The Democrats ended the 1988 election demoralized. Late in October, Michael Dukakis, facing almost certain defeat, stood at rail-side in Bakersfield, California and made his confession. He was a liberal after all: a liberal in the tradition of Franklin D. Roosevelt, Harry S. Truman and John F. Kennedy, one who "knows you have to pay your bills." He did not elaborate. He did not articulate any set of principles, offered no special perspective, and invoked no deeply resonant historical experience. The public was left, by default, with Lee Atwater's savage caricature: a Democratic Party short on patriotism, weak on defense, soft on criminals and minorities, indifferent to work, values, and family, and, inexplicably, infatuated with taxes.
Among major demographic groups, the Democratic coalition could now depend reliably on only Jewish, African-American, and Hispanic voters. In 1988 both Catholic and union households split their votes evenly between the parties; in both 1984 and 1988 native Southern whites gave two-thirds of their votes to the Republicans. The Democratic advantage in party identification, which hovered at 17 to 18 points for nearly the entire period from 1952 to 1980, sank to 7 or 8 points in the late Reagan years (1984 to 1988) and has perhaps disappeared entirely, according to some surveys.
Looking back at Democratic losses, conservative Democratic analysts conclude, reasonably, that Democratic nominees have proved "unacceptably liberal." The public has lost confidence in Democratic nominees who adhere to a "liberal fundamentalism" and have "lost touch with the American people." The answer proposed by the Democratic Leadership Council, which includes Senators Sam Nunn and Charles Robb, is greater credibility on military and foreign policy, closer alignment with mainstream values of responsibility and hard work, a "progressive" economic message of "upward mobility and individual effort," and a recasting of themes and programs to "bring support from a sustainable majority."'
The Enigma of Public Opinion
Alongside the liberal Democrats' demoralization and the conservative Democrats' critique, however, are a lot of contradictory "facts" that have no place to go. The public favors increased government spending in many areas -- anti-drug programs, Medicare, cancer and AIDS research, day care programs, and Social Security -- and wants new spending priorities focused, above all, on domestic investment. Populist impulses remain very strong. Voters want tougher regulation of corporate polluters and insurance companies and higher taxes for wealthy individuals and corporations. Public anxiety centers increasingly on lagging purchasing power, growing inequality, threats to the family and children, rising health care costs, corporate excesses, and America's declining economic position in the world.
THOSE "FACTS" REMAIN unexplained and without context because the historic models that could give them meaning -- the New Deal and Great Society -- have fallen into disrepute. The values and ideas associated with the New Deal and the Great Society still float about in the public discourse, but they are no longer embedded in a common historic experience or a convincing story. Only when new models and ideas gain currency will Democrats be able to take advantage of popular impulses that favor equity, populism, and national effort.
The Democrats do still benefit from a residual, positive image as the party of ordinary people. Voters today distinguish roughly between a party of the people and a party of the rich and powerful. Despite the alienated affection of recent years, they side instinctively with the Democrats on such issues as the environment, insurance rates, tax fairness, energy, and utilities, which pit ordinary citizens against concentrated private power. Lee Atwater seems to understand the divide, even if Democrats are confused about it. As Atwater told William Greider: "Simply put there is constantly a war going on between the two parties for the populist vote. The populist vote is always the swing vote .... The Democrats have always got to nail the Republicans as the party of the fat cats, the party of the upper class and privilege. And the Democrats will maintain that they're the party of the common man. The Republicans, of course, argue that the Democrats are the party of the liberal elites who're not in touch with the mainstream of the country."
The Shrinking Coalition
The New Deal once told a story that gave political meaning to the facts. Against the backdrop of the Great Depression and in the face of a hostile world, that story energized public and collective effort. It honored working people and stood with them against corporate power. It provided social insurance against the prospect of adversity. It championed a Keynesian economic model that united rising public expenditure and rising personal incomes, and it sought a secure future by promoting American leadership in the world.
