by Jason Stanley
On February 11th, in the democratic debate between Hillary Clinton and Bernie Sanders in Milwaukee, Clinton introduced a new criticism of Sanders that has since become one of her campaign’s central themes. Sanders is a single issue candidate, focusing on the problems caused by Wall Street, big financial interests, insurance companies and other wealthy and powerful business interests to the exclusion of other, equally important and structurally central issues.
There are, refreshingly, legitimate philosophical disagreements at issue in the democratic primary. However, I will present strong reasons to reject Clinton’s position. The Sanders’s campaign addresses significant issues that speak to a large, diverse, and important number of social and political ills, made worse by the lack of significant campaign finance reform. Most importantly, Clinton’s campaign strategy and arguments for it give us reason to suspect that they are problematically influenced in a way that strengthens, rather than minimizes, Sanders’s concerns.
Bernie Sanders could not be more explicit about his central political concern. It is wealth and income inequality. On his website, it is the first issue listed. It is described as “the great moral issue of our time…the great economic issue of our time, and…the great political issue of our time.” His view about how to tackle the problem is also clear. We must “take on the enormous economic and political power of the billionaire class.” This is a stark contrast with Hillary Clinton. In a recent article, Thomas Frank writes, “income inequality has little role in the grand sweep of her political career.”
Clinton introduced the charge that Sanders is a “single issue candidate” in Milwaukee:
Yes, does Wall Street and big financial interests, along with drug companies, insurance companies, big oil, all of it, have too much influence? You’re right. But if we were to stop that tomorrow, we would still have the indifference, the negligence that we saw in Flint. We would still have racism holding people back. We would still have sexism preventing women from getting equal pay. We would still have LGBT people who get married on Saturday and get fired on Monday. And we would still have governors like Scott Walker and others trying to rip out the heart of the middle class by making it impossible to organize and stand up for better wages and working conditions.
Clinton here blames the crisis in Flint on “negligence”, which is a failure of individual responsibility (presumably, the governor’s). The “racism holding people back” has nothing to do with “Wall Street and big financial interests, along with drug companies, insurance companies.” These are notions of racism, sexism, and homophobia detached from oppressive economic structures.
One model of racism, sexism, and homophobia treats them as problematic attitudes that individuals have. Clinton attributes Governor Scott Walker’s assault on the labor movement to his lack of empathy, also a problematic individual attitude. I begin by responding to Clinton’s arguments, using this individualist interpretation of Clinton’s examples.
Clinton is fair to describe Sanders’s mission in terms of a battle against the excessive influence of “Wall Street and big financial interests, along with drug companies, insurance companies, big oil”. Clinton clearly thinks this is not serious enough to be the basis of a presidential campaign. Her campaign strategy is to minimize the problems these institutions pose to our social and political system.
Many of us agree that racism, sexism, homophobia, Flint, and Scott Walker are serious problems. Clinton presents them as clearly outside the scope of Sanders’s single issue, the “excessive influence” of the billionaire class and the institutions they control. Instead, she attributes these problems to individual failings. Let’s take the problem of racism as a test case of this view. Is the problem of racism mainly or centrally a problem of individual racist attitudes? Or is racism substantially interrelated with the practices and institutions Sanders targets?
In “The Case for Reparations”, Ta-Nehisi Coates builds a case for reparations for Black Americans. One of his central examples of a historical racist harm reparations should address is the 20-1 wealth gap between white and Black Americans. Is the wealth gap mainly a problem of individual attitudes?
Coates argues that a central mechanism in the maintenance of the wealth gap is homeownership. At the heart of his analysis are the structural practices of mortgage lending at the intersection of government housing policy, banks, and other lending institutions. His argument for reparations culminates in an account of the predatory lending practices of financial institutions during the recent subprime mortgage crisis, which as have been well-documented, reinforced and increased the racial wealth gap. In short, he argues that in explaining a chief racial harm, the 20-1 wealth gap, one must appeal to the structural practices of the apparatus of mortgage lending, practices at the heart of the financial industry.
The practices of finance are mainly guided by the view that pure profit seeking is in the public good. The poor have no choice but to accept high interest rates. So when such practices are applied to a group that has been historically disenfranchised, their effect is to support and maintain that disenfranchisement. These are essential mechanisms in the support and maintenance of the racial wealth gap. After a certain point, the mechanism can even be self-sustaining. After all, even if everyone working in those institutions suddenly adopted antiracist views, practices that already target poor populations would not substantially change.
