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Can the US Democrats Harness the Growing sense of Injustice?

Fri 25th Apr 2008

With George Bush's Presidency drawing to a close, does history hold any lessons for the Democrats as they try to win back the White House? In the US recently, I was struck by some parallels between 2008 and another Presidential election year, 1988.

Like 2008, 1988 was the end of a two-term Republican Presidency (that of Ronald Reagan). Just as in 2008, in 1988 the American economy was sliding into recession amidst a credit crunch after eight years of "greed is good" Republicanism. And in 1988, just like now, the Wall Street financiers who had spent the previous eight years preaching the virtues of limited government were turning to the taxpayer to sort out the mess. Then, it was the savings and loan fiasco, which eventually cost the American taxpayer some $450 billion, or 3.2% of GDP. Now, it’s the rescue of Bear Stearns, one of Wall Street’s most aggressive finance houses, underwritten by the American taxpayer to tune of £30 billion. Few doubt that there are more bailouts to come.

In 2008 the Republican nominee for President, John McCain, is attempting to deflect attention from the economy by making national security the defining issue of the election. In 1988 the Republican nominee was George Bush senior, father of the current President. Also embarrassed by Republican economic mismanagement, he aimed to make national security, and the Democrats’ cultural liberalism, the central issues of the campaign.

In 1988, the two main contenders for the Democratic nomination were Michael Dukakis, the governor of Massachusetts, and the black civil rights leader Jesse Jackson. Dukakis was a technocratic centrist whose selling point was "competence". Jackson campaigned on a radical economic platform, attacking Wall Street's betrayal of ordinary Americans.

In 1988 I was a student volunteer on the Jackson campaign. As the recession hit home, there were signs that Jackson's economic arguments, particularly his attacks on Wall Street and corporate greed, were resonating with lower and middle income voters of all races. This was hardly surprising: despite massive gains for the very rich under Reagan, median family income in the US in 1988 was lower in real terms than in 1973. However, most white voters wouldn't vote for Jackson because of his race. It seemed obvious that a white candidate with a bold interventionist economic programme, and a willingness to criticise the super rich, could win against the Republicans in the general election. Which was exactly what the Republicans feared: Lee Attwater, Bush’s chief strategist, privately warned Bush that in a time of economic insecurity, “the way for the Democrats to win is to develop the class warfare issue. To divide up the haves and the have nots and to try to reinvigorate the New Deal coalition, and to attack”.

Dukakis defeated Jackson in the primaries and became the Democratic nominee. Dukakis drew the wrong conclusions from his victory over Jackson, insisting that voters wanted a ‘moderate’ economic message. As the general election approached, Dukakis squandered a huge poll lead by attempting, and failing, to compete with Bush on national security issues. The nadir of the Dukakis campaign was an excruciating photo op of the candidate driving a tank, and the press pack collapsing in hysterical giggles.

Only in the final days running up to election day did the Dukakis campaign come alive. Trailing in the polls, Dukakis transformed himself into a left wing populist, with attacks on Wall Street and Bush’s upper class background. It nearly worked, with Dukakis gaining strongly as election day approached. The Republican’s chief pollster later commented: “Going into the last week of the campaign, we clearly saw that the populist message of Dukakis was having an impact. It was cutting”. But it came too late; Bush had already succeeded in making national security and Dukakis’s cultural liberalism the defining issues of the campaign. Dukakis is chiefly remembered now for his failure to respond to Bush’s vicious personal attacks, but this was just one aspect of his larger failure to present a compelling narrative and policy platform around the economic hardships suffered by ordinary Americans, what had gone wrong and how he could fix it.

In 1988, conventional wisdom amongst mainstream Democrats was that criticism of the super rich would backfire; it was better to sound ‘moderate’. As the recession deepened, that proved to be a disastrous misreading of the public mood. Could the Democrats repeat the same mistake in 2008? Certainly, the economic outlook for many Americans today is bleak: in Ohio, one person in ten is now reliant on food stamps, the highest number ever.

This time, the two potential Democratic nominees, Obama and Clinton, are far better campaigners than Dukakis. There's no risk of Obama sounding like a boring technocrat (and white voters are far more willing to vote for a black candidate than in 1988). To some extent, both Clinton and Obama have absorbed the lessons of 1988. But will either of them will be bold enough to take on Wall Street?

Clinton certainly wants to be seen as the defender of ordinary Americans. Her TV ads show her amongst working class voters, hugging low paid employees at pizza restaurants and speaking to crowds wearing trade union T-shirts. But is this for real, or just a pose to garner votes from the Democratic base in the primaries before shifting rightwards in the general election? In substantive terms, Clinton is ill equipped to criticise Wall Street. Her husband, as President, encouraged financial deregulation. As Senator for New York, Wall Street is a significant part of her donor base. (Jamie Dimon, the CEO of JP Morgan Chase, the Wall Street investment bank which took over Bear Stearns, is one of her campaign contributors). Last week Clinton called for taxpayer assistance to homeowners facing foreclosure. Fair enough, but she was silent about the corporate greed and deregulation which caused the crisis in the first place.

Obama is probably more naturally inclined to criticise Wall Street. He has the most liberal voting record in the Senate. His donor base is broader than Clinton's, and less reliant on high finance. Last week he attacked “a corporate culture rife with insider dealing and short-term greed; economic policies that favour the few over the many”. One senses that he’d like to go further, but that his desire to be seen as a "uniter rather than a divider" may militate against more vocal criticisms of the super rich. That said, Obama’s recent keynote speech on race contained the seeds of a central theme for his campaign; that race is a distraction from issues of economic justice. Blacks, argued Obama, need to “bind our grievances- for better health care, better schools and better jobs- to the larger aspirations of all Americans- the white man or woman who’s been laid off, the immigrant struggling to feed his family”.

There's a palpable anger in the US at the cost to ordinary Americans of the shenanigans on Wall Street. As the economy slides into recession, as home foreclosures spiral, as the poor and middle class take the pain whilst the rich get bailed out by the taxpayer, can the Democrats harness that growing sense of injustice?

Winning the presidency will depend on it.

Richard Scorer is a Labour Parliamentary candidate.

A version of this article appeared on Compass.
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