The revival of economic populism in the Democratic Party
THE REBELS
Elizabeth Warren, Bernie Sanders, Alexandria Ocasio-Cortez, and the struggle for a new American politics
JOSHUA GREEN
352pp. Penguin. £20.99 (US $30).
BEFORE THE SUBJECTS of The Rebels became famous, the Democratic Party sold out. It is a long, sad and tawdry story that Joshua Green tells of the party of the New Deal and the United States’s labour unions betraying its roots to fill its purse from the financial industry and become the party of Wall Street. Jimmy Carter wanted to reform the tax code along the lines of “his simple Baptist decency”: “When a business executive can charge off a $55 luncheon on a tax return and a truck driver cannot deduct his $1.50 sandwich”, he said, “then we need basic tax reform.”
The peanut farmer-in-chief ’s morality play was not what the inflation-ridden country needed in 1978, his advisers informed him, and anyway it wouldn’t make a significant difference to the government’s bottom line. The National Restaurant Association revolted. Bankers told their sob stories to the New York Times. Meanwhile, the most effective liberal advocate for tax reform in Washington, Lawrence Woodworth, dropped dead of a stroke at a tax conference in Virginia. Carter was put on notice by members of his own party that what the country required was tax relief and stimulus. To prop up the economy it was business and the wealthy that needed the biggest boost. Deregulation was the order of the day, pushed naturally by the corporate right, but also by Ralph Nader from the left, in the name of consumer choice and lower prices. Tax fairness would have to wait. America is still waiting.
In the 1980 election Carter was routed by Ronald Reagan. Carter had never been a friend of labour unions, which he saw as bloated, corrupt bullies, but many of their long-standing friends in Congress were swept out with him. The remaining Democrats there, many of them of a new generation who had taken their seats in the aftermath of the Watergate scandal, were less loyal to labour, had college degrees and were upfront about funding their campaigns with money from investment bankers, whom they viewed as their peers. Legislators from the working class became a rarity. A young congressman called Tony Coelho, a cast-off from show business whose mentor was Bob Hope, took control of the party’s national congressional fundraising apparatus and convinced the business community that the Democrats were ready to play ball. The other end of the transaction was financial deregulation, and it was only competing interests among commercial and investment banks, insurance companies and other traders in paper that delayed, until 1999, the repeal of the Glass-Steagall Act – a rollback that loosed the forces of easy credit and credit default swaps that were to bring on the fi
