Thomas Ferguson on how voter
alienation from corporate candidates produced this year’s dizzying election
results.
It’s no secret that money
plays an outsized role in American elections. The Federal Elections Commission
estimates that Mitt Romney and Barack Obama spent some $7 billion in the 2012
presidential campaign, and that’s likely an undercount. Polls continually
find that the US electorate thinks well-heeled interests drive policy.
But how, exactly, does big
money structure elections?
No scholar has contributed
more to our understanding of money in politics than Thomas Ferguson. Since the
1980s, in books like Right Turn: The Decline of the Democrats and the Future of
American Politics and Golden Rule: The Investment Theory of Party Competition and the
Logic of Money-Driven Political Systems, Ferguson has offered a powerful
interpretation of US politics that focuses on the way the allegiances of
various sectors of American business shape the party system.
Ferguson’s work begins from a
simple premise: in electoral systems where vast amounts of money are needed to
run for office, candidates and parties’ first task is not to win the support of
voters, but rather to win the support of people willing to “invest” in their
campaigns.
In capitalist societies like
the United States, this means business and the rich. The funding requirement
can be thought of as a kind of first filter: candidates unable to raise the
requisite amount of cash are screened out, and voters then select from the
remaining, well-funded candidates.
Ferguson has used this model
to explain American politics from the New Deal to the present. In one of his
most well-known
articles, he showed that Franklin
Roosevelt’s Democratic Party was in no simple sense “the party of the
people,” but rather a coalition between unions and other progressive forces and
some of the most far-sighted sections of American capital.
Technologically advanced and
internationally oriented, these firms were willing to live with unions and a
modest welfare state if it brought an end to the turbulence of the Depression
years. In subsequent work, Ferguson tracked this alliance from Roosevelt’s time
to Carter’s, when it was shattered by the convulsions of the global economy.
More recently, Ferguson and
several colleagues have looked at the role business plays in contemporary
American politics.
Among their findings: Obama
has received strong support from the industries most closely linked to
the surveillance state, and the Tea Party wasn’t simply
bankrolled by eccentric billionaires like the Koch brothers, but by a broad
section of big business.
In the following interview,
New York University sociology PhD student Paul Heideman asks
Ferguson to reflect on this year’s presidential election.
What accounts for the
surprising success of Bernie Sanders? How have broader shifts in the economy
affected the electorate? And will large swaths of big business move into
Hillary Clinton’s camp in the general election?
Interviewer: Let’s start with
a simple question: just how surprised are you by what’s happened in the 2016
presidential campaign?
Ferguson: If you had told me
this time last year that a professed democratic socialist would win hundreds of
thousands of votes running against Hillary
Clinton, openly attack Wall Street’s headlock on the Democratic Party, and actually
win primaries in Michigan, Wisconsin, New Hampshire, and other states,
while sweeping a host of state party caucuses, I would have guessed you were in
Colorado, because you must be smoking something.
Say what you want about how
Sanders conducted his campaign. But recognize that his emergence as a serious
challenger is an epochal development: he has shaken the Democratic Party like
nothing in our lifetimes.
He didn’t rely on the usual
coterie of Democratic insiders on huge corporate retainers for advice on policy
and the economy. For the first time, you can see clear signs of
polarization along income lines within the party: there is a genuine lower-income
voting bloc emerging that is not an appendage of well-financed politicians
championing Wall Street and Silicon Valley worldviews and solutions.
He argued for implementing
single-payer health care, getting big money out of politics, and taking
aggressive action to guarantee full employment and fund major public projects
in front of millions of people who probably have never heard anyone press these
issues before.
When he responded to Hillary
Clinton that no one on Wall Street ever offers him six-figure fees for speeches
you could almost hear the whole TV audience collectively suck in its breath.
Or when he reminded Clinton of
her husband’s role in the financial deregulation that destroyed the world
economy and that she, the experienced
foreign-policy hand, had simply swum with the tide in the run-up to the
invasion of Iraq.
Sanders clearly connected with
the concerns of many of his listeners. And he has waged his campaign on a broadly
inclusive basis, stigmatizing bankers, not racial, religious, or sexual
minorities.
I think it is clear that many
on Wall Street and in the 1 percent regard the Sanders phenomenon as
potentially far more threatening than Trump.
