Historians of the Clinton presidency generally skip over the imprisonment craze into which he led the country in the mid-Nineties. It is hard to account for if the framework you’re applying to those years is one in which Clinton was the victim of right-wing persecution. Those who do acknowledge Clinton’s part in the Big Clampdown either depict it as a great success in the fight against crime—which it was not*—or else describe it in superficial Washington terms: He got a great big law passed through Congress, thus proving that he could be an effective bipartisan leader.
Besides, in rhetorical terms, Bill Clinton has always been a steadfast opponent of mass incarceration. In 1991, he said he thought it was awful that “we are now the number one nation in the world in the percentage of people we put in prison.” In 1995, two weeks before he signed the crack/cocaine law, he declared that
blacks are right to think something is terribly wrong … when there are more African American men in our correction system than in our colleges; when almost one in three African American men in their twenties are either in jail, on parole or otherwise under the supervision of the criminal system.
In an interview with Rolling Stone in 2000, Clinton said, “the disparities are unconscionable between crack and powdered cocaine. I tried to change that.” In 2008, he said he was sorry for the crack/cocaine law.10 And then, when every presidential candidate began talking up prison reform in 2015, he apologized again, this time saying that the 1994 crime bill was “overdone” and thus implying that he hadn’t really meant to throw so many people in prison.*
And maybe that’s what really matters. Maybe that will suffice to get Clinton off the hook on the day when some future Truth and Reconciliation Commission finally starts parceling out the blame for the generation-destroying policies of those years.
But I doubt it. Someday we will understand that the punitive hysteria of the mid-1990s was not an accident; it was essential to Clintonism, as essential as his vaunted repeal of the welfare system. Clinton treated different groups of Americans in radically different ways—crushing some in the iron fist of the state just as others were getting bailouts, deregulation, and a frolicking celebration of Think Different business innovation.
There is really no contradiction between these. Lenience and forgiveness and joyous creativity for one group while the other gets a biblical-style beatdown—these things actually fit together quite nicely. Indeed, the ascendance of the first group requires that the second be lowered gradually into hell. When you take Clintonism all together, it makes sense, and the sense it makes has to do with social class. Think of it as a slight variation on Stiglitz’s observation about the superiority of speculation to all other occupations: What the poor get is discipline; what the professionals get is endless indulgence.
THE CARROT AND THE STICK
In the summer of 2015, Hillary Clinton briefly criticized the Republican presidential candidate Jeb Bush for saying that “people need to work longer hours.” It’s a shame she didn’t stay with the subject. She might have recalled that, when she and her husband were reforming welfare in their White House days, pushing the poor into the workforce was administration policy. In fact, Bruce Reed, the Clinton aide who helped to craft the ’96 welfare reform measure, once wrote that “The real Clinton legacy on the poor comes down to one word: work.”11
On the financiers, the real Clinton legacy came down to four words: Grab what you can. For them, there were bailouts and trade deals that protected their interests and tax cuts and a timely shot of “liquidity” whenever stock markets seemed to be flagging. And a little deregulation should the laws of the land not meet with their favor.
But the poor needed to learn discipline. That seems to have been one of the ideas behind NAFTA: People employed in manufacturing had to accept working harder for less or else watch their jobs depart for Mexico. Discipline was the point of the ’94 crime bill, too: The poor were to live in a state of constant supervision where there was “zero tolerance” for those who stepped out of line. Mercy was to be a luxury item now, a thing reserved for those who could make big donations to the Clinton presidential library.
Discipline was most emphatically the point of Clinton’s 1996 welfare reform. This measure, as I said, deleted the longstanding federal guarantee to the people at society’s lowest rung and shifted the obligation to care for them to the states, which were permitted to go about the task however they wanted. States could outsource the program, turn applicants away, give them whatever amount they thought was right, and so on. The only requirement was that no one could stay on the rolls beyond a certain length of time. The new law made no provision for job training or anything similar, even though the man who signed it was the same person who loved to repeat that “what you earn depends on what you can learn.” For these people it was different: just get out there and work.
Some got the carrot; others got the stick. “Once the Democratic party had adopted this theology,” Christopher Hitchens pointed out in 1999, “the poor had no one to whom they could turn. The immediate consequence of this was probably an intended one: the creation of a large helot underclass disciplined by fear and scarcity, subject to endless surveillance, and used as a weapon against any American worker lucky enough to hold a steady or unionized job.”12
Welfare reform is almost always spoken of these days as a policy triumph, usually because of the single data point that there are fewer people now who collect welfare than there were before the law went into effect. This reasoning has always perplexed me: Of course fewer people are going to use a program if you cut the number of people allowed to use it.
The reason liberal pundits find this single data point convincing, I think, is because they want to be convinced. One object of welfare reform, remember, was to erase an embarrassing issue for Democrats, and if welfare recipients happened to disappear from the conversation along with it, well, that was just a bonus. There was no immediate burst of homelessness or desperation when AFDC was repealed, largely because the economy was just then expanding with the big bubble of the late 1990s. And, so: success! Problem solved!
