The Big Idea Which Side of the Barricade Are You On?

Doug Sosnik was a senior adviser to President Bill Clinton and co-wrote a New York Times best-seller on the future of politics in the United States.

Democratic strategist Doug Sosnik was a close adviser to President Bill Clinton, and he’s famed in Washington circles for his closely held, big-think memos on the state of American politics. We got our hands on his latest—in which he warns of a rising populist tide that threatens to swamp Republicans and Democrats alike—and are reprinting it in full here with his permission.

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For some time now, the daily commentary has focused on the public’s increasing anger and frustration about the sluggish economic recovery, dysfunctional government and a failure of leadership. But all this analysis misses the more fundamental point, which is that Americans’ alienation from our political system and its leaders has been building for more than a decade. This extended period of dissatisfaction has had an extremely corrosive effect on the nation’s social fabric.

The current discontent with the leadership in our country, coupled with long-term domestic economic trends dating back to the early 1980s, is beginning to force a redrawing of the political lines that have separated Americans since the culture wars of the 1960s. An emerging movement in our country is calling for change to the status quo and to the leadership class. Across the political spectrum, there is an growing populist push for a retrenchment from global affairs, with a renewed focus on the problems here at home. Americans are worried about the struggles of the battered middle class, whose real incomes have not improved in more than two decades, the elimination of special deals for the wealthy and big business and the protection of the public’s privacy from what they see as predatory companies and an intrusive federal government. These are the issues that will dominate our politics going forward, and we will see populists from the left and the right increasingly come together to force change.

A decade of anger and disaffection

There is a pent up desire for dramatic change that has been shaped by a confluence of major events in the United States and around the world. In the last 10 years the country has fought two wars, faced the greatest worldwide economic meltdown since the 1930s and experienced the most significant technological transformation since the Industrial Revolution. The nation has also undergone a major demographic makeover, shifting from a majority white country to an increasingly multicultural society. Throughout this period our leaders have failed to manage the pace of all this change and to face up to the severity of our challenges, resulting in disillusionment and deep divisions among the public by race, age and income.

The country’s dissatisfaction is evident in all the major polling trend lines. Since the beginning of the last decade, a majority of the country has believed that the country is heading in the wrong direction, regardless of which party was in power.

Trust in the federal government, as well as congressional approval ratings, have dropped to historic lows.

And the most recent NBC/ Wall Street Journal poll, published in late October, found that only 29 percent of voters believe that their member of Congress deserves re-election.

The lack of trust isn’t just directed at government. It cuts across virtually every major institution in our society, including the Supreme Court, big business, banks, religious organizations, our medical systems, public schools, organized labor and the media. Only the military, small business and the police generate confidence levels above 50 percent.

At the core of Americans’ anger and alienation is the belief that the American Dream is no longer attainable. Previous generations held fast to the promise that anyone who worked hard and played by the rules could get ahead, regardless of their circumstances. But increasingly, Americans have concluded that the rules aren’t fair and that the system has been rigged to concentrate power and wealth in the hands of a privileged few at the expense of the many. And now the government is simply not working for anyone.

Americans’ long-brewing discontent shows clear signs of reaching a boiling point. And when it happens, the country will judge its politicians through a new filter—one that asks, “Which side of the barricade are you on? Is it the side of the out-of-touch political class that clings to the status quo by protecting those at the top and their own political agendas, or is it the side that is fighting for the kind of change that will make the government work for the people—all the people?”

A widening economic and opportunity gap—the single most dominant issue of our times

For the last 30 years, the income gains have been increasingly concentrated among the top 1 percent of the country, while the shrinking middle class has been pushed downward and the ranks of the working poor have expanded. As President Obama noted in a July speech, the average CEO’s pay has risen by almost 40 percent since 2009, while “the average American earns less than he or she did in 1999.”

For the first time in our country’s history, there is more social mobility in Europe than in the United States. Up until the end of the 1970s there was a direct link and correlation between the country’s GDP growth, private employment, median household income and labor productivity. As our economy grew and productivity increased, more people gained employment and incomes increased. A rising tide lifted all boats, ensuring that the spoils of economic success were widely shared to everyone’s benefit. During this period, what was good for G.M. was in fact good for the American worker.