Many detest
Trump too, but right now they have Hillary Clinton as their firewall. Trump
gets more attention because he poses the more immediate threat.
The Donald’s emergence is
complicated, but, just as with Sanders, you could see the space opening for
something really new in the 2014 off-year elections. That election revealed
that our political system had arrived at some kind of end times.
Interviewer: How did 2014
telegraph 2016?
Ferguson: Walter Dean Burnham
and I analyzed the election’s results in detail. We both believe
historical analysis of voting returns is crucial to understanding political
systems, and we knew, like everyone else, that voter turnout typically drops in
the off-year congressional elections following a presidential election.
But when we looked at 2014, we
were astounded. The fall
in voter turnout from 2012 to 2014 was the second-largest of all time: 24
percentage points.
In many states in the East and
Midwest, voter turnouts collapsed to levels not seen since before the
Jacksonian revolution, when property suffrage laws choked off voter turnout.
Some states in the West
recorded their lowest turnouts since their admission into the union. And for
the first time since Reconstruction, turnout in the South finally caught up
with turnout in the North — thanks to the latter’s collapse.
Very few pundits or political
scientists believed us, but we couldn’t have been plainer about what was
happening. We wrote that the outcomelikely heralds a new stage in the
disintegration of the American political order. Though Republicans jubilate
now, the trend is probably as threatening to them as it is to the Democrats.
The reason is stark: Increasing numbers of average Americans can no longer
stomach voting for parties that only pretend to represent their interests.
Interviewer: So how does that
get us to Trump and Sanders?
Ferguson: Here it pays to be
really careful. 2014 demonstrated that a vacuum was forming within both major
parties. But that implied nothing about what might fill those spaces.
My investment approach to party competition stresses that in
most modern political systems, political parties are first of all bank
accounts: only political appeals that can be financed can reach voters.
Otherwise, no matter how many
voters want something, power passes by default to blocs of major investors, who
can afford to compete to control the state.
In that situation, you can sit
for years in policy positions very far from those preferred by voters; while
you may have many flavors of political competition, they don’t bring you any
closer to what voters want.
When the Wall Street Journal
and other publications tell you that Jeb Bush’s collapse this year proves that
money doesn’t matter in politics, just laugh.
Yes, Donald Trump was
well-known from his television show. But what gave him the freedom to jump in
the race and trash-talk the other candidates into oblivion was the fact that he
was a billionaire.
He didn’t need the money of
the Bush Golden Horde or the many 1 percent fans of Marco Rubio, Scott Walker,
and the rest. Or the Kochs.
In a normal election year,
anyone who talked like Trump in the GOP primaries might hope to shuttle around
some early small states and make a brief splash, before being swamped by a wall
of money in big multi-state primaries on some Super Tuesday later in the
campaign.
Not Trump — he was never going
to run out of money as long as he was willing to open his own wallet, and
everyone knew it.
His money gave him both the
means and the confidence to break the donors’ cartel that until then had eliminated
all GOP candidates who didn’t begin by saluting the Bush family for starting
the Iraq War, incessantly demanding cuts in Social Security and Medicare, and
managing the economy into total collapse via financial deregulation. He could
even mock the carried-interest tax loophole and sneer at Wall Street.
The effect, along with his
attacks on immigrants, highly publicized quarrels with women political
commentators, and demands for “America First” in foreign policy of course was
electrifying.
The political establishment
couldn’t comprehend what was happening. Trump just laughed at the other
candidates’ shibboleths and stuttering incapacity to say anything to any real
person.
Sanders, by contrast, looks to
have floated his race the old-fashioned way.
I do nearly all my work on contemporary US election finance with two gifted
analysts, Paul
Jorgensen and Jie
Chen. As we’ve explained in various essays, published data on campaign contributions
requires a lot of processing to draw reliable conclusions.
You have to integrate IRS and
Federal Election Commission databases, sort names, etc. So we are behind on
analyzing 2016 and won’t catch up till the very end of the campaign. But I have
looked through some of the Sanders campaign filings.
