Booker is a corporate Democrat—more precisely, a Wall Street and Silicon Valley Democrat—who praises the beneficent rich as sources of charitable giving and policy ideas that can lift the poor. De Blasio is an anti-corporate Democrat who condemns big business and the financial sector for using their wealth to rig the economy in their favor and at everyone else’s expense.
The divide between Booker and de Blasio matters because it defines the most fundamental fault line within the Democratic Party. Not so long ago, the Democrats generally agreed with one another on economics—hence the New Deal and Great Society—and fought with one another over foreign policy and the rights of minorities. Today, no national-security or social issue splits the party. Instead, economics now roils the Democrats. In 2016, the party’s presidential primaries will chiefly focus, as they have not in many decades, on the economic policy differences between candidates—that is, if there’s more than one candidate. If there’s only Hillary Clinton, her every economic utterance will be subjected to intense scrutiny.
The new Democratic comity on social issues culminates a 50-year transformation that began when Lyndon Johnson signed the Civil Rights Act. As Southern whites fled the party, Democrats welcomed socially liberal financial elites who had rejected the GOP’s rightward turn on racial and gender issues. This mix of Wall Street bankers and high-tech entrepreneurs has become a major source of Democratic funding. Their perspectives have dominated the party’s economic policies, beginning with former Goldman Sachs CEO Robert Rubin’s tenure as Bill Clinton’s Treasury secretary and continuing through the Obama presidency with such protégés as Lawrence Summers and Timothy Geithner. During Clinton’s presidency, Rubin et al. deregulated the financial industry and crafted free-trade accords that decimated American manufacturing. The dot-com boom and low unemployment levels of the late 1990s convinced the Rubinistas that they had found the key to generating good jobs in a nation that had been losing them for at least 25 years.
The crash of 2008 consigned the Rubin model of prosperity to the rubble. Nonetheless, his acolytes were installed in the key economic policy positions in the Obama administration, where they sought, with some success, to mitigate the wave of regulation that followed the financial panic. Their resistance to stricter oversight and the greater emphasis they placed on protecting banks than on protecting homeowners upset congressional liberals. Most progressives, though, were generally unwilling to go public with their criticism until after Barack Obama won re-election. That constraint removed, this summer they successfully blocked the president’s expected appointment of Summers to the chairmanship of the Federal Reserve.
These intraparty tensions will shape the contours of the 2016 presidential contest. Should Hillary Clinton seek the party’s nomination, she will have to decide whether, or to what extent, she should break with the economic policies and policymakers that held sway in her husband’s and Obama’s administrations. If she chooses not to run, the fight for the nomination will likely feature candidates identified either with the more populist and regulatory side of the party (Senator Elizabeth Warren of Massachusetts, say) or with its more centrist and corporate side (Governor Andrew Cuomo of New York, say). Whatever occurs, Wall Street’s role in the Democratic Party—a fait accompli for the past two decades, albeit one that Democrats seldom advertised—will be up for debate.
by Harold Meyerson, American Prospect | Read more:
Image: AP Images/Paul Sakuma
