"The most important money-in-politics race this year": Why lefty Tea Party may be here

Zephyr Teachout tries to return Democrats to their populist roots with a serious challenge to Andrew Cuomo (UPDATE)

Published July 19, 2014 1:45PM (EDT)

Tim Wu, Zephyr Teachout         (AP/Mike Groll)
Tim Wu, Zephyr Teachout (AP/Mike Groll)

Can the Democratic Party return to its populist roots?

It’s an odd question. Unlimited corporate money is pouring into politics after the Supreme Court’s "Citizens United" decision. Dramatic economic inequality is being exposed by best-selling economist Thomas Piketty. Politician Elizabeth Warren is ascendant in the Democratic Party. So the answer would seem to be yes. At the same time, Hillary Clinton, an extremely Wall Street-friendly candidate, is attracting the bulk of liberal support. Other candidates for the 2016, such as Martin O’Malley and Jay Nixon, may run, both solely as competent technocrats. In 2016, despite the seemingly potent moment, no serious candidate is directly challenging corporate power. It seems as if liberal Democrats are, to put it mildly, confused.

The answer to this question may best be answered by looking at an improbably important race in New York state, for governor. A year ago, this race looked like a snooze, with a popular and powerful incumbent Democrat, Andrew Cuomo, cruising to re-election. But that was before two things happened. One, federal prosecutors began investigating possible criminal activity by Cuomo in tampering with a New York state anti-corruption panel known as the Moreland Commission. And two, Zephyr Teachout, a constitutional law professor and corruption scholar, began her campaign to challenge Cuomo, on this same question of corruption. And Teachout’s campaign, though a longshot, is no laughing matter. Larry Lessig, the reform advocate who has raised $12 million for a campaign against corruption, calls this “the most important money in politics race this year.” It’s not just a race about corruption; it’s the first shot of what might be a real revolt in the Democratic Party.

Cuomo is a standard-bearer for the Democratic Party establishment — he’s a former Clinton cabinet official, New York attorney general, son of legendary liberal Mario Cuomo and a potential future presidential candidate. In the last six months, 16 billionaires have dumped money into his campaign. He has, as a lieutenant governor running mate, Kathy Hochul, a (non-registered) bank lobbyist and former upstate Democratic congresswoman with a long history of anti-immigrant activism. Teachout is an insurgent, a scholar of corruption and corporate influence in politics, as well as a longtime activist in Democratic politics. She chose as her running mate Columbia law professor Tim Wu, a specialist in internet law and former Federal Trade Commission official who coined the term ‘net neutrality’.

What makes this race unusual is that Teachout and Wu have made addressing corporate power the centerpiece of their campaign. One of Teachout’s first specific policy proposals was to use New York government to block the Comcast-Time Warner merger in the state. This is more revolutionary than it looks. Everyone in New York City hates Time Warner, and telecommunications companies are among the least popular companies in the country. But when was the last time anyone got to vote against their cable company? That’s the chance Teachout and Wu want to give voters. They have also pledged to take on the perceived monopolistic power that Amazon is wielding over the publishing industry, which is centered in New York City. Their platform lists public financing of campaigns and caps on corporate contributions to political parties as critical mechanisms to root out corruption and run a government for the people.

They also represent perhaps the most strongly pro-labor ticket in the country, supporting striking workers at fast food joints, paid sick leave, a higher minimum wage and public schools over charter schools. Teachout even supports a freedom to unionize that is completely equal with any existing freedom to incorporate a business, which would be a truly monumental shift in labor relations. Paired with this is an aggressive plan for better infrastructure, such as better broadband, water, railroads, food distribution systems, as well as a ban on fracking for natural gas in New York state to preserve existing water and environmental assets.

In the tradition of Wilson, Roosevelt, Truman and LBJ, they seek to place corporations in the service of the public by using the power of government. For instance, Wu is well-known for helping to create the intellectual argument for regulating internet service providers as common carriers. A common carrier is a private network, like a phone company, railroad, a utility and so forth, which nonetheless has public obligations. Enforcing common carrier obligations is a model of governance which, like antitrust, the Democratic Party discarded thirty years ago. But it a critical mechanism for ensuring that giant corporations don’t use their control of the playing field to abuse workers and crush small businesses. By framing their campaign as pro-small business, pro-market, pro-worker and pro-farmer, they hope to return the Democratic Party to its populist roots.

In other words, Teachout and Wu are not arguing about whether to redistribute wealth, but about how opportunity is distributed and wealth created in the first place. This represents a significant break from modern party orthodoxy. These professor-activists are attempting to provide a different raison d’être for the Democratic Party, and they are challenging one of the most powerful men in the party — and a prince of New York City — to do it. At first blush this looks crazy — Cuomo is a respected governor, 58% of Democrats approve of his tenure, he has $35 million in the bank, and less than two in ten voters in the state have heard of Teachout or Wu. Still, there are reasons to think that they can truly compete. Teachout and Wu just turned in 45,000 signatures to get on the ballot, three times as many as legally necessary, and they are winning endorsements of local Democratic Party clubs.

