Opinion

The Great Debate

Populism: The Democrats’ great divide

One day after President Barack Obama called for moving forward on trade authority in his State of the Union address, Senate Majority Leader Harry Reid (D-Nev.) declared, “I am against fast track,” and said he had no intention of bringing it to a vote in the Senate.

Reid’s announcement came after 550 organizations, representing virtually the entire organized base of the Democratic Party outside of Wall Street, called on Congress to oppose fast track. Though obscured by the Democrats’ remarkable unity in drawing contrasts with the Tea Party-dominated Republicans in Congress, the debate between an emerging populist wing of the Democratic Party and its still-dominant Wall Street wing is boiling.

For a constantly disputatious “big tent” party, Democrats are remarkably unified behind the jobs and inequality agenda the president ticked off in his State of the Union address — raising the minimum wage, immigration reform, paycheck fairness for women, paid family leave, investment in infrastructure, education and research and development, and an “all of the above” energy strategy. Republicans block action on all these relatively modest reforms, providing ammunition for Democrats in the November midterm elections.

But beneath this surface calm, there is a growing divide within the Democratic Party over what might be considered the tectonic plates of our political economy, a debate that has only begun to surface. Here are some of the core divisions:

Passive or Active Voice Populism

Since Occupy Wall Street, inequality has been Topic A, hardly surprising in an economy where the top 1 percent is capturing 95 percent of the income growth coming out of the Great Recession. The president weighed in, calling inequality the “defining challenge of our time.”

Democrats must overcome Clinton nostalgia

President Bill Clinton salutes supporters at a campaign rally Oct. 31, 1996. REUTERS/Archive. 

Democrats now delight in watching Republicans flounder as they try to free themselves from the failures of President George W. Bush and the extremes of the Tea Party. But the GOP’s tribulations should not blind Democrats to their own challenge. The party must free itself from the legacy of former President Bill Clinton and the centrism of his New Democrats.

Clinton’s successes in office have little relevance for Democrats today. The 1990s were a very different time both politically and economically. In fact, many of Clinton’s policies led to the travails now facing Americans. They are part of the problem, not part of the solution. And Clinton’s strategy of co-opting conservative themes offers no way out.

from The Great Debate UK:

Glass-Steagall Lite, brewed by Volcker, served by Obama

Laurence Copeland

- Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -

Let me say at the outset that I am far from enthusiastic about either of President Barack Obama’s major policy initiatives: healthcare reform and the banking reform plan announced on Thursday.

But both cases are truly momentous, because both are tests of whether America is an imperfect democracy (like all the others) where government by the people eventually works, more or less, or a totally dysfunctional oligarchy.

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