My tentative judgment is that
unlike 2008 and 2012, when the Obama campaign clearly encouraged donors to
break up their contributions into smaller amounts to create the appearance of a
mass movement, the Sanders campaign pretty much is what it appears to be: a
movement swept along by a vast array of small donors. No wonder Democratic
elites were so nervously petulant at Sanders for staying in the race and
continuing to propagate his views.
Interviewer: You have to be
aware of all the claims now appearing in the major media that Sanders and
Trump voters are really
just confused or even, according to some press accounts, really content
with an improving economy. What’s your response?
Ferguson: You are looking at
historic developments in politics accompanying momentous changes in the economy
that have been poorly explained in the media and only occasionally grasped even
by social scientists. So it’s hardly surprising if voters display some
confusion if pressed in detailed poll questions.
But the basic shape of what is
happening is straightforward and easy to understand. Simply summing the
supporters of Trump and Sanders suggests that a majority of the primary
electorate understood what is happening quite well.
At its heart is the emergence
of what my colleague Peter Temin calls the “dual economy.” His
working paper on race and the American economy is a must-read for this
election.
Temin adapts the old W. Arthur Lewis model of a developing economy, in which a
relatively small industrial sector produces rising incomes and reasonably good
jobs coexist with a much larger agricultural sector that lives off vast masses
of workers earning little more than minimum wages.
Temin shows that an analogous
type of split-level reality now obtains between the core sectors of finance,
technology, and electronics and the rest of the economy, which is now comprised
of mostly low-paid service sector jobs.
Managers and professionals in
the core have one or more college degrees, earn high salaries, and some
financial assets of their own. Everybody else, by contrast, scrambles in poorly
paid labor markets with only intermittent access to relatively expensive
credit.
Save for the late nineties,
workers as a group haven’t had a raise in a generation. Many are leveraged to
the hilt, often for homes that are still underwater from 2008 or in hock for
college credits they couldn’t complete. They are on a treadmill to nowhere, and
they know it.
Temin notes that if you are
not looking for this phenomenon, you will not see it in polls or surveys. His
point goes far toward explaining the establishment’s shock, surprise, and,
often, blank denial of what has happened in the campaign.
Interviewer: So how,
concretely, did all this show in the primaries?
Ferguson: The first glimmer of
rationality dawned when some analysts noticed a study
from Anne Case and Angus Deaton on mortality rates. The two economists found
that death rates for poorly educated white, non-Hispanics have soared since
1999.
This kind of data, which
brings to mind the demographic disasters that attended the collapse of the
Soviet Union and its brief experiment with unfettered markets, stands out like
a neon light in a fog of ideology. There is no way you can square it with
stories about how great everything is.
Not surprisingly, analysts who
looked had little trouble finding striking correlations with the Trump vote in counties where
death rates were unusually high. No single variable model of mass voting is
going to be definitive, but I think here reality was trying to send a message,
however the controversies
finally come out about the exact role gender plays in the phenomenon.
The other telltale fact is the
generational
gap in the Clinton/Sanders support. The splits on age within the Democratic
vote were often mind-boggling, almost like falling off a cliff, as younger
cohorts swarmed headlong for Sanders.
Various analysts have opined
that this reflects some kind of confusion or just youthful exuberance. I think
those claims are wildly misleading. The correlation of success in the core
economy and age is substantial among voters (who tend to be more affluent).
As William Lazonick and others
have emphasized, the globalization of production and the
financialization of American large firms has dramatically changed labor
markets.
They have hollowed out
traditional career tracks even in the primary sectors. In addition, large firms
now subcontract more and more work to contractors, who themselves rely on
unskilled labor.
For young people, the
implications are huge. None of them can reasonably expect to build a career
within a single large firm and grow within it.
Job tenure in firms has
shortened dramatically; traditional defined-benefit pensions are gone; pensions
of any type are much scarcer; and people change jobs very frequently.
Vast numbers of people who
would like full-time positions are working part time. Young people, even in the
tech sector, see this very clearly and understand what it means for them.
In addition, as Temin
explains, higher education is the ticket to jobs in the affluent core.
Desperate young people know that. But with the state’s withdrawal of support
for public higher education, many have no choice but to take on high levels
of debt.
Sanders picked up on that
dominating reality, and he and his staff displayed a great deal of interest and
sympathy for the idea of debt relief and public financing for college
education.
