The Return of Liberal Populism in America and Britain

Obama and Miliband signal a shift to class-conscious politics for the left.

LONDON, ENGLAND - MAY 24: US President Barack Obama holds a meeting with Labour leader Ed Miliband at Buckingham Palace, as Shadow Foreign Secretary Douglas Alexander (second left), Shadow Secretary of State for International Development, Harriet Harman (left) and US Secretary of State Hillary Clinton (right) look on, May 24, 2011 in London, England. The 44th President of the United States, Barack Obama, and his wife Michelle are in the UK for a two day State Visit at the invitation of HM Queen Elizabeth II. During the trip they will attend a state banquet at Buckingham Palace and the President will address both houses of parliament at Westminster Hall.
National Journal
Ronald Brownstein
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Ronald Brownstein
Dec. 19, 2013, midnight

LON­DON — Dur­ing the 1990s, Demo­crats in the United States and the Labor Party in the United King­dom pur­sued par­al­lel trans­form­a­tions. Be­hind the lead­er­ship of Pres­id­ent Clin­ton and Prime Min­is­ter Tony Blair, each party re­cast its tra­di­tion­al lib­er­al­ism in­to a “Third Way” cent­rism that bal­anced gov­ern­ment act­iv­ism with re­form and tilted its em­phas­is from eco­nom­ic “fair­ness” to­ward growth. Now the two parties are mov­ing along match­ing tracks again, but to­ward a more con­front­a­tion­al ap­proach that re­flects each coun­try’s shift­ing eco­nom­ic and polit­ic­al land­scape.

Pres­id­ent Obama and Ed Miliband, the lead­er of the Brit­ish Labor Party, signaled the change this fall with mile­stone speeches in which each pledged to fo­cus on the in­ter­locked is­sues of widen­ing in­come in­equal­ity, de­clin­ing up­ward mo­bil­ity, and stag­nant liv­ing stand­ards for av­er­age fam­il­ies.

Ad­dress­ing the Labor Party con­fer­ence last Septem­ber, Miliband made clear he wants to force those is­sues to the cen­ter of the May 2015 elec­tion when the party hopes to un­seat Prime Min­is­ter Dav­id Camer­on’s rul­ing co­ali­tion of Con­ser­vat­ives and Lib­er­al Demo­crats (a cent­rist third party). The link between over­all eco­nom­ic growth and gains for av­er­age fam­il­ies, Miliband in­sisted, has “broken.” Eco­nom­ic re­cov­ery, he charged, now “just seems to lift the yachts” while leav­ing most fam­il­ies con­front­ing a “cost-of-liv­ing crisis” in which prices are rising faster than wages.

Obama, in his speech to the lib­er­al Cen­ter for Amer­ic­an Pro­gress this month, struck the same notes. “[A] dan­ger­ous and grow­ing in­equal­ity and lack of up­ward mo­bil­ity “¦ has jeop­ard­ized middle-class Amer­ica’s ba­sic bar­gain that if you work hard, you have a chance to get ahead,” he in­sisted. “I be­lieve this is the de­fin­ing chal­lenge of our time.”

These sharp words mark an un­mis­tak­able shift in tone and em­phas­is for Demo­crats and Labor since the Clin­ton and Blair era. Neither man ig­nored in­equal­ity or com­pletely muted eco­nom­ic pop­u­lism. Clin­ton raised taxes on the rich, at great polit­ic­al cost, in his 1993 budget and sig­ni­fic­antly ex­pan­ded tax cred­its for low-wage work­ers; Blair passed Bri­tain’s first na­tion­al min­im­um wage.

But the “New Demo­crats” around Clin­ton and Blair’s “New Labor” mostly stressed ideas (such as free trade, tar­geted de­reg­u­la­tion, and pub­lic in­vest­ment mod­er­ated by fisc­al re­straint) meant to ac­cel­er­ate over­all eco­nom­ic growth. Each was less in­ter­ested in lash­ing the rich as a polit­ic­al foil than in win­ning more up­per-middle-class and even af­flu­ent voters (which each, for a time, did with con­sid­er­able suc­cess). Blair even pledged not to raise in­come-tax rates dur­ing his first term.