Research conducted by MIT research scientist Andrew McAfee found that in the 1980s, the country experienced a “decoupling” effect when increases in GDP and labor productivity did not translate into increased household income and private employment. Over time, this decoupling began to produce a larger gap between the top income earners and the rest of society.

Increased globalization, technological innovations that eliminated lower and mid-level jobs and the drop in unionized workers from 23.3 percent in 1983 to 12.5 percent last year all contributed to these higher levels of unemployment and underemployment. The recession exacerbated all of these problems, putting even more pressure on most American workers.

The latest Census numbers underscore the inequality built into the system. Last year the top 1 percent of the country made 19 percent of the income, and the top 10 percent made 50 percent.

Yet, one in six Americans lived at or below the poverty line last year – almost 50 million people. The median annual household in 2012 was $51,017, the same as in 1989.

One factor that has perpetuated the income gap is educational achievement – the single best predictor for future financial success. Since educational opportunities are disproportionately afforded to families at the top of the income ladder, the children of the less fortunate are finding social advancement through educational achievement even more difficult.

A June 2013 Brookings Institution Hamilton Project report found that “children of well-off families are disproportionately likely to stay well off and children of poor families are very likely to remain poor.” High-income parents are investing more in their children, widening the gap between the children of the rich and poor in test scores, college attendance and graduation. These gaps – combined with expanding income inequality – further threaten the ability of the next generation to improve their lot in life. The report also cites an earlier 2010 Carnezale and Strohl study that found that in most selective higher education institutions “… the wealthiest students out-populate the poorest students by a margin of 14 to one.”

Research conducted by MIT economists Daron Acemoglu and David Autor in 2010 shows that for males, the wage gap by education began to widen in our country at the beginning of the 1980s. While male workers who went to graduate school before that time consistently outperformed everyone else in income levels, there was not a significant variation in wage levels among male workers who either graduated or attended college, graduated high school or dropped out before completing their studies. However, during the 1980s, a widening income gap emerged between college graduates and those with little or no college participation, making education the defining predictor of a person’s chances for financial success in the future.

America’s emerging populist movement

Plutocracy (Plu-toc-ra-cy): An elite or ruling class of people whose power derives from their wealth

Most of the daily attention in American politics centers on the “who’s up and who’s down” in the two-party system rather than focusing on the underlying trends that cut across both parties in terms of where the country is headed. Neither political party has actually been winning this debate; it has really been more about which party has been losing it.

For the three election cycles between 2006 and 2010, the country voted against the status quo, punishing the party in power. The existing problems have been building for a long time, and the current partisanship and gridlock suggest that there is every reason to believe that the trend will continue in the 2014 elections and beyond.

The governmental dysfunction, as well as the implementation of Obamacare, is a daily reminder for most Americans about just how broken our government is at the federal level. As if that’s not enough, Americans need look no further than the soaring stock market to remind themselves that the rich are getting richer while everyone else is struggling to get by.

More and more we are beginning to see populists from the left and the right band together to fight a broken system that fails to address the concerns of the American people. Senators like Elizabeth Warren and Rand Paul share the same point of view on many of the issues that have surfaced. It wouldn’t be surprising to see them working together on issues in the future. In particular, there are several areas of consensus that will provide the foundation for this movement going forward:

1. A pull back from the rest of the world with more of an inward focus. The country is exhausted from the two wars that date back over a decade. They are tired of risking American lives for what appear to be intractable problems, and they are tired of paying for these wars. A general sense is starting to build across party lines that with all of our problems at home the last thing that we should be doing is bearing the heavy costs of these wars and the burdens of the unfinished cleanup in other parts of the world.

2. A desire to go after the big banks and other large financial institutions. There is an overwhelming belief that the financial institutions played a major role in the recent global recession, while taxpayers paid the price for their malfeasance and the damage they caused to the rest of the country. Americans see the financial industry reaping huge financial benefits and they have concluded that the bad actors were rewarded for their misdeeds, instead of being punished like they deserved.

3. The elimination of corporate welfare. The country is increasingly making a distinction between small business and large corporations. While support for small business owners continues to be high, Americans are viewing big business as yet one more pillar of the plutocracy that benefits from gaming the system to enrich shareholders at the expense of the rest of the country.

