market economy. But even these measures will not transform the fundamental economic condition that has caused such unease among millennials and downwardly mobile workers. In this context, Sanders’s call for a radical expansion of economic rights and income redistribution would, if enacted, mark the greatest shift to the left the party has known since the New Deal. Like the previous shifts, it would bring an excited core of new constituents to the party, even while costing it some others—disproportionately, some of the socially liberal wealthy donors who have helped fill the party’s coffers for the past several decades and who continue to fill Clinton’s coffers today.
President Lyndon B. Johnson signs the Medicare Bill at the Harry S. Truman Library in Independence, Missouri, in 1965. Truman is seated at the table with Johnson.
Clinton surely understands that, in light of the growing populism of the electorate, her ties to finance have become an electoral liability. While she cannot credibly morph into a Sanders or an Elizabeth Warren, she’d do well to embrace more of their positions—calling for the breakup of the mega-banks, for a tax on financial transactions, for greater public provision for the cost of college. More fundamentally, she’d do well to acknowledge more explicitly the great and growing imbalance of power and income between workers and owners, between ordinary Americans and the economic elite, and to situate her proposals under that rubric.
Clinton has been right to insist that there are more kinds of inequality than the economic variety that Sanders rails against. She does not have to abandon her concerns for the myriad inequalities that Democrats have worked to mitigate for the past 50 years. But to win not just the votes but the allegiance of millennials, she needs to do what Democrats have largely avoided doing for decades: acknowledge the breakdown of a once-thriving economic order, identify the culprits, and propose a solution. Identifying the culprits is the part that does not come naturally to her, but there are moments when simple leadership requires it. Those are the moments when parties must reorient to face fundamental new challenges. That’s something that Roosevelt, Johnson, and Bernie Sanders knew in their bones.
What Donald Trump has done to the Republican Party this year may best be described as outing. He has stripped off its thinning veneer of respectability—what he refers to as “political correctness”—and revealed it to be the party of xenophobic white nationalism, its decades of simmering racism now adjusted to full boil. Well before the thought that Trump could become the party’s presidential nominee had occurred to any but Trump himself, Republicans had demonized minorities, stranded more than ten million immigrants in legal limbo, and done their damnedest to suppress minority voting.
As in the 1930s, when many in the middle class saw their hitherto secure existences thrown into turmoil, so the economic dislocations of recent decades, and particularly since 2008, have driven millions of older, working-class whites into either lower-paying jobs or an uneasy early retirement. In the 1930s, fascist demagogues preyed on these people’s anxieties and biases by demonizing presumably alien “others”—with more success in Europe than in the United States. (Father Coughlin is a footnote today; Adolf Hitler is not.) In the U.S., the Depression struck at a time when immigration had already been shut down, and Southern Democrats compelled Roosevelt to craft the New Deal’s new rights and benefits so they largely didn’t apply to blacks. That didn’t leave much of a target for far-right rabble-rousers.
This time around, the nationalist right has found more congenial ground. The downward mobility of working-class whites, coupled with the inattention to their legitimate economic concerns by elites of both parties, has created a sense of abandonment that registers in all manner of social indices, including rising death rates. As was not the case in the 1930s, this downward mobility has taken place in a period of widespread immigration by racial minorities, even though that immigrant wave has greatly subsided since the crash of 2008. Displaced from their role at the center of a once-thriving economy, and from their role as the dominant constituency in the American electorate (working-class whites constituted 65 percent of the electorate in 1980; they constitute just 36 percent today), a sizable segment of the white working class and middle class has displaced its rage onto the nation’s growing nonwhite population, and its African American president.
Before Trump came along, Republicans sought to channel this rage in “respectable” ways—stoking it to the point that voters would keep sending them back to Congress to ward off immigration reform and block any programs that might help minorities, but shunning the kind of bigoted outbursts at which talk-radio shock jocks excelled. Trump has won his party’s nomination not only by demonstrating the authenticity of his rage through shock-jock talk, but also by displaying a Manichean white-nationalist worldview his supporters could appreciate. In Trump’s world, there’s a good welfare state (Social Security and Medicare, which reward elderly whites for their work) and a bad one (Obamacare, welfare, and other programs, which presumably are targeted to minorities). The economic elites who devised the trade deals that hollowed out the economy are the enemy, too.
GOP presidential candidate Donald Trump waves to supporters at a rally in Phoenix, Arizona, on June 18, 2016.
Trump’s narcissism poses an immediate challenge to Republican prospects this year, but it’s a challenge peculiar to Trump himself, and will pass from the scene when he does. The genie of white nationalism that he’s uncorked, however, presents the GOP with a deeper dilemma. Will Trump’s supporters rally only to candidates who hate and fear the “other” as Trump does? If so, can the party survive, or will it fade to insignificance, like the GOP in California, which made the fatal mistake in the 1990s of demonizing Latino immigrants in an increasingly multiracial state?
When Republicans meet in Cleveland this July, we will get more of a sense of whether major forces in the GOP will step forward to reject Trump’s appeal to nativism and racism, and whether any prominent Republican will be able to generate a different narrative for the fall campaign. At best, the Republicans will come out of the convention as a deeply divided party.
Eighty years ago this summer, the Democrats convened in Philadelphia (as they will this July) to re-nominate Franklin Roosevelt. On the final night of the convention, the delegates, in the company of nearly 100,000 other Democrats, repaired to Franklin Field to hear Roosevelt’s acceptance speech—one of the most remarkable addresses in the history of presidential politics. Roosevelt understood that his speech marked a fundamental redefinition of what the Democrats, and the citizens of Depression-era America, were about.
Noting that it was in Philadelphia that Americans had first defined their nation’s creed, Roosevelt equated their break with the British crown with the New Deal’s break with the “economic royalists” of 20th-century America. “Through new uses of corporations, banks and securities, new machinery of industry and agriculture, of labor and capital—all undreamed of by the [founding] fathers—the whole structure of modern life was impressed into this royal service. … It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over Government itself. … The political equality we once had won was meaningless in the face of economic inequality.”
The task before the nation, Roosevelt continued, was thus to equalize both economic and political power. “If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.”
At a time when totalitarian regimes were rising around the world, Roosevelt said, the success of American democracy—of democracy itself—depended on its ability to create a more broad-based prosperity, a more egalitarian economy. Ours, he said, “is not alone a war against want and destitution and economic demoralization. It is more than that; it is a war for the survival of democracy.”
“This generation of Americans,” he concluded, “has a rendezvous with destiny.”
Whether the current generation’s challenge is anywhere as epochal as all that remains to be seen. As the Democrats and their presumptive nominee gather in Philadelphia this summer, however, the sense and sensibility of Roosevelt’s words should stand as a model of how a party and its standard-bearer can grapple with the nation’s deepest dilemmas, can disenthrall themselves from outmoded analyses and policies, and can reset their compass for the challenges that a new generation of Americans confronts every day.