Obama and Miliband haven’t aban­doned those themes (or up­per-in­come voters, who of­ten identi­fy with their parties on so­cial is­sues). But they are turn­ing the dial back to­ward a more class-con­scious mes­sage and agenda. “Polit­ics be­came less ideo­lo­gic­al in the Blair years,” said Stew­art Wood, a top Labor polit­ic­al strategist who also serves in Par­lia­ment’s House of Lords. “Ed Miliband has to be on the side of people who are go­ing through tough times.”

On each side of the At­lantic, the shift to­ward in­equal­ity serves some short-term polit­ic­al needs. It of­fers Obama an op­por­tun­ity to re­dir­ect what polls show is wide­spread frus­tra­tion over the slug­gish pace of re­cov­ery five years in­to his pres­id­ency. Fo­cus­ing on in­equal­ity of­fers Miliband the op­pos­ite op­por­tun­ity: shift­ing the de­bate away from in­dic­a­tions that the Brit­ish eco­nomy, after years of pain, is be­gin­ning to gath­er mo­mentum. “For the next elec­tion, there’s a con­test between two eco­nom­ic nar­rat­ives,” says Peter Kell­ner, pres­id­ent of YouGov, a lead­ing Brit­ish polling firm. “The Con­ser­vat­ive nar­rat­ive is, ‘We’ve turned the corner, it’s work­ing, don’t give the keys back to the people who crashed the car.’ The Labor nar­rat­ive is that the be­ne­fits of re­cov­ery are go­ing [only] to the rich.”

But, in each coun­try, the shift is mostly rooted in the real­ity of deep eco­nom­ic change. Like al­most all ma­jor in­dus­tri­al­ized coun­tries, the U.S. and the U.K. have ex­per­i­enced a steady po­lar­iz­a­tion of in­come: The top 1 per­cent of earners roughly doubled its share of na­tion­al in­come in the U.S. from 1980 through 2008 and in the U.K. from 1970 through 2005. That con­cen­tra­tion didn’t gen­er­ate as many alarms while the in­come for av­er­age fam­il­ies was rising through the late 1990s (es­pe­cially in the U.S., where Clin­ton’s second term pro­duced the broad­est in­come gains since the 1960s.) But with the me­di­an in­come in both coun­tries stag­nant over the past dec­ade — and the pro­spect for fu­ture gains dim — rising in­equal­ity and di­min­ish­ing mo­bil­ity have be­come an un­avoid­able con­cern for many on the left (and even some con­ser­vat­ives.) Fo­cus­ing on in­equal­ity “feels right to people since the 2008 crash,” said Wood. “If you go back to 1997, Labor talk­ing about the prob­lem of in­equal­ity would have been in­con­ceiv­able.”

Both Obama and Miliband have faced some back­lash from Clin­ton- and Blair-era re­formers un­easy with their sharp­er pop­u­lism. But the bulk of opin­ion in both the Demo­crat­ic and Labor parties clearly sup­ports their shift. Hav­ing largely won the in­tern­al de­bates, they now face a vastly more dif­fi­cult com­pet­i­tion with their con­ser­vat­ive rivals. In each coun­try, squeezed liv­ing stand­ards have helped tilt many middle-in­come voters to­ward con­ser­vat­ive ar­gu­ments against spend­ing, wel­fare, taxes, and im­mig­ra­tion. Camer­on, who began his term by try­ing to cen­ter his party, is now mov­ing right on all those fronts (even while main­tain­ing con­trast­ing notes on ex­pand­ing ac­cess to high­er edu­ca­tion and im­prov­ing in­fra­struc­ture).

Miliband has countered by pro­pos­ing a freeze on en­ergy prices and, like Obama, is tout­ing a high­er min­im­um wage and ex­pan­ded edu­ca­tion­al op­por­tun­it­ies. Polls have shown sup­port for all of those ideas — and many of the con­ser­vat­ive re­sponses, too. But at a time when glob­al­iz­a­tion, tech­no­lo­gic­al change, and the shift­ing bal­ance of power between work­ers and cap­it­al are squeez­ing liv­ing stand­ards and height­en­ing in­equal­ity across the in­dus­tri­al­ized West, it’s an open ques­tion wheth­er any party — from left, right or cen­ter — has found an­swers that can truly re­store broadly shared prosper­ity.

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