Are Dems who propose cuts to Social Security “stupid” or just doing risk-analysis?

This is part editorial, and part analysis of my own. The kickoff point relates to Social Security, but it also relates to a whole set of similar unpopular, unpopulist proposals.

Let’s start here. I frequently read statements like these:

How can Democrats be so stupid? Don’t they realize that when they agree with Republicans about cutting Social Security (or whatever), they’ll still get attacked by Republicans for … cutting Social Security? How dumb is that? When will they learn?

This has been happening recently, in fact, on just the issue above. Buzzfeed:

Republicans Now Attacking Florida Democrat For Supporting Simpson-Bowles

The National Republican Congressional Committee (NRCC) has taken an odd course in the Florida special election to replace Republican Rep. Bill Young after his death in October of last year: The NRCC is bashing Democratic candidate Alex Sink for supporting Simpson-Bowles, a deficit reduction plan Republicans most often attack President Obama for abandoning or ignoring.

ClassWarKitteh_catfood“Alex Sink supports a plan that raises the retirement age for Social Security recipients, raises Social Security taxes and cuts Medicare, all while making it harder for Pinellas seniors to keep their doctors that they know and love,” Katie Prill, a spokeswoman for the NRCC said, according to the Sunshine State News. “Sending Alex Sink to Washington guarantees that seniors right here in Pinellas County are in jeopardy of losing the Social Security and Medicare benefits that they have earned and deserve.”

The list of Republicans who have praised, cited, or attack Obama for ignoring Simpson-Bowles is long.

“Simpson-Bowles” is the informal name for the Catfood Commission chairmen’s report. Florida Republicans who formerly supported the Simpson-Bowles recommendations are accusing Democrat Alex Sink of supporting … Simpson-Bowles, ’cause, Catfood.

Smart move on the Repubs part. But is it a dumb move on the Dems part, in general, to do otherwise? Candidate Sink talks about cutting Social Security because she believes it (possibly); because her “professional consultants” tell her to say it (probably); because the Dem–funding class, the Robert Rubins and their ilk, insist on it (certainly).

So is that “stupid” or something else?

My personal belief is that the “how stupid are they” comments offer a great deal of undeserved ground cover for Dem misdeeds, and shield them from being held responsible for what they may actually be doing, something much worse. Let’s look at that.

Are Democrats “stupid” — or something else — when they risk election by promoting anti-populist messages?

It’s clear that reducing Social Security benefits, like other anti-populist (and unpopular) proposals, poses a risk to election outcomes. Just look at the case of Ms. Sink, who might lose her bid in Florida. Or, in fact, President Obama, who tried all through his first term to grand-bargain his way to a set of benefit cuts. That could have cost him big in 2012.

So why do they make these proposals, these benefit-cutting Democrats? And while we’re asking, why do they keep offering these NAFTA-style trade agreements, when in fact, the whole country now knows how bad they are for us ordinary people?

To answer those questions, I think we have to consider the world from Robert Rubin’s point of view, and that of his friends in the billionaire class. And to do that, I’d like to offer a short history lesson.

American free-marketeers left the Democratic Party in the 1930s, and then came back

Let’s posit that the billionaires of both parties have many cultural differences, but one main common interest — money and power. Back before FDR, “free-marketism” and “liberalism” (now called “classic liberalism”) were the same thing — “liberation” of markets from government interference. That’s hard to imagine, but it’s true. For more than a century prior to FDR, “liberalism” and “free market ideology” were identical. This goes way back, deep into the 1700s. (I wrote about that here.)

FDR re-introduced a needed role for government regulation of markets in order to stave off what could have been popular revolt during the Depression. That semi-anathema offshoot of classic liberalism came to be called simply “liberalism” in the U.S., but in fact it was “social liberalism,” a variant, a side path (now called “socialism” in Europe).

Because pre-FDR liberalism had as its gospel, zero interference from government in markets, the Democrats’ pro-government heresy had the effect of moving most of the free-marketeers into the Republican party, and at the same time, taking away their former name (“liberal”). Things stayed this way until the 1970s.

Fast forward to the beginning of the effort to kill the FDR revolution, the Carter years and after. Troglodyte (knuckle-dragging, John Birch Society) free-market billionaires stayed in the Republican Party, their natural cultural home. But because of the increased interest in “deregulation” by Carter and the Democrats, the more open-minded of the moneyed class (those who hated gays less, for example, or believed in some civil rights) returned to the Democratic Party as “neo-liberals” — which actually means its opposite. They were “new liberals” only from an FDR point of view. They were actually “old liberals,” classic free-market liberals from pre-Depression days.

Al From and Bill Clinton fronted for them politically when they built the DLC, but it was a billionaire op all the way. (For a great exposé of this by Rick Perlstein, click and read here. The birth of the DLC and the rise of the neoliberal Democrats is a fascinating story.)

So now the free-market strain of billionaires, which is actually a “we want to control markets for our benefit” strain, is rampant in both parties. It’s a deep strain in the billionaire class, on all sides of the social spectrum, and as I say, it goes back before Jeremy Bentham.

There’s a perfect expression of that here, in a speech given by new-Senator Barack Obama to a founding meeting of a Robert Rubin think tank dedicated to advancing neoliberal goals via the Democratic Party.

