The Democratic Party, as we have known it for the past 70 years, is now in its last days.
Yes, the House Republicans may raise the debt ceiling for a mix of spending cuts and revenue raisers. Yes, Barack Obama may win the 2012 presidential contest. Yes, bureaucrats and judges will continue to impose new and costly regulations on the economy.
But it doesn't matter. The long-term trends are almost all bad news for the left wing of the party.
This week's fight over raising the federal debt limit exposes a key weakness in the warfare-welfare state that has bestowed power onto the Democratic Party: Without an ever-growing share of the economy, it dies. Every vital element of the Democrats' coalition -- unions, government workers, government contractors, "entitlement" consumers -- requires constant increases in payments, grants and consulting contracts. Without those payments, they don't sign checks to re-elect Democrats.
Like it or not, Obama is not the new FDR, but the new Gorbachev: a man forced to preside over the demise of a political system he desperately wants to save.
Democrat champions in the punditocracy confidently predict that the future of the world's oldest political party is bright. But in fact, the coalition that is the modern Democratic Party is doomed. Every pillar upholding its heavy roof is crumbling.
The Democratic and Republican parties are structurally different.
The Democrats are a coalition, forged in the New Deal, of diverse interests that do not get along well. Imagine the deer-hunting union member sitting down with the vegetarian college professor and the lesbian lawyer and you will begin to see the trouble party leaders have holding the horde together. So far, money and government preferences have been essential. It is largely a party of unions, government workers and retirees, "green" industries, "entitlement" payees, professors, teachers and social-change activists -- all of whom require government payments in one form or another. The only major element of the Democratic base that doesn't receive government payments is the professional class (lawyers, engineers, stock brokers and so on). These high-earners amount to less than 5% of the population and are not reliable Democrat donors.
On the other hand, the Republicans are a consensus party. Activists and leaders fight like hell -- leading Democrats to periodically predict the Republicans' demise -- only to settle on some principle that is then adopted by the majority. Tax cuts and preemptive invasions were once battlegrounds, now they are cornerstones. Significantly, very few of its supporters receive government payments. Yes, defense firms, farmers and small-business owners get contracts, subsidies or loans. Yet the overwhelming majority of Republicans pay more than they receive. They want to pay less, not get more.
The exception is retirees, who want their Social Security and Medicare while sometimes voting Republican. Since this group is large and reliably votes in large numbers, its entitlements will never be severely trimmed in the foreseeable future. But that fact actually spells trouble for the Democrats. The only way to pay retirees is to 1) raise taxes, 2) borrow more or 3) cut funding to other members of the entitlement class. As I explain below, options one and two are essentially off the table. Option three is a nightmare for Democrats and, if not today then very soon, a political reality.
This crisis comes at a very bad time for Democrats. Their coalition is either dying off or going broke.
Unions. Private sector union membership has declined from 52% of the American workforce in the 1950s to 7% today. As large-scale manufacturing and the Fortune 500 shed jobs, the prospect for increasing unionization rates diminishes. There is no likely scenario in which private-sector unions grow by significant amount; indeed they will likely continue their slow, steady march into the mists of history.
As for government-worker unions, they too are declining. Wisconsin, Ohio, Indiana and soon Michigan are ending their privileges. Indiana ended automatic payroll deductions for government unions, shrinking their numbers by more than half. Wisconsin and Ohio expect similar reductions in the percentage of state workers paying union dues. Union benefits are also shrinking for government workers. Over time, much of the upper-Midwest will tip red -- making it even harder for Democrats to win national elections.
Federal workers. The civilian government workforce numbers some 2.3 million. More than 750,000 federal workers are eligible to retire in the next three years. While Obama has increased salaries to senior federal employees and increased the federal payroll at the lower end, that trend has slowed. Given the federal government's $14.5 trillion debt and the failing economy it is unlikely that federal government will be able to replace more than 10% of those workers. No matter who is in office, the federal workforce will shrink by 2014. Without more federal workers in the pipeline, the Democratic base shrinks a little more every year.
While federal retirees will remain a potent political force for decades, their health care and pension costs will make it costly to hire their replacements.
