Talking Pints: 1896, 1932, 1980 and 2008--What Kenny Rogers Can Teach the Democrats

by Mark Blyth

“You got to know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run.”

Kenny Rogers may seem an unlikely choice for the post of Democratic party strategist, but the advice of ‘the Gambler’ may in fact be the single best strategy that the Democrats can embrace when considering how, and who, to run in 2008. Although we are still a long way from the next US Presidential election, the wheels seem to have truly come off the Republicans’ electoral wagon. The ‘political capital’ Bush claimed after his reelection was used up in the failed attempt to privatize Social Security and in the continuing failure to stabilize Iraq. Sensing this, Congressional Republicans (and fellow travelers) increasingly distance themselves from Bush, claiming that, in the manner of small furry passengers who have decided that the cruise was not to their liking after all, the Bushies (and/or the Congressional Republicans) have betrayed the Reagan legacy, that Iraq was a really bad idea all along, and that when its all going to pot you might as well grab what you can in tax cuts for yourselves and head for the exits.

Such un-characteristic implosion from the usually well-oiled Republican machine might lead one to expect the Democrats to make real political inroads for the first time in years. Yet, as the line attributed to Abba Eban about the Palestinians goes, the Democrats “never miss an opportunity to miss an opportunity.” This lack of Democratic political bite, when seen against the backdrop of an already lame-duck second-term President, is remarkable. For example, leading Democrats cannot get a break. Joe Biden makes a ‘major’ policy speech on Iraq, and outside of the New York Times reading ‘chattering classes’ it is roundly ignored. While some Democrats argue for a troop pull-out in Iraq, others in the same party urge ‘stay the course’ thereby ‘mixing the message’ ever further. Even populist rabble rouser Howard Dean, now head of the Democratic National Committee, has all but disappeared from view.

Yet should we be surprised by this? Perhaps the Democrats are a party so used to offering ‘GOP-lite’ that they really have no independent identity. Just as Canada has no identity without reference to the USA (sorry Canada, but you know its true), so the Democrats have no identity without defining themselves against the GOP. But to be against something is not to be for anything. Given that the Republicans are clearly for something, the ‘fact free politics’ of ‘freedom’, ‘prosperity’, ‘lower taxes’, ‘individual initiative’, and other feel-good buzzwords, the Democrats seem to have no one, and no big ideas, to take them forward, except perhaps one person – Hillary Clinton.

Its pretty obvious that she wants the job. Much of the media has decided that she already has the Democratic nomination in the bag, but are split on whether she can actually win. To resolve this issue, we need the help of an expert, and this is where I would like to call in Kenny Rogers. Mr. Rogers’ advice is that you have to know when to hold, fold, walk, or run. I would like to suggest that the best thing that the Democratic Party can do is to realize that this next Presidential election is exactly the time to do some serious running; as far away from the White House as possible. I would like to propose the following electoral strategy for the Democrats:

1. Hillary Clinton must run in 2008. She will lose. This is a good thing.

2. If the Democrats lose in 2008, they might well win the following three elections.

3. If the Democrats nominate anyone other than Hillary they might actually win in

   2008, and this would be a disaster.

Ok, how can losing the next election be a good thing for the Democrats? The answer lies in how some elections act as ‘critical junctures’, moments of singular political importance where because an election went in one direction rather than the other, the next several elections went that way too. 1896 was such an election for the Republicans, as was 1932 for the Democrats when they overturned Republican control and began their own long period of political dominance into the 1970s. Indeed, it is worth remembering that the Democratic party used to be the majority party in the US, and that the institutions and policies they set up in the 1930s and 1940s from Social Security to Fannie Mae, are as popular as ever. Indeed, one might add that only one of nine post-WW2 recessions occurred when the Democrats were in power. How then did the Democrats become the weak and voiceless party that they are now? The answer was Ronald Reagan and the critical election of 1980.