Keynesian assumptions conveniently served the particular interests of Democrats' electoral base as well as the national interest in stable economic growth. The Democrats could serve simultaneously as a party of the people and a party of the nation. But the high inflation, slow growth, and rising tax rates of the 1970s, followed by the high budget deficits of the 1980s, broke voter confidence in the model and its assumptions. Stimulating demand through government spending now looked profligate, more of a special favor to beneficiaries than an effort to meet the needs of society as a whole. Middle-class voters doubted that the model served their interests.
The New Deal model also crashed on the rocks of America's challenged international position, evident in the defeat in Vietnam and the emergence of competing economic powers, particularly Japan. The assurance of economic security for American workers was linked to an expansive view of American power. That view seemed confirmed by World War II and the world that emerged from it. John F. Kennedy, the last Democratic President to articulate that vision, conveyed an image of America as a leader among nations, rich but generous and respected. However, after the humiliations in Vietnam and Iran, the Democratic Party lost its ability to project that image and thereby lost some of its hold on the loyalty of America's working and middle classes.
Great Society liberalism was forged in a decade of historic upheavals. Innovative and optimistic, it advanced new concepts of justice and altruism that associated the Democrats with advancing civil rights and fighting poverty. But liberalism emerged from this period with a narrowed image of its constituencies. The beneficiaries of liberal initiative no longer appeared to be the broad working population, but rather the poor. And, for many, that meant blacks. Public spending, once conceived as furthering the broad economic interests of the working population, now seemed like a narrow response to special needs and special claims against the coalition.
A Closer Look at Public Opinion
The defeat of national Democratic candidates and the decomposition of Democratic models coexist with public attitudes that contradict the supposed new realities. The voters favor new national priorities; they are restive about the excesses of private power and are open to a broader governmental role in society. A 1989 ABC/Washington Post survey, for example, found that voters want to increase spending on drug programs (76 percent of those polled), Medicare (72 percent), and Medicaid (61 percent), cancer research (68 percent) and AIDS research (66 percent), day care programs (61 percent), and Social Security (58 percent). On the other hand, there is little interest in increased military spending (18 percent). Warren Miller, a political analyst, points out the paradox: "The shift toward the Republicans occurred in the face of generally increasing support for liberal policies."
Those vague voter preferences, however, lack intellectual or political grounding. Few political leaders try to integrate them into a coherent framework because of the widespread and poorly examined belief that the public's mood is conservative. In the absence of intellectual or political leadership, these "facts" lose significance for voters, social critics, and politicians alike. Voters lose confidence in their own preferences, giving into their worries about taxes and their skepticism about governmental performance. Nonetheless, their concerns about the future persist, as do their inclinations to use public means to effect solutions.
1988: The Contradictions
George Bush's "kinder, gentler" rhetoric reflected a calculated reading of the public mood. Even as voters scorned Michael Dukakis -- many because he was "too liberal" -- a large majority still wanted the next President to pursue a liberal agenda and a populist course. My own election-eve survey found that 65 percent of respondents gave top priority to making sure the "wealthy and the big corporations pay their fair share of taxes." Sixty percent supported "imposing stricter environmental regulations on corporations" that "produce toxic wastes." Voters wanted a President who would expand the provision of broad-based social welfare services: helping the poor and homeless (49 percent top priority), protecting American jobs from foreign competition by tougher trade laws (47 percent), and providing long-term health care and health insurance for everyone (44 percent).
The conservative dominance rests on a benign and simple economic vision -- rosy economic indicators, strong job growth, slow inflation, incentives for new investment, and above all, low taxes. But in America today, the ordinary voter sees a middle class that carries a disproportionate load for society and that faces increasing economic obstacles. The burden and inequity is immediately evident in the realm of taxes: "rich people and corporations not carrying their share of the tax burden" (72 percent see this as an extremely or very serious problem) as well as the "amount of taxes paid by the average person" (64 percent). But the middle class faces a broad range of economic pressures: "middle-class families having a harder and harder time making ends meet" (71 percent) and "young families unable to keep up with the rising cost of housing and other needs" (62 percent).
The voters believe that a rising foreign economic presence is a growing threat to the country. Nearly three-quarters identify, as very or extremely serious, "foreign investors buying up American companies and land." About two-thirds express similar concerns about "foreign competition for American industry and jobs," "the loss of America's lead in technology," and "America's trade imbalance with foreign countries."