Media. Nearly every newspaper with a circulation greater than 100,000 readers has laid off workers. The Washington Post is losing money for the first time in its history; the New York Times is borrowing money from Mexican billionaires. The Seattle Post-Intelligencer has stopped printing, the Miami Herald is up for sale, and so on. Newspaper staffs will continue to contract. Broadcast television news is also making painful cuts; cable-news employment is flat or shrinking.
The only bright spot for liberals looking for journalism jobs is National Public Radio, whose audience has doubled to 14 million in the past eight years. Still no one expects its budget to grow by more than a few percentage points ahead of inflation.
While media is not a real source of money or votes, it is a major source of influence. That, too, is declining. The media market is fragmenting, as bloggers, talk radio and free weeklies gain mind share.
Professors. New state universities and community colleges provided thousands of jobs to baby-boomer scholars in the 1960s and 1970s. Now, expansion plans have been put on hold and new state-run colleges are a rarity. Faculty retirements do not automatically mean new hires; administrators often pocket the savings. The working professoriate will continue to shrink.
What's more, think tanks, the Internet and talk radio offer new ways for students to challenge their professors -- reducing their influence. Again, liberal mindshare is slowing shrinking.
Teachers. Like other unions, teachers unions see flat or declining membership rolls. Budget cuts and changing demographics mean that their numbers will probably decline, not rise. The mayor of Providence, R.I., and the governor of New Jersey have successfully taken on teachers' unions and beaten them. These fights will continue and spread to other jurisdictions. Tight state budgets and the teachers' outsized pay and benefits almost guarantee that the teachers' unions will spend the next few years fighting desperate rear-guard battles.
Trial Lawyers. A major source of campaign funds for Democrats, these would-be social engineers are losing too. Texas and other states have enacted tort reforms that make it much harder for them to win windfalls. Federal tort reform would doom them.
Piecemeal tort reforms enacted under the GOP-led Congress in the Bush years remain in force and cut into the potential earnings of trial lawyers.
In today's troubled economy, not even a Democrat-run Congress would sanction a billion dollar cigarette-style settlement to enrich their trial-lawyer friends. Meanwhile, the U.S. Supreme Court is continuing to trim the ability of lawyers to bring "mass torts" (class actions involving millions of plaintiffs), as the recent Walmart case illustrates.
While multi-million-dollar lawsuits will continue until Congress enacts serious tort reform, the rate of growth seems to be slowing.
Environmentalists. The economy has sharply reduced public support for environmental groups, and public giving to green groups has declined with the economy. Lawsuits and government grants are now their main means of support. Tort reforms constrain their ability to cover their budgets through lawsuits while government agencies and private foundations have generally not increased grant-making enough to cover the difference. The most successful environmental groups, like the NRDC, simply sue the federal government seeking tougher regulations, win attorneys fees paid out at rates much higher than public-interest lawyers actually earn in friendly settlements, and pocket the difference. In today's budget environment, it is hard to imagine that this cozy arrangement continues for much longer.
State Governments. California is on the edge of bankruptcy. New York skirts the abyss with budget tricks. Illinois and other Democratic strongholds have more will than wallet; even if they succeed is pushing through unpopular tax hikes, they will still have to trim the rate of projected spending increases. Debt service crowds out more and more of state-government budgets. Democrat-dominated cities and counties are no better off. Overall, high-tax states are losing high-income taxpayers while public housing, unemployment payments and other state aid discourages the jobless from finding work in other states. This downward spiral of falling tax revenue and climbing entitlements forces lawmakers to make painful cuts. That, too, will shrink the Democratic Party voting base.
Porn Industry. Usually overlooked by analysts, this lucrative industry is a small but important source of campaign cash for Democrats. But the Internet is gutting it. XXX theatres, a fixture of the 1970s are long gone, and the DVD side of the business is dying too. As a 2009 Conde Nast Portfolio magazine article shows, YouPorn.com and other porn sites now offer hours of video content online for free, squeezing Larry Flint's Hustler, Hugh Hefner's Playboy and their many print rivals. The underground cultural force of these publications is shrinking with their revenues. While porn is here to stay, the Internet has empowered anyone to put up a website and collect revenue from ads or pay-per-view -- underpricing the Goliaths that write campaign checks. As for Democrats, organizing tens of thousands of small-business porn stars will prove a difficult and low-margin proposition.