What you’re seeing is former Clinton Treasury Secretary multi-millionaire Robert Rubin (“Bob” in Obama’s intro), the self-interested front man for his “enlightened” band of millionaires and billionaires, hosting a gathering that makes the same pitch for free-markets and austerity that the Republican-aligned billionaires are making. Why the benefit cuts? Because it frees up more money to scoop up. That’s why they want to kill pension funds as well.

" I am an unapologetic free market capitalist (mostly). But the third spirit of Christmas haunts me" (source)

” I am an unapologetic free market capitalist (mostly). But the third Spirit of Christmas haunts me” (source)

Bottom line — This is in their historical and personal blood, and it’s also in their self-interest. It’s what almost all billionaires and their enablers want. (And if you haven’t figured it out yet, the writer Masaccio has figured it out for you — there are no free markets and never will be. All markets are rigged by the rules that regulate them. Guess who regulates today’s “free” markets?)

So what’s the electoral calculation on the Democratic side?

Which brings us to why the Rubins and the Clintons and the Obamas — and whoever is financing campaigns for the Alex Sinks of the world — are apparently willing to look “stupid” to make these destructive neoliberal, unpopular, anti-populist proposals. If I’m Robert Rubin or someone in his position (there are many), I’d figure it like this:

If the Republicans offer “free markets” and racism, and I offer “free markets” and far friendlier social politics, I can still win the White House most of the time. (The White House is where the power and money are, money I can dole out to my friends via gifts and appointments.)

So whenever someone in my base says, “But wait … I don’t want the billionaires and bankers to win and skate free. I don’t want bailouts and “free trade” agreements. I don’t want benefit cuts. Also, jobs!” — I immediately reply, “Really? So you want Chris Christie? Mitt Romney? Rush Limbaugh to run the country? You just had Bush because you messed up and weren’t loyal enough.”

“Line up, son, or take the blame,” they say. And they mean it. And in fact, most do line up; daughters and sons alike. Some do not, of course, and some just stay home, bored and sick with the lack of real choice. Sure that diminishes the Democratic vote total, but if they win the White House by +3% instead of +10%, so what? They still win.

And for them, when it comes to the general election, if the choice is between two free-marketeers anyway, so what? Rubin doesn’t suffer when Bush is in office, nor does anyone he hangs with. He and his friends still get their factories in China, and they still get the strongest stock market the Fed can deliver. They suffer all the way to the bank, count their cash, wait for the next electoral round, and try again. Most of the real pain is felt by those below, by the failed electeds, and by us.

So that’s the calculation, and it’s based on, yes, triangulation and the squeeze play. They triangulate and the base gets squeezed. True, there’s a slightly greater risk of losing the White House than if they propose truly progressive, truly popular policies. But there’s no price to them personally for losing, and they’ll win most of the time anyway, especially in this era of shifting demographics. It’s a relatively low-risk, high-reward strategy, based on this calculation.

So they take the risk. This is my speculative thinking, my explanation, but I don’t think I’m wrong. Frankly, if I were evil in a Robert Rubin / hedge-fund billionaire way, I’d do this 10 times out of 10. Win or lose, I’m still in France half the time anyway, when I’m not at St. Andrews with David Koch, or counting my cash on my yacht.

The real risk to free market billionaires is from the populist left

By this calculation, the real price to be paid by the Rubins, their enablers and their beneficiaries, would only come if an actual FDR–type (or an emboldened Elizabeth Warren–type) got into the White House. That would present a problem. She’d have to be dealt with. Much better to never let her get close. For me, this explains the Rubin–Obama disdain for the actual left; and as you know, Rubin and Obama are not alone. The populist left is the real direction of danger to all these people, so they shed the actual left like flies and cling to more like-minded candidates.

Naturally there’s a risk with this strategy. Consider the 2012 presidential election. That 4% popular vote differential was not much of a margin, and if Romney hadn’t become “Mr. 47%” in most people’s eyes, it’s conceivable he could have pulled closer. But there’s just no way the Rubins and the hedgies and all their minions are going to allow an anti-billionaire “Warren populist” into the general election. They have to stick with a free-market type.

So the very best they can hope for is a newbie who can lie, pretend to be something he’s not, a man or woman without a track record. (Remind you of someone? Obama in 2008, Kid “Hope and Change” and “Yes We Can”?) That brings out the Hopeful and swells the numbers. Otherwise they just have to go with what’s available and roll the dice. By 2012 no one was Hoping, certainly not in great numbers, not after four years of Grand Bargains and promises betrayed (do click; it’s a stunning list). Many were just voting not-Romney, those who voted at all.

So yes, there’s some risk to this neoliberal calculation and strategy. In 2012 they took the risk and it paid off, in a 4% popular vote victory. Could the strategy still lose occasionally? Yes, but again, given the demographics and with appropriate pushback in the states, it’s increasingly less likely.

And even if it does produce a loss, consider the alternative from the Rubin side of things. What do you do? (1) Put a real FDR in the White House and let him challenge the whole billionaire system, or (2) risk having to count your money in electoral exile for a just few years, then try again?

I don’t see the Rubins of the world ever making the first choice. And I do think they’ve really thought this through. To return to where we started, very few of these men and women are stupid.

Side thought — Keep the above in mind when scoping out the 2016 race. We have a neoliberal front-runner with a track record and an unwillingness to speak on most issues. Where’s the turnout going to come from?

Mes centimes,


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Gaius Publius is a professional writer living on the West Coast of the United States.

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