The uncertainty about the future is reflected in the public's view of the external world, where virtually all historic assumptions have been turned on their head. As a result of the shift in relations with the Soviet Union, just 4 percent cite Soviet aggression as a top threat. New threats now loom larger, particularly drug trafficking (identified by 37 percent of those polled), terrorism (10 percent), nuclear proliferation (12 percent), the economic power of foreign countries (9 percent) and destructive environmental practices (5 percent).
In the new world order, few voters see America as the leading nation: it now shares leadership in such critical areas as economic strength and high technology. Concerned that America's problems are going unaddressed, many voters seem ready to respond to national leadership that calls for increased spending for domestic investment and much tougher environmental regulation (68 percent). Seventy-six percent favor increased taxes on upper-income households and corporations "to help finance new initiatives.
Voters seem eager for a mobilization and unity of energies. There is nearly universal support (88 percent) for a proposal to "call together business and civic leaders from all over the country to identify emerging problems and set national goals." Voters like the idea of a "national economic plan that helps direct private sector investment to areas important to America's economic position in the world" (79 percent). They want government to play a larger role "developing and capturing new technologies for American industry" (79 percent). Americans, it seems, are looking for stronger national leadership that would seem to give the country more active control over its own economic future.
THE PUBLIC'S RECEPTIVENESS TO new national priorities and activist leadership remains, for popular commentary, a perplexing set of facts largely ignored for want of an explanation. The conservative Democratic discourse is silent on these currents, preferring to save the party by moving to the right. Even the dominant forces in the Democratic Party, while supporting a liberal policy agenda, have lost confidence in the Democrats' economic message and general principles and thus are uncertain what to do. They know that they are standing uneasily on the shoulders of political coalitions and historical models that cannot support them any longer. Many are tempted to draw the lesson that the American people reject a "class warfare political argument" and want instead "leadership that argues for economic growth strategies," as an article in The New York Times concluded after the Democrats lost the 1989 vote on a capital gains cut in the House of Representatives.
IN THE ABSENCE OF A convincing Democratic story that makes sense of the facts, voters have turned increasingly to the Republicans in one vital area after another. Voters now express greater confidence in the Republicans to promote growth and prosperity (43 to 33 percent) and control inflation (55 to 27 percent). Since World War II, Democrats have not won the Presidency unless they have enjoyed an advantage of at least 15 points in public opinion on the issue of keeping the country prosperous. Recently, Democrats have watched their advantage on that key issue decline from parity in late 1987 to a 21 -point deficit in the summer of 1989.
The absence of any Democratic advantage concerning trade is particularly troubling. America's declining economic position in the world is an issue made to order for the Democrats. Yet the Republicans enjoy a small advantage on dealing with foreign imports (40 to 34 percent), despite the Democratic initiatives in the Congress and the absence of any discernible Republican policy. The Democrats, in fact, offer divided counsel on the trade question, finding unity only on tactical responses like 60-day notification of plant closings, rather than on serious economic principles. It is hardly surprising that the public does not know where to place trade on the partisan and ideological spectrum.
These facts are a signal to Democrats: begin building new intellectual and political models that will explain and legitimate the public's still inchoate affinity for greater equity, broad social welfare, checks on concentrated power, and an affirmative role for government. Of course, creating a new model and building a new coalition is no simple act of will. Our historic models were forged by specific presidents at distinct historic moments: Franklin Roosevelt in response to the Great Depression and Lyndon Johnson in response to the civil rights upheaval. But absent a moment beyond anyone's making, Democrats can embark on thematic projects that stake broad claims to the middle class, offer a distinctive understanding of the economy and expansive views of America's world position, and rebuild public confidence in the public sphere.
Democrats are positioned to take up the cause of domestic investment and American economic strength; they can address the declining or stagnant living standards of the majority and the forces menacing the modem family; they can acknowledge the values and burdens of the middle class and the excesses of the corporations in particular. Democrats can elevate these subjects into a revitalized statement about the party's purpose and identity.
