Thread by @matthewstoller

How Democrats Became the Party of Monopoly and Corruption

My deep dive into the Bill Clinton years...
vice.com/en_us/article/…

1. Key to understanding the transformation of the Dems in the 1980s is that institutionally they stopped seeing monopolies as bad ten years before. The killing of Wright Patman in 1975 unleashed the beast of monopoly, because Dems changed their minds. promarket.org/how-the-waterg…

2. In the late 1970s, Jimmy Carter was a catastrophe. Carter was influenced by Ralph Nader and the counter-culture infused consumer rights left. The consumer rights movement, led by Ted Kennedy, were strong supporters of deregulation of finance, trucking, airlines, etc.

3. The public in 1981 turned to Ronald Reagan out of desperation. Reagan, among many other promises, said he would make America great again. Instead he organized a policy framework based on cruelty and concentrating power. vice.com/en_us/article/…

4. Amidst a farming depression, factory layoffs, a blizzard of credit cards and Walmarts, Studs Terkel wrote: "In the thirties, an Administration recognized a need and lent a hand. Today, an Administration recognizes an image and lends a smile."

And the Democrats? Ooof. Lost.

5. Nader's movement failed. "Ambitious men now wanted to change the world through finance. Bruce Wasserstein had been a "Nader's Raider" consumer advocate; he now worked at First Boston as one of the most successful M&A bankers of the 1980s." vice.com/en_us/article/…

6. A boom in Silicon Valley. "Immediately after Reagan's election, in December of 1980, Apple Computer went public, instantly creating 300 millionaires, and raising more money in the stock market than any company since 1956. A young Steve Jobs was instantly worth $217 million."

7. Regional inequality grew, as airlines cut routes to rural, small, and even medium-sized cities. So did income inequality, the emptying farm towns, the hollowing of manufacturing as executives began searching for any way to be in any business but one that made things in the US.

8. Ross Perot runs a strong third party challenge against corruption and offshoring. Bill Clinton wins in 1992 on the slogan "Putting People First." And he has the chance to reverse the Reagan era. Will he?

9. Bill Clinton actually *sounds* populist. "For too long, those who play by the rules and keep the faith have gotten the shaft," Clinton said. "And those who cut corners and cut deals have been rewarded. vice.com/en_us/article/…

10. No. The real slogan comes from Clinton donor and Dem operative Wayne Thevenot, who laid out the new theme of the modern Democratic Party: "I gave up the idea of changing the world. I set out to get rich."

11. Clinton boosted Wall Street, and especially the trading and merger desks. He appointed ex-Goldman CEO "Robert Rubin as his treasury secretary, super-lawyer Eugene Ludwig to run the OCC, and reappointed Alan Greenspan as the chairman of the Fed."

12. Robert Rubin had been an arbitrage specialist at Goldman, in the same circles as convicted junk bond king Michael Milken. His profited based on speculating whether mergers went through, and Rubin's team had had a brush with Milken-linked insider trading scandal.

13. Massive roll-up in farm country. Monsanto bought DeKalb Genetics, Delta & Pine Land. Cargill bought Azko Salt and pieces of Continental Grain Inc. ConAgra bought Knott’s Berry Farm Foods, Gilroy Foods, Hester Industries, and Signature Foods.

Catastrophe for farmers.

14. Clinton's antitrust chief, Joel Klein, didn't bother to show up at a field hearing in Montana about ag consolidation.

When Obama walked around Iowa badmouthing Clinton to farmers, it worked for a reason. Not because he was compelling, but because the Clinton's were hated.

15. Clinton signed the Telecommunications Act of 1996, which he touted as "truly revolutionary legislation," Clear Channel grew from 40 radio stations to 1,240. The bill included Section 230, which set the stage for Big Tech.

16. Larry Summers, smug and proud, in 1998, loved American monopolies.

"Whether it is AIG in insurance, McDonald's in fast-food, Walmart in retailing, Microsoft in software, Harvard University in education, CNN in television news—the leading enterprises are American."

17. Dems embraced, "big is good." From the White House CEA: "Large size is not the same as monopoly power. For example, an ice cream vendor at the beach on a hot day probably has more market power than many multi-billion-dollar companies in competitive industries."

18. Clinton was worse than Reagan. The guardrails came off.

"During the 12 years of the Reagan and Bush administrations, there were 85,064 mergers valued at $3.5 trillion. Under just seven years of Clinton, there were 166,310 deals valued at $9.8 trillion."

19. Corruption...

"In 1996, Thomson Corporation bought West Publishing, creating a monopoly in digital access to court opinions and legal publishing; the owner of West had given a half a million dollars to the Democratic Party and personally lobbied Clinton to allow the deal."

20. All of this was a result of intellectual confusion, a collapse of the anti-monopoly philosophy. Nader didn't mean to unleash this, many Dems were well-meaning. But they had stopped seeing power, and then corruption became normalized. That's why old Dems are out of touch.

21. The 1980s/1990s were similar to the 1920s, with the new Jim Crow being less formal and done through economics.

In the 1990s, the man overseeing a financial bubble was not Herbert Hoover.

It was Bill Clinton. I'm a Democrat. But this is our party.

prospect.org/culture/books/…

22. Many people were there and saw it happen.

https://twitter.com/Chris_arnade/status/1186628930893176833

23. Now see, I wrote a book. It's all in there. This chapter is about Clinton. But there are two chapters before about how Reagan facilitated the merger boom of the 1980s.

Our problems came through both parties. Both. That is crystal clear.

https://twitter.com/potatoportato/status/1186627015987945473