But deleting welfare didn’t eliminate poverty itself. We might as well have expected to conquer aging by overturning Social Security.
The poor are still with us, although the program that helped them is not. And once the flush times of the late Nineties receded, matters played out in exactly the dire way you’d expect: Neediness exploded in the United States. Thanks to Bill Clinton’s welfare reform, there has been a large increase in the number of people living in what the sociologists call “extreme poverty,” meaning living on less than two dollars per day. Studies of people in merely “deep poverty,” meaning at a level half the official poverty line, noted that this particular stratum of the wretched reached its all-time high point in the years just after the Great Recession. The number of people on food stamps in 2014 was double what it had been in 1997.13
Another goal of welfare reform was reducing what used to be called the “illegitimacy rate.” By removing society’s guarantee for single moms, its proponents used to say, we would change the incentives and give people a nudge, and soon everyone would get married before they had kids. That’s not what happened, though. In 1995, 32 percent of American children were born to unmarried mothers; today that number is 40 percent.14
Even the political aspect of welfare reform has proven illusory. Repealing AFDC was supposed to inoculate Democrats against predictable right-wing attacks on the party of moochers; this is what made it the crowning glory of Clintonism, the change that had to come before the New Dems could get started on “transforming politics.” But today it’s as though nothing changed at all. Conservatives still routinely blast the clueless generosity of the welfare state, which supposedly coddles the 47 percent and rocks the lazy to sleep in a comfy government-issue hammock.
But what I want to focus on here are the economic effects of welfare reform. Plunging our society’s weakest and most vulnerable into economic desperation trigg
ered a domino effect of misery right down the line, with the slightly better-off now feeling the competition of the utterly hopeless. The effect was to make all of us a little more precarious. On its own, welfare reform was a meanspirited thing to do—“one of the most regressive social programs promulgated by a democratic government in the twentieth century,” in the words of the sociologist Loïc Wacquant, who has studied the subject in depth.
Considered as part of a grander economic architecture, however, it makes an awful kind of sense. As Wacquant continues, welfare reform “confirmed and accelerated the gradual replacement of a protective (semi) welfare state by a disciplinary state mating the stinging goad of workfare with the dull hammer of prisonfare, for which the close monitoring and the punitive containment of derelict categories stand in for social policy toward the dispossessed.”15 Toil hopelessly or go to prison: that is life at the bottom, thanks to Bill Clinton.
THE DISASTROUS SUCCESS OF THE CLINTON PRESIDENCY
One of the first exhibits you encounter when you visit the Clinton presidential museum in Little Rock is a vivid pink neon light representing the ever-growing number of jobs in America during Bill’s White House years. There’s also a Dow Jones zipper sign to remind you of the miraculous way the stock market ascended in the 1990s, but it’s that disembodied, glowing pink line that keeps catching your eye as you wander among the exhibits.
If the former president had a little less modesty, his museum would probably find a way to trace that upward-trending pink line in the sky over Little Rock every night with a laser beam. They would trademark it, print it on T-shirts, baseball caps, and bags of New Economy potato chips. After all, this line demonstrates President Clinton’s one real accomplishment.
Let us give Bill Clinton his due: This was a fine thing. When he was president, America came close to full employment. As a result, wages grew for several years—and for real, not just in nominal dollars.
But it was prosperity buoyed up by an investment bubble. It did not reverse the long-term trend toward inequality that Clinton liked to talk about in 1992. It did the opposite. The share of the national income taken by the top 1 percent zoomed upward along with the Nasdaq during Clinton’s time in office. Financialization marched in step, with Wall Street accounting for an ever-greater percentage of GDP. Average CEO compensation at big companies hit twenty million dollars in 2000, the most ever recorded—some 383 times as much as average workers made during that final year of the bubble.16
Today, numbers like that make Americans furious; they send us raging onto the comments pages of our dying local newspapers, where we fume about our stunted lives. Back in the nineties, however, those developments fueled a steamy climate of market celebrationism the likes of which we will probably never see again. In 2000 I myself filled a whole book with samples of this stuff, like the commercials for a telecom outfit that hollered, “Is This a Great Time or What?”*
It wasn’t all bubbly Internet fantasy. There was something else driving the New Economy ebullience in the Nineties, something that went beyond all the modish rhetoric about business rules being repealed and CEOs as supermen. Disagreements over how an economy worked or in which direction social policy was to be steered were being brushed aside. From entitlement reform to free trade, it was an age of harmony and understanding. “The United States has arrived at a new consensus,” wrote Daniel Yergin and Joseph Stanislaw in an influential 1998 book on (what they believed to be) the eternal battle between markets and government: in their minds, markets had won a complete victory.17
It wasn’t the microchip that brought us this togetherness, or optical fiber, or the Internet. The economics department of the University of Chicago didn’t win this victory, nor did the fall of the Berlin Wall bring it about. Not even the election of Ronald Reagan was sufficient, on its own, to make the market consensus happen. It required something else—it required the capitulation of the other side.