Abortion Services. Abortionists are essentially government contractors, receiving billions from federal and state governments to provide "contraceptives." Some of that money is recycled into campaign cash. The Pro-Kan Do PAC, funded by a Kansas abortionist, helped elect five state-wide office holders in 2006.
But abortion demand seems to have peaked. The population is aging, on average, and younger people appear less likely to use such services. Polls show support for abortion among women of child-bearing age began to slowly drop from 2000 onward. For more than a decade, state and federal governments have imposed restrictions on minors receiving abortions without adult approval -- reducing demand by teenage girls for abortions, according to a study by University of Alabama professor Michael New.
Planned Parenthood's image is now tarnished. Young journalists with hidden cameras have caught Planned Parenthood workers seeming to agree to illegal procedures, making even centrist lawmakers wonder if government grants are being properly administered. The GOP-led House of Representatives opposes sending billions to Planned Parenthood. Cash-strapped state governments are also trimming payments to the nation's largest abortion provider. In Minnesota alone, Planned Parenthood has been forced to close almost half of its clinics. As revenue falls, abortion providers will have fewer dollars to donate to Democrats.
The Population. Those who fondly remember FDR are largely disappearing. The Great Society crowd, now entering retirement, is next. Meanwhile, the Reagan youth is entering its 40s, when most American adults become politically active.
With its traditional funding drying up and its core constituencies fading away, the Democrat Party of 2020 will look very different. It will either be smaller or much more centrist. Without federal money to spread, the Democrat Party will have to reinvent itself. It will. The world's oldest political party knows how to survive.
And it will look back at 2011 as its high point, the year before the tide ran out.
Richard Miniter, a Forbes columnist, is the author of Mastermind: the many faces of 9-11 architect Khalid Shaikh Mohammed (Sentinel, 2011).
Yes, the House Republicans may raise the debt ceiling for a mix of spending cuts and revenue raisers. Yes, Barack Obama may win the 2012 presidential contest. Yes, bureaucrats and judges will continue to impose new and costly regulations on the economy.
But it doesn't matter. The long-term trends are almost all bad news for the left wing of the party.
This week's fight over raising the federal debt limit exposes a key weakness in the warfare-welfare state that has bestowed power onto the Democratic Party: Without an ever-growing share of the economy, it dies. Every vital element of the Democrats' coalition -- unions, government workers, government contractors, "entitlement" consumers -- requires constant increases in payments, grants and consulting contracts. Without those payments, they don't sign checks to re-elect Democrats.
Like it or not, Obama is not the new FDR, but the new Gorbachev: a man forced to preside over the demise of a political system he desperately wants to save.
Democrat champions in the punditocracy confidently predict that the future of the world's oldest political party is bright. But in fact, the coalition that is the modern Democratic Party is doomed. Every pillar upholding its heavy roof is crumbling.
The Democratic and Republican parties are structurally different.
The Democrats are a coalition, forged in the New Deal, of diverse interests that do not get along well. Imagine the deer-hunting union member sitting down with the vegetarian college professor and the lesbian lawyer and you will begin to see the trouble party leaders have holding the horde together. So far, money and government preferences have been essential. It is largely a party of unions, government workers and retirees, "green" industries, "entitlement" payees, professors, teachers and social-change activists -- all of whom require government payments in one form or another. The only major element of the Democratic base that doesn't receive government payments is the professional class (lawyers, engineers, stock brokers and so on). These high-earners amount to less than 5% of the population and are not reliable Democrat donors.
On the other hand, the Republicans are a consensus party. Activists and leaders fight like hell -- leading Democrats to periodically predict the Republicans' demise -- only to settle on some principle that is then adopted by the majority. Tax cuts and preemptive invasions were once battlegrounds, now they are cornerstones. Significantly, very few of its supporters receive government payments. Yes, defense firms, farmers and small-business owners get contracts, subsidies or loans. Yet the overwhelming majority of Republicans pay more than they receive. They want to pay less, not get more.
