How Democrats Killed Their Populist Soul by Matt Stoller in The Atlantic complements The Unconnected with a spot-on analysis that includes considerable information that was new to me. It’s also very long, so I post some excerpts below. I italicize points that I found particularly interesting.

The subtitle is: “In the 1970s, a new wave of post-Watergate liberals stopped fighting monopoly power. The result is an increasingly dangerous political system.”

…The result today is a paradox. At the same time that the nation has achieved perhaps the most tolerant culture in U.S. history, the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century. This is not what the Watergate Babies intended when they dethroned Patman as chairman of the Banking Committee. But it helped lead them down that path. The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump….

In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy. …

There are hints of this tradition today, on both sides of the aisle. Patman was the first congressman to propose auditing the Federal Reserve, which was an outgrowth of his investigation of Mellon. Auditing the Fed is now supported by conservatives like Ted Cruz and populists like Bernie Sanders. Senator Warren’s attempt to re-impose Glass-Steagall is a basic Brandeisian notion. New Dealers understood this not as regulation, but decentralization, a shrinking of the financial sector to prevent conflicts of interest. In the commercial sphere, Patman had a trust-busting agenda, not a big-government one….

Packaged together, these measures epitomized the idea that citizens must be able to govern themselves through their own community structures,…

The essence of populist politics is that political and economic freedom are deeply intertwined—that real democracy requires not just an opportunity to vote but an opportunity to compete in an open marketplace. This was the kind of politics that the Watergate Babies accidentally overthrew….

In 1968, there was a great debate about the future of the Democratic Party. Robert F. Kennedy sought to win the primary with a “black-blue” coalition of black “have-nots” and working-class whites. He sought continuity in the policies of protecting independent farmers, shopkeepers, and workers, all of which formed the heart of the New Deal—yet he also wanted to end the war in Vietnam and expand racial justice.

But Kennedy’s strategy to merge these ideas disappeared when he was assassinated. …

With the help of strategist Fred Dutton, Democrats forged a new coalition. By quietly cutting back the influence of unions, Dutton sought to eject the white working class from the Democratic Party, which he saw as “a major redoubt of traditional Americanism and of the antinegro, antiyouth vote.” The future, he argued, lay in a coalition of African Americans, feminists, and affluent, young, college-educated whites. In 1972, George McGovern would win the Democratic nomination with this very coalition, and many of the Watergate Babies entering office just three years later gleaned their first experiences in politics on his campaign….

This cynicism allowed the traditional Republican notion of overregulation to be introduced into a liberal-leaning group. …

On the Democratic Party’s left, a series of thinkers agreed with key elements of the arguments made by Jensen, Stigler, and Bork. The prominent left-wing economist John Kenneth Galbraith argued that big business—or “the planning system” as he called it—could in fact be a form of virtuous socialism. Their view of political economics was exactly the opposite of Patman’s and the other populists. Rather than distribute power, they actively sought to concentrate it. …His theory was called “countervailing power.” Big business was balanced by those subject to it: big government and big labor. …

In an influential book, The Zero-Sum Society, Thurow proposed that all government and business activities were simply zero-sum contests over resources and incomes, ignoring the arguments of New Dealers that concentration was a political problem and led to tyranny. In his analysis, anti-monopoly policy, especially in the face of corporate problems was anachronistic and harmful. Thurow essentially reframed Bork’s ideas for a Democratic audience….

Henceforth, the economic leadership of the two parties would increasingly argue not over whether concentrations of wealth were threats to democracy or to the economy, but over whether concentrations of wealth would be centrally directed through the public sector or managed through the private sector—a big-government redistributionist party versus a small-government libertarian party. … And in doing so, America’s fundamental political vision transformed: from protecting citizen sovereignty to maximizing consumer welfare….

In an early sign of where it would lead, President Jimmy Carter deregulated the trucking, banking, and airline industries, … Democrats then popularized supply-side economics in a Thurow-influenced and Democrat-authored 1980 Joint Economic Committee report, “Plugging in the Supply Side.”

In 1982, journalist Randall Rothenberg noted the emergence of this new statist viewpoint of economic power within the Democratic Party with an Esquire cover story, “The Neoliberal Club.”…

… the very idea of competition policy, of inserting democracy into the economy, made no sense to them. Previously, voters had expected politicians to do something about everything from the price of milk to mortgage rates. Now, neoliberals expressed public power through financial markets. …

They sought an “industrial policy”—a never-quite-defined planning mechanism—to direct resources in the economy through a cooperative three-way dialogue among labor, business, and government….

