Remember what it was like president obama had been elected on this massive wave of hope and enthusiasm. On election day 2008 elected on this amazing wave. The countrys at his back. All the forces of history are behind him, and he proceeded to continue the policies of president bush essentially unchanged. Im referring to his policies towards wall street, towards the investment banks. No big banks were ever put into receivership, no bailouts were unwound. No elite bankers were ever prosecuted. Obama and his democrats refused to change course when every sign was telling them to turn. When it would have been good policy to turn. When it would have been overwhelmingly popular to turn. When the country fully expected them to turn. And when i say the country, i mean the bankers themselves. The wall street bankers thoughtl they were going to be taken to the woodshed. And when it was fully within the president s and his partys power to steer this country in a different direction, they didnt do it. What im saying is on this matter there was no conflict between pragmatism and idealism, and this is a conflict that weve been hearing a lot about during the primary season, right . The pragmatic candidate, the idealistic candidate. But on this issue, what to do about wall street, there was no conflict. The idealistic thing was also the practical thing and the healthful thing. It would have been good for the economy, and the popular thing. U the public wanted him to do it. They were behind him in enormous numbers. And he chose not to. Now, i know that the democrats are the good guys. For a liberal like me, the democrats are the good guys. Or, rather, i should say the less bad guys. But when you start with Something Like that, its not a coincidence that all the economic gains of the recoveryre that have happened since then presided over by a democratic president , a president that we are often told is the most liberal of all possible president s if not an outright communist, right . [laughter] the gains, all the economic gains of this recovery that he has presided over have gone to the already wealthy. And this is not, or i should say not only because, you know, sinister, diabolical republicans keep thwarting the righteous liberal will. I know republicans are awful, and i know how they play the game. I live in d. C. These days. Theyre very good at it. They are dedicated to obstructionism. Its like a philosophy for these guys. But what im talking about here is something different. E. It is a straight up democratic failure. Obama played this issue the way he did because thats how he wanted to play it. We have to get our heads around that. Now, i call this a failure, but you know what the right word for it is. This is a betrayal. And the history of this betrayal goes back a long way. When i was young in the 70s and the 80s, the Democratic Party, you know, youd read the newspaper, and the Democratic Party was forever grappling witd its identity. You know, arguing with one another over who they were and what the Democratic Party stood for. This went on for decades all through the 70s, all through the 80s, up into the 90s. Different factions basically fighting like cats and dogs. Whats funny is they all agreed on one thing. E all of these different factions agreed on one thing, and that was what the democrats had to do was turn away from the legacy of the new deal with its fixation on working class people. Thats what they had to do. So the man who brought this, you know, closure, lets say, to this longrunning Democratic Civil war was, of course, president bill clinton. And i think if we want to understand where the Democratic Party and the country are today, this is one of the turning points that we have to look back at, and we have to scrutinize in some detail. Bill clinton brought a new kind of Democratic Administration to washington. Rather than paying homage to the politics of Franklin Roosevelt which is, you know, what democrats used to always do, right . He was the patron saint, all that sort of thing, clinton did opposite. He did these kind of singular favors for fdrs old enemies, for the banks, the radio networks, the power companies. Or basically, thes bosses. The bosses. He deregulated wall street, he insured and when i say he deregulated wall street, it wasnt just one or two measures. This was throughout his presidency, item after item after item, deregulating banks, deregulating finance. He insured that derivative securities would be traded without any kind of supervision. He deregulated radio and telecoms, and he basically put an end to the federal welfare system, the old afdc system. One of the things he did that most people dont know about is that in 1997 clinton had a series of secret meetings with newt gingrich, and they arrived at a plan to privatize Social Security. People the meetings were secret at the time, but its since come out. Its a known thing. People have written books about it. Its well documented. Gingrich now talks about it. But they had this series of meetings. They came up with a plan for privatizing Social Security, how they would roll it out, how they would introduce the policy. Gingrich had the votes, clinton would sign it, and clintongn actually took the first step in their proposed plan in his state of the union speech in 1998. He said, oh, jeez, what was it . We need to i almost said we need to end welfare as we know it, but thats not what it was. He said we have to oh, shoot. Now i cant remember what his exact words were. But you know what happened. The very next day after his state of the union speech, the Monica Lewinsky scandal, right . [laughter] that put an end to that. We can thank her for, basically, saving the Social Security system. [laughter] im