Left Behind

ABBREVIATIONS

INTRODUCTION

Doing Well by Doing Good

On a steamy day in July 1999, President Bill Clinton rested in a plastic lawn chair in front of a ramshackle prefabricated home in the Whispering Pines trailer park in Tyner, Kentucky. The economically depressed coal town lay deep in the Appalachian Mountains. While drinking from a can of Mountain Dew, Clinton talked with sixty-nine-year-old Ray Pennington, a self-described “old-timer” with severe emphysema who required a portable oxygen tank to breathe. Pennington had recently lost his wife of fifty-one years and had moved in with his daughter Jean. Four generations of the family lived in the rented double-wide now. Jean quit her job flipping burgers and swirling soft serve at a local Dairy Queen to care for her father. The family was now entirely reliant on the $6.30 per hour her son-in-law earned making plastic safety glasses at the Mid-South Electric Company, one of the only employers in the area.1

The Pennington home was Clinton’s first stop on a four-day tour. He went on to Clarksdale, Mississippi, and ended in Watts, California, with stops in East Louis, Illinois, the Pine Ridge Reservation in South Dakota, and a Phoenix, Arizona, barrio. Like Tyner, these places had some of the highest rates of poverty in the nation. Like the Pennington family, residents suffered from health problems, unemployment, and a lack of adequate transportation and housing. It was the first and only time that Clinton would visit many of these communities during his presidency. His travel plans usually took him to the expansive mansions and office parks of Silicon Valley and the skyscrapers of Wall Street, the places that represented the success of his agenda to stimulate a “New Economy” based in tech, finance, and real estate. First Lady Hillary Clinton, who had stayed behind in Washington, explained, “Ray Pennington’s story should remind us that, although this has been a great time for America, not every American has benefited from our country’s success.”2 The administration aimed to target the people and places like Pennington and Appalachia that were being “left behind” by the forces of the New Economy.3 This descriptor reinforced the administration’s contention that these places were anomalies in the boom times of the late 1990s and evaded the fact that the poverty of their residents was in large part the result of the forces of the New Economy, which Clinton helped to unleash.

Clinton’s trip drew immediate comparisons both to Lyndon Johnson’s visit to Appalachia in 1964 to build support for the War on Poverty and Robert Kennedy’s high-profile poverty tours of Kentucky, the Mississippi Delta, Pine Ridge, and Watts in the mid-1960s.4 Clinton’s conversation with Pennington evoked the iconic image of Johnson squatting on the porch of a rundown cabin in Inez, Kentucky, to talk with Tom Fletcher, surrounded by the eight children he supported on $400 per year.5 Clinton traversed much of the same ground as his Democratic predecessors, but his purpose was different. The Clinton tour aimed to do more than expose the problems of the “Other America.” He wanted to draw attention to their profit-making potential. As Clinton explained during his 1999 State of the Union address: “Our greatest untapped markets are not overseas—they are right here at home. And we should go after them [by building] a bridge from Wall Street to Appalachia to the Mississippi Delta, to our Native American communities.”6

Clinton and his staff compared the New Markets tour, as the four-day journey was called, to the trips they orchestrated for corporate executives throughout the 1990s to explore investment opportunities in emerging markets in Southeast Asia, Africa, and Latin America. For this so-called domestic trade mission, Clinton invited CEOs and representatives of several major corporations and financial institutions including Bank of America, Citigroup, Aetna Insurance, Walgreens, and Fannie Mae. As Clinton explained to an audience in Appalachia, not far from the Pennington home, he was showing corporate leaders that they should “take a look at investing in rural and inner-city America. It’s good for business, good for America’s growth, and it’s the right thing to do.”7 Selling the New Markets program to Wall Street and Silicon Valley executives during the last two years of his presidency, Clinton would frequently tell them that it was a “win-win” and a way that they could “do well by doing good.”8