4. Reducing special deals for the rich. While there is more of an appetite from the left to go after the rich in our society, there is general agreement from both ends of the political spectrum that we should eliminate any special deals that benefit the wealthiest. Several states led by Republican-controlled statehouses and legislatures have advocated for a cap on homeowner deductions for the most expensive homes, as well as an elimination of deductions for second homes. Some localities have put a tax surcharge on the highest income families to pay for local services. As the federal government pushes more mandates on states, and state budgets get tighter, this trend of squeezing more from the wealthy is likely to continue.

5. Pushing back on the violation of the public’s privacy by the government and big businesses. The United States lags far behind most of Europe—Germany in particular—when it comes to protecting individuals’ rights to privacy. Throughout Europe there are many more limits on the ability of government and private industry to gain access and use of personal data for their own purposes. The privacy issue will gain more attention as technology continues to improve and becomes more invasive. The issue isn’t a partisan one. It is hard to distinguish between the policies of the Bush and Obama administrations when it comes to placing limits on gathering and using people’s personal information for what they perceive to be in the national interest. Moving forward, we are likely to see the curbs and restrictions throughout Europe become more of the norm in our country as the public begins to voice its outrage at what they view as intrusions into their personal lives.

6. Reducing the size of government. There is no institution that better symbolizes Americans’ disgust with the status quo than the federal government. Congress has long been one of the least respected institutions in our country and Obama’s precipitous drop this year has spread this discontent to the executive branch of government as well. According to Gallup, even the Supreme Court’s popularity has dropped 16 points since the summer of 2000.

While a sizeable group of Americans continues to support the active role of government, the Republican Party in general and the Tea Party in particular have made reducing the size of government the centerpiece of their agenda since Obama became president. Political moderates have been skeptical about the role of government, but they have consistently recognized the benefits to some government programs and rejected the more extreme Republican and Tea Party positions when it comes to massive cuts.

In 2011, when the two parties cut a budget deal that included the subsequent threat of sequester if they failed to resolve their differences, most people thought that such a draconian measure would never materialize because of the public outrage that was sure to surface if it ever went into effect. As everyone now knows, the negotiations failed and the cuts took place, and the widely anticipated outrage to reinstate the program cuts never happened.

The current problems around the implementation of Obama’s health care program are likely to become a seminal moment that symbolizes government’s perceived incompetence and its inability to capably manage the taxpayers’ money. There will be increased pressure to continue to reduce the size of the federal government going forward as the political middle moves away from a more activist government.

America has been, and continues to be, a center-right country. We can be sure that these issues will dominate the presidential primaries and continue through the next presidential general election.

The decline of the political parties

One biproduct of all of the anger toward the political class is the disapproval ratings of both political parties. The late October NBC/ Wall Street Journal poll showed the Republican Party with a 22 percent positive rating and a 53 percent negative one. Although Democrats are doing better, they are also underwater, with a 37 percent positive rating and a 40 percent negative one.

Due to recent Supreme Court rulings, power and money has flowed away from both parties. With this increasingly decentralized party structure, political entrepreneurs are increasing dominating the debate, making the parties less important in the political process.

There is clearly an opening for a third party in our country. While most of the focus is at the presidential level, there is a long-term opportunity to build this movement from the bottom up, state-by-state. This could take several years to grow, but as the country continues to move further and further away from the two-party system, this slower build is more likely to ultimately metastasize into an effective national movement. This third party will most likely be led by community-based leaders who are focused on getting things done to improve people’s lives rather than by professional politicians interested in their own agenda.

The sorry state of the Republican Party

It is difficult to add much to the current piling on about all of the challenges facing the Republican Party. The party has become narrowly defined as a congressional party controlled by the Tea Party movement. And Republicans continue to have enormous problems with women, young people, Hispanics, Asians and African Americans. It is clear that they will never become a majority party in an increasing multiracial society until they deal with their positions on the issues that have alienated these broad groups of voters.

