As the Democrats take Congress

The Democrats made full use of the situation in Iraq in their successful campaign for Senate and House seats in the mid-term elections. Although George Bush will stay on until the end of his presidency in January 2009, his job will be directly affected by the Democrats’ victory.

Things got serious for Republican party campaigners in the mid-term elections in the United States. “Everything our party has achieved in the past six years is at risk of being lost in just one day,” wrote Sam Brownback, the Republican senator for Kansas. “Will we turn over control to the Democrats who want to raise taxes across the board, weaken our ability to fight an effective war on terror, and launch impeachment hearings [against the president]?”

In the second electoral district of Indiana, automated canvassing systems inundated potential voters with phone calls; these were funded by lobbies outside the state, determined to secure the Republican representative’s re-election.

Some appeals were slightly more personal. In an email message addressed to someone assumed to be a US Republican supporter (but in fact a Parisian with quite different political loyalties), President George Bush wrote to me: “Dear Serge, in 2004, you were part of a historic nationwide organisation that propelled my campaign to victory. Together we delivered a clear message to the American people about the need to keep our nation safe and secure, the need to keep our taxes low to continue creating jobs. This year I am asking for your help once more . . . Without [a Republican majority in Congress] you can bet that our political opponents will do all they can to roll back important tools like the Patriot Act, to raise your taxes, and stop me from appointing conservative judges to the Federal bench.”

The militant tone of the email reflected the basic assumption made by Karl Rove, the White House adviser on polls and strategy. Turnout at mid-term elections is always low (last time, in 2002, it was only 39%) so it is more important to mobilise the party faithful than to persuade floating voters.

Patrick Ruffini, the Republican campaign director, said in September: “In 2004, because of your tireless efforts, 62 million Americans voted for President Bush, a record. And in the last midterm elections of 2002, 77 million Americans voted. If we can bring identified Republicans who don’t normally vote in a year like 2006 to the polls, Republicans will defy the media pundits, make history, and keep the House and the Senate.” This was a daring wager. Things had been going so badly for the White House that even the journalist Bob Woodward, who lauded Bush in two previous books, had turned against him. With a bloody quagmire in Iraq, an under-age sex scandal centring on a Republican representative, Mark Foley, known for his defence of traditional values, and the growing impression that life has been getting harder, it was an uphill battle to mobilise Bush’s supporters.

There was no shortage of financial and technical resources. Candidates in each district or state where the result seemed uncertain could identify the potential electors they needed to canvas as a priority by comparing data on age, type of housing, faith and consumption patterns. There was nothing new about this approach. In 1995 President Bill Clinton’s poll guru convinced him that he must concentrate on people who were keen on hiking, camping and golf, so he avoided sailing during his summer vacation.

Micro-targeting the voters

The system has been perfected since. Micro-targeting techniques allow parties to profile typical sympathisers. In Michigan the Republicans identified 42 different categories, after collating masses of data on such topics as magazine subscriptions, donations to charity, private school attendance and even snow-scooter ownership (which generally coincides with support for Bush, so the campaign staff were making sure all scooter owners realised that the Democratic party’s “environmental extremism” was likely to prevent the construction of their mountain trails).

Campaign staff might write to voters, send emails or go door-to-door to put the message across. This micro-targeting of voters meant that churchgoing white Christian women in rural areas received letters drawing attention to the threat that homosexual marriage would be legalised (1).

By 7 November the main parties had spent $500m on just the congressional elections, not counting funds invested by the candidates themselves. Micro-targeting did not supplant more direct techniques. A Republican advertisement growled about the war on terrorism: “Vote as if your life depends on it. Because it does.” The Democrats fought back on this issue, claiming that al-Qaida “is coming back to get us because of the failed policies of George Bush”.

The overall malaise probably explained why dozens of Democratic representatives had accepted the repeated civil liberties violations orchestrated by the White House, including the legalisation of torture (2). On 29 September the Senate unanimously approved the Pentagon’s $448bn budget (up 40% on 2001), including $70bn in additional funds for the wars in Iraq and Afghanistan.

Although the war in Iraq was a key campaign issue, it was difficult to distinguish the parties’ positions. Most Republican representatives advocated “staying the course” until full control can be handed over to the Iraqi authorities. Most of their Democratic counterparts maintained that they wanted a change of course, but refused to commit themselves to a timetable for troop withdrawals. In a comparison of the policies backed by the candidates tipped to run for the presidency in 2008, the head of the diplomatic review The National Interest wrote “compare the statements of Senator Hillary Clinton with those of Senator John McCain and you will see a nearly identical approach to world affairs” (3). Indeed it is often the right that voices the toughest criticism of Bush’s imperialist adventures (4).

In domestic policy too there has been a huge gap between the radical views promoted to the electorate, exaggerated by advertising and the internet, and the likelihood of any real break with the policies decided by the current administration. Apart from an increase in the minimum federal salary ($5.15 an hour), which has not changed since 1997, and a few cosmetic measures to combat social dumping by the giant retailer Wal-Mart, it is difficult to see what economic new deal a Democratic majority in Congress might propose. Anyway, it would still have to overcome the obstacle of a presidential veto. Here again, even a hypothetical change of direction must wait till January 2009.

Of course the US may sink into recession sooner than expected. With negative savings, rising interest rates and millions of dollars borrowed on mortgages secured by (now overestimated) house values, the property bubble, which has kept the economy buoyant, may burst. However the overall picture is not entirely gloomy. The trade deficit may reach $800bn by the end of the year (about 6% of gross domestic product), but inflation is low (2.1%) and the official unemployment figures (4.6%) steady, with sustained growth and a bearable budget deficit ($260bn or 2% of GDP) for a country at war.