quite serious. I think, i think Monica Lewinsky is a hero. Is a her [laughter] now, bill clinton, you know, interesting guy. He had this strategy as a candidate. When he was running for the presidency, he had this strategying where he would go out of his way to insult or distance himself from some Traditional Democratic constituency like organized labor or minorities and, thus, assure the public that he was his own man. The most famous example also happened here in chicago. H it was jesse jackson. Do you remember, they called this the Sister Soldier moment when clinton sort of arranged or contrived to insult jackson to his face before the cameras of the nation. And the democrats of the Clinton School had this kind of way of rationalizing this. They could insult these people with impunity they thought because, remember this phrase . They had nowhere else to go, right . Remember that . T . Now, whats interesting about clinton is that this Campaign Tactic eventually became a fullblown philosophy of governance for this guy, right . Body slamming the people who got you elected. And the classic example here is the north American Free trade agreement or nafta. And you remember what this was about. George bush sr. Had negotiated it with canada and mexico, but he couldnt get it through congress because congress at the time was controlled by old school democrats. But bill clinton could do it. And he brought in your currentur mayor, rahm emanuel, who was his point man on getting nafta passed. Come on now, folks. I remember this vividly, because i was living in chicago at the time, and i would watch this i lived down on 48th street. Well talk about that another time, but i would watch the debates over this on my stupid little tv set in that house. On my stup anyhow, so nafta. This is a fascinating story if you think about it. When clinton got nafta passed, clinton rammed it through congress. He wasnt merely insulting his friends in organized labor who opposed nafta, he was conniving in their ruin. Okay . He was assisting in then destruction of their economic power. He wasnt just insulting them, he was materially injuring them. He was right . Doing his part to undermine his own partys greatest ally, to insure that management would always and forever now have the upper hand over workers whenever they tried to organize or went out and complained about something. Basically anything. Because now management can always say, well, were going to move the plant to mexico. They can always make that threat now. Ow and this is well known, they do it all the time. And sometimes they even follow through on it. But by passing nafta, clinton made the problems of working people materially worse, okay . Now, nafta is interesting for a lot of reasons, and one of them is that it was as close to a straight up class issue as we ever see in this country, nafta was. And it gives you, when you look at the debate over nafta back in those days, in 92, 93, it gives you an idea about what our modern democrats stand for and what groups they mean to please. And like i say, i remember very vividly watching these debates on my tv set down in hyde park. And the debate came down, you know, it was very obvious who was on which side. Professionals and the rich were in favor of nafta. Working people were opposed to it. People with graduate degrees were always very impressed to learn that 283 economists had signed a statement talking about how nafta would boost Employment Creation and Overall Economic growth and that sort of thing. Now, ironically ory paradoxically, whatever adverb you want to use, the predictions of the unlettered Blue Collar Workers who opposed nafta turned out to be far closer to what eventually happened than did rosy scenario of those 283 economists and the Rhodes Scholar who sat in the oval office, president clinton. But, no matter. Bill clintons admirers, the new democrats they called themselves, regarded this as his findest hour. Finest hour. They use this phrase all the time. This was a particularly brave act. This was his greatest moment as president. Yo and you can find a version of this viewpoint in an admiring 1996 biography of bill clinton by the british journalist Martin Walker who said, yes, clintoned had done a few things wrong, but these things were this is a quote from the book in the end, balanced and even outweighed by his part in finally sinking the untenabling, old consensus of the new deal and the crafting of a new one. Thats why this guy liked him. Thats why he admired bill clinton. Because he killed the i new deal consensus, okay . So this new consensus that he talks about, this new consensus that came up to replace that old one. Who were the heroes of this new consensus . Well, the same democratic thinkers of that period that ive been describing, you know, who were always saying that the party needed to abandon workers in the new deal, they had the answer. Who should the Democratic Party serve . Ne what should democrats embrace . Well, it was obviously, right . The emerging postindustrialnd economy and people that the Democratic Party needed toto identify with were the winners in this new economic order or we were entering. The highly educated professionals who populated our innovative knowledge industries, right . Lawyers, doctors, the math ph. D. S who write the derivative securities. The biochemists who make the prescription drugs. Now, if you can remember back to the 1950s, youll recall that professionals were once very solid republicans back in those days. But by the time of bill clintonh they had entirely shifted, and today they are one of the most solidly democratic groups in the country. Y. And thats who . Democrats thats who the democrats are today. Th they