Any effort the party makes going forward should factor in the following:

1. The lack of a leader. The Republican Party is leaderless and will continue to be until it has a 2016 nominee. This nominee will either be the next president or the party will go back to being leaderless for four more years after losing its third presidential election in a row.

2. The repudiation of the party elders. There is no longer an establishment wing of the Republican Party. The failed leadership under President George W. Bush and the Republican Congress led to the enormous expansion of government spending and got the country into two wars that taxpayers are still funding. These actions alienated a majority of Americans and pushed the activist wing of the party to repudiate what used to be the establishment wing. The party should stop waiting for the ‘grownups’ to come to its rescue since there are no longer party elders that the activist wing is willing to listen to, much less follow.

3. The demise of right-leaning think tanks. The political contamination of right-leaning think tanks has stripped away the party’s ability to develop a series of substantive ideas and policies to rebuild the party for the future. The intellectual foundation of Ronald Reagan’s election in 1980 began forming in the early 1960s through the ideas of National Review and other right-of-center organizations.

4. The likelihood that the next Republican president will come from the states. The Republican Party is now perceived nationally as a congressional party, which is poisonous given how much most of America hates Washington. There’s a chance that the party might nominate a member of Congress, but it is highly unlikely that a nominee from the congressional wing of the party could be elected president in 2016.

5. The party’s congressional wing cannot fix the image of the Republican Party. There’s little that Republicans at the federal level can do to help their party except to do no further harm. All of the burdens for redefining the party will fall on state leaders until Republicans nominate a presidential candidate in 2016.

6. The lack of consensus on the reasons for Mitt Romney’s defeat continues to divide the party. Romney was the worst possible candidate to put up against Obama last year, particularly given Obama’s relative popularity in 2012, the bruising Republican primary in what is now widely considered one of the weakest fields in presidential history and the public’s perception that the economy was on the rebound. On top of all this, there’s the fact that Obama simply ran a vastly superior campaign.

Given the vacuous nature of Romney’s campaign, there continues to be an ongoing debate within the GOP about the lessons learned from his defeat. Romney’s inauthentic efforts to position himself as a conservative led many to conclude that he ended up standing for nothing. The ascendant wing of the party concluded that Romney wasn’t conservative enough to win.

The worst thing for Democrats would have been for former senator Rick Santorum to have won the nomination. If he had, Obama would likely have won the presidency in one of the largest landslides in history. This would have settled the open question about the viability of a Republican candidate from the right wing of the party. For now, the debate will continue to paralyze the party until 2016. If Republicans lose the next presidential election, this intra-party debate will continue for the rest of the decade.

7. The Republican Party’s continued failure to adapt to the electorate’s views on social issues. It’s not hard to conclude that America has changed and that the Republican litmus test on social issues is out of step with the majority of voters. The party’s failure to change with the times is the principle reason that it has performed so poorly among younger voters for the past decade. Despite the party’s talk about becoming more tolerant and inclusive, it hasn’t done anything in the past year to deal with these issues.

8. Angry, partisan and negative aren’t what the country is looking for right now. One of the core strengths of Ronald Reagan, the last successful Republican president, was his uplifting message of optimism and hope for the country and its people. He also conveyed a sense of mission and a willingness to work with the other side to get things done for the American people. Today’s Republican Party is seen as an angry force that is solely focused on scoring political points against the president rather than focusing on what’s right for the country.

The Democratic Party at a crossroads with challenges of its own

Compared with the Republicans, the Democrats are a vibrant party with favorable demographics and an edge when it comes to the Electoral College map. But the comparison masks several big challenges the Democratic Party faces in next year’s midterm elections, as well as a post-Obama future:

1. Managing the rapid decline of Obama’s popularity. Since the launch of the Affordable Care Act, the president has suffered a significant drop in his job performance ratings, personal favorability and trust levels.

These drops have already started to affect poll numbers for Democratic candidates across the country in federal and state races, and there is nothing in the trend lines to suggest that the president’s popularity will improve in the near future. The 2014 elections are still 11 months away, and a lot can change in that time. But second term midterm elections have historically proven difficult for the party in power.