The tour marked the culmination of Clinton’s enduring effort to promote private sector investment, market-based tools, and opportunity—rather than redistribution, government assistance, and economic security—as the best route to address poverty, economic inequality, and racial segregation. As Clinton explained to an audience at a factory in Clarksdale, Mississippi, in the heart of the Delta, he had been cultivating this approach to poverty, economic growth, and governance since his time as governor of neighboring Arkansas. In the 1980s, he invited Muhammad Yunus, the founder of the pioneering Bangladeshi microfinance organization Grameen Bank, and Mary Houghton and Ron Grzywinski of the ShoreBank Corporation, a community development bank based in Chicago, to set up a bank and microenterprise program in the Delta aimed at helping poor Black women on welfare become entrepreneurs. Clinton carried this model with him in his successful 1992 campaign for president as part of his quest to prove that he was a “new kind of Democrat.” Once in power, the Clinton administration implemented this market-based approach in its economic empowerment, international development, and welfare, housing, and school reform efforts. These efforts crested at the end of Clinton’s presidency with this attempt to bring capital investment to places like the Appalachian hamlet where Ray Pennington lived.

Clinton was aided in this measure by many of the other figures who joined him on his journey to these so-called left-behind places. In addition to the corporate executives, Clinton was accompanied by cabinet secretaries like Andrew Cuomo, several members of Congress, Democratic Leadership Council (DLC) head Al From, and civil rights activist Rev. Jesse Jackson. It was fitting that From joined Clinton on tour since the DLC played a critical role in shaping Clinton’s market-based vision to poverty and governance. From and a group of Democratic politicians, including Clinton and Al Gore, founded the DLC in 1985 with the explicit goal of reinventing the party through a new electoral strategy and policy agenda. Calling themselves “New Democrats,” the DLC declared that Democrats should make it their fundamental mission “to expand economic opportunity not government,” which would be achieved through free markets and free trade.9 They also called for introducing choice, competition, and market incentives into the public sector and stressed that market-oriented solutions could encourage individual responsibility and empowerment among the poor.

It was more jarring to see Jesse Jackson as part of the entourage scouting out new markets in economically distressed and racially segregated communities. The civil rights activist and two-time Democratic presidential candidate had served as the most prominent face and voice for the left wing of the Democratic Party for much of the previous two decades. Jackson had also been one of most vocal critics of the New Democrats. He dismissed the DLC as “Democrats for the Leisure Class” and accused them of trying to “suburbanize” the Democratic Party. He had also routinely castigated Clinton for trading in race-baiting politics and ignoring marginalized groups, deeming his reforms to the welfare system as a “war on the poor.” By 1999, however, he had done an about-face and become one of the most enthusiastic participants on the New Markets tour, affirmatively celebrating how Clinton was launching a “war for profits.”10 Jackson’s ringing endorsement symbolized how dominant the faith in market-based thinking had become by the end of the 1990s and how much a progressive vision advocating equity and justice rather than opportunity, individual responsibility, and profits had diminished.

Accounts of politics in the late twentieth century have tended to focus on conservatives and the Republican Party. In this telling, a powerful coalition of right-wing businesspeople and activists used the economic and social chaos of the late 1960s and early 1970s as an opportunity to gain political power through the election of Ronald Reagan in 1980. Reagan’s victory offered conservatives the chance to implement an agenda that combined free market, antigovernment, socially conservative, and racially reactionary policies.11 These efforts became critical in destroying both the electoral coalition and social welfare commitments that had defined the Democratic Party since the New Deal. When Democrats appear in these accounts, they are largely disorganized and weakened, defensively creating policies and electoral strategies in reaction to Republicans.

Left Behind dispels this narrative of the Democratic Party and the political history of the United States since the late 1960s. It reveals how Bill Clinton and the New Democrats helped to fundamentally remake many of the priorities and policies of the Democratic Party and liberalism during this period. The New Democrats’ adoption of market-oriented approaches to address inequality was not a defensive reaction to the Republicans. Rather, it was based on a genuine belief in the power of the market and private sector to achieve traditional liberal ideals of creating equality, individual choice, and help for people in need. This approach, and the ideas and policies that flowed from it, propelled the Democratic Party’s increased focus on economic growth and the tools of the private sector rather than on direct government assistance and economic redistribution as the main means to address persistent poverty and structural racism. This emphasis pushed comprehensive social welfare programs further off the table and blunted the power of the labor movement and other progressive groups. Even more significantly, by placing poor people at the whims of the private sector, it put them and their communities at risk for financial instability and predation, as became all too clear in the 2008 financial crisis and its aftermath.

