“I am a New Democrat,” Barack Obama told the New Democrat Coalition back in March 2009. Whether he wins a second term or is defeated, the first black president of the United States may be not only the second but also the last of the New Democrats in the White House.
Between the 1980s and the present, the so-called New Democrats have existed in two distinct forms. In the early 1980s, the Democratic Leadership Council (DLC) was formed, chiefly by white Southern and Western Democratic politicians, with the goal of winning back “Reagan Democrats” — white working-class members of the dying Roosevelt coalition, who combined support for universal social programs like Social Security and Medicare with hawkish military attitudes and socially conservative values on attitudes like abortion, censorship and gay rights. Early in its history, the DLC proposed a program of educational and other benefits for young Americans in return for national military or civilian service, along the lines of the G.I. Bill.
The original New Democrats were hard to distinguish from Southern and Western “Blue Dog” Democrats (“blue dog” is a play on the term “yellow dog Democrat” for someone who would vote for a “yellow dog” as long as it was a Democrat). Al From, the founder of the DLC and its leader until 2009, had been a staffer for Willis Long, a Democratic representative from Louisiana. Among the presidents of the DLC were Al Gore, senator from Tennessee, and Bill Clinton, governor of Arkansas.
But in the 1990s a combination of events shifted the center of gravity of the New Democrat movement from the South and West to the Northeast. After the New Democrats succeeded in electing one of their own, Bill Clinton, to the White House in 1992, the 1992 midterm elections not only gave Republicans control of the House and Senate but wiped out Democrats in the South and West. After 1994, the Democrats were much more dominated by urban areas, minorities and white social liberals.
Meanwhile, the end of the Cold War combined with Republican victories in the federally funded military-industrial “gun belt” of the Southern periphery eliminated a traditional base of support in the Democratic Party. The center of gravity of the New Democrats shifted from the former Confederacy to Wall Street. The original New Democrats had been symbolized by Sam Nunn, the conservative Democratic senator from Georgia, chairman of the Senate Committee on Armed Services. The second-wave New Democrats of the 1990s were symbolized by Robert Rubin, the New York financier and Democratic fundraiser who became Bill Clinton’s secretary of the Treasury and pushed an agenda of international financial liberalization and financial deregulation.
During the two terms of George W. Bush, the evolving New Democrat or “neoliberal” movement was dominated by socially liberal economic conservatives in Wall Street and Silicon Valley. These centrist Democrats jettisoned the white working-class Southerners and Westerners who had been wooed by the original New Democrats, and focused instead on winning over former moderate Republicans in the Northeast and West Coast who combined liberal attitudes on abortion, gay rights and environmentalism with opposition to “big government” and concern about federal deficits.
In 2008, many Wall Street Democratic donors abandoned Hillary Clinton and supported a relatively unknown first-term senator from Illinois, Barack Obama. In his first term, Obama has governed as an “Eisenhower Democrat.” He combined a foreign policy realism reminiscent of Republican realists like Eisenhower, Brent Scowcroft and Colin Powell (who voted for him in 2008 and endorsed him in 2012). In domestic policy, his major success has been the Affordable Care Act or Obamacare, which was based on the “individual mandate” system promoted in the 1990s by the moderate Republican Sen. Lincoln Chafee of Rhode Island and adopted by “Romneycare” in Massachusetts. To the dismay of progressive and populist Democrats, Obama refused to support radical reform of the financial sector, which had largely funded his campaign in 2008, and surrounded himself with Wall Street insiders like Timothy Geithner and William Daley.
As presidents, Bill Clinton and Barack Obama have both reflected the priorities of the second New Democrat coalition, uniting donors from Wall Street, Hollywood and Silicon Valley with a “new majority” coalition of racial minorities, immigrants, liberal women and young voters. Because Democratic voters are disproportionately poor, this has produced a Democratic Party that, in economic terms, is an hourglass coalition of the top and the bottom. Economic populism frightens the party’s billionaire donors, while social populism, which has often been associated with white working-class xenophobia, racism and religiosity, frightens blacks, Latinos, immigrants and white social liberals. The result is what Mike Konczal and others have called “pity-charity” liberalism — a kind of liberalism that appeals to the sympathy of the rich for the poor, rather than appealing, as the New Deal did, to solidarity among the middling majority. It was a version of progressivism ill-suited to the Great Recession, which demanded the visionary leadership of a Franklin Roosevelt, not the managerial competence of a Nelson Rockefeller.
The most recent version of the New Democrat project may be doomed, even if the self-described New Democrat Barack Obama is elected to a second term. In 2012, most Wall Street donors, offended by Obama’s mild criticism and alarmed by the support shown by many Democrats for Occupy Wall Street, have swung their support away from the Democrats to the Republicans.
It is unlikely that most of them will ever come back. In the aftermath of the Great Recession, moderate as well as progressive Democrats are going to emphasize deficit reduction through tax increases far more than even moderate Republicans. The easiest way to raise lots of revenue is to raise today’s low rates on capital gains, perhaps even making the capital gains and income tax rates equal. Any such reform will cut deeply into the incomes of many Wall Street rentiers whose “progressivism” extends only to cost-free support for gay rights and abortion rights.
At the same time, the moderate conservative economic agenda adopted by Clinton and Obama, like the more extreme conservative agenda that Democratic neoliberalism copies and dilutes, has failed to slow the growth of inequality or stop the long-term erosion of the American middle class. In the 1990s, New Democrats like Clinton argued that Americans should embrace free trade and become “knowledge workers” to flourish in a win-win global economy. By 2012, such optimistic rhetoric rang hollow. Most of the jobs being created in the U.S. are low-wage jobs that require only high school diplomas. And in this year’s election, Obama and Romney have competed to denounce Chinese state capitalism and mercantilism, instead of indulging in happy talk about the wonders of globalization.
The first-wave New Democrats sought the votes of white working-class Reagan Democrats. The second-wave New Democrats abandoned the Reagan Democrats and sought to convert former moderate Republicans in the Northeast, Midwest and West Coast. But if Obama wins reelection, it may be because of Democratic partisanship among Latino voters.
If the Democrats depend increasingly on the Latino vote, then New Democrat policies may be politically irrelevant, if not harmful. In many ways Latino voters are more like the white working-class Reagan Democrats than like the white Rockefeller or Eisenhower Republicans whom Democrats have persuaded to switch parties in recent years. It is easy to imagine the growing Latino population supporting affirmative government to help the working class and middle class, as the heavily working-class “white ethnics” of the industrial cities did in the mid-20th century. And industrial policy like Obama’s GM bailout is likely to appeal to Latino working families as well as to working-class whites. In contrast, the Clinton-Obama synthesis of free-market conservatism with the identity politics of the cultural left is less likely to resonate with these new voters.
Symbolizing the end of an era, the Democratic Leadership Council closed its doors in 2011. The Democratic Party will continue to evolve, reflecting demographic and cultural and economic shifts. But this year’s election may be the last in which the Democratic nominee for the presidency calls himself a “New Democrat.”