Within this broadened discourse, intrinsic Democratic principles need no longer be submerged or appear disfigured. Principles such as equity and opportunity, a populist skepticism of private power, and a government able to respond to people in need and to lead the nation, take on new life and meaning and create distinctions that make voting worthwhile.
The Middle-Class Project
The Democrats need to reassert their claim to represent the majority of working Americans. The working middle class needs to figure at least as centrally in the party's identity as the traditional blue-collar imagery of the New Deal coalition because in our time the working middle class constitutes the broad majority.
To reach the middle class today, Democrats need to accommodate "middle-class consciousness," containing three primary and interconnected principles: work, reward for work, and restraint. Most Americans, including both those who formed the New Deal coalition and those who constitute the potentially expanded base, believe that work is a central value. Working people contribute to society, create the wealth, and carry the burden of taxes. They have learned and accepted the rules that govern social behavior, and they expect, in turn, to get a fair reward for their work. As the primaries were coming to a close in June 1988 voters thought Michael Dukakis' references to "good jobs at good wages" signaled a respect for work, and they inferred that he was "a middle-class kind of guy" That was all obscured by August; the lesson should help guide the future.
THE MIDDLE CLASS TODAY perceives itself as "squeezed" between the rich and the poor, neither of whom play by the rules, but seek their reward through shortcuts or special claims -- tax breaks, windfalls, and welfare. Middleclass consciousness deplores the lack of values" today, which, in context, means the failure to honor work and recognize limits. To many, society seems to be spinning out of control and to be forgetting the people who carry the principal burdens. Middle-class voters believe that even though they carry disproportionate burdens (paying the taxes) and play by the rules (working hard), they get few of the benefits.
In real terms, middle-class and working families are indeed facing tougher economic odds, particularly those under 45 years of age. The bottom 40 percent of the population have lost income since 1979, and the middle 20 percent have stayed even only by the grace of working spouses. Homeownership has been increasingly frustrated (down 8 percent for young adults during the 1980s), and many face rising costs for day care for their children and long-term care for their
parents. According to a CBS poll, while 55 percent of baby-boom voters believe the future will bring them better jobs and more money, they also believe that their children will have a "harder time." Children have become the central focus of discussion, perhaps the displaced object of all those unaddressed anxieties.
The middle class feels aggrieved and is experiencing economic difficulties, producing, in our polling research, gloomy assessments about the future: "the middle class is dying out"; "there will only be two classes, the poor and the rich." Many anticipate facing substantial costs in the next four years with long-term care (42 percent across all age groups), college tuition (36 percent), buying a house (21 percent), and child care (18 percent, rising to 38 percent for those under age thirty). Just a quarter of all voters expect any significant help or service from government, but a majority favor it nonetheless: 65 percent favor help with college costs, 74 percent with parental leave, 71 percent with long-term care, and 55 percent with child care (70 percent among those who expect to face the expense).
The liberal validation of middle-class values and concerns need not divide the middle class from the poor. After all, most poor people also work, or want to work, and identify strongly with middle-class aspirations of security and upward mobility. Thus Democratic conservatives make a grave mistake when they associate this set of "middle-class" issues with a simple move to the right, abandoning the poor, or rejecting affirmative government. Indeed, it is the link between the broad working middle class and affirmative government that allows Democrats to define a majority politics.
The National Investment Project
With rising apprehension, voters have watched the intellectual disarray about America's economic life. There is no new ascendant model, only the ghosts of past orthodoxies. As voters watch the looming budget and trade deficits, the rising foreign presence in the United States, and America's weakened position in the world, they know something important is amiss. Despite the short-run strength of the economic indicators, voters lack confidence in the economic recovery and the state of the country. Large numbers believe the good times are just a mirage and the future is endangered.
The impact of America's "economic decline" in the world context is already pronounced: only one in four persons believes the United States is now the leading economic power in the world, one in three has lost a job or knows somebody who has because of trade, and seven in ten believe that trade now hurts the economy. Two-thirds say growing foreign investment is a very serious problem. Americans are anxious to "put our own house in order"; they cannot understand why the nation's leaders have allowed the drift and decline.
