I thought we'd already lost it with that long-ago appearance of the wealthy's self-negotiated "Grand Bargain" acceptance by all of Obama's troops.
It's nice to know that although most of us have been miserable economically for over a decade that the thoughtful rich are still worried that we might ask for too much.
October 06, 2014
WASHINGTON — On a summer afternoon amid the frenzy of the Democratic National Convention in Boston 10 years ago, a group of Washington business lobbyists, political operatives, and a smattering of senators gathered at one of the city’s downtown law firms to hear a plan.
Members of the group worried that, with the end of the Bill Clinton era, the Democratic Party’s centrist wing had lost its way. Over sodas, they pitched a new think tank named for Clinton’s political philosophy, Third Way.
Fast forward a decade: The philosophy, sketched out privately at the Boston office of Brown Rudnick, is now at the center of an intense struggle for the soul of the Democratic Party.
Third Way, backed by Wall Street titans, corporate money, and congressional allies, is publicly warning against divisive “soak-the-rich” politics voiced by populist Democrats. Its target: Elizabeth Warren, the Massachusetts senator whose rise to power two years ago helped galvanize Democratic grass roots against Wall Street and pushed the issue of income inequality to the forefront.
This is more than a grudge match. At stake for the Democratic Party is the support of middle-class, swing voters who decide elections.
Third Way ignited a clash in December when its leaders essentially declared war on Warren in a guest column in the editorial pages of The Wall Street Journal, warning Democrats not to follow Warren and New York Mayor Bill de Blasio “over the populist cliff.”
Many on the left were shocked, and angered. Warren’s allies saw Third Way as a proxy — being used by her enemies on Wall Street to scare off the rest of the party.
“Wall Street is extremely good at pushing anybody that is critical of them as being populist, or know-nothings,” said Ted Kaufman, who temporarily served as an appointed US senator to replace Vice President Joseph R. Biden Jr., then succeeded Warren in leading a special congressional panel that oversaw the bank bailout.
For their part, Third Way representatives bristle at the idea they are doing the bidding of Wall Street power brokers.
With the income gap growing between most of the nation’s taxpayers and the wealthiest 1 percent, the battle is over how aggressively the party’s candidates — including, potentially, Hillary Clinton — will contrast themselves with Republicans on tax and economic issues in 2016.
The philosophy set out by Third Way will be part of that conversation.
The organization publicly discloses little about its funding.
But a Globe examination of public documents and the backgrounds of its leadership offers a window into how some wealthy Wall Street and business interests — who contribute generously to Democratic candidates — have sought to tip the Democratic Party’s intellectual debate against populism.
Third Way raises just over a third of its $9.3 million annual budget from undisclosed corporations.
The remainder, the bulk of its funding, is donated by individuals, almost all of whom are members of Third Way’s board of trustees.
The group is dominated by executives from the financial industry, people who are typically the targets of the populist rhetoric of Warren, and sometimes even President Obama.
Two-thirds of its 31 trustees have held senior leadership positions in investment funds or big banks or served in some other capacity on Wall Street.
Board members include its chairman, John Vogelstein, who once led the private equity firm Warburg Pincus; vice chairman David Heller, the former global head of equity trading for Goldman Sachs; and Derek Kirkland, a managing director at Morgan Stanley.
Both Vogelstein and Heller were major financial backers of Obama, and all three contributed heavily to Senate Democrats.
Third Way’s founders dispute that they are doing Wall Street’s bidding or are trying to leave the poor behind. They also insist their financial supporters on the board of trustees do not influence the organization’s political and policy positions.
“We’re not remotely aligned with what Wall Street wants,” said Jonathan Cowan, the group’s president and cofounder.
This is certainly no Tea Party-style civil war of the sort that is fracturing parts of the Republican Party. This struggle among Democrats often plays out behind the scenes — in the White House, the corridors of Congress, and the office suites of lobbying firms in downtown Washington.
But in a decade of existence, Third Way has been able to expand its influence, hosting Vice President Joe Biden and other Democratic luminaries at its symposiums. Visitor logs show that Third Way leaders have enjoyed excellent access to the Obama White House, with at least 50 visits since 2009.
Third Way leaders are extremely sensitive to questions and criticism about their sources of funding.
The real issue, Third Way says, is that harsh populist positions and rhetoric are damaging the Democratic Party.
“It goes back to what Bill Clinton said, which is ‘You can’t love the job and hate the job creators,’ ” said Matt Bennett, Third Way’s vice president for public affairs and one of its cofounders.
“Vilification of industry isn’t helping Democrats.”
Washington home base
Third Way’s offices are just off K Street, the epicenter of Washington’s lobbying district. The space is modern and youthful, with frosted glass separating work pods and offices for the think tank’s 40 casually dressed employees. The walls can be written upon, which researchers do with colorful markers.
Much of their work squares with bread-and-butter liberal orthodoxy: gun control, gay rights, immigration, and health care reform.
“We are centrist Democrats, not centrists,” Cowan said.
Matt Bennett, Jonathan Cowan, and Jim Kessler, three of the five co-founders of Third Way. (Chris Maddaloni/Getty Images)
Their overarching emphasis is on solidifying political support among the middle class.
Where they differ from many Democrats is how they plan to appeal to the vast middle: reduce deficits and cut spending growth on such entitlements as Social Security and Medicare.
They insist on deficit reduction and entitlement cuts as conditions for key tax hikes on the wealthy.
That is a sharp contrast from many other Democrats, including Warren, who speak about taxing the wealthy as a matter of fairness and who would support raising their tax rates as stand-alone measures.
Third Way’s insistence on linking tax hikes to a grand bargain — which has been impossible to obtain in the Obama era — has a direct bearing on the wallets of the group’s wealthy funders.
Third Way denies that its wealthy donors give money only because the organization is against stand-alone tax hikes on the rich.
Rather, its leaders say it is a political blunder for Democrats to wage class warfare on the 1 percent.
It publicly issued a memo in July that said the group’s polling suggested a better message to appeal to America’s middle class: “economic growth and opportunity.”
And thus we now know (if we weren't sure before) where the need for the so-called necessary Grand Bargain arose: The Rich!
As if it could have been any other way.