In this extract from an essay that originally appeared in the January-February 2007 edition of New Left Review, Robert Brenner reads the 2006 US mid-term Democrat victory against the rightward structural shift in the American polity. Robert Brenner is the author of many vital books on global economics including: The Boom and the Bubble, Merchants and Revolution, and The Economics of Global Turbulence.
The 2006 Elections and the Rightward Shift
How should the Democrats’ 2006 recapture of Congress be interpreted in the context of the broader trends in American politics over the last decades? In what follows, I will examine the development of the two parties against the background of underlying shifts in the balance of class forces in America, to read the conjuncture of 2006 against the deeper structural movements of the American polity—from the labour struggles of the 1930s and construction of the New Deal Democrats, through the Great Society reforms of the postwar boom, to the political paradigms of the capitalist offensive with the onset of the long downturn. Within this framework, I will argue that the rise of the Republican right, building from bases in an expanding, non-unionized South, has introduced a new dynamic into US politics that aims to push the pro-corporate agenda beyond anything even Reagan had contemplated.
I. THE DEMOCRATS' VICTORY
The results themselves have already received much scrutiny. Broadly speaking, the basis for the Democrats’ victory in the 2006 mid-terms lay in swings of 4–6 per cent in their favour among nearly every category of the electorate, plus a highly significant 14 per cent swing among Latinos.  This enabled the Democrats to increase their House delegation from 201 to 233 seats, with the Republicans dropping from 232 to 202. In the Senate, the DP won six new seats, to move from 45 to 51 (including two independents), while GOP seats fell from 55 to 49.
Though some have hailed a new thrust toward social reform,  it is generally acknowledged that the vote represented a repudiation of the Bush Administration’s record rather than a surge of positive support for the Democrats. Throughout October 2006, American TV screens were dominated by images of increasing mayhem and communal strife in Mesopotamia, with sixteen intelligence agencies reporting that the war was fuelling terrorism, not reducing it. In addition, corruption exposés and sex scandals laid bare the hypocrisy of the Republican-fundamentalist charade; Katrina remained a running sore; ‘homeland security’, like Iraq reconstruction, was sold to the highest bidder—against a background of poor jobs performance, real-wage stagnation, and dwindling pensions and health insurance. But it is of course America’s failure in Iraq that has made this such an exceptional electoral conjuncture. 
Since 9/11, Karl Rove’s strategy has been to portray first Afghanistan and then Iraq as the central arenas in the ‘war on terror’, in order to win the popular support the Bush Administration needed for the implementation of its pro-business agenda, which could not have prevailed electorally on its own. Rove was successful in 2002 and 2004, when worry about national security outweighed mounting opposition to the war. The swing votes of married women with children, the so-called ‘security moms’, had favoured the Republicans by, respectively, 53 and 56 per cent. But by 2006, the moms were supporting the Democrats by a 12-point margin, 50 per cent to 38 per cent. Fifty-seven per cent of Americans (against 35 per cent) now felt that the Iraq war had failed to make the country more secure. Herein lies the nub of the 2006 election. 
Nevertheless, the Republicans have held their own to a remarkable extent. Their base turned out in force, with white evangelicals increasing their share of the total vote from 23 to 24 per cent, while the figure for those attending church at least once a week rose from 41 to 45 per cent, albeit on a significantly smaller overall turnout.  In their southern heartland the Republicans retained all their House seats save for two in the Miami area—which in socio-political terms barely counts as the South—and one in North Carolina, where former pro-football star Heath Shuler ousted John Taylor.  More serious was the narrow defeat of Virginia Senator George Allen, a party leader and standard-bearer of the right, by a Reagan-era Navy Secretary, James Webb; but since the seat was lost by such a slender margin, following an unusually gaffe-prone campaign, the broader significance for the Republicans is moot. Overall, Rove must be comforted by the degree to which the Republicans retained their popular following, despite the debacle of Iraq and with the Administration having forced through a raft of blatantly pro-business legislation.  In 2000 Bush ran as a ‘compassionate conservative’, and the Republicans won 48 per cent of the House total popular vote. By 2006, compassion had been entirely abandoned, yet the Republicans still garnered 46 per cent. In 2000, 36 per cent of those voting had described themselves as Republicans; in 2006, 35 per cent still did. 
