The protagonists of this economic story were our familiar friends: the “learning class,” the “wired workers,” the “symbolic analysts.” Innovation was the driving force behind this new era, sometimes personified by Wall Street, on other occasions by Silicon Valley. The place where the magic happened was “the ideopolis”: the postindustrial city, where highly credentialed professionals advised clients, taught college students, wrote software, crafted mortgage-backed securities—and were served in turn by an army of retail greeters and latte foamers who were proud to share their betters’ values.
This vision of what we were becoming was a specifically political one—a specifically Democratic one. The influential 2002 book that sketched it all out was called The Emerging Democratic Majority, the same title as Lanny Davis’s 1974 effort, and it predicted an era of Democratic domination for the same reasons as its predecessor had: we were becoming a postindustrial society in which professionals, as a class, were increasing explosively in number. The authors of this new iteration, John Judis and Ruy Teixeira, still urged Democrats to try to win back the working-class voters they had lost to Nixon and Reagan and, now, George W. Bush, but the task wasn’t quite as urgent this time around. Because the groups that had come together to back McGovern in 1972—meaning women, minorities and professionals—had become so much more important over the intervening years, Democratic triumph was now basically assured, in an electoral reversal the authors called “George McGovern’s Revenge.”
Look more closely at these prosperous ideopolises and the picture becomes even more familiar. The symbolic embodiment of all this innovative postindustrial economic activity was none other than Frederick Dutton’s countercultural hero, hymned now as the very embodiment of the New Economy. Youth radicalism became the language in which the winners assured us that they cared about our individuality and that all their fine new digital products were designed strictly to liberate the world. Remember? “Burn down business-as-usual,” screamed a typical management text of the year 2000 called The Cluetrain Manifesto.
Set up barricades. Cripple the tanks. Topple the statues of heroes too long dead into the street.… Sound familiar? You bet it does. And the message has been the same all along, from Paris in ’68 to the Berlin Wall, from Warsaw to Tiananmen Square: Let the kids rock and roll!3
The connection between counterculture and corporate power was a typical assertion of the New Economy era, and what it implied was that rebellion was not about overturning elites, it was about encouraging business enterprise. I myself mocked this idea in voluminous detail at the time. But it did not wane with the dot-com crash; indeed, it has never retreated at all. From Burning Man to Apple’s TV commercials, it is all over the place today. Think of the rock stars who showed up for Facebook billionaire Sean Parker’s wedding in Big Sur, or the rock ’n’ roll museum founded by Microsoft billionaire Paul Allen in Seattle, or the transformation of San Francisco, hometown of the counterculture, into an upscale suburb of Silicon Valley. Wherever you once found alternative and even adversarial culture, today you find people of merit and money and status. And, of course, you also find Democrats.
It is, in a way, the telos of everything I have been describing so far. It is as though the enlightened youth of the Sixties had stepped straight from battling the pig in Chicago ’68 to a panel discussion on crowdfunding at this year’s South by Southwest, the annual festival in Austin, Texas, that has mutated from an indie-rock get-together into a tech-entrepreneur’s convention; a place where the hip share the streets with venture capitalists on the prowl. This combination might sound strange to you, but for a certain breed of Democratic politician it has become a natural habitat. At SXSW 2015, for example, Fetty Wap performed “Trap Queen,” the Zombies played hits from the ’60s, Snoop Dogg talked about his paintings—and Commerce Secretary Penny Pritzker swore in the new director of the U.S. Patent and Trademark Office, Michelle Lee. In case you’re keeping track, that’s a former subprime lender swearing in a former Google executive, before an audience of hard-rocking entrepreneurship fans.4
THE MARRIAGE OF MONEY AND MORALS
In the Democrats’ vision of the postindustrial society, and up until very recently, one industry in particular always stood out as an object of liberal-class admiration: high finance. For liberal thinkers, Wall Street was the place where money, merit, and morality came together.
Once upon a time, the suggestion that Democrats might align themselves with investment banking would have sounded preposterous. This is the party that made hating Wall Street its prime passion in William Jennings Bryan’s crusade against the gold standard in 1896 … that won its great historic triumph in the aftermath of Wall Street’s failure in 1929 … that launched the Securities and Exchange Commission in 1934 … that eventually raised the marginal tax rate paid by the country’s highest earners to more than 90 percent.
To the leaders of the liberal class, however, the ambition is not so fantastic. For them, the transfer of the party’s affections from the middle class to the banker was not a strategic blunder but a necessary step up. It made deep ethical sense as well. In fact, each new moment in the courtship of the Democrats and the rich convinced them that they were witnessing a natural union for the postindustrial, post-partisan age. Wealth and righteousness, the two traditional poles of American goodness, would finally be as one.