I have represented Clinton’s argument with the use of individualist notions of racism and sexism. But the argument cannot be saved by appeal instead to structural ones. There is no notion of structural racism that is entirely devoid of economic oppression of the sort Coates discusses (mutatis mutandis for the structural effects on race of the health industry and the energy industry). Similar points can be made about structural sexism.
Clinton has spoken movingly and incisively about structural sexism. But in this campaign, Clinton has repeatedly represented calls for significant structural reform as juvenile or pointless. This suggests an ideology that minimizes the effects of structural oppression. Clinton tends to propose policies that support the ideal of enhanced individual opportunity. The rhetoric of individual opportunity suggests a picture of social and political reality as consisting simply of array of individual citizens. It supports general enhancement of opportunities as a natural policy goal. But this is dangerous political illusion.
Suppose one group fails to benefit from a policy intended to benefit all. A picture of political reality that omits structural barriers to a group will leave its members as the only visible source of fault for policy failures. When a policy fails because of the structural barriers the group faces, its failure will instead be attributed to character flaws of members of that group. A correct picture of social and political reality must include not just individuals but also the significant structural barriers between them.
Sanders’s agenda in running for President is to reform institutions and practices responsible for the maintenance of structural barriers between groups, with the structural barriers erected by wealth and income inequality as his focus. He emphasizes “the billionaire class”, by which he means those who control and direct streams of capital, out of suspicion that their practices bear outsized responsibility for maintaining unjust social and economic distinctions. The individuals and institutions provide mechanisms through which historical structural injustices become self-reinforcing. I have used Coates’s explanation of how mortgage and lending practices are mechanisms in the maintenance of the racial wealth gap to illustrate Sanders’s point. In our society, much structural injustice runs through the mechanisms that control flows of money. They are far from the only mechanisms supporting the diversity of kinds of structural injustice, but given our economic system, they are the ones that have the widest application.
Why did Hillary Clinton choose the general campaign of minimizing concern for the causes of wealth inequality? Why not instead coopt the Sanders agenda, combining it with her indisputable policy expertise, experience, and brilliance? This would show respect for Sanders’s concerns, while making a powerful case that she is the best candidate to address them. It’s implausible to attribute this campaign strategy to a decision about electoral strategy; indeed her campaign strategy has widely been taken as the cause of Sanders’s shocking upset in Michigan. As a short-term plan, her campaign strategy was unwise. This has not been addressed in recent discussions. It requires explanation.
Two examples Clinton prominently used of real problems that would not be addressed by Sanders’s concerns and reforms are crucial to discuss in explaining her choice of campaign strategy. These are the examples of Scott Walker’s policies, and the disaster in Flint, Michigan. Her choice of these two examples is concerning. On closer inspection, it supports Sanders’s views about the moral and political threat posed by “the billionaire class”.
Is the cause of Scott Walker’s anti-labor policies lack of empathy? Or is it rather that he is, in the words of a prominent national politician, just getting “his marching orders from the Koch brothers”? The Koch brothers are the nation’s premier financial supporters of politicians whose policies reinforce structural barriers due to wealth inequality. Their relationship to Scott Walker is one of the most salient examples of the “enormous economic and political power of the billionaire class”. And Hillary Clinton is undeniably aware of the duplicity involved in using this example; after all she is the “prominent national politician” quoted at the start of this paragraph.
Far more worrying, however, is Clinton’s use of the water disaster in Flint, Michigan as a problem that would be left completely unaddressed by Sanders’s “single issue” reformist agenda. Clinton attributes the cause of the crisis to a failure of individual responsibility. This is an egregious misrepresentation. There are two central causes of what occurred in Flint. One cause is Michigan’s Emergency Manager laws, which were used to replace democratically elected mayors with “emergency managers” who were then in complete control of financial decisions. Racism played a significant role here, as claims of emergency seemed to suspiciously correlate with majority Black cities. These “emergency managers” then made undemocratic decisions, which seemed to serve the “billionaire class” at the center of Sanders’s concerns, rather than the citizenry.
The second central cause of the disaster in Flint is the swap contract the banks engineered with Detroit Water and Sewerage Department (DWSD). DWSD had to pay $537 million simply for a swap contract termination fee. DWSD was forced to raise its fees drastically. Since Detroit sits on the world’s largest body of fresh water, it is quite obviously not because of a resource poor situation. It is because of a swap contract that was, to say the least, ethically deeply troubling.