This mix of central planning and private monopoly may sound odd, but it is the intellectual underpinning of both the Affordable Care Act and the Dodd-Frank Wall Street Reform Act….

Faith in technocrats, the revolving door, and privatization all flowed from a belief in this basic structure to deliver social justice….

In their first five years, the 1975 class of Democrats categorically realigned American politics, ridding their party of its traditional commitments. They released monopoly power by relaxing antitrust laws, eliminating rules against financial concentration, and lifting price regulations….

The success of the Watergate Baby worldview over the old populists can be seen in what did not happen in response to this quiet yet extraordinarily radical revolution: There was no fight to block Reagan’s antitrust restructuring. …

Clinton Democrats eventually came to reflect Dutton’s political formulation, more diverse and less reliant on the white working class. … Clinton stripped antitrust out of the Democratic platform; it was the first time a reference to monopoly power was not in the platform since 1880. Globalization, deregulation, and balanced budgets would animate Clinton’s political economy, with high-tech and finance leading the way….

At the end of his presidency, Clinton explained his success. … Bork and Thurow, in other words, were right.

In terms of concentrations of power in the private sector, however, it was more a completion of what Reagan did than a repudiation of it….

Corporate concentration also occurred in less-examined ways, like through the Supreme Court and defense procurement…. the administration restructured the defense industry, shrinking the number of prime defense contractors from 107 to five. The new defense-industrial base, now concentrated in the hands of a few executives, stopped subsidizing key industries. The electronics industry was soon offshored….

But who could argue? The concentration of media and telecommunications companies happened concurrent with an investment boom into the newest beacon of progress: the internet. …

Despite this prosperity, in 2000, the American people didn’t reward the Democrats with majorities in Congress or an Oval Office victory. In particular, the rural parts of the country in the South, which had been a traditional area of Democratic strength up until the 1970s, were strongly opposed to this new Democratic Party. And white working-class people, whom Dutton had dismissed, did not perceive the benefits of the “greatest economy ever.” …

And it turns out, according to a McKinsey study, that a disproportionately large amount of the productivity gains from the remarkable computerization of the economy were the result of just one company: Walmart…The gains of the 1990s, it turns out, were not structural, but illusory. …

By 2008, the ideas that took hold in the 1970s had been Democratic orthodoxy for two generations. “Left-wing” meant opposing war, supporting social tolerance, advocating environmentalism, and accepting corporatism and big finance while also seeking redistribution via taxes. The Obama administration has been ideologically consistent with the Watergate Babies’ rejection of populism…. Culturally, the United States is a far more tolerant and open society….

In the last seven years, another massive merger boom has occurred, with concentrations accruing in the hospital, airline, telecommunications, and technology industries. …

But what intellectuals like Thurow, Galbraith, Greenspan, Bork, and so forth didn’t foresee was political disillusionment on a vast scale…. Despite their best efforts, U.S. institutions seem as out-of-control and ungovernable as they did when the 1975 class came into office….

Trump’s emergence would not be a surprise to someone like Patman, or to most New Dealers….Americans feel a lack of control: They are at the mercy of distant forces, their livelihoods dependent on the arbitrary whims of power…. Having yielded to monopolies in business, the nation must now face the un-American threat to democracy Patman warned they would sow….

Americans, sullen and unmoored from community structures, are turning to rage, apathy, protest, and tribalism, like white supremacy….

Ending the threat of authoritarianism is not a left-wing or right-wing problem, and the solution does not reside in building a bigger or a smaller government. …

Fortunately, Americans are beginning to remember what was once lost. Senator Elizabeth Warren often sounds like she’s channeling Wright Patman. Senator Bernie Sanders stirred enormous enthusiasm in a younger generation more in touch with their populist souls. Republicans even debated putting antitrust back in their party platform. President Obama has begun talking about the problem of monopolies. Renata Hesse, the head of the government’s antitrust division, recently gave a blistering speech repudiating Bork’s corporatist ideas. And none other than Hillary Clinton, in an October 3, 2016, speech on renewing antitrust vigor, noted that Trump, while a unique figure, also represents the “broader trends” of big business picking on the little guy.

Restoring America’s anti-monopoly traditions does not mean rejecting what the Watergate Babies accomplished. It means merging their understanding of a multicultural democratic society with Brandeis’s vision of an “industrial democracy.” The United States must place democracy at the heart of its commercial sphere once again. That means competition policy, in force, all the time, at every level. The prevailing culture must be re-geared, so that the republic may be born anew.