In 2006, the last competitive primary for governor, a little over 750,000 votes were cast in the Democratic primary. If the number of voters remains similar, 12% of the people needed to win have already signed up to put Teachout and Wu on the ballot. In other words, they already have 12% of the votes they need to win. That’s grassroots power, and there’s only upside since most Democrats have no idea yet that there’s another option on the ballot aside from Cuomo. There are several other secret weapons; Wu will be able to draw upon a rich trove of immigrant community votes, and the duo could bring in a vast network of liberal voters who dislike Cuomo and who belong to internet groups. Moveon alone has 293,000 list members in New York City. It’s a difficult race, but it is actually not impossible.

Since the 1992 election of Bill Clinton, Democrats have been governed by a specific ‘New Democrat’ model. The basic theory of the ‘New Democrat’ model of governance is that Wall Street and multinational corporate elites produce wealth through the creation of innovative financial practices and technology, and that Democrats should then help middle class and poor citizens by taxing this wealth, and then using some of it to support progressive social programs. Financialization, which is a specific type of financial capitalism in which various elements of society are turned into revenue streams to be sold into financial markets, has been the order of the day.

This method of running the economy has become so accepted among Democratic leaders that writers like New York Times columnist Paul Krugman and Vox writer Matthew Yglesias now argue that there simply is no alternative. "Every single Democrat in congress,” argues Yglesias, “and certainly any plausible national leader — regularly backs proposals to make rich people pay more taxes in order to finance more generous benefits for people in the bottom half of the income distribution.” There are no disagreements, he argues, except around the tactics of how to defeat Republicans. Krugman says that Democrats largely agree on policy; it is the Republican Party that is riven with conflicts between a business and tea party wing.

Yet, this overlooks six bitter years of policy disagreements within the Democratic Party over war and peace, bank bailouts, prosecutions of bankers, antitrust and corporate power, surveillance, national security, the public option in health care and so forth. Many progressives associate themselves with Elizabeth Warren. But no one, until now, has spelled out why the disagreements in the party actually exist, and what the alternative to Bill Clinton’s 25-year-old Democratic version of “trickle down” public policy looks like. Teachout and Wu, by showing that they would use public power to reorganize markets, are doing just that.

There is a hunger in the Democratic Party for making the party serve the interest of regular voters, not the rich. In 2008, liberal Democrats decisively broke from the Clinton legacy and voted for Barack Obama, with his mantra of hope and change. Obama, however, stocked his administration with Clinton administration officials like Larry Summers, Tim Geithner and Janet Yellen. A joke going around Democratic circles after the election was that “Those supporting Obama got a president, those supporting Clinton got a job.” Obama broke with the Clinton name, but brought the Clinton intellectual legacy, and Clinton’s Wall Street-backed machine, into governance.

Today, liberal Democratic primary voters are exhausted by six years of an administration under siege. Liberal Democratic voters still, by and large, do not view Obama’s failure to deliver on his promises as a failure of design or of personnel. Instead, they generally blame structural corruption in politics, or radical right-wing truculence. Obama, they think, is a good liberal man who did what he could. But looking ahead to 2016, many are attracted to what they perceive as Hillary Clinton’s pragmatism. They are ready to return to the Clinton family because they think what is needed is competence.

The potentially transformative message of the Teachout-Wu campaign is that the problem is not solely one of personalities or tactical political approaches. Rather it is that the New Democrat model itself, and the Democratic party establishment, is fundamentally at odds with the party’s traditional liberalism.

The fight between Teachout and Cuomo is a good foil through which to understand this problem. Though his father was the legendary liberal Mario Cuomo, Andrew Cuomo himself came of political age through the Clinton political machine. He served as the Secretary of Housing and Urban Development during the late 1990s, embracing the then-rudimentary policies that would later lead to a tragic mortgage bubble (specifically the nationalization and automation of mortgage origination). In 2006, Cuomo was elected New York state attorney general, a position nicknamed the ‘sheriff of Wall Street’. Only instead of taking an Eliot-Spitzer-like approach during the financial crisis, Cuomo laid low, quietly choosing not to seek jail for anyone at, say, the ratings agencies who stamped AAA on toxic mortgage bonds. When Spitzer resigned as governor, Cuomo moved quickly to take his place. He did so in 2010, and immediately staked out a right-wing set of policies on economics, while pushing through gay marriage as a way to neutralize liberal complaints. Cuomo learned his politics from Bill Clinton, and executed them to a tee.

Though a law professor, Teachout actually has a background in insurgent politics against the Democratic Party establishment — she was the online organizing director of Howard Dean’s 2004 presidential campaign. She authored a book on political corruption, and has been in and around progressive politics for over a decade. And just like Dean, Teachout is bumping up against a lot of surprising obstacles, including several ‘progressive movement’ leaders.