What do these statistics mean in a country where class divisions are hardening? It is an enduring mystery of the US that the myth of social mobility is stronger than ever and people still believe in “rags to riches”. In 1983 57% thought they could start out in life poor and end rich. Now 80% of the population think that is the case. Yet between 1983 and 2006 the share of national income pocketed by the richest 1% almost doubled, from 9% to 16% (5).

Long-term gloom

The long-term picture is even less encouraging. Salaries now represent the smallest fraction of GDP since records have been kept. At the same time profits account for the highest share of national income in 50 years, boosting tax revenue (corporation tax alone is up by 27%) and keeping the budget deficit at a reasonable level.

The US right sees this achievement as proof that supply-side economics work, the tax cuts introduced since 2001 having boosted tax revenue. This analysis overlooks two points. The prime objective of supply-side policies was to encourage saving (for the first time since 1933 Americans are spending more than they earn). And, as The Wall Street Journal acknowledged, the surplus revenue flowing into the Treasury was “largely fuelled by wealthy individuals, who benefited from higher salaries, bonuses and stock-market gains” (6). The cause of the increase in tax revenue is simple enough: the rich are paying a little more in taxes because they are earning a great deal more.

Their hold on the benefits of economic growth, which keeps on increasing, has become a key characteristic of US society. A study by Ian Dew-Becker and Robert J Gordon of Northwestern University confirms this trend, without even taking into account capital gains. Between 1966 and 2001 the median salary in the US increased by only 11% in real terms. But the 10% of workers who are the highest-paid registered a 58% increase in income, and the curve climbed ever more steeply to reach a 121% gain for the top 1%, 256% more for the 0.1% richest and 617% more for the 0.01% most prosperous (7). Sharing is a thing of the past. The winner now takes all (8).

This was not always the case: “Historically,” wrote Clive Crook, “rising productivity has been a tide that lifted nearly all boats. For more than 20 years during the long surge of productivity growth that followed the second world war, median incomes in the United States rose as quickly as the highest incomes” (9). Yet according to the Northwestern University study, between 1966 and 2001 the richest 1% of people cornered far more of the productivity gains than did the poorest 50%. It is easy to understand why most voters do not leap for joy when they hear the latest figures for economic growth.

The Bush years have accentuated a trend already apparent under Clinton, in which deregulation of trade, relocations, immigration and increasingly feeble unions were pushing down the pay of the most poorly qualified workers. At present the US system is so heavily weighted in favour of the most fortunate that some remedies no longer have any effect. In an attempt to embarrass corporate boards that had been overgenerous towards their executives, the federal authorities demanded in 1993 that companies listed on the stock market publish the pay and bonuses of chief executive officers. In 1984 Congress had cancelled certain tax allowances for CEOs whose salary and “social protection” (for example, the golden parachute exit pay-off) exceeded $1m.

The measures seem to have had little effect. The average pay of the bosses of leading firms reached $10.5m in 2005, which is 369 times the average pay of their employees (comparable relationship numbers were 131 in 1993 and 36 in 1976). The obligation to publish pay figures prompted the least well paid bosses to demand as much as their more fortunate colleagues, while the $1m threshold became a symbolic lower limit for the salaries of CEOs. However, they sometimes have trouble keeping their side of the bargain. At the end of 2005 the CEO of Pfizer had accumulated $83m in retirement plans — yet under his leadership the value of the company’s shares had dropped by 37% (10).

Half of all Americans share a mere 2.5% of the nation’s wealth; the richest 10% own 70% of it (11). Among the latter are many members of Congress, often chosen to represent their party because of their ability to fund a campaign. So the display of democratic fervour every two years does little, if anything, to correct market forces. The media make little difference and for similar reasons.

Whatever the voters’ decision, the social make-up of the next Congress, like that of the last one, will be remarkably unrepresentative of the US as a whole. Out of 100 senators, 40 have assets exceeding $1m, and 123 of the 435 representatives earn that amount in just a single year. Members of Congress usually leave Capitol Hill richer than they arrived. A study has shown that no one, not even Wall Street brokers, plays the stock market as successfully as do US senators (12). This also applies to Bush’s political opponents. Major corporations such as Boeing, Wal-Mart and General Electric can adjust the balance of their political patronage in favour of the Democrats with complete peace of mind.

Translated by Harry Forster

(1) See Dan Gilgoff, “Everyone is a special interest”, US News and World Reports, New York, 25 September 2006; Caroline Daniel “Party arsenals feature duelling databases”, Financial Times, London, 13 October 2006.

(2) Twelve Democratic senators and 39 representatives voted in favour of the law, signed by Bush on 17 October, legalising arbitrary detention and interrogation of terrorism suspects.

(3) Nikolas K Gvosdev, “In foreign policy, don’t hold your breath”, International Herald Tribune, 18 October 2006.

(4) See Jeremy Brecher and Brendan Smith, “US: discord among the conservatives”, Le Monde diplomatique, English language edition, October 2006.

(5) Harpers, New York, September 2006

(6) Deborah Solomon, “Budget deficit shrinks on strong tax receipts”, The Wall Street Journal, New York, 12 October 2006.

(7) Data quoted in Clive Crook, “The height of inequality”, The Atlantic Monthly, New York, September 2006.

(8) To borrow the title of a prophetic book by Robert Frank and Philip Cook, The Winner Take-All Society, The Free Press, New York, 1995.

(9) Clive Crook, op cit.

(10) See Joann S Lublin and Scott Thurm, “Money Rules”, The Wall Street Journal, 12 October 2006.

(11) David Wessel, “US rich are still getting richer”, The Wall Street Journal, 2 March 2006.

(12) William K Tabb, “The power of the rich”, Monthly Review, July-August 2006.