This romantic story has many points of origin, but let us return, for the sake of convenience, to the administration of Bill Clinton. You will recall that Clinton won the presidency after running as a populist alternative to the aristocratic George H. W. Bush; almost immediately after being elected, however, he chose to make financial markets his number one constituency. To satisfy those markets, he made reducing the federal deficit his top priority; he cut capital-gains taxes; he deregulated the banking industry; he ensured that derivatives would face no government scrutiny; and he cheered for the bull market as though it were an achievement of the average citizen: “How can any American, of any station in life, not be proud of the financial markets we have built,” he said in 1997.5
Remember also Clinton’s personal obsequiousness to the class of Americans who actually built the financial markets—the way he fundraised among them, invited them for coffee in the White House, and partied with them in the Hamptons. “The people of the Hamptons want desperately for Clinton to be safe,” said one representative of that gilded region when impeachment proceedings drove the president into its sheltering embrace. “He is the spirit of the bull market.”6
Clinton’s achievement was to make Democrats an equal competitor with Republicans for Wall Street’s affections—a momentous accomplishment in the eyes of some. Bull Run, a book published near the apex of the Nasdaq bubble in 2000, excitedly listed all the prominent bankers who were Democrats, all the former Wall Streeters who worked in the Clinton administration, and all the former Clinton administration hands who worked on Wall Street. In fact, so relentlessly did its author, Daniel Gross, unfurl this long roll of honor that the reader is, finally, convinced of his thesis: The Democrats essentially became the party of finance in those years. “[B]y 1996,” Gross announces, “being a responsible Democrat, and one interested in prosperity and opportunity for people at all levels in society, meant being concerned about the fate of the stock and bond markets.”7
Wall Street was an ideal constituency for a party reorienting itself as a representative of the professional class. The industry in question was supremely wealthy, of course. And financiers tended to be well-graduated people of a certain cultural liberalism; the prospect of gay marriage, for example, never seemed to send them into a moral panic the way it did so many others. Wall Street didn’t pollute either, at least not in a way that cameras can see. The industry’s operations were always coated in a thick patina of expert-talk, which (as we saw in Chapter One), the professional mind finds irresistibly beguiling. Furthermore, any distasteful results of Wall Street’s operations could be easily ignored and were always far removed
from the thrilling precincts of lower Manhattan.
In 2004 the journalist Matt Bai discovered a clique of earnest venture capitalists who were pouring money into liberal activist groups. It seems these public-minded tycoons were concerned about the Democrats losing elections and losing their way, and thankfully they were able to diagnose the party’s malady as a case of being “maddeningly slow to adapt their message to the postindustrial age.” Thirty-three years after Frederick Dutton said just about the same thing, these investors had realized that “progressive politics [was] a market in need of entrepreneurship”; that the country’s left was “still doing business in an old, Rust Belt kind of way.”8
In 2007, the business world was startled to learn that John Mack, the CEO of Morgan Stanley and a prominent fund-raiser for George W. Bush, had declared himself ready for Hillary Clinton, hosting a fund-raiser for the former first lady’s presidential campaign in the investment bank’s offices. The financier’s conversion was so startling that it made the cover of Fortune magazine, with the words “Business Loves Hillary!” printed over a photograph of Ms. Clinton.9
The Democrat who would really pitch the Wall Street woo in 2008, however, was not Hillary Clinton but her rival, Illinois Senator Barack Obama. He became in that year not only the first Democratic presidential candidate in modern times to badly out-fund-raise his Republican opponent, but the first to prevail in campaign contributions from the financial industry specifically, traditionally a Republican bulwark.
As for the reasons the financiers chose Obama over his Republican opponent, we know surprisingly little. One motive, certainly, was that business likes to back winners, and 2008 looked like a Democratic year, what with the economic collapse and the backlash against the incompetent Bush administration. But let us not discount the professional-class admiration the financiers themselves expressed to the press. “My goal is not to pay less taxes,” the Obama donor and hedge fund boss William Ackman told Reuters in July of 2008. “My goal is to elect an incredibly smart and capable guy.”10 In the days before the crash, perhaps that was enough of a reason. Financiers were smart people. Obama was a smart person. Nuff said.
BLUE BILLIONAIRES
And so it was that during the Aughts the media made its great discovery: a substantial number of rich people were in fact pretty liberal. There were precedents for this, of course—think of the many WASP Brahmins over the years who have been interested in protecting endangered species—but what was happening now was different. Not only were there said to be many more rich liberals than in the past, but they were separated from rich conservatives by a rift greater than personal taste. The divide between rich liberals and rich conservatives was supposed to be something essential, something engraved in the very structure of our society—and, needless to say, something upon which you could safely build the Democratic party.
