By Robert Reich
More Americans than ever believe the economy
is rigged in favor of Wall Street and big business and their enablers in
Washington. We’re five years into a so-called recovery that’s been a bonanza
for the rich but a bust for the middle class. “The game is rigged and the
American people know that. They get it right down to their toes,” says Senator Elizabeth Warren.
Which is fueling a new populism on both the
left and the right. While still far apart, neo-populists on both sides are
bending toward one another and against the establishment.
Who made the following comments? (Hint: Not
Warren, and not Bernie Sanders.)
A. We “cannot be the party of fat cats, rich
people, and Wall Street.”
B. “The rich and powerful, those who walk the
corridors of power, are getting fat and happy…”
C. “If you come to Washington and serve in
Congress, there should be a lifetime ban on lobbying.”
D. “Washington promoted moral hazard by
protecting Fannie Mae and Freddie Mac, which privatized profits and socialized
losses.”
E. “When you had the chance to stand up for
Americans’ privacy, did you?”
F. “The people who wake up at night thinking of
which new country they want to bomb, which new country they want to be involved
in, they don’t like restraint. They don’t like reluctance to go to war.”
(Answers: A. Rand Paul, B. Ted Cruz, C. Ted Cruz, D. House Republican Joe Hensarling, E. House Republican Justin Amash, F. Rand Paul )
You might doubt the sincerity behind some of
these statements, but they wouldn’t have been uttered if the crowds didn’t
respond enthusiastically – and that’s the point. Republican populism is
growing, as is the Democratic version, because the public wants it.
And it’s not only the rhetoric that’s
converging. Populists on the right and left are also coming together around six
principles:
1. Cut the biggest Wall Street
banks down to a size where they’re no longer too big to fail. Left
populists have been advocating this since the Street’s bailout now they’re
being joined by populists on the right. David Camp, House Ways and Means
Committee chair, recently proposed an extra 3.5 percent quarterly tax on the
assets of the biggest Wall Street banks (giving them an incentive to trim
down). Louisiana Republican Senator David Vitter wants to break up the big
banks, as does conservative pundit George Will. “There is nothing conservative
about bailing out Wall Street,” says Rand Paul.
2. Resurrect the Glass-Steagall
Act, separating investment from commercial banking and thereby
preventing companies from gambling with their depositors’ money. Elizabeth
Warren has introduced such legislation, and John McCain co-sponsored it. Tea
Partiers are strongly supportive, and critical of establishment Republicans for
not getting behind it. “It is disappointing that progressive
collectivists are leading the effort for a return to a law that served well for
decades,” writes the Tea Party Tribune. “Of course, the establishment political
class would never admit that their financial donors and patrons must hinder
their unbridled trading strategies.”
3. End corporate welfare –
including subsidies to big oil, big agribusiness, big pharma, Wall Street, and
the Ex-Im Bank. Populists on the left have long been urging this; right-wing
populists are joining in. Republican David Camp’s proposed tax reforms would
kill dozens of targeted tax breaks. Says Ted Cruz: “We need to eliminate
corporate welfare and crony capitalism.”
4. Stop the National Security
Agency from spying on Americans. Bernie Sanders and other populists
on the left have led this charge but right-wing populists are close behind. House
Republican Justin Amash’s amendment, that would have defunded NSA programs
engaging in bulk-data collection, garnered 111 Democrats and 94 Republicans
last year, highlighting the new populist divide in both parties. Rand Paul
could be channeling Sanders when he warns: “Your rights, especially your right
to privacy, is under assault… if you own a cellphone, you’re under
surveillance.”
5. Scale back American
interventions overseas. Populists on the left have long been
uncomfortable with American forays overseas. Rand Paul is leaning in the same
direction. Paul also tends toward conspiratorial views about American
interventionism. Shortly before he took office he was caught on video claiming
that former vice president Dick Cheney pushed the Iraq War because of his ties
to Halliburton.
6. Oppose trade agreements crafted
by big corporations. Two decades ago Democrats and Republicans
enacted the North American Free Trade Agreement. Since then populists in both
parties have mounted increasing opposition to such agreements. The
Trans-Pacific Partnership, drafted in secret by a handful of major
corporations, is facing so strong a backlash from both Democrats and tea party
Republicans that it’s nearly dead. “The Tea Party movement does not support the
Trans-Pacific Partnership,” says Judson Philips, president of Tea Party Nation.
“Special interest and big corporations are being given a seat at the table” while
average Americans are excluded.
Left and right-wing populists remain deeply
divided over the role of government. Even so, the major fault line in
American politics seems to be shifting, from Democrat versus Republican, to
populist versus establishment — those who think the game is rigged versus those
who do the rigging.
In this month’s Republican primaries, tea
partiers continue their battle against establishment Republicans. But the major
test will be 2016 when both parties pick their presidential candidates.
Ted Cruz and Rand Paul are already vying to
take on Republican establishment favorites Jeb Bush or Chris Christie.
Elizabeth Warren says she won’t run in the Democratic primaries, presumably
against Hillary Clinton, but rumors abound. Bernie Sanders hints he might.
Wall Street and big business Republicans are
already signaling they’d prefer a Democratic establishment candidate over a
Republican populist.
Dozens of major GOP donors, Wall Street
Republicans, and corporate lobbyists have told Politico that
if Jeb Bush decides against running and Chris Christie doesn’t recover
politically, they’ll support Hillary Clinton. “The darkest secret in the big
money world of the Republican coastal elite is that the most palatable
alternative to a nominee such as Senator Ted Cruz of Texas or Senator Rand Paul
of Kentucky would be Clinton,”concludes Politico.
Says a top Republican-leaning Wall Street
lawyer, “it’s Rand Paul or Ted Cruz versus someone like Elizabeth Warren that
would be everybody’s worst nightmare.”
Everybody on Wall Street and in corporate
suites, that is. And the “nightmare” may not occur in 2016. But if current
trends continue, some similar “nightmare” is likely within the decade. If the
American establishment wants to remain the establishment it will need to
respond to the anxiety that’s fueling the new populism rather than fight it.'
ROBERT B. REICH, Chancellor’s Professor of Public Policy at
the University of California at Berkeley and Senior Fellow at the Blum Center
for Developing Economies, was Secretary of Labor in the Clinton administration.
Time Magazine named him one of the ten most effective cabinet secretaries of
the twentieth century. He has written thirteen books, including the best
sellers “Aftershock" and “The Work of Nations." His latest,
"Beyond Outrage," is now out in paperback. He is also a founding
editor of the American Prospect magazine and chairman of Common Cause. His new
film, "Inequality for All," is now available on Netflix, iTunes, DVD,
and On Demand.