The philosophy and ideas of Bill Clinton and other politicians, policymakers, and economic actors who circulated around the DLC is essential to understanding both the precarity of low-income people of color today and the current tensions within the Democratic Party. It is tempting to lay the blame for the problems of inequality and the seeming paralysis of the Democratic Party on the Republicans. It also tempting to see the New Democrats as purely cynical operators with little concern for the poor. Both explanations are incomplete and miss a bigger and messier truth. While Clinton and his allies worked within the constraints of their historical and political moment—including many inherited from the Reagan administration and imposed by Republicans in Congress—they were not without agency or power and made deliberate choices about how to address inequality. The pursuit of these policies did not solve inequality, but it did ensure that a faith in market-based solutions became a pervasive and endemic feature of Democratic thought and policy that has persisted to the present day. On the way, the New Democrat agenda blocked the development of policies that created meaningful structural change and limited the influence of progressives on the direction of the party. The political, economic, and social crises of the twenty-first century have led the party and nation to grapple with the consequences of this focus on markets, opportunity, and individual responsibility and for the first time in decades to consider alternatives. Taking better stock of who and what was left behind by these past choices is essential to charting a different path forward.

In recent years, the term neoliberalism has reverberated across academia and Twitter, even making a cameo in a Saturday Night Live skit. It has increasingly become shorthand for describing and dismissing the centrist and corporatist bent of the Democratic Party, symbolized by Bill and Hillary Clinton. This popularization has also stretched it thin. Broadly, neoliberalism describes the theory of political economy that free markets and government austerity are the best way to create individual freedom and choice. The term also has become a way to define the historical period since the 1970s when these ideas of market fundamentalism, disseminated by Milton Friedman and the Chicago school of economics, came to structure seemingly all aspects of governance and spheres of human activity in the United States and much of the world.12

The seeming pervasiveness of these ideas has produced a tendency to treat neoliberalism as monolithic and totalizing, which obscures the spectrum of market-oriented thinking and policy. The New Democrats’ distinctive view of the market and the role of government has been consistently overlooked. The roots of this Democratic version of neoliberalism were rooted less in the free-market conservatism of Ronald Reagan and Milton Friedman and more in the liberalism of the New Deal and the Great Society, with its commitment to public-private partnerships and its faith in technocratic expertise to solve social problems and capitalism to create economic stability, security, and growth.13 In fact, a faith in markets as a vehicle for social change was not “new” to the New Democrats but a fundamental feature of liberalism through much of the twentieth century.

More than the increasingly fraught term neoliberalism, the phrase doing well by doing good better crystallizes the approach of the New Democrats. The phrase has become so frequently invoked in the speeches of Silicon Valley executives and the mission statements of their companies that it seems like a timeless adage.14 Yet, it came into popular usage in the 1990s largely through the help of Bill Clinton, who readily adopted it. Clinton used it to describe both his administration’s approach of enlisting the private sector to address poverty domestically and using free trade and globalization to promote freedom, democracy, and human rights around the world.15 The phrase encapsulates the aspirational belief that it is possible for the market to do good and to achieve traditional liberal goals of equality and providing for those in need.

Since the New Deal, liberals had advocated for doing well and doing good. However, the form of political economy enacted during the New Deal and, later, the New Frontier and Great Society understood these as distinct goals. The architects of mid-twentieth century liberalism believed that stimulating capital markets was the best path to creating economic growth and security (doing well).16 The job of the federal government, as they saw it, was to fill in the holes left by capitalism with compensatory programs to help the poor, like cash assistance and Head Start, and to enact laws that ended racial and gender discrimination (doing good). In contrast, the New Democrats sought to merge those functions and thus do well by doing good. This vision contended that the forces of banking, entrepreneurialism, trade, and technology, which had created the economic growth and prosperity of the 1990s, could substitute for traditional forms of welfare and aid and better address structural problems of racial and economic segregation. In this vision, government did not recede but served as a bridge connecting the public and private sectors.