Some saw the split between the two factions of the wealthy in quasi-moral terms. For Daniel Gross, writing in 2000, it all came down to “arrogant” capital versus “humble” capital—meaning that selfish and stuck-up investment bankers were Republicans while modest and unpretentious ones were Democrats. For the journalist David Callahan, it was (among other things) a matter of the “dirty rich” versus the “clean rich”—meaning that industrialists who polluted were conservatives while those who purchased carbon offsets were liberals.11
Every now and then, one of these rich liberals was moved to write a manifesto handing down his own personal wisdom on the matter. John Sperling, the billionaire behind the for-profit University of Phoenix, made a notable splash in 2004 when he published a work of political theory called The Great Divide: Retro vs. Metro America. Like every other liberal-class reformer to take up the pencil over the preceding thirty years, the billionaire Sperling* advised Democrats to give up immediately on the class-based politics of the New Deal; what the party needed to adopt instead was an industry-based approach. Instead of understanding voters in terms of their place in the social hierarchy, in other words, the way to think about them was by what industry dominated their state or region. Democrats had to understand that places where people embraced “economic modernity” and worked in “manufacturing, finance, insurance, and services in general” were now what made up the liberal base. Places where “extraction industries” dominated, on the other hand, were the heart of red-state backwardness, closed to science and entrepreneurship, and given (thanks to their weird fundamentalist religions) to racism and low taxes.
So spake the liberal billionaire. The country had polarized itself into “two nations,” he declared—two incompatible cultural-economic systems. One of these Americas, the “Retro” one, was “rooted in the past”; the other America, which Sperling dubbed “Metro,” was “modern and focused on the future.” The obviously superior “Metro” America consisted of “vibrant” cities where people appreciated fine things like ballet and believed in “rational discourse” and birth control. “Retro” America, however, was a place of ugly pursuits like oil and farming, a land of white supremacy where people have “chosen irrationality” along with lowbrow religions in which pudgy men bellow feral slogans at giant rallies.12
Another failing of the “Retro” areas, the billionaire charged, was that they were hostile to the spirit of enterprise, suffering from “a dearth of scientists, inventors, innovators, entrepreneurs, and captains of industry—the people who build modern economies.” Those fine people were only to be found in the “Metro” regions, places where thrived admirable institutions like the Massachusetts Institute of Technology, which (Sperling wanted you to know) owned a highly creative Frank Gehry building under whose wildly zigzagging roof transpired all manner of juicy “research-focused collaboration.”
THE MARX OF THE MASTER CLASS
Creative buildings, creative innovation, creativity in general—who doesn’t love these things? Creativity is self-evidently good; it is beyond controversy, and in the years of the last decade it also began to seem like the defining virtue of liberalism, the quality that brought together all its different constituencies among the affluent.
During the Aughts, Democratic officials and administrators across the country were wowed by the idea that conspicuous public counterculture was a thing to be encouraged, because it appealed to members of the professional-managerial class. Making such people feel welcome, in turn, was the way to achieve prosperity, as we could clearly see from successful cities like Austin and San Francisco.
This idea, which raged through the Bush years and which rages still, was given memorable expression by a professor of economic development named Richard Florida, specifically in his 2002 bestseller, The Rise of the Creative Class.
Yes, the “creative class.” We’ve heard several flattering ways of describing the professional cohort, and now we come to the most obsequious designation of them all. According to Richard Florida, “creatives” were “the dominant class in America,” because the thing they controlled—“creativity”—had become “the decisive source of competitive advantage”; “new technologies, new industries, new wealth and all other good economic things flow from it.”13
In Florida’s reasoning, this “creative class” included traditional artists and intellectuals, but the creatives who really mattered were people who worked in tech, people who worked in offices, people with advanced degrees. The same people, as it happened, with whom Democrats had been infatuated since the days of McGovern, only with one new detail: professionals were now described as the class that creates, like farmers were in the imagination of Thomas Jefferson or like the proletariat was in the dreams of the 1930s.
Cities and regions across the country heeded the guru’s advice and swung immediately into the work of ingratiating themselves with the creative class. The hard-bitten state of Michigan launched a “Cool Cities Initiative,” which, in the words of the state’s governor, established numerous “local commissions on cool that are uncorking the bottle of creativity.” Dayton, Ohio, decided it needed a film festival as
well as a “Dayton Creative Incubator,” a performance hall called “C{space,” and an art exhibit called “Creative Soul of Dayton.” Tampa, Florida, appointed what USA Today called a “manager of creative industries” and “Creative Tampa Bay” dedicated itself to “synergizing the community’s assets to cultivate an environment that encourages innovation, expands the economy and is a magnet for creative people,” as its website used to say.
The ones who ingratiated the most were Democrats, who saw in the “creative class” strategy a way to revitalize struggling cities that were left behind when manufacturing departed for other climes. The many, many bike paths that were built in hopes that professionals would show up and ride upon them? By and large, those were built by Democrats. All those art districts and street fairs? Democrats. Indeed, Republicans were excluded from competing for the favor of the new dominant class almost by definition, since one of Richard Florida’s requirements was that cities perform well on what he called the “Gay Index.” Sure, those vulgar Republicans could offer crass inducements like low taxes, but in the age of creativity it was supposed to be your town’s theatrical performances and its carefully handmade cupcakes that truly opened the door to prosperity.
Listen, Liberal: Or, What Ever Happened to the Party of the People? Page 12