The exception is retirees, who want their Social Security and Medicare while sometimes voting Republican. Since this group is large and reliably votes in large numbers, its entitlements will never be severely trimmed in the foreseeable future. But that fact actually spells trouble for the Democrats. The only way to pay retirees is to 1) raise taxes, 2) borrow more or 3) cut funding to other members of the entitlement class. As I explain below, options one and two are essentially off the table. Option three is a nightmare for Democrats and, if not today then very soon, a political reality.
This crisis comes at a very bad time for Democrats. Their coalition is either dying off or going broke.
Unions. Private sector union membership has declined from 52% of the American workforce in the 1950s to 7% today. As large-scale manufacturing and the Fortune 500 shed jobs, the prospect for increasing unionization rates diminishes. There is no likely scenario in which private-sector unions grow by significant amount; indeed they will likely continue their slow, steady march into the mists of history.
As for government-worker unions, they too are declining. Wisconsin, Ohio, Indiana and soon Michigan are ending their privileges. Indiana ended automatic payroll deductions for government unions, shrinking their numbers by more than half. Wisconsin and Ohio expect similar reductions in the percentage of state workers paying union dues. Union benefits are also shrinking for government workers. Over time, much of the upper-Midwest will tip red -- making it even harder for Democrats to win national elections.
Federal workers. The civilian government workforce numbers some 2.3 million. More than 750,000 federal workers are eligible to retire in the next three years. While Obama has increased salaries to senior federal employees and increased the federal payroll at the lower end, that trend has slowed. Given the federal government's $14.5 trillion debt and the failing economy it is unlikely that federal government will be able to replace more than 10% of those workers. No matter who is in office, the federal workforce will shrink by 2014. Without more federal workers in the pipeline, the Democratic base shrinks a little more every year.
While federal retirees will remain a potent political force for decades, their health care and pension costs will make it costly to hire their replacements.
Media. Nearly every newspaper with a circulation greater than 100,000 readers has laid off workers. The Washington Post is losing money for the first time in its history; the New York Times is borrowing money from Mexican billionaires. The Seattle Post-Intelligencer has stopped printing, the Miami Herald is up for sale, and so on. Newspaper staffs will continue to contract. Broadcast television news is also making painful cuts; cable-news employment is flat or shrinking.
The only bright spot for liberals looking for journalism jobs is National Public Radio, whose audience has doubled to 14 million in the past eight years. Still no one expects its budget to grow by more than a few percentage points ahead of inflation.
While media is not a real source of money or votes, it is a major source of influence. That, too, is declining. The media market is fragmenting, as bloggers, talk radio and free weeklies gain mind share.
Professors. New state universities and community colleges provided thousands of jobs to baby-boomer scholars in the 1960s and 1970s. Now, expansion plans have been put on hold and new state-run colleges are a rarity. Faculty retirements do not automatically mean new hires; administrators often pocket the savings. The working professoriate will continue to shrink.
What's more, think tanks, the Internet and talk radio offer new ways for students to challenge their professors -- reducing their influence. Again, liberal mindshare is slowing shrinking.
Teachers. Like other unions, teachers unions see flat or declining membership rolls. Budget cuts and changing demographics mean that their numbers will probably decline, not rise. The mayor of Providence, R.I., and the governor of New Jersey have successfully taken on teachers' unions and beaten them. These fights will continue and spread to other jurisdictions. Tight state budgets and the teachers' outsized pay and benefits almost guarantee that the teachers' unions will spend the next few years fighting desperate rear-guard battles.
Trial Lawyers. A major source of campaign funds for Democrats, these would-be social engineers are losing too. Texas and other states have enacted tort reforms that make it much harder for them to win windfalls. Federal tort reform would doom them.
Piecemeal tort reforms enacted under the GOP-led Congress in the Bush years remain in force and cut into the potential earnings of trial lawyers.