That the triumph of Clinton marked the end of the Democrats as a party committed to working people and egalitarianism is not some perverse conviction held by out-of-touch eggheads like me. Clinton’s admirers used to be quite open about it; for many of them, it was precisely what they liked about the guy. Clinton biographer Martin Walker, for example, found hope in “the degree to which [Clinton] explicitly repudiated the traditions of the Democratic Party” and noted that it wasn’t until Clinton was seated in the Oval Office and the Democrats in Congress had gone down to defeat that “the old New Deal and Great Society consensus on domestic matters finally collapsed.”18
Let us now apply what we have learned from our study of the Clinton era to the modern-day Democratic Party and the way it interacts with people concerned about inequality—the great mass of voters who can see what has happened to the middle class and who hold out hope that some modern FDR will come and save them. As we know, many Democratic leaders regard such voters as people who have nowhere else to go. Regardless of how poorly Democrats perform on inequality matters, they will never be as awful as those crazy Republicans.
People do find other places to go, of course—they stay home, they join the Tea Party, whatever. But my purpose here is to scrutinize the tacit Democratic boast about always being better than those crazy Republicans. In truth, what Bill Clinton accomplished were things that no Republican could have done. Thanks to our two-party system, Democratic politicians carry a brand identity that inhibits them in some ways but allows them remarkable latitude in others. They are forever seen as weaklings in the face of the country’s enemies, for example; but on basic economic questions they are trusted to do the right thing for average people.
That a Democrat might be the one to pick apart the safety net is a violation of this basic brand identity, but by the very structure of the system it is extremely difficult to hold the party accountable for such a deed. This, in turn, is why only a Democrat was able to do that job and get away with it. Only a Democrat was capable of getting bank deregulation passed; only a Democrat could have rammed NAFTA through Congress; and only a Democrat would be capable of privatizing Social Security, as George W. Bush found out in 2005. “It’s kind of the Nixon-goes-to-China theory,” the conservative Democrat Charles Stenholm told the historian Steven Gillon on this last subject. “It takes a Democrat to do some of the hard choices in social programs.”19
To judge by what he actually accomplished, Bill Clinton was not the lesser of two evils, as people on the left always say about Democrats at election time; he was the greater of the two. What he did as president was beyond the reach of even the most diabolical Republican. Only smiling Bill Clinton, well-known friend of working families, could commit such betrayals.
But prosperity meant that Clinton would not be judged on these grounds. Prosperity was the ultimate political trump card. Played the right way, prosperity could negate any concerns, could override any objections, could even make policies seem like their opposites.
Prosperity meant that, for years, Clinton associates like Hillary and Rahm Emanuel could pose as mystic prophets of affluence—they had worked with Bill, after all. They knew what it took to make a country rich. Prosperity made Clinton himself into a respected elder statesman, a champion of the little guy, and a towering economic success whose every move needed to be emulated by future Democrats.
Prosperity could even transform the traditional demands of Wall Street into the politics of people who worked. You could give the rich every last item on their bill of particulars and still present yourself to the public as a champion of the average citizen. Thus, in the summer of 2000, an article appeared in Blueprint, the magazine of the Democratic Leadership Council, insisting that thanks to the deeds of Bill Clinton, we now knew how to reduce inequality. All that America needed to end the gap between the rich and everyone else was growth brought on by “fiscal discipline, global competition, flexible labor markets, transparent capital markets, deregulated businesses, rapid communications, and limited government interference in markets.”20
And these were Democrats. Over the years to come, their mantra would become a liberal version of the right’s “voodoo economics.” Just as Ronald Reagan’s Republicans claimed to be able to bring down the federal deficit by cutting taxes, so Clinton’s Democratic heirs were able to pass off virtually any favor to the rich as an act of concern for the poor. How, you might ask, does deregulating the banks help those who work? Well, that’s what Bill Clinton did, and just look at what happened. Just look at how that glowing pink line went up and up.
6
The Hipster and the Banker Should Be Friends
In Chapter Two we reviewed the many questionable ideas professed by the Democratic Party’s various reform movements back in the day. We learned how some of them saw profundity-for-the-ages in the Sixties counterculture, how others pretended to speak for the forgotten middle class, but how all of them ultimately came together in rejecting the New Deal order and anticipating the imminent dawning of the postindustrial society.
And then, one day, the damn thing actually dawned. It happened in the waning years of the Clinton administration, when the brilliant sunshine of a booming tech sector finally and permanently overcame the dusty tales of old-fashioned woe that used to emanate from places like Decatur, Illinois. The name Americans gave to this rising order was “the New Economy,” a regime of tech-based prosperity unfolding into the future as far as the eye could see. The phrase and the idea behind it had once been popular among conservatives—Ronald Reagan himself used it in a famous speech in 19881—but now Democrats rushed to claim it as their own. In 1999, the think tank run by the Democratic Leadership Council—the onetime champion of conservative Southern Democrats, remember—began issuing a “State New Economy Index,” ranking the states according to how dedicated they were to education, venture capital, and the retention of “managerial/professional jobs,” among other things. President Clinton himself hosted a White House Conference on the New Economy in April of 2000, claiming the marvelous new era to be the product of a balanced federal budget and the deregulatory program he had enacted during his time in office.2
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