Let's Hope the Democrats Are Not Stupid Enough to Keep Embracing Wall Street
One of the best ways to help Trump win a second term would be for the Democratic Party to embrace Wall Street. That surely would convince enough working-class voters in key states that the Democrats are totally in bed with financial elites, care little about the destruction of middle-class jobs, and will continue to promote and profit by runaway inequality.
Well, that's precisely the strategy recommended by Douglas Schoen, a political strategist and pollster who worked for Bill Clinton. In a recent New York Times op-ed, he doesn't mince words: "It’s not popular to say so today, but there are still compelling reasons Democrats should strengthen ties to Wall Street."
There are compelling reasons to worry about Schoen's political judgment: In the closing week of the 2016 campaign, Schoen declared "in good conscience, and as a Democrat, I am actively doubting whether I can vote for the Secretary of State."
Why turn on Hillary Clinton? He believed that because of the surprise Comey letter, "we will be facing the very real possibility of a constitutional crisis with many dimensions and deleterious consequences should Secretary Clinton win the election." (To be fair, he also said he wouldn't vote for Trump.)
His credibility as a pollster is also in question. He simply ignores all the data showing that the American people detest Wall Street. Here's the most recent Bloomberg poll about how the public views major U.S. institutions:
So what could possibly be the rationale for tying the Democrats to such an unpopular institution as Wall Street? To Schoen's credit, he has the courage to say openly what many corporate, anti-Sanders Democrats truly believe.
Here are their core arguments as put forth by Schoen.
1. The Democrats can't win without Wall Street money.
Schoen, like Hillary Clinton and like most mainstream Democrats, points out that Wall Street money (more than $63 million to the Dems in 2016) is absolutely necessary to fund campaigns in the aftermath of Citizens United.
But this argument ignores the fact that Sanders, with his $27 average donations, kept pace with Clinton without taking any Wall Street or super-PAC money. As of June 2016, he had raised $229 million to Clinton's $238 million.
Apparently, rank-and-file Democrats and independents are willing to fund campaigns they believe in. In 2016, they believed in a campaign aligned against runaway inequality and Wall Street.
2. If the Democrats make criticism of Wall Street a litmus, the party will lose its best candidates.
Schoen believes that "For the 2020 election, some of the party’s strongest potential presidential candidates — Senators Cory Booker, Kirsten Gillibrand and Kamala Harris as well as Deval Patrick, the former Massachusetts governor — should not be dismissed simply because of their current or past ties to Wall Street."
Dismissed by whom? Schoen seems to be talking only to party elites. He is warning them not to be swayed by the Sanders wing. But it is the rank-and-file voters who are rejecting these candidates precisely because of their Wall Street ties. Maybe these "strong" candidates are likely losers in a general election.
3. Americans like capitalism and dislike socialism.
Wall Streeters choose to believe they are the heart and soul of capitalism, and that Americans much prefer their kind of capitalism to socialism (as embodied in Sanders' soak the rich policies). As Schoen puts it, "Even in May 2016, when Senator Sanders made redistribution a central part of his platform, Gallup found that only about 35 percent of Americans had a positive image of socialism, compared with 60 percent with a positive view of capitalism."
The Clinton pollster, however, forgot to mention a recent poll by Harvard University that shows "young adults between ages 18 and 29 ...51 percent of respondents do not support capitalism. Just 42 percent said they support it." Maybe having grown up into the aftermath of the Wall Street created financial crash has something to do with it.
But Wall Street has an even bigger problem: It defies the very idea of capitalism. In a free market system, businesses compete for our dollars. Those with superior goods and services survive and thrive. Those with inferior goods and services perish. But when Wall Street failed spectacularly, they were rescued with taxpayer bailouts which defy all the norms of free-market ideology. One of the main reasons for the vast antipathy towards Wall Street is because they profited wildly when taking down the economy, and then profited again when the government bailed them out. Why would any party want to tie themselves to such blatant crony capitalism?
4. Democrats should praise Wall Street for all the good they do.
Schoen argues that it is hypocritical for the Democrats to fawn over Silicon Valley, and "then turn their backs on the very people who help finance its work. The financial industry brings to market the world’s most innovate products and platforms that expand the economy and create jobs."
Honestly, I think even Goldman Sachs would be embarrassed by this spin. That claptrap is used to justify every bit of Wall Street's predatory behavior. Shoddy mortgages? No, we are all venture capitalists who create Facebook, Google and Apple. Heavens, we don't open up phony accounts, or gamble on fake derivatives or finance payday lenders. No, we are the wholesome, red-blooded risk-takers who find and finance all those Silicon Valley geniuses. Good luck running on that.
5. The Clinton Democrats were right to deregulate Wall Street.
The corporate Democrats look back fondly to the Bill Clinton years. By embracing Wall Street, they claim to have created an economic miracle in which all boats rise. They "ended welfare as we know it," created jobs and decreased poverty.
The key was deregulating Wall Street — ending Glass Steagall and preventing the regulation of derivatives. This miracle can happen again, according to Schoen, if we further deregulate Wall Street because this "allows banks to employ capital and finance investment in our country’s future, making electric cars, renewable energy and internet connectivity across the globe a reality."
Such historical amnesia! They forget that the wonders of financial deregulation led, step by step, to the worst financial crash since 1929. Because of lax or non-existent standards, Wall Street ran wild, concocting scheme after scheme to strip-mine the economy and run up enormous profits. When it all came crashing down in 2007-'08, eight million Americans lost their jobs in a matter of months due to no fault of their own. Not one banker went to jail for the financial crimes against the American people. This is what the corporate Democrats want us to embrace?
Why did Hillary lose?
Ultimately, the corporate Democrats are creating a narrative about why Hillary lost. Schoen argues that "Hillary Clinton’s lurch to the left probably cost her key Midwestern states that Barack Obama had won twice and led to the election of Donald Trump." In this way, Wall Street Democrats put the blame on Sanders for forcing that "lurch to the left."
This is where party elites collapse into a rabbit hole. First off, Schoen seems to forget that he abandoned Hillary because of her emails, not because she lurched to the left. So did millions of other voters. Hillary also lost voters because she took millions from Wall Street for speeches that she refused to release. It’s obvious to anyone not on Wall Street or being paid by them, that Clinton lost credibility because she was too close to Wall Street. It also should be obvious by now that cuddling up to Wall Street is one of the surest ways to reelect Trump.
Why are the corporate Democrats so politically tone deaf?
It is frightening to see how out of touch corporate Democrats are from the American public, especially working people. This is not an accident. Since Clinton and company moved the party towards corporate elites, runaway inequality has accelerated. In 1970, the gap in earnings between a top 100 CEO and an average worker was $45 to $1. Today it is $800 to $1.
A small percentage of Americans have become filthy rich since Wall Street was deregulated. Another group just below them have also become multi-millionaires — Clinton and his minions among them. They are living the good life. They never again have to worry about money or whether their kids will find decent jobs. It's all wired for them. They no longer have any idea how the rest of us live, and the American people know it.
Once you float around in that elite strata, it becomes easy to make the ridiculous case that the Democrats should suck up to Wall Street. They are your friends, colleagues and employers. It then becomes so easy to make up fantasies about how deregulating them is a thing of beauty. It becomes natural to blame the party's demise on Sanders or programs like free higher education or Medicare for All. And sadly, these Democratic elites will feel no financial pain during the era of Trump. The markets are going up, aren't they?
But if the Democrats continue to suck up to Wall Street, they're through. One wonders if that's precisely what Wall Street wants.