The first nationally reported effect of these deeply problematic financial industry contracts was the widespread water terminations in Detroit. It was predictable then that there would be additional victims of the combination of undemocratically appointed “emergency managers” with financial industry practices of offering absurd swap contracts to “protect” municipalities and public utilities from drastically rising interest rates that never arrived. The general consensus is that the EM’s decision to switch Flint’s water source away from DWSD was to avoid high rates for water paid by customers of DWSD. If so, the cause of the Flint emergency is the disastrous swap contract that the banks negotiated with DWSD, i.e. a direct result of bank practices that Sanders’s campaign targets.
In recent weeks, newly uncovered emails have suggested an alternative motivation for the switch from DWSD to the Flint River. According to the Detroit Metro Times, the emails suggest the motivation for the switch was instead [Governor Rick] “Snyder’s desire to privatize and break up DWSD or maybe Snyder’s goal of opening up fracking opportunities around the new KWA pipeline.” After all, removing Flint, an important source of revenue for DWSD, obviously adds to the financial woes caused by its deal with the banks, and strengthens the claim to sell it into private hands.
This too squarely places the blame on the agendas of the “billionaire class”. DWSD is a public utility with access to the world’s greatest supply of fresh water, the Great Lakes. There are many wealthy and powerful interests who would wish to own such a unique resource and use it for profit, and its debt is used in the argument to privatize it. The entire story about Flint is one about the “billionaire class” jockeying for money and power; the only question is which exact interests are the cause. None of it involves “negligence”. Quite the contrary, it involves careful strategic planning.
Why has Clinton’s campaign strategy taken the form of minimizing the problem of wealth inequality? To deepen the mystery, why use examples that underscore the importance of the issues at the heart of Sanders’s campaign, in an effort to minimize them? What follows, of necessity, involves speculation about motivations.
The water crisis in Flint has attracted international attention. A shady financial industry deal with a public water utility is generally agreed be its cause (a point oddly absent from the national press narrative). The situation raises serious concerns for the financial industry. Flint is an obvious example to use to build public pressure for a general reformist agenda that would address the problem of shady municipal loans. Perhaps the whole practice of such contracts with public utilities and municipalities might be drastically reformed, well beyond what already has occurred in Dodd-Frank.
The second concern is that Flint could be employed to extract a record settlement as well as lawsuits against the banks (conservative estimates of costs of repairing the water system start at 1.5 billion). JP Morgan Chase offered a swap contract to the public water and sewer utility in Jefferson County, Alabama, which almost led to the country’s largest municipal bankruptcy. The SEC leveled a 722 million dollar fine against JP Morgan Chase for overcharging on swaps. The state of Michigan is Jefferson County writ large.
As Wallace Turbeville documents in an important 2013 piece in Demos, the “risky financial deals” Wall Street sold to Detroit in 2005 and 2006 play a large role in its financial problems. DWSD’s rate hike due to a problematic swap contract led to the water crisis in Detroit last year. The water crisis in Flint is also directly connected to the debts DWSD incurred from this Wall Street contract (even the argument for privatizing DWSD is based on its thus incurred debt). At some point, even the national media might recognize that there is a stream of problems in Michigan connected to water. It is but a short step to trace them to the public utility supplying it, and to recognize that its problems are due to an ethically dubious swap contract arranged by Wall Street. A good deal of the work of Snyder’s “emergency managers” has been to obscure and prevent such an outcome, by directing the blame elsewhere (e.g. pensions), and keep revenue streams flowing to the banks. But if the national media were somehow (miraculously) to draw the connections, there could be strong public pressure for settlements and lawsuits of historic proportions.
The above facts raise the possibility that Clinton disconnected the crisis in Flint from its actual causes in a highly prominent television moment as part of an agenda to protect the interests of Wall Street.
Hillary Clinton has received 2.9 million dollars in speaking fees from speeches to financial institutions between 2013 and 2015. She has many other connections, and is the recipient of much campaign support from them. These facts lead her to be less critical about these institutions and their practices, to minimize their harms, including the influence of their lobbying on politicians. And isn’t that exactly the problem Sanders’s reformist agenda seeks to address?
“The billionaire class” directs vast flows of cash at our politicians. We have seen strong evidence that is has influenced Clinton’s recent rhetorical strategy, whose purpose after all is to minimize concerns about the influence of “the billionaire class”. The very campaign strategy she has taken is in fact its own best self-refutation.