That is why investment is such an important concept for Democrats. It expresses the widespread aspiration for national renewal and suggests a series of elements:
- Economic strength. Investment represents a commitment to the primacy of economic strength in the definition of American security. Under this banner, Democrats can emerge as the party prepared to meet the challenges that rob us of our autonomy, sovereignty, and security.
- Nationalism and internationalism. Investment represents a determination to give primacy to America -- our people, technology, and ownership. Yet it is also internationalist, for investment provides America with the opportunity to play more effectively on the world stage.
- Activism. Investment requires a more expansive role for government to encourage productivity growth, to foster technological innovation, to uplift the population, to revive American industry, and to open up markets.
- Economic policy. In the realm of policy, investment contains a logic that favors taxing unproductive speculation and excessive luxury consumption, rewarding productive private investment, and emphasizing investment in decisions about public spending.
- Social welfare. Under the rubric of investment, social programs take on a new meaning as a way of expanding "human capital." Everybody has an interest in literacy, health, productive work, and education. Voters are less tax sensitive and more receptive to social spending the more they are convinced that programs will offer broad benefits.
- Values. Investment contains two positive values-reward for work and self-restraint-that remedy Democratic troubles in other contexts. Investment means encouraging savings and productive work and discouraging excesses of consumption and profit-taking.
Under the banner of investment, Democrats can become a voice for a new common sense. The political logic of investment represents a challenge to the present emphasis on defense spending. As the Soviets have become less threatening, voters have concluded that our security depends more on economic than on military power. Democrats need to redefine their domestic agenda as shift in favor of productive national investment designed to protect America where its security is now in greatest jeopardy.
The Populist Project: Corporate Accountability
The Democrats must remain the party that checks the excesses of private power. That is why voters turn instinctively to the Democrats on the environment, social insurance, and tax fairness. Yet in recent years, anxious not to look out of fashion, Democrats have toned down their rhetoric, even supporting new tax cuts for the rich. But that misses the public mood that still responds strongly to a populist message: four out of five voters, for example, support a tax increase for individuals earning over $240,000.
VOTERS ARE READY FOR an ambitious populist project, linked to the new emphasis on national renewal. The Reagan and Bush administrations introduced a new social compact that gave the wealthy lower taxes in exchange for more productive investment and that asked workers to give up higher wages and tolerate higher profits now for the promise of good jobs and economic growth. The wealthy did receive cuts in their effective tax rates, and workers gave up higher incomes. Between 1979 and 1986, real wages stagnated or slipped for the bottom 60 percent of the population. Meanwhile, incomes rose sharply for those in the top fifth.
But did corporations and the wealthy keep their bargain with the American people? Americans see corporations as more interested in mergers and acquisitions than in productive investment and the creation of jobs. They see defense contractors, up to their elbows in corruption, cost overruns, and failing weapons; they see a savings and loan industry, guilty of fraud and extravagance yet passing off its losses to the taxpayers. Americans see Japanese companies capturing advanced technology while American companies seem unwilling to join the battle, they see corporations more interested in outsourcing and foreign investment than in generating jobs in America.
Many Americans feel, therefore, that the corporate community has failed to keep its end of the bargain. The Democrats are in a position to demand an accounting. They can insist on more honest business practices, a higher corporate tax burden, a more active pursuit of new technology, and greater investment in American jobs. Democrats, in short, can offer a new compact with the American people to replace the unkept deal of Reaganomics.
Reconstituting a Democratic Vision
This is no easy road. The path is strewn with older liberal models that enjoy little support in the public and color the Democrats as partial, narrow, and out-of the mainstream. Republicans will be quick to drag out Willie Horton and the pledge of allegiance. Conservative Democrats will ridicule the Dukakis tank and helmet. The whole project could collapse, as Democratic leaders try to build a new political bloc, based on common interest as well as common justice. Critics will interpret their economic nationalism as protectionism and their populism as "class warfare." Nonetheless, by evoking the themes of a squeezed middle class and working families, the need for national investment, and a new populist compact, the Democrats can respond to deep voter concerns and reorganize the disturbing "facts" of American life into a coherent story about the nation's problems and its path of recovery. Only with such a new model will Democrats be able, once again, to speak for both the people and the nation.