The New Democrats treated poverty and other forms of discrimination largely as a market failure. In response, its adherents looked for ways to both bring the market to poor people of color and to integrate them into the capitalist system. This thinking led to the promotion of programs like microenterprise, which aimed to transform marginalized people into entrepreneurs and savers, and inspired initiatives such as Empowerment Zones and New Markets, which sought to make distressed urban and rural places profitable. The New Democrats also applied market-based tools to areas like public housing, education, and regulation of business, where capitalism had been seen as the problem, not the solution. Clinton and his allies extended the values of what historians call racial liberalism: the argument that for marginalized groups, especially African Americans, inclusion in American society and the legal system provided the best means for creating racial equality.17 At the same time, proponents contended that giving poor people of color the tools to start businesses, open bank accounts, get mortgages, and increase their purchasing power would generate profits and allow them to become engines of economic growth. This approach built on a long-standing liberal tradition of drawing on ideas from international development to address poverty in the United States and vice versa.18 Policies trying to tap emerging markets and stimulate entrepreneurship show how ideas that see poor countries, places, and people as sites of profit came to ricochet globally.

The New Democrats were genuinely convinced that the market could improve the lives of poor people, alleviate the problems of racial segregation, improve the functioning of government, and maintain traditional liberal ideals of egalitarianism and individual choice and freedom.19 In fact, the New Democrats often argued that they were simply using new means to achieve the same liberal aims. Unlike free-market fundamentalists like Milton Friedman, the New Democrats believed that both government and corporations had a fundamental obligation to do good. They aimed to enlist the private sector to not just line the pockets of large corporations but to also use the resources and techniques of the market to make government more efficient and better able to serve the people.

Clinton and his allies routinely referred to microenterprise, community development banking, Empowerment Zones, mixed-income housing, and charter schools as revolutionary ideas that had the power to create large-scale change. These programs, nevertheless, uniformly provided small or micro solutions to large structural or macro problems. The New Democrats time and again overpromised just how much good these programs could do. Suggesting market-based programs were a “win-win” obscured the fact that market capitalism generally reproduces and enhances inequality. Ultimately, the relentless selling of such market-based programs prevented Democrats from developing policies that addressed the structural forces that produced segregation and inequality and fulfilled the government’s obligations to provide for its people, especially its most vulnerable.

Although Clinton started the New Markets tour visiting Ray Pennington, a white Appalachian coal miner, the New Democrats’ agenda overwhelmingly focused on Black and brown women who had become the face of the poor in the 1980s and 1990s. In speeches and photo-ops, Bill and Hillary Clinton and their allies routinely celebrated people like a Black welfare recipient in rural Arkansas who started her own catering business, a poor seamstress in Chile who used a loan from a microenterprise organization to buy a sewing machine and provide for her family, and a Latinx charter school student in Los Angeles receiving a top score on a state achievement test. These images and descriptions of poor people aligned with the meritocratic ethos of the Ivy League graduates of Wall Street, Silicon Valley, and the White House. However, these celebrations falsely suggested that market forces could give the vast majority of poor people the power to move out of poverty, overcome racial segregation, and control their own lives.

Although the valorization of poor women of color as hardworking entrepreneurs and savers seemed more compassionate than the infamous Reagan-era image of the “welfare queen,” it proved no less detrimental. The focus on transforming poor people of color into financial actors contributed to making what was left of the social safety net in the 1990s and beyond only available to those people willing or able to operate within the imperatives and strictures of market capitalism.20 The celebration of a few individuals who managed to achieve success through market-based programs obscured the fundamental barriers and forms of structural discrimination and uneven development of global capitalism that made it impossible for most people of color in the US and around the world to succeed. Clinton’s efforts to reward those “who played by the rules” also continued to stigmatize those poor people who allegedly did not. The “doing well by doing good” ethos, therefore, further legitimized—and operated hand in hand—with punitive policies like those contained in the 1996 welfare reform law. It also fit with the tough-on-crime politics of the DLC and the Clinton administration, including the passage of the 1994 crime bill, which led to the vastly disproportionate surveillance and incarceration of millions of African American men, whom the New Democrats deemed unable to become entrepreneurs, savers, or valuable contributors to the New Economy.21