2. Building an infrastructure outside of Obamaworld. Obama’s success was deeply personal and not easily transferable to other Democratic candidates. The Obama infrastructure that was successfully built over two presidential elections gives the party a strong advantage moving forward. There seems to be a recognition by party leaders that new organizations and structures outside of the orbit of the president are essential in maintaining this edge. The party is much further along than the Republican Party in building an integrated apparatus to support fundraising, policy ideas, opposition research and overall communications. This work is essential to maintain this edge in the future.

3. Motivating first-time and occasional voters to turn out when Obama is not on the ballot. Obama demonstrated a tremendous ability to attract new voters to register and vote when he was on the ballot. In 2008, 12 percent of the electorate – 15,112,000 voters – were first-time voters and they voted for Obama by over two to one. The party’s single most important challenge is to figure out how to leverage the expanded electorate and to translate these voters’ support for Obama to other Democrats on future ballots. This will be particularly important in next year’s midterm elections.

4. Managing a more muscular progressive wing of the party. The progressive wing of the party has picked up considerable strength in the past decade on issues such as income inequality, the environment and social welfare issues. Progressives have also been very adept at harnessing new technology platforms to effectively advocate their positions on these issues. While the president has been generally supportive, he hasn’t given them everything that they have asked for during the last five years.

For the most part, Obama has been given a pass when he hasn’t committed his support or delivered on his campaign promises. In the future, we can expect the left to place much more pressure on candidates who seek the party’s nomination for elected office to support their issues in order to get their support. The recent election of Bill Deblasio, who ran for New York mayor on an explicitly progressive platform, foreshadows a growing trend that is likely to spread across the country.

5. Defending a significant role for government. Perhaps the single greatest difference between the two parties is the Democrats’ overriding belief in the power of government to improve the lives of all Americans. The fumbled launch of Obamacare and other government missteps have made it more difficult to demonstrate that government is up to the job of successfully executing major policies and programs. A Nov. 18 Gallup poll found that 56 percent of the public doesn’t believe that it is the responsibility of the federal government to make sure all Americans have healthcare coverage – a record high. Before the passage of Obamacare, a clear majority said that the government should take responsibility.

6. A hollowed out state and local base. The ramifications from the 2010 Republican landslide elections across the country will continue to reverberate for Democrats for the rest of this decade. Republicans’ wins allowed them to successfully gerrymander district lines for their national and state representatives in a way that limits their losses at the state and local level for the rest of the decade. They have also made it difficult for the Democratic Party to rebuild its base at the local level by electing a new generation of leadership.

Going forward

The country is experiencing such a profound and historic period of change in real time that it’s difficult to grasp its significance as people go about their daily lives. The pace of change will only accelerate in the future, making it even more difficult for our old institutions and leaders to adapt going forward.

The transformation of our economy into a system “haves” and “have-nots” was well underway prior to the recession. And we are now in the fifth year of a jobless recovery, while median incomes remain stagnant.

The rising levels of economic inequality are approaching a national crisis that no one—regardless of their political views—can support or justify. And there are few economists who would predict anything close to a robust economic recovery, at least not until the end of the decade.

The ballot box has traditionally been the place where Americans’ voices their discontent. But the political system has built-in safeguards through reapportionment and redistricting that will limit the vulnerability of most incumbent elected officials. These lines will not be redrawn until the beginning of the next decade, forestalling the massive desire for change that is building in our country.

This all suggests that the period of turmoil and dissatisfaction that we have been experiencing for the past 10 years could well continue through the end of this decade. However, underneath this turmoil you can see the shape of an emerging populist movement that will, in time, either move the politicians to action or throw them out of office. The country is moving toward new types of leaders, those who will be problem-solvers and build institutions that are capable of making a difference in people’s lives.

This past Friday marked the 50th anniversary of President John F. Kennedy’s assassination. For many, Kennedy’s brief presidency symbolized a time of hope and optimism for a brighter future. Today’s emerging generation of leaders shares many of the values of the greatest generation. These young people share a strong sense of community and a desire to improve people’s lives. Tomorrow’s leaders will be focused on making a difference in their communities every day rather than simply moving up the ranks in the political class and protecting the status quo.

These new activists will be standing on the right side of the barricade, fighting for change.

Doug Sosnik is a Democratic political strategist. He was formerly political director in President Bill Clinton’s White House.