Passive beneficiaries of the fallout from Iraq, the Democrats had run a national campaign without a discernible programme—and this entirely by design.  Their strategy, under the direction of Rahm Emanuel, head of the party’s Congressional Campaign Committee, was to field hand-picked centrist and conservative candidates in the most marginal districts, focusing entirely on the Bush Administration’s failings.  As a result, their newly elected members of Congress will largely serve to strengthen the right wing of the party, which longs for nothing more than a return to the glory years of Bill Clinton, when balanced budgets and neoliberalism were the order of the day, Lincoln’s Bedroom was always occupied and triangulation was the highest principle.
As much as anyone, Emanuel exemplifies today’s Democratic Party and is likely to be among those setting its future direction. A top political operative under Clinton, he has played a leading role in the ‘modernizing’ Democratic Leadership Council, formed in 1984 to adapt the Party to the Reagan era. The DLC-New Democrats’ aim is to expand their access to business, to the white vote and to the South—the assumption being that traditional black and working-class Democrat constituencies will have nowhere else to go. This means support for stepped-up military spending and US imperial ventures, advocacy of tax breaks and other pro-business policies, and the termination of any remaining socially redistributive commitments to the labour movement and black organizations. The DLC now have sixty representatives in the House, over a quarter of the Democrats’ total roll. In addition, the Party’s ultra-conservative Blue Dog caucus now has 44 representatives, up by seven since 2004. Formed in 1994 by right-wing congressional Democrats, particularly—but not solely—from the South, to counter what they saw as a left-wing Party majority, the group lean to conservatism not just on ‘social issues’ like abortion and gun control, but also on economic policy. ‘Pro-growth’ and committed to ‘fiscal responsibility’, many Blue Dogs voted in favour of the Bush Administration’s most socially regressive measures. On the eight major pieces of legislation that divided the Democrat and Republican majorities in the 2004–5 session of Congress, 45 per cent of Blue Dog votes backed the Republicans. 
In the wake of the 2006 mid-terms, the victorious DP conservatives have been flexing their muscles. As Arkansas representative Mike Ross announced: ‘Republicans lost their seats not to liberals but to Blue Dog Democrats . . . We’ll have a lot to say about what passes and what doesn’t.’ Tennessee representative John Tanner has stated: ‘We increased our market share by going where the market was, to moderate, even Republican, districts . . . If we’re going to hold and consolidate that, we have to understand the reality that the face of the Democratic Caucus has changed from where it was in the late 80s and early 90s.’ Naturally this is welcome news to the House Republican leadership. 
II. THE RIGHTWARD TRAJECTORY
The Democrats’ electoral-legislative strategy and likely future trajectory make manifest the transformation of the American polity over the past half-century. From the hegemony of liberalism, in which the Democrats made the running and to which the Republicans had to adapt, this has shifted to an ascendancy of the right, in which the Republicans have been the driving force, and with respect to which the Democrats have been obliged to remake themselves. This shift was itself the expression of an underlying evolution in the balance of class forces and the pattern of capital accumulation. This had been shaped, first, by an unprecedented explosion of working-class power in the 1930s, followed by a quarter-century of prosperity accompanied by the decline of labour. The onset of profitability problems from the 1960s then made for long-term economic stagnation, paralleled by an unending offensive of capital that led ultimately to Clintonomics, and then to the hard-right Bush Administration. To this progression I now turn.
Rise, persistence and collapse of liberalism, 1932–80
Against the background of the Great Depression and Hoover’s initial calamitous response, it was the great upsurge of industrial militancy across manufacturing in the mid-30s that created the transformations in working-class political consciousness and organization that were the basis for the rise and reproduction of American liberal reformism.  It was this explosion of mass direct action outside the electoral-legislative arena that constituted the indispensable precondition for the popular gains of the New Deal. Industrial unions were established in the face of determined employer resistance, and under conditions of increasing political radicalization. Thus the newly-established United Auto Workers initially refused to support the Democratic ticket and, at their founding convention in 1936, called for the formation of independent farmer–labour parties. During this period, such parties flourished at local and state level across the country. In 1934, the Democrats’ congressional landslide in the mid-term elections had already been understood as the expression of an ascending left. Working-class militancy now made for sufficient pressure to oblige the Roosevelt Administration, which had been dragging its feet, to pass its centrepiece reform legislation: the 1935 Social Security Act and Wagner Act, recognizing trade union rights.