are the party of the highla educated professional class. Es they have other constituencies, of course. Minorities, women and the young, for example. These are the pieces of what they like to call the coalition of the ascendant. But when you read democratic literature, you quickly realize that professionals are the ones who come first. These are the ones whose technocratic outlook always prevails in Democratic Party arguments. Its their its professionals tastes and manners that are celebrated by liberal newspapers, and its their particular way of regarding the world that is taken for granted by liberals as being objectively and obviously true. So what im saying is that professionals dominate liberalism and the Democratic Party in the same way that ivy leaguers dominate the obama cabinet. As democrats so a big part of listen liberal is me reading a lot of Democratic Party literature, magazines, statements, this kind of thing. And they have all of these wonderful, flattering phrases, these terms of endearment for their favorite demographic. They call these highachieving professionals the wired workers who will inherit the future. They call hem a learning the. A learning class that truly gets the power of education. I love that one, by the way. A learning class. So some people are in the working class, and other people are in the learning class, right . [laughter] isnt that great. U are going to the one youre going to know, they are a Creative Class that naturally rebel against fakeness and conformity. Theyre an innovation class that just cant stop coming up with awesome, new stuff, right . And Democratic Leaderscr themselves are, of course, drawn almost exclusively from the ranks of this very same Demographic Group that im talking about. Its not a coincidence that both bill clinton and barack obama and Hillary Clinton, for that matter, were all of them pluck from on security by prestigious universities. You look at bill clintons life story. Its sort of this classic tale who the democrats are nowadays. Hes a kid in hot springs, ash. Goes to georgetown hot springs, arkansas. Goes to georgetown, and the doors of the world swing open to him. He becomes a Rhodes Scholar and goes to yale law school. Thats who he is. And Barack Obamas life story is very similar, as so manymo Democratic Leaders are. The time that they spend at really fancy schools is what defines them as individuals. And you look at their cabinet choices, either clinton or obama. Its always the same kind of people. These successful professionals from a very limited number of institutions. Successful professionals whose wealth has been established by their achievements in college or graduate school. Institutions so think about what im saying here. They have, the party has developed a theory of history where this group is like the winners, right . They are the heros of history standing at the endpoint of all of the great dialectics of history. At the professional class. They are the winners. They are also the partys number one constituency, and theyre the Demographic Group from which all the partys leaders are drawn. Okay . What im describing here is a, basically, a complete shift of allegiance from the traditional working and middle class to this other group, to professionals. And this, i think, is what explains so much of what is frustrating about our modern day democrats. For example, this is what explains the problem that i started off with. The sort of vexing problem of obama and the banks. Why was it that the obama team failed to do what obviously needed to be done with the wall street banks . Why did they declare that wall street executives were going to be held to a different Legal Standard than ordinary criminals . Le and they did declare this. Ls the guy who said it had to resign immediately, but he did say it. S it did come out. Why did team obama choose wall street over average people again and again and again and again . Every time there was a choice to be made, they always went that direction. Why . Because for the achievementconscious people who fill the Obama Administration, Investment Bankers are more than friends. These guys are classmates. These guys are peers. I mean, the two groups administration, Investment Banking these two groups are essentially the same. People go back and forth through the revolving door in d. C. There is no difference. Democrats, you know, in the leadership clique, they look at wall street, they see its filled with these people of subtle minds, sophisticated jargon and extraordinary innovativenessing, you know . Making up derivative securities, plucking wealth out of thin air. Its the most amazing thing inin the world. This is exactly the kind of Creative Industry and creative individuals that Democratic Party theory tells us we must honor and respect, right . Theyre making these Financial Instruments that are so admirably complex. By the way, i have an anecdote here. I have a friend who was a Bank Regulator back in the 80s. Old school. He had a hand in prosecuting a whole bunch of s l executives back in those days. And he was telling me when he used to do this stuff, that he and his fellow Bank Regulators, when they would look at a bank and see undue complexity, like guys doing all sorts of youle know what i mean. They would say, ah, red flag. Fraud. Zero in on it, theyre up to something. Lets have a look at that, lets take a closer look at that. But with the obama team when they see complexity, its the opposite. Theyre like, oh sophistication, right . They love that stuff. Its like financial rocket science, as an Obama Administration official once said. And by the way, when he said that, it was part of an explanation nor why they hadnt prosecuted these guys. Nobody