In today's troubled economy, not even a Democrat-run Congress would sanction a billion dollar cigarette-style settlement to enrich their trial-lawyer friends. Meanwhile, the U.S. Supreme Court is continuing to trim the ability of lawyers to bring "mass torts" (class actions involving millions of plaintiffs), as the recent Walmart case illustrates.
While multi-million-dollar lawsuits will continue until Congress enacts serious tort reform, the rate of growth seems to be slowing.
Environmentalists. The economy has sharply reduced public support for environmental groups, and public giving to green groups has declined with the economy. Lawsuits and government grants are now their main means of support. Tort reforms constrain their ability to cover their budgets through lawsuits while government agencies and private foundations have generally not increased grant-making enough to cover the difference. The most successful environmental groups, like the NRDC, simply sue the federal government seeking tougher regulations, win attorneys fees paid out at rates much higher than public-interest lawyers actually earn in friendly settlements, and pocket the difference. In today's budget environment, it is hard to imagine that this cozy arrangement continues for much longer.
State Governments. California is on the edge of bankruptcy. New York skirts the abyss with budget tricks. Illinois and other Democratic strongholds have more will than wallet; even if they succeed is pushing through unpopular tax hikes, they will still have to trim the rate of projected spending increases. Debt service crowds out more and more of state-government budgets. Democrat-dominated cities and counties are no better off. Overall, high-tax states are losing high-income taxpayers while public housing, unemployment payments and other state aid discourages the jobless from finding work in other states. This downward spiral of falling tax revenue and climbing entitlements forces lawmakers to make painful cuts. That, too, will shrink the Democratic Party voting base.
Porn Industry. Usually overlooked by analysts, this lucrative industry is a small but important source of campaign cash for Democrats. But the Internet is gutting it. XXX theatres, a fixture of the 1970s are long gone, and the DVD side of the business is dying too. As a 2009 Conde Nast Portfolio magazine article shows, YouPorn.com and other porn sites now offer hours of video content online for free, squeezing Larry Flint's Hustler, Hugh Hefner's Playboy and their many print rivals. The underground cultural force of these publications is shrinking with their revenues. While porn is here to stay, the Internet has empowered anyone to put up a website and collect revenue from ads or pay-per-view -- underpricing the Goliaths that write campaign checks. As for Democrats, organizing tens of thousands of small-business porn stars will prove a difficult and low-margin proposition.
Abortion Services. Abortionists are essentially government contractors, receiving billions from federal and state governments to provide "contraceptives." Some of that money is recycled into campaign cash. The Pro-Kan Do PAC, funded by a Kansas abortionist, helped elect five state-wide office holders in 2006.
But abortion demand seems to have peaked. The population is aging, on average, and younger people appear less likely to use such services. Polls show support for abortion among women of child-bearing age began to slowly drop from 2000 onward. For more than a decade, state and federal governments have imposed restrictions on minors receiving abortions without adult approval -- reducing demand by teenage girls for abortions, according to a study by University of Alabama professor Michael New.
Planned Parenthood's image is now tarnished. Young journalists with hidden cameras have caught Planned Parenthood workers seeming to agree to illegal procedures, making even centrist lawmakers wonder if government grants are being properly administered. The GOP-led House of Representatives opposes sending billions to Planned Parenthood. Cash-strapped state governments are also trimming payments to the nation's largest abortion provider. In Minnesota alone, Planned Parenthood has been forced to close almost half of its clinics. As revenue falls, abortion providers will have fewer dollars to donate to Democrats.
The Population. Those who fondly remember FDR are largely disappearing. The Great Society crowd, now entering retirement, is next. Meanwhile, the Reagan youth is entering its 40s, when most American adults become politically active.
With its traditional funding drying up and its core constituencies fading away, the Democrat Party of 2020 will look very different. It will either be smaller or much more centrist. Without federal money to spread, the Democrat Party will have to reinvent itself. It will. The world's oldest political party knows how to survive.
And it will look back at 2011 as its high point, the year before the tide ran out.
Richard Miniter, a Forbes columnist, is the author of Mastermind: the many faces of 9-11 architect Khalid Shaikh Mohammed (Sentinel, 2011).
