Third Way's co-founder sought to defeat Elizabeth Warren in her 2012 Senate election, smearing her as "catastrophically anti-business." The opposite is true. Senator Warren wants to reestablish the rule of law and end the rigged system -- so that honest business people can prevail instead of the frauds that cause our recurrent financial crises. She is not "anti-business," but rather with colleagues like Bernie Sanders, the champions of honest business people. Third Way champions keeping the financial system rigged in favor of the predatory CEOs and against the customers, creditors, workers, and shareholders.
What Needs to Happen
Democrats need to say that the conduct I describe in this article is unacceptable. (It is also politically suicidal.) Brazile is unfit to run a precinct, much less the DNC. She should resign immediately. The new interim head of the DNC should immediately return the $20 million to Third Way. The DNC should adopt, and live up to, the promise that it will never again serve the interests of Wall Street.
I suggest a foundational principle (and a slogan) for the newly reconstituted Real Democrats -- NOT 4 SALE.
Former president Obama and Bill and Hillary Clinton should formally support the election of Representative Ellison to run the DNC. Representative Ellison should adopt a policy of the DNC raising funds solely through small contributions from individuals. If Wall Street remains in charge of the DNC, the democratic wing of the Democratic Party should found a new party free from Wall Street and big corporate influence.
Background on Third Way
With the arrival of Donald Trump, the preposterous has become the norm for the Republican Party, but the Democratic Party is moving from the farcical to the preposterous and (even more) suicidal. Donna Brazile, the New Democrat who runs the Democratic National Committee (DNC) has just accepted a $20 million donation from Third Way, which is "Wall Street on the Potomac." Third Way falsely claims to be a progressive arm of the Democratic Party. Third Way is actually one of Wall Street many bases located in Washington, D.C. Wall Street funds it. Wall Street bosses run it. Third Way is a group of self-described "New Democrats." The reality is that it acts, as its founders and funders intended to enrich and champion Wall Street CEOs. Jonathan Cowan, its leader, was a Pete Peterson prote'ge'. Peterson is a Wall Street billionaire. He is a Republican. He devotes his money and time on his three obsessions: (1) creating and spreading a "moral panic" about the federal deficit and debt, (2) pushing austerity, particularly cuts to the safety net, and (3) pushing Wall Street's greatest dream -- the privatization of Social Security.
The Origins of the New Democrats, the DLC, and the PPI
A little history is in order for those not versed in the New Democrats' origins. Senator Henry (Scoop) Jackson was a Democrat who was a fervent military hawk with a special passion for Israel. He wanted to be President, but he was never popular enough with Democratic voters outside of his home State of Washington to succeed. He formed two right-wing groups designed to push for a dramatic increase in U.S. military funding and a more aggressive foreign and military policy. Neither group succeeded in becoming a powerful force in Democratic politics, but they helped set the stage for the creation of the Democratic Leadership Coalition (DLC) in 1984. The DLC's original source of members was politicians from Southern and border-states. DLC members described themselves as "New Democrats," in order to highlight their denunciation of New Deal progressivism as hopelessly antiquated.
The DLC was exceptionally successful in winning the Democratic Party's nomination for the presidency. Bill and Hillary Clinton and Al Gore were all DLC leaders. President Obama, early in his first term, told the Congressional coalition of New Democrats: "I am a New Democrat."
Jimmy Carter Was a Proto-New Democrat
The DLC began under the Reagan administration and adopted a wide-range of Reagan's policies. Jimmy Carter, from Georgia, became president before the DLC formed, but he was a proto-DLC president. He had been a senior military officer. He appointed Paul Volcker to run the Fed knowing that Volcker was one of the Nation's leading deficit and inflation hawks. One of Carter's leading domestic policies was deregulation. He produced more substantive deregulation in one term than Reagan did in two terms. Carter's deregulation of trucking is almost universally praised while his deregulation of airplane fares is broadly praised.
Deregulation Spells Disaster: The DLC Seeks to Prevent S&L Reregulation
By 1984, when the DLC formed, the Reagan administration's paramount act of deregulation -- the savings and loan industry -- was proving catastrophic. By mid-1983, the federal examiners were warning that the deregulation, desupervision, and de facto decriminalization of the S&L industry (the three "de's") were producing a surging epidemic of elite fraud. By late 1983, Reagan's (deeply conservative, Republican) appointee as top S&L regulator, Ed Gray, had begun reregulating the industry in order to contain the epidemic of elite financial fraud.
In late 1984, the New Democrats and the Republicans in the House joined in co-sponsoring a resolution calling on Gray to cease re-regulating the industry. Had Gray done so the elite frauds would have grown to the point that it would have produced bubbles in commercial (and eventually residential) real estate that would have rivalled the recent housing bubble.
On their first major policy call, the DLC allied itself with Reagan's most disastrous policy. Reagan's S&L deregulation purported to "modernize" a New Deal regulatory structure -- and nothing is more anathema to the New Democrats than the New Deal. The New Democrats' hatred for the New Deal is pathological. Joining with Reagan in trying to prevent the essential reregulation of the S&L industry started two unbroken patterns for the New Democrats. First, the policy differences that the New Democrats identify as separating themselves from the democratic-wing of the Democratic Party are all policies on which the New Democrats adopted the hard-right Republican position. Second, on those defining policies that New Democrats say separate themselves from other Democrats, the New Democrats' policies have invariably proven dead wrong and extremely harmful to the public and (with a lag) the Democratic Party.
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