With a research focus on 20th century political and urban history in the US, Lily Geismer has been grappling with answers to a long-sought after question: why is inequality so hard for the Democratic Party to effectively combat?
TSL sat down with the Claremont McKenna College history professor to discuss the course the Democrats took in the 1990s, and how it informed policies that some marginalized groups still feel the impacts of today.
With her latest book “Left Behind: The Democrats’ Failed Attempt to Solve Inequality,” Geismer hopes readers take away that the party should not seek to implement policies that will win elections, but rather ones that will have fewer negative repercussions down the road.
This conversation has been edited for brevity and clarity.
TSL: The political narrative over the past several decades has framed the Republican Party as the architect of the United States’ economic crisis. Your book, however, argues that the Democratic Party has played a significant role in creating conditions of inequality through advocacy for market-based solutions. How do you understand the Democratic Party’s ability to evade criticism?
Lily Geismer: I think it’s common, especially amongst people who align with the left, to look to Republicans and either make fun of Trump or just sort of blame a lot of problems on the right. I think it’s important to acknowledge that there are many ways that the rise of conservatism has shaped what the Democratic Party has done and what’s been possible, but I think in a large part, market-based solutions to issues around inequality have come less as a reaction and more as the result of a particular ideology.
TSL: Why is it important to draw attention to the ideology behind such policies?
LG: I think one of the things that many people say is that it doesn’t matter if the intent was to try to use the market to do good if the result created problems of inequality. But I actually think it’s really important to understand intent, because it’s crucial to understand the consequences of those policies in order to come up with other types of solutions.
TSL: Your book looks specifically at policies implemented during the 1990s. To what extent should the Clinton administration be implicated in the current inequality crisis?
LG: One thing that’s really important is that you can’t blame everything on one administration or one policy. So everything isn’t the fault of George W. Bush or the fault of Trump. And you can’t look to one administration to solve every problem either. But I do think that there are really important things that came into fruition during the 1990s and were implemented by Clinton that had long term effects on inequality. I think an issue is that when we think about the 1990s, it’s often seen as this decade of prosperity.
When Clinton came into office, the Democrats had this attitude of pro-economic growth, especially growing the sectors of tech, finance, trade and real estate. There was a belief that those kinds of market-oriented, privatized solutions could address larger social problems. And some of the key policies that the Clinton administration implemented following this belief have had long-term effects on inequality,
TSL: Can you provide examples of such policies?
LG: A prominent example is the famous welfare-to-work policies which removed a critical source of cash-based assistance from many people. The idea was that long-term support would come from getting a job rather than being dependent on the government and that it would get more people in the workforce, which would grow the larger economy. But I think that the move away from cash-based assistance put many people in a much more vulnerable position as a result.
A second example is programs around public housing. The Clinton administration had this idea of ending public housing as we know it by getting rid of big public housing developments that were kind of iconic in the 1980s. This program was called HOPE VI, and it’s still in place, but what it did was clear out a lot of these big developments, especially in major cities, and replace them with a combination of both market-rate and subsidized housing. In doing so, it removed a lot of people from public housing and made it really difficult to move back in. A critical element of the program was an attempt to encourage homeownership amongst moderate low-income people, especially people of color, putting them at the whims of the growing mortgage industry. There was also this element of worthiness that played into access. For instance, if you or one of your relatives had been convicted of a crime, you couldn’t move back into housing.
A third piece of legislation that’s really important to think about was big deregulation of the banking industry, which famously culminated with the repeal of the Glass-Steagall Act in 1999. One of the things the Clinton administration tried to do was incorporate more people into the banking sector. But at the same time, banking itself was changing rapidly. And so deregulation took away critical aspects of the social safety net and opened up many more people to predation by private companies. We really see the effects of this converging in the financial crisis of 2007-2008. So while I think the Clinton administration isn’t solely to blame for the 2008 financial crisis, a lot of these policies laid the groundwork for what happened.
TSL: You spoke earlier about the importance of understanding intent. What was the Clinton administration’s intent behind these policies? Was it to address inequality or was it to cater towards a certain demographic of wealthy liberals who would benefit from privatization?
LG: It was kind of to do both, and banking deregulation is an example of this. The idea behind deregulation was that, when you have too much regulation, it stifles competition and doesn’t give as many options to consumers. If you can have more mortgages out there, for example, more people can buy homes, and in the United States, homeownership has been seen as a foothold into gaining economic wealth. And so the intent wasn’t only to cater to wealthy people, but that is definitely a critical component of it. You’re helping companies and helping them help poor people.
Another key program I look at in the book is the New Markets Initiative, which was implemented towards the end of Clinton’s second term and encouraged big companies to open stores in poor and low-income communities. So in some ways that’s helping companies, but the idea was that it would help poor people as well. The issue with asking companies to do what was traditionally the responsibility of the government is that companies don’t have the same kind of obligations. So when they were not making profits, they left many communities that were dependent.
TSL: Public trust in the government has declined over the past several decades. Biden’s trillion-dollar American Rescue Plan, for instance, has received very little attention or praise. If government solutions are more effective at combating inequality than market-based solutions, as your book argues, how should politicians and policymakers gain support from an electorate that continues to become increasingly wary of the government’s ability to enact change?
LG: This is a critical point. I think one of the things the pandemic showed was the need for government solutions, and one of the things I argue for is not relying heavily on the private sector to solve social problems.
I think the question of how to rebuild trust in government actually has to come from beyond the frameworks of government and from other kinds of movements. The labor movement, for instance, has the power to push at the corporate level but also at the institutional level. Looking to social movements has traditionally been a powerful force on the Democratic Party and on government more broadly in pushing for change. As a historian, when we look at where major social changes happen, it often happens from the outside and from the bottom up. And so that’s a place that I think actually could help to restore both a sense of common good and collective action, while also forcing certain kinds of government action.
TSL: Looking forward, what takeaways would you like readers to walk away with after reading your book? What changes would you like policymakers to consider?
PG: My hope is that both sides will realize the consequences of relying heavily on the market. I think the idea has become so powerful that it’s become almost unconscious. I also want people to think hard about the trajectory of many of these programs, both in terms of the political economy, but also the ways in which they’ve affected the Democratic Party itself. I think there’s been a lack of faith amongst a lot of people, not only in the government, but also the Democratic Party. I think it’s important to focus on what kinds of policies can lead to a stable coalition for the Democrats rather than just win elections, and how to use that coalition to create better political and social programs that can help more people in need.