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Miles Mogulescu Headshot

The Democrats' Authoritarian Health "Reform" Bill and the Ascendency of Corporatism in the Democratic Party

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(This is the first of a series of blogs/articles that will try to put the growing disappointment of many progressives at President Obama's policies into a wider political and theoretical perspective about the divide in the Democratic Party between progressives and corporatists.)

If Barack Obama and today's Congressional Democrats were passing Social Security for the first time, instead of a creating a public program, they would likely be mandating that every American buy an annuity from a private, profit-driven Wall Street firm like Goldman Sachs (who could keep 15%-20% of their payments for overhead, profits and executive salaries) with the IRS serving as Wall Street's collection agency. If they were passing Medicare today, they would be mandating that every American buy a health insurance policy from profit-driven companies like Aetna, Humana and Wellpoint that would start paying benefits with 40% co-pays and $10,000 a year deductibles when they turn 65.

Therefore, when Senate "liberals" argue that their health "reform" bill, while compromised, is like the first iterations of Social Security and Medicare and provides a "starter home" that can be added to later, many progressives respond that its foundation is built on quicksand and that it's not incremental reform but a step in the fundamentally wrong direction.

Democrats and liberals once stood for providing a social safety net through government programs like Social Security, Medicare and unemployment insurance, which were administered by government employees for the benefit of the American people and not by private companies for the benefit of their shareholders and executives who receive multi-million dollar salaries and bonuses. For over 60 years, they stood for the principal that health care should be a right and not a privilege and that Medicare should be extended to all Americans.

Democrats in Congress, under the leadership of Barack Obama, have now turned that principal on its head and made health care neither a right, nor a privilege, but an obligation for individual citizens and a government-mandated profit center for private corporations. For the first time in American history, Democrats are about to pass a bill that uses the coercive power of the federal government to force every American -- simply by virtue of being an American -- to purchase the products of a private company. At heart, the Democrats' solution to 48 million uninsured is to force the them to buy inadequate private insurance -- with potentially high deductibles and co-pays and no price controls -- or be fined by the federal government.

In effect, this represents an historic defeat for the type of liberalism represented by the New Deal and the Great Society and the ascendancy of a new type of corporatist liberalism. As Ed Kilgore recently wrote in an important and provocative article in The New Republic,

"To put it simply, and perhaps over-simply, on a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. This approach was a hallmark of the so-called Clintonian, 'New Democrat' movement, and the broader international movement sometimes referred to as 'the Third Way,' which often defended the use of private means for public ends... To put it more bluntly, on a widening range of issues, Obama's critics to the right say he's engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector."

Or as David Brooks wrote in The New York Times earlier this summer,

"[Obama and Clinton] Democrats learned never to go to war against the combined forces of corporate America. Today, whether it is on the stimulus, on health care, or any other issue, the Obama administration and the Congressional leadership go out of their way to court corporate interests, to win corporate support and to at least divide corporate opposition."

The differences between progressive New Deal liberals -- what Howard Dean termed the "Democratic wing of the Democratic Party" -- and corporatist liberals or "New Democrats" were largely papered over for the past 8 years by common opposition to the free market absolutism and neoconservative foreign policy of the Bush administration. In terms of health care reform, they were papered over by the hopes of many progressive liberals -- who were willing to give up fighting for Medicare-For-All as politically "impractical" -- of achieving a robust public option as an acceptable compromise in the context of a larger health insurance mandate.

For many of these progressive liberals, the idea of the public option, at least at the beginning, was that it would be so large and successful that it would prove the superiority of government-run health insurance over private profit-driven health insurance and would eventually evolve into a single payer system. They watched, with increasing concern, as a large and robust public option was first turned by House Democrats into a small and puny public option that would insure only a handful of Americans and provide little competition to private insurers, and then as the public option was dumped entirely by Senate Democrats, with no help by President Obama to defend it.