Reagan did something that no Democratic politician ever did before, he (or at least those around him) really didn’t give a damn about the federal budget. Reagan managed to combine tax cuts, huge defense expenditure increases, super-high interest rates, and welfare cuts into a single policy package. Despite the supposed ability of voters to see through such scams and recognize that tax cuts now mean tax raises later, Reagan managed to blow a huge hole in federal finances and still be rewarded for it at the ballot box. Despite their fiscal effects, this tax-cutting ‘thing’ became extremely popular, and the Democrats had to find an issue of their own to argue against them. That new issue was the so-called “Twin deficits’ that Reagan’s policies created and the policy response was deficit reduction.

Under Reagan (and Bush the elder) the US ran increasingly large deficits both in the federal budget and in the current account. The Democrats of the day seized on these facts and banged-on and on about them for a decade as if the very lives of Americas’ children depended on resolving them. The problem was however that as the world’s largest economy with the deepest capital markets, so long as foreigners were willing to hold US dollar denominated assets, no one had to pay for these deficits with a consumption loss. The US economy became the equivalent of a giant visa card where the monthly bill was only ever the minimum payment due. Take the fact that no one ever refused US bonds, and add in that most voters would have a hard time explaining what the budget deficit was, let alone why it was this terrible thing that had to be corrected with tax increases, and you have a political weapon as sharp as a doughnut. By arguing for a decade that the twin deficits were real and dangerous, and that tax increases and consumption losses (pain) were the only way forward, the Democrats went from being the party of ‘tax and spend’ to being the party of tax increases and balanced budgets, which simply played into Republican hands.

Which brings us to why the election of the other Clinton (Bill) in 1992 was not a critical turning point away from Republican politics in the way that 1932 was. Having banged-on about how terrible the deficits were, once in power the Democrats had to do something about them. Being boxed into a fiscal corner, Bill Clinton’s proposals for a budget stimulus and universal healthcare collapsed, and all that was left was (the very worthy) EITC and (the very painful) deficit reduction. Cleaning up the fiscal mess that the Republicans had made became Clinton’s main job, and this helped ensure that by 1996 Clinton was seen as a lame duck President who hadn’t really done anything. His unexpected win in 1996 confirmed this insofar as it resulted in no significant policy initiatives except the act of a Democrat ‘ending welfare as we know it.’ The asset bubble of the late 1990s may have made the economy roar, and Clinton’s reduction of the deficit may have helped in this regard, but the bottom line was that the Democrats were now playing Herbert Hoover to the Republicans’ Daddy Warbucks.

So Bush the younger was elected and he continued the same tax cutting agenda, but coupled this to huge post 9-11 military expenditures and the Iraqi adventure. As a result of these policies the US carries current account and federal deficits that would make Reagan blush, the Republicans have a splintering party and support base, and the country as a whole is mired in Iraq with a very unpopular President at the helm. Surely then 2008 can be a new 1932 in a way that 1992 wasn’t? The inauguration of a new era of Democratic dominance? Possibly…but only if the Democrats loose the 2008 election rather than win it. To see why, let us examine what might happen if the Democrats did win the next election with Hillary Clinton at the helm.

In terms of security politics its far more likely that Iraq will go from bad to worse than from worse to better over the next few years. Its a mess a regardless of who is in charge, and the choices at this point seem to be ‘stay forever’ or ‘get out now.’ If the Republicans sense that they are going to lose in 2008 the smart thing to do would be to keep the troops in Iraq so that the Democrats would be the ones who would have to withdraw US forces. When that happens, Iraq goes to hell in a hand-basket, and the Democrats gets blamed for ‘losing Iraq’ and ‘worsening US security.’ If on the other hand Bush pulls US forces out before 2008 and the Democrats win, the local and global security situation worsens, and the probability that ‘something really bad’ happens on the Democrats’ watch rises, which they then get the blame for.