But having ‘trusted in Roosevelt’, the CIO unions experienced a devastating defeat at Little Steel in May 1937, and then a further demoralization during the ‘second great depression’ of 1937–38. A new layer of full-time CIO leaders also played a significant part in the domestication of worker militancy, helping to repress the wave of wildcat and sit-down strikes that broke out across industry in the winter and spring of 1937, and failing to press home a potential victory against the Chrysler corporation. The Communist Party, which had played a decisive role in organizing the mid-30s CIO upsurge, now followed Moscow’s line in committing itself to a Popular Front that included not only John Lewis’s CIO and the Democratic Party, but also the Roosevelt Administration. Meanwhile, increasingly separated from the daily activity of the shop floor and dependent on the union itself for their livelihood, an emergent CIO officialdom reacted to the fall-off in mass struggles by turning to the institutionalization of union–employer relations, through state-sanctioned collective bargaining and regulation. This entailed a full commitment to the electoral road and to the Democratic Party, as a vehicle through which to win further reforms via the legislative process. 
The support of organized labour brought not only a huge increase in the Democrats’ electoral base but a huge fillip to their electioneering efforts, as the CIO unions provided funds and foot soldiers for elections, as well as lobbying pressure. But it also set in motion a longer-term process that undermined not only the power of the unions but also the potential of the Party as a vehicle for social redistribution. By failing to enhance their own strength, independent of the DP, through standing up to the corporations, the trade unions increasingly forfeited their leverage over the Party, yet were still left to rely upon it to produce the goods for their members. Consequently, Democrat leaders could count on the unions’ support while delivering ever less in return. With labour’s backing taken for granted, the DP leadership was free to manoeuvre with the forces on their right, notably the Party’s Southern wing; this would set inevitable limits on any reform programme. In doing so Democrat leaders, like trade union officials, served only to further the disintegration of organized labour—their most powerful social base. A comparable process would be repeated with the black, women’s and Latino movements, all of which originated in independent direct action in the streets and workplaces, throwing up militant new organizations; but whose emergent middle-class leaderships ultimately came to rest, alongside labour officialdom, inside the DP cocoon.
World War II brought big gains in membership for the trade unions, at the price of further emasculation and bureaucratization. Government patronage, in return for a no-strike pledge, raised the prestige of labour’s ‘new men of power’ to hitherto inconceivable heights—but in the context of a triumphant politico-economic revival of the corporations, based on record-breaking profits, and the subordination of labour to government and business in the tripartite administration of the war effort. A powerful postwar strike wave in 1946 won minimal gains, dashing union hopes for a price-control system that would allow the labour movement to offer a form of social-democratic leadership to the working class as a whole. The resulting demoralization was expressed in a sharp drop in working-class turnout for the 1946 mid-term elections, which issued in a swing to the Republicans. The red-baiting assault on labour that followed would culminate in the 1947 Taft–Hartley Act, placing decisive curbs on union power. 
More damaging in the long term was the failure to unionize the South through Operation Dixie. For this campaign to have succeeded, the labour leadership would have had to unleash mass social struggles, comparable to those of the 1930s, against the entrenched southern elite; but they had no intention of risking this sort of confrontation. This failure would later permit this low-wage, low-tax region to become the setting for the first wave of US corporate globalization, undermining the strength of labour in the rest of the economy. The labour movement would see a brief revival during the Korean War and after. But by the end of the 1950s, feeling the first pangs of international competition from emerging European and Japanese industry, the corporations dealt the unions a series of devastating blows in autos, electrical-goods and steel. The rate of private-sector unionization peaked in 1953 at 36 per cent; but this fell to 31 per cent in 1963, 27 per cent in 1973 and would decline continuously thereafter. 
Paradoxically it was at this point, from the early 1960s, with the trade-union movement greatly weakened, that the extension of the postwar boom brought a new lease of life to projects for (mild, state-managed) social redistribution, and to the ‘political liberalism’ of the Democratic Party in general. The expanding US economy allowed corporate profits, take-home pay and social spending to rise together. Within this context, labour and other social-reform-minded forces within the Party moved to outline the ‘Great Society’ programme—which the Republicans, too, would find themselves obliged to support. Even during the Truman and Eisenhower administrations, these forces had played an important role in making social-security benefits broadly available, albeit financed by an ultra-regressive payroll tax on workers. The Democrats’ reform aspirations were always limited by the priority they gave to capitalist profits, both in terms of ensuring the general process of capital accumulation, and in attracting business funding for themselves. This entailed a programme of encouraging foreign direct investment in Europe and elsewhere, pushing for free trade, and patronizing the newly emerging Euromarkets as a base for mobile capital—all of which would further weaken American labour’s leverage. It also meant retaining the Taft–Hartley Act, despite ever-larger Democratic congressional majorities won in 1958 and 1964, based on increasing urban and working-class populations.