And as they have seen the end result of the Democratic Senate's health care bill, progressives have started to get angry. Stripped of the public option, progressives could now look through the Democratic health care bill to its essence: the permanent entrenchment of the corrupt private health insurance corporation as the nexus of the American health care system; the authoritarian liberal solution of solving the problem of the uninsured by using the coercive power of the federal government to force citizens to buy inadequate private insurance sold by oligopolies with their profits subsidized by taxpayer dollars; and the increased political power of the of the private health care industry into the indefinite future, fueled by government money that can then be used to lobby the government for more private benefits.

As a result, the past two weeks have seen a revolt from much of the progressive base of the Democratic Party, articulated by people like Howard Dean, Marcos Moulitsas, Keith Olbermann, Ed Schultz, and by organizations like MoveOn, The AFL-CIO, SEIU, and Progressive Democrats of America. The ideological fault line between progressive Democrats and corporatist "New Democrats" has split wide open.

Obama campaigned, at least on the level of political imagery, as a progressive liberal. His campaign slogan was "Yes We Can", taken directly from the '60's era slogan of Cesar Chavez and The United Farm Workers Union, "Si Se Puede". He evoked the imagery of Martin Luther King and the civil rights movement. He talked about overthrowing the influence of special interests and lobbyists and transforming the way Washington does business. He promised transformative "Change" (although, as some critics pointed out at the time, he left the direction of "Change" so vague that voters of various stripes could read what they wanted into it). That's why a majority of progressive Democrats supported Obama over Hillary Clinton in the primaries, particularly after the more populist John Edwards withdrew. They didn't want to see a return to the centrism, corporatism, and triangulation of Clintonism.

But from the moment he was elected, Obama has governed not as a progressive liberal but as a corporatist liberal. Progressive liberals hoped Obama would be like FDR. Instead, he's been like Bill Clinton on steroids.

Obama's economic advisors, such as Larry Summers and Tim Geithner, were all drawn from the Wall Street wing of the Democratic Party. His foreign policy advisors were all liberal hawks like Hillary Clinton or even Bush administration veterans like Robert Gates. From day one, Obama continued Wall Street Republican Hank Paulson's financial policies of throwing money at the banks while demanding next to nothing in return in terms of making credit available to average Americans and small businesses or creating new jobs.

When it came to health care "reform", Obama's strategy was to cut deals with for-profit health care corporations. He cut a deal with big Pharma to continue banning Medicare from negotiating for lower drug prices and to continue banning consumers from buying cheaper drugs from Canada. He cut a deal with the for-profit hospital industry that there would be no effective national public option that might pay them lower rates that the for-profit insurance oligopoly. While he gave mild rhetorical support to the public option, he did nothing to actually fight for it , and, as Russ Feingold has pointed out, Joe Lieberman was really doing Obama's work in killing it.

Because of Obama's rhetorical and imaging skills, it has taken until the past week or two, with the death of the public option, for progressives to begin to wonder whether Obama was really their friend. And what's most remarkable, by teasing them with the hopes of a public option, he's so far held onto the vote of virtually every Congressional liberal for an essentially authoritarian corporatist health care bill.

So total has been Obama's success to date in defeating the progressive Democrats and enshrining the corporatist New Democrats, that even progressive talk radio veteran Al Franken and the closest thing to a European-style social democrat to hold national political office, Bernie Sanders, are not only voting for -- but are talking up the virtues of -- the Senate health "reform" bill. Although nearly 60 members of the House Progressive Caucus signed a letter promising to vote against a health care bill doesn't have a robust public option, unless, to everyone's surprise, there's a big enough revolt over the Christmas holidays among large progressive groups like the AFL-CIO (who's money and volunteers many Democratic Congresspeople need to get reelected), virtually all of those House Progressives will end up breaking their pledge and voting for a final Congressional Conference bill with no public option, a coercive mandate, and a tax on the "Chevy" health care benefits of union workers.

Only an African American President cloaked in the rhetoric and imagery of progressive change could have pulled off such a rout of progressives and such a virtually unanimous victory for the corporatists in the Democratic Party. The Clintons could never have pulled it off.

That helps explain why many progressive Democrats -- myself included -- are increasingly in a state of anger and despair. If after millions of progressives worked so hard to elect Barack Obama and a Democratic majority in Congress, the result is an almost total defeat of progressives in the Democratic Party -- or at least in the Congressional Democratic Party -- where do progressives turn? A progressive primary challenge to Democratic incumbents in 2010, or even to Obama's reelection in 2012, is probably futile and counterproductive. At the same time, as the 2000 Nader campaign so aptly demonstrated, the winner-take-all American electoral system makes the formation of a third party equally futile.