In terms of economic policy the structural problems of the US economy are only going to get worse over time. Since Bush came into office the dollar has lost over a third of its value against the Euro and around 20 percent against other currencies. This means higher import costs, which along with higher oil prices, suggests future inflation and larger deficits. Given that the US relies on foreigners holding US debt, any future inflation and larger deficits would have to be offset with higher interest rates. This would negatively impact the already over-inflated US housing market, perhaps bursting the bubble and causing a deep recession. So, regardless of who is in office in 2008, the economy is likely to be in worse shape then than it is now. If the Democrats are in power and the economy tanks, they will get the blame for these outcomes regardless of the policies that actually brought the recession about.

In terms of cultural politics, social issues are likely to come to a head with the new Roberts’ court finding its feet. It is probably safe to say that there will be an abortion case before the Court during the 2008-2012 cycle, if not before. This is usually treated as the clinching argument for why the Democrats must win the next election rather than lose it. Again, I disagree. Precisely because the only people who still think Bush is doing a good job are conservatives with strong social policy concerns, you can bet they will mobilize to get this policy through even if the rest of the world is crashing about their ears. I say let them have it. The sad truth is that if Roe v Wade is overturned rich white women will still get abortions if they need them, and poor women will not be much worse off since they don’t get access to abortion in most of the country as it is. But more positively, if the Republicans go for this, anyone who says “I’m a moderate Republican” or “I’m socially liberal but believe in low taxes” etc., has to confront an awkward fact. That they self-identify with an extremely conservative social agenda: one that treats women’s bodies in particular, and sexual issues in general, as objects of government regulation. If this comes to pass then the Democrats have a chance to split the Republican base in two, isolate moderates in the party, and turn the Republicans into a permanent far right minority party.

Finally, in terms of electoral politics, the Democrats have to face up to an internal problem – Hillary Clinton really is unelectable. While she may be smart, experienced, popular in the party, and have a shit-load of money behind her, the very appearance of her on television seems to result in the instant emasculation of around 30 million American men. Indeed, 33 percent of the public polled today say that they would definitely vote against her, and this at a time when Bush’s numbers are the worst of any President in two generations. It may be easy to forget how much of a hate figure Hillary Clinton was in the 1990s. One way to remember is to simply search amazon.com for books about Hillary Clinton and see how the ‘hate book’ industry that dogged the Clintons all through the 1990s is moving back into production with a new slew of ‘why she is evil incarnate’ titles. But Hillary Clinton is not just a hate figure for the extreme right. After a decade of mud slinging (that is about to go into high gear again) she is simply too damaged to win. There is a bright side to all this. Hillary Clinton is a huge figure in the Democratic party in terms of fundraising, profile, and ambition. The only way she will get out of the way and allow new figures in the party to come forward who might actually win is by her losing; so let her lose.

In sum, ‘knowing when to walk away, and when to run’ is a lesson the Democrats need to learn, and losing in 2008 would be ‘the Gambler’s’ recommendation. First, making the Republicans clean up their own mess would not only be pleasing to the eye, it would be electorally advantageous. Forcing the Republicans to accept ownership of the mess that they have made makes their ability to ‘pass the buck’ onto the Democrats, as happened to Bill Clinton, null and void. Clearly, from the point of view of Democratic voters the probable consequences of a third Republican victory have serious short-term costs associated with them, but it is also the case that the possible long term benefits of delegitimating their policies, watching their base shatter, and not having to clean up their mess and get blamed for it, could be greater still. Second, if the Democrats do win, then all the problems of Iraq, the declining dollar, the federal and trade deficits, higher interest rates, a popping of the housing bubble, a possible deep recession, and being blamed for the end of ‘the visa card economy’, become identified with the Democrats. They come in, get blamed for ending the party, clean up the mess, and get punished for it at the next election. Seriously, why do this? Third, if it is the case that Hillary Clinton will indeed get the nomination, then let her have it. She cannot win, so why not kill two birds with one stone. Nominate Hillary, run hard, and lose. That way Hillary cannot not get nominated again, new blood comes into the party, and the Republicans have to clean up their own mess. Do this, and 2012 really might be 1932 all over again.

Mark Blyth's other Talking Pints columns can be seen here.

NOTE: This essay is posted by Abbas Raza due to a problem with Mark's computer.