It required the rise of the black civil rights movement, and especially its extension to the North, to induce the Democrats to turn once more towards serious social reform. The demand for jobs was central in the 1963 March on Washington. Black rebellions in New York, Philadelphia and Los Angeles in 1964–65 extended the movement’s goals beyond political equality to economic well-being. Against the backdrop of Vietnam, and expanding Third World struggles, the Johnson Administration launched not only landmark civil-rights and voter legislation but also, very consciously, the greatest expansion of the welfare state since Roosevelt. The panoply of ‘Great Society’ reforms included Medicaid, Medicare, the Food Stamp programme, Supplemental Security Income, the Elementary and Secondary Education Act, and Head Start. So hegemonic was this programme in the early 70s that for Nixon—in the context of Black Power and mass anti-war movements—it was electoral common sense to step it up. A substantial increase in social security benefits, expanding unionization for federal government workers, a proposed Guaranteed Annual Wage (rejected by the Democrats), creation of the Legal Services Corporation (Legal Aid), the Environmental Protection Agency, the Consumer Product Safety Commission, the Occupational Safety and Health Administration and (under Gerald Ford) initiation of the Earned Income Tax Credit scheme, were the results. Apparently permanent prosperity, assured by federal deficits, made for what seemed to be an open-ended programme of social reform, whichever party was in power. As Nixon put it, ‘We’re all Keynesians now.’
Onset of the downturn
But this high tide of social reform was very brief. From the mid-60s the rate of return on capital began to fall, and continued to do so over the next decade and a half, reducing the pre-tax rate of return for non-financial corporations by 35 per cent between 1965 and 1979; and introducing, from 1973, an extended epoch of stagnation and crisis of even greater length than the postwar boom. In response, employers unleashed an intensifying assault on labour organization and working-class living standards that has not abated to this day. The ‘Great Society’ increases in social spending and business regulation had been premised upon a regime of high profits, economic expansion, and the taming of working-class and other social rebellions. The profitability crisis and employers’ offensive left DP liberals politically disarmed, obliged by their own principles to subordinate all else to the recovery of the rate of return. The collapse of the social reform project was the inevitable outcome.
In the early 1960s trade-union leaders had stood passively by as American industry, increasingly challenged by rivals in Germany and Japan, sought to revive competitiveness by pushing through what was then termed ‘a new hard line’. The growth of manufacturing wages for the period 1960–69 was half that of 1948–59, despite the continued economic expansion. Under rising pressure from their members, labour leaders did organize a series of strikes later in the 60s; but they made a more systematic—and successful—effort to crush the series of rank-and-file revolts that broke out in trucking, auto, telephones, mining and elsewhere. Union officials now had to face the wrath of corporations determined to intensify work rates and reduce wage growth, whatever the risk of strike action, so as to counter falling profits and increasing international competition. Between 1973 and 1979, days lost in strike action fell by about a quarter, and private-sector unionization rates dropped to 22 per cent. Real wages in the private sector had ceased to rise by 1972; they would now fall for the remainder of the 1970s and 80s, and much of the 90s.
In the wake of Watergate—and in the midst of a recession that would turn out to be the worst since the 1930s—the Democrats picked up 49 seats in the 1974 mid-term elections, to secure their biggest House majority since the New Deal. In 1976 Carter won the Presidency, by a narrow margin. But in the space of barely half a decade, the meaning of Democratic control of government had been completely transformed and the prospects for further ‘Great Society’ reform extinguished. In part, this was because the new congressional intake was of a different political stripe to its predecessors, who had first won office in the halcyon days of boom-era liberalism. The incoming 1970s ‘moderates’ had won their seats due to the revulsion against Nixon in relatively affluent suburbs, hitherto Republican; their highest priority was to hold down spending so as to reduce taxation. But the underlying reason for the Democrats’ precipitous retreat from a reform agenda was that, with the economy gone sour, the corporations on a rampage, and the unions wilting under fire, they found themselves operating in a transformed socio-political environment.
This essay can be read in its entirety at New Left Review.