The Reich Stuff

The Labor Secretary thinks that attacking corporate welfare will revive the Democrats. But so far he hasn’t been able to convince his party or president

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Early in the spring, the Economic Policy Institute, Washington’s most consistent source of progressive policy ideas, held a fundraising roast in honor of one of its founders, Labor Secretary Robert Reich. Hosted by Molly Ivins, and featuring such stalwart wits as Barney Frank and John Kenneth Galbraith, the toasts occasionally rose above the root canal standard that such events bring to mind, but it proved painful nevertheless.

The hopes that had once animated the people in the room for a progressive, intellectually animated administration personified by Reich and others like him had died a long time ago. Reich, the lonely, not-quite-resurgent liberal, was still in office, as were Donna Shalala and Laura D’Andrea Tyson, but the thrill was gone. Washington was once again a Republican town, and nobody cared what a bunch of labor leaders and liberal intellectuals thought about anything.

This is unfortunate for a number of reasons, but a strong one is that Reich, more than anyone else in the administration, holds the key to Clinton’s re-election.

The administration’s lone liberal holdout, Reich has continued to dance with the girl that brung him. He fought hard for Clinton’s promised investment package in the first administration budget–and lost. He went to the mat for a significant rise in the minimum wage–and lost. Most significantly, he floated the idea of moving the welfare debate from picking on single mothers to attacking “aid to dependent corporations” — and was swatted down before he even had a chance to lose.

Aside from being a genuine wit and an eloquent policy wonk, Reich speaks the language of class. OK, so he rarely uses the word proletariat, and even seems to have trouble with the word union. Nevertheless, his division of the American people into an “underclass,” an “overclass,” and an “anxious class” unmasks the fiction that “we” are all in this together.

“We’ve got to stop pointing fingers at each other,” complains Clinton, “so that we can join hands.” But to speak of joining hands with the likes of Gingrich, a newly far-right-leaning Bob Dole, and the rest of the Republican Congress is to saw off most of what remains of the Democratic Party and send it out to sea.

What this administration desperately needs to do is to change the subject. Fighting school lunch cuts rallies the faithful but does not reach into the anxieties of the “anxious class.” Neither do slightly less draconian welfare rules, or barely less regressive tax cuts.

In April, the president’s advisers hinted that Clinton was at last ready to change the subject at a speech he gave before the American Society of Newspaper Editors in Dallas, where Gingrich and others were also to appear. The president, it was promised, would define his administration–and hence, his re-election campaign–in the Reichian terms of education and training.

Instead, Clinton rejected the idea at the last minute and gave a speech patterned entirely on Gingrich’s “Contract.” The president took a Chinese-menu approach to the Contract, accepting a few ideas from column A while taking polite issue with the direction of column B. It was as if he were planning to run for re-election on the slogan “Not Quite as Venal as Newt.”

Clinton could move the debate off those hot-button issues that lead Americans to turn to mean-spirited charlatans like Newt by picking up on Reich’s suggestion–made immediately after the November election without any clearance from the White House–that Congress go after corporate welfare.

Ideologically, the idea appeals to analysts across the board, including the right-wing libertarians at the Cato Institute, the self-conscious centrists at the Democratic Leadership Council, and the wishy-washy liberals at the Center for Budget and Policy Priorities. And these subsidies and tax breaks cost us anywhere from $53-$87 billion a year, depending on whether you believe the Progressive Policy Institute or the Cato Institute.

When asked why the White House refuses to embrace Reich’s idea, administration sources explain that the notion of going after corporate welfare is great “in the abstract,” but the particulars always get reduced to “this administration is raising taxes again.” This fear was exactly the reason the administration refused to consider a single-payer health care policy, and that decision turned out to be a disaster.

The impression one gets from discussions with White House staff is that Clinton and his closest advisers have great affection for Reich and just wish they lived in the kind of world where Reichian economics might be practicable. But really, gentlemen, let’s be adults about this. A senior White House official explained to me at dinner recently that of the three serious social democratic leaders elected in the West in the past dozen years or so, French President Francois Mitterrand, British Prime Minister James Callaghan, and Bill Clinton, only Clinton managed to avoid an all-out assault by the global market elites on his policies. This is, of course, because Clinton tailored his policies to accommodate those markets. But would it have been any better, the adviser asked, if Clinton had fought them and lost?

Still, Clinton, or more precisely, Harold Ickes, his de facto campaign manager, may ultimately decide that Reich’s populist, class-tinged rhetoric is the president’s only hope for winning re-election. Clinton himself is clearly leaning in the opposite direction, but this is a man who could win the America’s Cup for his ability to sail with prevailing political winds. Might focusing on corporate welfare work? Well, it would attack the deficit in a serious fashion; it would define Clinton as a fighter for real people: and it would cast Republicans as defenders of the privileged and powerful.

But maybe the more important question is this: Would a return to a populist economic election strategy have any implications for the way Clinton would govern in a second term? The answer to that is almost certainly not. And not merely because Clinton has no stomach for making enemies or for upsetting the Washington establishment. Just as important is the way he and his advisers have defined the problem in the first place. Treasury Secretary Robert Rubin (a Goldman Sachs alum), the driving political and intellectual force behind the administration’s economic policies, is not a man even to countenance such discussion except in the strictly political sense of feeding some red meat to Greenberg, Carville, Begala, and the other politicos.

The real danger of campaigning on an insincere policy would not simply be that those who believed Clinton the first time around would feel even stupider. But that this time, the alienation of squeezed workers and would-be Democrats will be further translated into nihilistic, anti-political rage. The right will continue to stoke the fires of self-pity and paranoia as long as Democrats fail to present people with a better alternative.

Promising to fight, only to switch once elected, is a surefire formula for the kind of backlash that threatens not merely Democrats, but democracy.

Journalist Eric Alterman is Mother Jones’ Washington, D.C. correspondent.


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