But to really understand what
is happening, you have to go beyond all the particulars and critically evaluate
the whole. The system hasn’t worked for many Americans for at least a
generation, and vast numbers of them now realize this.
Yet they aren’t hearing any
acknowledgement from the political establishments of either major party. All
they hear is partisan posturing and gobbledygook. And, as polls show
conclusively, most Americans are very, very aware that political money sloshes
everywhere in the system.
There is more. Establishment
economists have discredited themselves first by failing to foresee the
catastrophe of 2008 and then nattering on about the “new normal,” “green
shoots,” the wonders of quantitative easing, and, recently, carrying on about
the need to raise interest rates, instead of recognizing how the world has
crumbled for so many of the 99 percent.
It’s good that some mainstream
economists have finally recognized that their naïve faith that free markets
would guarantee the reemployment of workers displaced by imports was horribly
wrong — but it’s too late.
Mistrusting not only the
political establishment, but “experts,” the mass media, and even official high
culture, many in the electorate are convinced that the system is rigged.
As a consequence, they just
shrug off inconsistencies of candidates they believe are trying to tell the
truth to them. They increasingly think in classic “friend or foe” terms and
just tune out those who they perceive as tools of the establishment.
In the 2016 primaries, we’ve
had what my friend Walter Dean Burnham likes to call a “runaway” electorate. I
entirely agree with him that the best parallel to what has happened is the
sequence of elections in the 1850s in which the Whig Party collapsed.
When you see whole areas laid
waste in just a few years — as globalization and the transportation revolution
did in the middle of the nineteenth century — you should expect big chunks of
the electorate to behave like a headless horseman.
I don’t think we can partial
out precisely which aspects
of globalization drove which primaries right now. But even mainstream
economists admit that they way underestimated the impact of imports on the US
economy, especially from China after 2001.
The Obama administration’s
failure to push through a robust recovery program was a miscalculation of
historic proportions and led to the 2010 congressional disaster that has
defined the American political universe up till now.
The president’s insistence on
trying to work with Republicans and his early interest in cutting, not
defending, programs like Social Security did nothing to mitigate the effects of
that earthquake.
The Federal Reserve’s “green
shoots” nonsense and its programs of quantitative easing, I think, did little
for ordinary Americans, while stimulating a stock market boom that just helped
the 1 percent. It couldn’t make up for the failure to use fiscal policy.
Interviewer: Is there anything
else the Obama administration has done that had big consequences for this
year’s election?
Ferguson: It’s impossible to
inventory them all; we’d never finish. I’d mention a couple here.
Firstly, there was the
decision to run inequality up the flagpole as an issue. As I observed at the time, it was the White House that made the decision
to receive Thomas Piketty royally after the release of his book Capital in the Twenty-First Century, arranging Beltway
briefings and generally blowing trumpets.
Major media in the US took the
White House’s cue, as they usually do, and the issue became OK for salons — a
good thing, since the issue was also big in the streets. At the time, the
calculation was surely that the issue would highlight the weaknesses of GOP
policy proposals.
I would also point to
something I think the administration really did rather well on: especially in
the last few years, it made some serious efforts to protect the lowest-wage
employees; it took real action against wage theft; its appointees promulgated a
series of rulings that made unionization a bit easier and less onerous.
I don’t want to exaggerate all
this, but I think these steps facilitated organizing that spilled over into
Sanders’s campaign. This is true even though Clinton’s victories in several
states owed a lot to various unions.
Interviewer: So what happens
now that Clinton has won the nomination?
Ferguson: A lot depends
on Trump. Here a context effect may be decisive. Against the half-dead
wraiths in the Republican primary, he looked like Shakespeare’s Julius Caesar,
who “doth bestride a narrow world like a colossus.” But referring to the GOP
elite as “narrow” is a pathetic understatement.
Trump clearly has problems
with self-control; he may look a lot different against a candidate whose answer
to every problem is not nonsense about the Second Amendment, bathrooms, and
“radical Islam.”
Right now, for the Democrats,
it’s 1964. They have virtually all the media with them; they are gleefully
recalling the legendary anti-Goldwater
ad with the little girl counting flower petals who is suddenly incinerated
by a nuke, and planning to run twenty-first century equivalents.
