Economics and politics - comment and analysis
10. February 2016 I Will Denayer I Countries and Regions, General, General Politics

Can Bernie Sanders win the presidency?

The caucus season started in Iowa last week. Yesterday it was New Hampshire’s turn. Nevada and South Carolina are next and on Super Tuesday (March 1) caucuses or primaries are being held in nine states simultaneously. The ways in which people vote in the caucuses differ from state to state. In Iowa, people assemble in school buildings and fire stations and the like. There were long waiting lines. The rooms were too small. In one precinct in Iowa, the 2012 caucus counted 30 people. Last week there were 634. They all have to be in the same room – pro Sanders to the left, pro Clinton to the right. In six Iowan precincts, the results ended up undecided. In order to decide the win a coin was tossed. Six times out of six, Clinton won (see here). I am not a complot theorist. This is mere fact. The chance of tossing 6 coins exactly 6 times by chance is 1.56%, meaning that there is a 99.44% chance that this outcome will not occur by chance. Since there is no ballot, there is no paper trail so recounts are impossible.

The system is New Hampshire is also unsatisfactory. The GOP passed new voter ID laws in the state. Voters need to produce a special government-issued ID or otherwise they need to sign an affidavit and their picture will be taken before they can cast a vote. Of course many people do not like this. The GOP says that the law is necessary to prevent voter fraud, although between 2000 and 2015 only one case of voter impersonation was found (ironically the son of a GOP legislator). The real reason lies in changing demographics. The state may still be overwhelmingly white and historically GOP, but the democratic base is growing while the GOP base is shrinking (see here). So, let’s make it harder to vote. But the GOP failed. A record number of people voted last evening. In some precincts waiting lines were two miles long.

Sanders’ problem is the same as Corbyn’s in the UK: both have huge popular support, but the establishment of the Democratic party cannot wait to see Sanders fail, just as with Labour in the UK. Until even a couple of months ago, it did not matter much. But Sanders’ appeal keeps growing. According to a poll from last Friday, Sanders cut Clinton’s more than 30% national lead down to 2% – within the margin of error (see here). According to Robert Reich, the American class is revolting (see here). It is easy to see why. The middle class saw its real wages stagnate for the last thirty years. Little has to happen for people to fall into poverty. Millions of Americans lost their savings, their jobs, even their homes because of the financial crisis of 2008-2009. Two-thirds of Americans are living from pay check to pay check. Most could lose their jobs at any time. Many are part of a burgeoning “on-demand” workforce – employed as needed, paid whatever they can get (see here). For the first time in history, life spans of middle-class whites are dropping. Social security safety nets are full of holes. Most people who lose their jobs do not qualify for unemployment allowance. All of this, while the 1% and especially the 0.1% have never been so rich. People understand that the system is rigged. There is no doubt about it. In 2013, Gilens and Page, two political scientists from Princeton looked at 1.799 decisions that Congress made over the last twenty years. Their conclusion was that the preferences of the average American have a near zero, statistically non-significant impact upon policy (see here).

To Reich, who is former secretary of Labour under Bill Clinton and teaches public policy in Berkeley, this election is not about detailed policy proposals, it is about changing the parameters of what is politically feasible and ending the choke hold of big money on the political system (see here). Reich sees Sanders as a political activist who tells it as it is, who lived by his convictions for fifty years and who does not accept donations from Wall Street. Sanders’ program includes raising minimum wages, introduce universal health care and affordable (or free) education. He plans to re-regulate the financial sector. Clinton differs with him on each of these points. Reich recalls that Obama created widespread enthusiasm with his ‘Yes, we can’ campaign. Now, Reich says, it sounds like ‘We’re not even trying.’ The Clinton campaign wants people to vote for ‘Hillary’ in order to keep Trump and the socialist Sanders out and because it is time for a woman to become president. But what is Clinton standing for?

