Ted Smyth


Democrats face eight hard steps to retake the White House
Despite catastrophic loss to Donald Trump, the pulverised party can still pick itself up

by Ted Smyth

Wednesday, December 28, 2016

“Many working people voted for the guy who said he would change the rigged system.”
Photograp: Getty Images

As Democrats in the US plan a new campaign to win back the White House and Congress, a few lessons can be learned from the recent election. First, Donald Trump’s win was not a decisive victory for Republicans, given that the billionaire TV star, a one-time Democrat, ran as an outsider, shunned by nearly every official in the Republican party. Hillary Clinton would have triumphed if she had not lost by a tiny margin in the key battleground states of Pennsylvania, Michigan and Wisconsin. She actually won the popular poll by 2.8 million votes, a bigger margin than any other presidential election. Ironically, the electoral college, designed by the founding fathers to limit the “mischiefs of faction”, officially elected the candidate who stoked the fears of a once-dominant racial majority. Most important, Clinton lost because she allowed Trump to run to her left with working people, those who are facing a growing crisis of low wages and suffocating debt. A more nimble campaign would have said: “Obama deserves the credit for rescuing us from the Republican recession, but working men and women are still getting stiffed. We’ve got to fix the system, which is rigged against ordinary people.” Instead, the campaign seemed to think it could win by building a targeted coalition of women, Hispanics and blacks. This alienated many whites who still represent 70 per cent of the electorate. Many blacks and Hispanics did not vote, and more than half of white women voted for Trump.

Economy, stupid
t’s still the economy, stupid. Twenty-four years after James Carville coined the term, Clinton and her staff forgot this wisdom. Manufacturing wages and benefits have been in decline since the 1980s; in Michigan, hourly pay has fallen from $28 (€26.8) in 2003 to $20 in 2016. Most low-skilled workers in banks and retail stores across the country earn about $10 per hour.
      The challenge for Democrats is to restore growth and equality to a system that has left more than two-thirds of Americans with flat and declining incomes for the past decade. Since the 1990s, presidential candidates from both parties have promised various fixes to low wages and unemployment, including worker retraining. While business has benefited enormously from trade agreements and technology, the wealth has not been shared. Training programmes have been underfunded and jobs and wages continue to be cut. According to one study, if trends continue, a quarter of American men aged 25-54 will be out of work by mid-century.
      When Barack Obama ran for president in 2008 and 2012, he represented enough novelty and hope for change that many white working people voted for him. But by the time Clinton ran in 2016, she represented more of the same (even hesitant to support a $15 minimum wage) and many voted for the guy who said he would change the rigged system.

Political theatrics
rump is quite prepared to say anything it takes to smooth a deal, whether you are a low-wage white guy or the government of Taiwan. You will be literally advised by the Trump people not to believe everything.
      As we know from his television hit The Apprentice, Trump does have a gift for popular theatre. His “saving” of 800 jobs in Indiana in return for tax rebates was a political win, all the more so when it was criticised by the free market zealots of the Republican Party. Neither Obama, who has saved/created millions of jobs, nor Clinton, who had excellent economic policies, have that sense of theatre.
      For example, where were the Boss Springsteen concerts in working class Youngstown, Ohio and, Flint, Michigan? Democratic party volunteers wanted them last August, but that was the month Clinton devoted to fundraising among the very rich. Jeb Bush’s defeat in the Republican primary, despite spending $100 million, had already shown that you needed more than money to beat Trump.
     Trump and Bernie Sanders connected with voters by criticising the corporate system of global elites, which have created rules that benefit capital at the expense of labour. In absence of collective bargaining and strikes, American companies fulfil their fiduciary duty to maximise returns to shareholders at the expense of workers.
     Many of these shareholders are short-term corporate raiders, who attack corporations possessing strong balance sheets and intimidate management and directors into being more “shareholder-friendly”. This usually results in companies leveraging their balance sheet and going into debt to pay out millions in special dividends to these shareholders.

Disgruntled workers
n return for this munificence, the raiders move on to the next prospect, leaving the company in debt and management forced to cut labour and other costs. The limited power left to disgruntled workers is to stick it to someone every four years in a presidential election. Against this background, here are eight proposals to help Democrats retake the White House in 2020 and win the 10 Senate seats up for re-election in 2018 (in states won by Trump).
1.   Accept the economic system is rigged against working people and campaign for solutions, including rebuilding a modern labour movement. Support living wages and portable benefits, which will stimulate demand. Explore novel proposals, such as allowing corporations to capitalise on their human capital (the present value of future compensation) and claim accelerated amortisation of it, just as they can claim accelerated depreciation on physical capital. This will correct the tax bias in favour of investing in automation rather than in people.
2.   Be the champion of all working people. Fight for every vote; do not be misled into thinking you can manipulate segments with algorithms and big data.
3.   Nominate younger candidates: Nancy Pelosi (76) has been a great liberal House leader, but Tim Ryan, a bright 43-year-old congressman from a working class district in Ohio, represents the future, with New York’s Joe Crowley, chair of the House Democratic Caucus.
4.   Challenge the “shareholder first” model of business and join those, including editors at Fortune-Time, attempting to create a model that challenges the domination of unfettered globalised capitalism and offshore finance.
5.   Increase gross domestic product growth and create millions of jobs by rebuilding America’s crumbling infrastructure through legislation that will repatriate billions in overseas earnings, provided it is invested in infrastructure.
6.   Ensure there is a competitive presidential primary process in three years’ time, which elects a telegenic, inspirational candidate who represents real change and hope for American working families. Names being floated include senators Elizabeth Warren, Cory Booker and Tim Kaine, as well as John Hickenlooper, governor of Colorado.
7.   Rebuild the Democratic National Committee with a full-time leader who uses social media to unite a broad Democratic coalition. Fight back against bigotry and hold Facebook accountable for ensuring its algorithm does not give fake news an advantage over truthful news.
8.   Finally, at a time when inequality is growing, embrace the Democratic party’s proud history of progressive achievements from Roosevelt to Johnson, which created decades of strong and inclusive prosperity for all Americans. A majority of Americans want a fairer society with well-paying jobs and affordable healthcare, housing and education. This is the majority that Democrats must lead.

Ted Smyth, a former Irish diplomat, is a public affairs consultant in New York City