Their major problem is the
weak economy and the fact that, as the debate
about economist Gerald Friedman’s projections of Sanders’s economic program
revealed, Democratic economists basically believe that the best the US can do
is 2 percent growth. Anything else they rush to declare irresponsible.
Trump and some people around
him have made intermittent noises reminiscent of the old Reagan “supply-side”
programs, even proclaiming that making a fetish out of the federal deficit
(which has shrunk anyway) is a major mistake.
If Trump gets that sort of
appeal across, he can do very well against Clinton. Whether he’s up to it, I’m
not sure at all.
Clinton, for her part, is very
clearly focused on healing the split between the Democrats and Wall Street that
opened up when Obama embraced the Volcker Rule in the wake of the disastrous
loss of Ted Kennedy’s Senate seat in 2010. Jie Chen and I wrote a short paper about it as the time, because it was obviously
a watershed.
You may remember the context:
the special election to fill Kennedy’s seat came right as reports filled the
news of giant bonuses to Wall Street firms just rescued by the government.
Scott Brown, the long-shot
Republican candidate, rode to victory on a wave of money from financiers on
Wall Street and elsewhere, including, obviously, Boston, the happy hunting
ground of the mutual fund industry.
Reeling from the surprise
loss, the Obama administration rushed to burnish its reform credentials, which
were by then in shreds. Within days, the White House trotted out Paul Volcker, with his eponymous rule limiting some
proprietary trades by Wall Street firms.
The Volcker Rule was really a
detail, not the essence of anything. But the ensuing fight to keep it and
enforce other reforms in the Dodd-Frank bill alienated big portions (though not
every segment) of Wall Street.
With virtually all Republicans
against reform, you could see the issue’s effects in the financing of the 2012
election. The old alliance between the Democrats and major parts of Wall
Street, which extended as far back as the New Deal, suddenly cracked — money
from Wall Street to the Democrats fell off steeply in 2012.
Obama had to make it up with
funding from what we can epitomize as Silicon Valley, in the face of massive
opposition from industries like coal, oil, chemicals, and other heavy
polluters.
Clinton is plainly aiming to heal that breach. The refusal even to say
what she told Goldman
Sachs in those famous speeches
is part and parcel of her campaign to reaffirm the old ties her husband
furthered so much.
Interviewer: In closing, what
do you think of all
this talk about “fascism” in relation to Trump?
Ferguson: I think it distracts
from the real problems.
Private armies were key
resources for both Hitler and Mussolini; Trump has built nothing like this,
even though some of the early rallies played vaguely on distant resemblances,
and he hasn’t tried to build anything like them, though he has certainly
pursued endorsements by police groups.
More broadly, key parts of
business and big agriculture supported
the takeovers in Italy and Germany.
In the American economy today,
there are sectors of big business and finance, notably parts of oil and some
people alarmed by Chinese interventions not in their currency but the rules for
high-tech, that are looking over Trump, along with segments of finance.
But most of business, I think,
is not going to embrace him. His America First talk appears to strike
fundamentally at the alliances that are the very stuff of life to American
multinationals, even though a close reading of Trump suggests he really is
focused on increasing “user charges.” If there is an Italian parallel to Trump,
it is Silvio Berlusconi, not the Duce.
I would caution on this,
though: within the business community, disliking Trump doesn’t mean you go for
Clinton.
It is clear if you look at
commencement speeches and other indicators that major parts of the business
community think Clinton is too far left, as odd as that may sound to Sanders
supporters. That spells trouble down the road.
You will, for sure, see a lot
of reluctant endorsements on a professed one-time-only basis. The result, I suspect,
will be an influx of money from normally Republican circles into the Clinton
campaign.
That’s likely to distort the
political forces at the top of the Democratic Party; you may see some very
strange things happening.
Clinton’s strategy for winning
votes is now very simple: you go to women and say the magic word: “Trump.” You
go to African Americans with the same mantra: “Trump.” And you go to Latinos,
just pointing and repeating “Trump,” while the media plays “Ride of the
Valkyries” 24/7.
With Trump carrying on as he
has, it may be all Clinton needs. After the election, though, we will all wake
up to discover that little in the campaign will have addressed the problems
that the primaries so memorably revealed.
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