Historically, strong popular movements, like the labor movement and the civil rights movement, have pressured elected corporate Democrats to enact a measure of progressive change. And, as progressives come to understand the corporatist nature of Obamism, perhaps the best hope is that progressive organizations will be less anxious to be extensions of the White House and return to grassroots organizing. The question is whether Obama -- the one-time community organizer -- is susceptible to pressure from mass grassroots organizations. If not, the country, as well as Democrats and progressives, may be in for a hard time.

As it increasingly appears that Obama is the President of Wall Street, and not the President of Main Street, he is losing not only the left but the center. It's a myth that the path to winning the popular center in American politics is moving to the corporate center. If the only political choice given to American voters is using their taxes to help big government subsidize wealthy corporations, or the Republican message of shrinking the size of government and cutting their taxes, many who voted for Obama will return to the fold of the seemingly brain-dead Republican Party. Obama will likely face an even more conservative Congress after the 2010 election and even, like Jimmy Carter, could end up as a one-term President.

The hopes of millions of Obama campaign workers and voters that the Age of Obama would sweep in a new era of progressive change could be dashed. A generation of young voters could be turned off to politics instead of becoming permanent Democrats.

Let's hope, that with the defeat of the public option at Obama's hands, the Democratic wing of the Democratic Party wakes up and begins to realize that it has a fight on its hand against the corporatist Democrats, and that Obama might not be its natural ally.

As Kevin Baker wrote in Harpers Magazine last spring, warning of the dangers of a failed Obama Presidency,

"Obama internalized what might be called Clinton's 'business liberalism' as an alternative to useless battles from another time...Clinton's business liberalism, however, is a chimera...a capitulation to powerful and selfish interest. ..a 'pragmatism that is not really pragmatism at all, just surrender to the usual corporate interests...

Franklin Roosevelt also took office imagining that he could bring all classes of Americans together in some big, mushy, cooperative scheme. Quickly disabused of this notion, he threw himself into the bumptious give-and-take of practical politics; lying, deceiving, manipulating, arraying one group after another on his side--a transit encapsulated by how, at the end of his first term, his outraged opponents were calling him a "traitor to his class" and he was gleefully inveighing against "economic royalists" and announcing, 'They are unanimous in their hatred for me--and I welcome their hatred.'

Obama should not deceive himself into thinking that such interest-group politics can be banished any more than can the cycles of Walls Street. It is not too late for him to change direction and seize the radical moment at hand. But for the moment... Barack Obama is moving prudently, carefully, reasonably toward disaster."

That was spring. Now it's the winter of our discontent. The moment for Obama to "change direction and seize the radical moment at hand" is fast receding. Will he continue to move "prudently, carefully, reasonably towards disaster?" If not, I worry for the future not only of progressives and Democrats, but of the country. President Palin in 2012?

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POSTSCRIPT: As I read the comments, I find too many are taking away the message that everything is now hopeless for bringing about progressive change. That's not the message I intended to convey. While I'm disheartened in many ways to report on the truth, as I see it, of Obama governing from the corporatist wing of the Democratic Party, my goal with this article is to increase awareness, not to encourage the view that there's nothing that can be done. The first thing is for progressives to understand the situation with clarity. Then progressive organizations need to move away from trying to ingratiate themselves with Obama and Rahn Emanuel and working hand in glove with the White House and go back to their core mission of building a mass grassroots movement for progressive change. We can't leave all the grassroots organizing to the populist right and the tea-baggersm who are effectively adopting the old strategies of progressive movements and whose organizing, for the moment, seems to have more energy than that of progressives. To quote the old labor slogan, "Don't Mourn. Organize." Or to quote from the beginning of Studs Terkel's last book, "Hope has never trickled down. It has always sprung up." Historically, elected corporatist liberals have sometimes enacted progressive change when put under enough pressure by grassroots progressive movements like the labor movement and the civil rights movement.

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