Clinton opposes reinstating a bank break-up law known as the Glass-Steagall Act. It will be recalled that it was Bill Clinton who repealed Glass-Steagall in 1999. The Glass-Steagall Act of 1933 had the purpose of making a repeat of the 1929 crash impossible (see here). The Act made it impossible for banks to take in deposits from savers and making loans and to lend to speculators or pump up share prices themselves. But this is not how Wall Street saw it. They wanted deposits, savings and mortgages for the casino finance to produce obscene profits. When the system eventually collapses because balance sheets are full of junk, non-performing loans and worthless derivatives it is the duty of the public to bail out the vultures. Goldman Sachs CEO Blankfein said that “Politicians should naturally reside in a state of more or less constant accommodation with Wall Street.” To him, Sanders is a danger, a dysfunction, an anomaly. Clinton agrees. Thankfully, the American people do not agree (see here).

The second main issue is Clinton’s ties with the military. As secretary of State, Clinton was among the most hawkish of Obama’s advisors (see here and here). Even this is playing to her disadvantage now. Many democrat voters are tired of hearing about the need for endless wars to keep America safe. Clinton is not just seen as the candidate of Wall Street, she is also perceived as the candidate of the military industrial complex. Her vote in 2003 in favour of the invasion of Iraq is not forgotten. The horrendous consequences of this invasion are there for everyone to see. Clinton strongly pushed for the bombing of Tripoli and ‘regime change’ in Libya, which was a clear violation of international law. Libya is now a stronghold of IS and other fundamentalists. She also promoted regime change in Syria. The war destabilised the whole Middle East. It displaced more than ten millions Syrians. The obsession to get rid of Assad let to the active support for ‘moderate’ fundamentalists, whose actions and ideology differ in reality in nothing from any of the other fundamentalists who are killing civilians (see here).

Clinton portrays herself ‘a progressive who gets things done,’ but is she? Cohen shows that as secretary of state she globally promoted fracking in cooperation with Chevron and other oil companies, she praised the Trans-Pacific Partnership (TPP) and recruited countries into the deal (see here). When Wall Street, Big Pharma and other corporate interests paid her $230.000 for a speech, what did Hillary Clinton think it was for (see here)? As Sanders mentioned, ‘these speeches cannot be that good.’ Between 2001 and 2015, the Clintons were paid $153 million for their speeches. Politico reported that soon after her speeches to the CEOs of Goldman Sachs, Clinton offered a message declaring that the banker-bashing so popular within both political parties was unproductive and indeed foolish and that re-regulating the financial sector had to be an incremental and cooperative process and not the upset that Sanders advocates (see here and here).

Health care is always a major political issue in American elections. Hillary Clinton’s record speaks against her. In 1993, president Clinton chose his wife to lead his administration’s healthcare initiative. Cohen analysed what followed. Clinton’s proposal kept the big for-profit insurers, the middle men between the public and the health professionals who turn the US health system into the most dysfunctional and the most expensive in the developed world (see here for a short international comparison) in the heart of the system (see here). As Cohen writes, her ‘Managed Competition’ scheme was so complex and bureaucratic that it never got anywhere, except most probably where Clinton wanted it to be: Hillary Clinton’s proposal killed off a single-payer Medicare for All bill, a truly progressive measure that was backed by 100 members of Congress (with a Democratic majority), by labour unions, consumers unions and grassroots movements (see here). Instead, Sanders favours a simple single payer system that is much closer to European systems. It would basically provide health care to every American, although, there are, admittedly, budget problems (see here).

The New Hampshire result speaks for America. Sanders’ decision to target Clinton’s donations from Wall Street appears to have been very effective. His calls for free tuition at public colleges and universities resonate well as does his plan for universal healthcare insurance, cost notwithstanding. But New Hampshire’s results are a poor predictor. The democrats in the state are more liberal than democrats nationally. It is encouraging that Sanders appears to have won substantial backing from New Hampshire’s independent voters. The big test is South Carolina. Sanders cannot win the nomination if he cannot win in the South.