How Democrats Became Liberal Republicans
“In ways inconceivable to Republicans of the 1970s, 1980s, and 1990s, Democrats have embraced almost all of their economic arguments about tax cuts. Back then, sizable swaths of the Democratic Party sought to protect higher tax rates for all. Many opposed President Reagan’s 1981 across-the-board tax cuts and the indexing of tax brackets for inflation. Many were skeptical of Reagan’s 1986 tax reform that consolidated 15 tax brackets into three and lowered the top marginal rate from 50 percent to 28 percent (with a “bubble rate” of 33 percent for some taxpayers). They despised the expanded child tax credit and marriage-penalty relief called for under the GOP’s Contract With America.
“Now all of that is embedded in Democratic economic theory and political strategy. The only taxes that the most progressive Democratic president since Lyndon Johnson wants to raise are those affecting couples earning more than $267,600 and individuals earning more than $213,600 (these are the 2013 indexed amounts from President Obama’s 2009 proposal of $250,000 for couples and $200,000 for individuals). Yes, some of this increase would hit some small businesses. But that can be finessed.”
I think that a lot of the Democratic Party’s rightward drift resulted from two factors. First is the continuing decline of organized labor from 24 percent of the labor force in 1973 to less than half that percentage in 2011. And the decline among private sector workers has been even more severe.
When the AFL-CIO was strong, it looked out for the working class as a whole. Its leadership understood that improving the pay and benefits of all workers was ultimately to the benefits of unionized workers. Labor support was critical to the passage of every important piece of social welfare legislation since the 1930s. Hence the decline of unionization has deprived liberals of their most important ally.
Secondly, the collapse of the Soviet Union essentially led to the collapse of support for socialism worldwide. I think voters bought the idea that the economist F.A. Hayek made during World War II that socialism impoverishes people and necessarily becomes totalitarian eventually. The disappearance of socialism as a viable political philosophy deprived liberals of their ideological anchor, causing liberalism itself to drift rightward with the tide.
There are other factors as well, such as the dependence of Democrats on campaign contributions from Wall Street, but I think these are the most important. But whatever the reason, the result is that the nation no longer has a party of the left, but one of the center-right that is akin to what were liberal Republicans in the past – there is no longer any such thing as a liberal Republican – and a party of the far right.
In a little-noticed comment on Spanish-language television on December 14, Obama himself confirmed this typology of today’s political spectrum. Said Obama, “The truth of the matter is that my policies are so mainstream that if I had set the same policies that I had back in the 1980s, I would be considered a moderate Republican.”
I think this is correct and explains a great deal about why Obama refuses to use his leverage to pursue liberal policies and keeps inviting Republicans back to the negotiating table again and again on the budget. He wants a deal, he wants to cut spending and balance the budget if possible. This may or may not be a wise course for a Democratic president to follow, but that is who Obama is.