Teachout came to notice in New York politics because the Working Families Party, a third party with strong links to unions and the Democratic establishment, almost nominated her to challenge Cuomo. Cuomo had opposed the WFP agenda, blocking a higher minimum wage, failing to follow through on his promises of public financing of elections, and dismantling a commission investigating corruption in New York state. Furthermore, Cuomo cut corporate taxes, reduced pensions for New York state workers, embraced charter schools, and blocked a tax on higher income New Yorkers to pay for universal kindergarten. His policies were so disliked by activists that he was derisively titled "Governor 1%" by the Occupy Wall Street movement. Cuomo's base comes from the business lobbying community, those who, like New York business leader Kathryn Wylde, want more strident agreements with workers, opposed a key minimum wage hike bill and a paid sick leave law. Or as the governor puts it, “I am a progressive Democrat who's broke.

After Cuomo and New York City Mayor Bill de Blasio threatened the unions that provide most of the Working Families Party funding, the WFP narrowly endorsed Cuomo. New York Attorney General Eric Schneiderman, who, like de Blasio, describes himself as a stalwart ally of the progressive movement, also whipped for Cuomo. But Teachout then, in defiance of strong party pressure from bosses like de Blasio, decided to run on her own for the Democratic nomination.

De Blasio is routinely showered in praise by liberal magazines like The Nation. His election in New York City was trumpeted as representing a populist moment. But in whipping against Teachout, and then working aggressively behind the scenes against her campaign, de Blasio in particular has revealed himself as another ‘New Democrat’-style party boss. Just last week, the Working Families Party began attacking Wu on behalf of Cuomo and Hochul, indicating that progressive infrastructure is being inverted to help Wall Street-friendly and anti-immigrant politicians.

On a policy level, De Blasio is to the left of Cuomo, but while he seeks to move a bit more Wall Street wealth to the poor, he actually shares most of Cuomo’s political and policy assumptions. Despite a background in liberal politics, De Blasio served as campaign manager for Hillary Clinton in 2000, and has ties to Citigroup and the for-profit surveillance state. De Blasio’s endorsement of Cuomo, along with complicated machinations involving the New York state Senate, show that Teachout actually represents a real challenge to the Wall Street power that both de Blasio and Cuomo represent.

Teachout and Wu are trying to place the citizen at the center of policy. They do that through their proposals for public financing, for antitrust, for social insurance, infrastructure and labor. It’s a callback, not just to 20th century Democratic presidents like Franklin Roosevelt, but to the politics of Thomas Jefferson, James Madison and other 19th Century anti-monopoly Democrats. Cuomo and de Blasio, though they disagree on how much the middle class should have, place the CEO and the Wall Street banker at the center of policy. For them, it is apparently just fine for Citigroup — rather than the public — to make all key decisions on how to allocate credit in society.

This is not the last election in which populists, with a fully fleshed-out program, begin to take on the people who have dominated Democratic politics for decades. Many people, including the institutional progressive establishment, wish Teachout and Wu would just go away. But elections like this can create power and influence even if the underdog loses, just by creating credible rhetoric and showing there is a hunger for a different kind of policy framework. And if, by some remarkable turn of events, Teachout and Wu manage to come close or even win, that would send shockwaves throughout the entire political establishment. The races and voter pool are obviously quite different, but Eric Cantor, the House Republican leader who lost to populist insurgent Dave Brat despite an apparent 35 point lead in the polls just weeks before the election, showed just how vulnerable an incumbent in this environment can actually be.

That said, the entire establishment is against Teachout and Wu. Though these two are credible figures, they have virtually no institutional support. Liberal figures within the Democratic Party have been getting crushed in primary elections for the last six years. Despite ample reasons for unions, activist groups and liberals to come out for liberalism, it has been the Andrew Cuomos of the world that have been getting liberal votes. Cuomo is even maneuvering to crush the Working Families Party itself, by putting forward a similar party that will draw liberal votes from the WFP and put them under the 50,000 vote threshold required for a New York political party to stay in existence. Cuomo is attempting to ignore Teachout and Wu into submission, and teach liberals to not even think of challenging him again. The odds are he'll succeed, as Democratic leaders have been succeeding in suppressing liberals for decades. If he does so, the prospects of a Democratic party revolt will remain slim.

Still, populism is always a powerful force, even if it is latent and suppressed by fear. It is why a group of dedicated, principled activists can threaten entrenched interests. Arguments about antitrust, corporate power, unions, infrastructure, democracy and immigrant-run small business are in the DNA of the Democratic Party, even if they have been suppressed for more than two decades. And for that reason, this race is very much worth watching, and could be one of the most important elections of the decade. A Democratic Tea Party may be on our doorstep.

Update, 7/21/14: This post initially described business leaders like Kathryn Wylde as wanting to "decimate" unions. Wylde disputes this characterization; instead we've updated the post to describe her position on key worker issues.

By Matt Stoller

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