In the run-up to 2016 presidential race, press attention is sensibly focused on the money primary – the candidates strutting their stuff before deep-pocket donors who will decide which candidates get a real shot to compete with the already established leaders, Jeb Bush and Hillary Clinton.
Overshadowed is the ideas primary – the competition to formulate a compelling message and agenda that appeals to voters. Hillary and Jeb have even postponed unveiling their ideas in order to focus on the money. But under the radar, in sharp contrast to the money primary, economic populism has become the coin of the realm in both parties. And on the Democratic side, populism is driving the ideas primary.
Vermont Sen. Bernie Sanders, the only formally announced challenger to Clinton, is an unvarnished populist, seeking to rouse working Americans across lines of race and region against what he calls the “billionaire class.” But Sanders isn’t alone. Former senator Jim Webb of Virginia has a proud populist record – opposing corporate trade deals, warning of rising inequality, challenging the national security elite’s efforts to police the world. Former Maryland governor Martin O’Malley is remaking himself into an economic populist, joining the opposition to President Obama’s Trans-Pacific Partnership trade deal. Clinton, the establishment champion, has put off the unveiling of her agenda, but has proclaimed herself the “champion” of “everyday people.” She has criticized soaring CEO pay, and has delivered forceful addresses for comprehensive immigration reform and against mass incarceration and the systematic racial bias of our criminal justice system.
The force of this conflict between money and ideas is at the center of the furious debate over fast track trade authority and the still secreted Trans-Pacific Partnership (TPP) deal. The money – Wall Street, Silicon Valley, Hollywood, Big Pharma, Big Oil and Big Agra – is almost entirely lined up in favor of fast track and the TPP, which is less a trade deal than an investment and special interest deal featuring tough negotiations to protect various American interests (like investment rights and drug patents) in exchange for offering greater access to American markets.
President Obama – like Bill Clinton and George Bush before him – has led the fight for fast track and TPP. The president has forcefully argued that this treaty meets traditional liberal goals, including allegedly the strongest provisions on labor rights and environmental protections.
The problem for the president, however, is that the debate has moved far beyond that. America has racked up unprecedented trade deficits – now totally over $7 trillion this century. The result, no longer denied by pro-trade economists, has been costly to workers whose jobs have been shipped abroad, and more generally to wage levels driven down by competition with low-wage labor. In addition, even conservative economists like former Federal Reserve Chair Ben Bernanke argue that the extreme trade imbalances contributed directly to the financial excesses that blew up the economy.
Among liberal economists, traditional supporters of trade accords – former Treasury Secretary Larry Summers, Nobel prize winners Joseph Stiglitz and Paul Krugman – now are skeptics. Summers chaired the Commission for Inclusive Prosperity, designed by the Center of American Progress to be a precursor to a Hillary Clinton platform. It conceded that trade had contributed to income stagnation and inequality, and argued that trade accords ought to include protections against the currency manipulation that has undermined the U.S. trade position. Stiglitz not only calls for action on currency manipulation, but also opposes the investor-state dispute settlement (ISDS) system that essentially erects a private judicial system for foreign investors, giving them rights not available to domestic companies or workers. Sen. Elizabeth Warren has made this arcane provision infamous.
The president also argues a national security case that if we don’t get the TPP, China will write the rules for the growing Asian economy. But the problem, as Warren and Stiglitz reveal, is that “we” aren’t writing the rules, multinationals are – and they are rigging them in their interests, not in the interests of American workers. (Moreover, the president’s entire argument is risible. China represents nearly 20 percent of the world economy. Countries want to trade with the Chinese, and China has made it clear that it writes the rules of access to its economy. Moreover, our trade deficits have contributed directly to China amassing staggering foreign currency reserves, which it is now using to buy companies and access across the world. TPP will alter neither of those realities.)
These arguments against fast track and TPP are backed by a massive mobilization of the Democratic base, with environmentalists, community groups and consumer groups joining with unions in opposition. This has put fast track and TPP at risk, with Democrats in the House lining up in large numbers against them. (Whether fast track can survive will depend in large part on whether the faux right-wing populists of the Tea Party listen to their donors or their voters.) One result is the increasingly deafening silence of Hillary Clinton on fast track and TPP, as she is caught between supporting the president she served and standing with the Democratic activists whose enthusiasm she needs.
Money still talks with a bullhorn – both in the presidential primaries and in the policy debates. But it is notable that senators up for re-election expressed the least support for fast track. The authority of the old elite arguments has been shattered. As the trade debate illustrates, Americans are increasingly skeptical of the old snake oil, and populist ideas are starting to drive the ideas debate.