What the 1990s Did to America

In 1996, a commercial law professor at Harvard decided to change her party registration from Republican to Democrat. She was then at the midpoint of a distinguished academic career, some of which had been spent at the summer conferences of the Law and Economics movement, a well-funded intellectual project driven by a core belief in the efficiency of markets. Law and Economics was only one front in the decades-long advance of a revived free-market ideology, an ideology whose moment had finally come after the political and economic crises of the 1970s. The primacy of the market would become the new American consensus, overseen by Ronald Reagan’s Republican Party.

By the mid-1990s, however, the law professor wasn’t so sure. “I was a Republican [rather than a Democrat] because I thought that those were the people who best supported markets,” she later explained, but “I think that is not true anymore.” The law professor’s name was Elizabeth Warren.

The 1970s and 1980s are usually seen as the transformative era of recent American political history. And if the 1970s saw a “great shift” in US politics—with defeat in Vietnam, oil crises, industries in decline, and liberalism unraveling—then Americans woke up in 1981 to the bright morning of a new free-market consensus. The 1990s, by contrast, are typically construed as an historical ellipsis between that era of sanguine prosperity and the upheaval of the 2000s. The ’90s were a moment of tranquility. Cold War won, business booming, history at an end.

Nothing could be further from the truth. New scholarship indicates that the end of the Cold War did not so much settle history’s debates as it did undermine the structuring framework of American politics. It allowed an era of hyper-globalization, incipient since the 1970s, to emerge fully. This so-called neoliberalism—characterized by the free flow of capital, globalization, rising inequality even within wealthy regions, and cultural cosmopolitanism—was a distinctive product of the 1990s. And because of these transformative economic changes, the 1990s also became a laboratory of populist backlash, roiling both Republican and Democratic parties and creating the conditions for the unsettled politics of the present day.

Left Behind: The Democrats’ Failed Attempt to Solve Inequality (2022) and Partisans: The Conservative Revolutionaries Who Remade American Politics in the 1990s (2022), exciting recent books by historians Lily Geismer and Nicole Hemmer, respectively, shed light on this new understanding of the 1990s as America’s pivotal decade. Taken together, these books depict circa 1989–2001 as a watershed rather than, as George F. Will once put it, a “holiday from history.”

Moreover, Elizabeth Warren’s timely party switch evokes these books’ separate central propositions: the 1990s were a new beginning for both Democrats and Republicans. It was in the ’90s that the Republican Party left postwar conservatism behind, revealing the limits of its free-market, internationalist politics (embodied by Ronald Reagan) and sowing the seeds of a 21st-century populist revolution. It was in the ’90s that liberals on the other side of the aisle embraced an elite consensus centered on market-based policies and an individualized conception of social justice as entwined with personal economic success; a worldview Geismer evocatively describes (paraphrasing Bill Clinton) as “doing well by doing good.” The Democratic Party, according to Left Behind, turned away from the state and toward the market. More than this, however, Geismer argues that the “New Democrats” of the 1990s were not dominated by the Reaganite Right but were instead ideological coarchitects of neoliberalism.

The conventional understanding of postwar conservatism is something like this: starting in the 1950s, potentially contradictory tendencies on the American right (broadly, economic libertarianism and social traditionalism) were joined together, at levels ranging from elite politicians to grassroots activists, to create postwar conservatism. (Writers at the National Review called the new conservative philosophy “fusionism.”) Certainly, this simplifies a complex history, but a crucial feature of almost all existing historical narratives is that the Reagan presidency brought this conservatism into power.

It is Hemmer’s contention that the Reagan presidency was not the dawn of free-market conservative rule but instead postwar conservatism’s late summer. In fact, postwar conservatism did not really survive the Reagan presidency. It began to fall apart soon after President Reagan left the White House because the Cold War’s end in December 1991 took away conservatism’s ideological alloy—anticommunism.

Hemmer tells the story of the post–Reagan Right partly through figures such as Patrick Buchanan and Newt Gingrich, who appear in Partisans as alternately iconoclastic, sinister, and visionary. Or, rescued from historical obscurity, take Representative Helen Chenoweth-Hage of Idaho, who praised the militia movement, discussed New World Order conspiracy theorists’ “black helicopters” in Congressional hearings, and made use of PR stunts to aggravate liberals in ways that elicit comparison to Marjorie Taylor Greene. With their combative, conspiratorial political style, all of these partisans presaged present-day populist conservatism.

Indeed, today’s currents of nativism, racial resentment, and media hysteria arguably sprung from the 1990s. When repudiating affirmative action, President Reagan had argued that racial discrimination was a problem already solved by the civil rights victories of the 1960s. (It was in typical fabulist fashion, Hemmer wryly notes, that in making such political arguments the president elided the fact he had opposed most major ’60s civil rights legislation.) Reagan’s “shallow” yet seemingly earnest belief in the merits of diversity was shared in the ’90s by Republicans such as Jack Kemp and Colin Powell. This style of colorblind conservatism was, however, largely eclipsed by a new focus on the cultural threat of immigration (Peter Brimelow’s 1995 Alien Nation is a key text) and arguments from writers such as Dinesh D’Souza about how liberal “identity politics” simultaneously re-subjugated people of color and marginalized nonelite whites.

Of course, such views were not entirely invented in the late 20th century; they had deep roots in America’s pre–Cold War Old Right. But it was modern media that crystallized the flavor and tone of these discourses that continue to rage today. An intriguing through line in Partisans is Hemmer’s view that in US politics, the style is the substance. For example, potentially contradictory tendencies in conservatism were held together in the 1980s as much by President Reagan’s narcotizing agreeableness as by the power of Cold War anticommunism. Conspiracies, culture wars, and vituperative partisanship remade politics in the ’90s, but perhaps even more determinative was the infotainment and provocation introduced by cable TV and talk radio. And as an entertaining analysis of Bill Maher’s Politically Incorrect shows, this was not something that came only—or even most influentially—from conservative media.

The 1990s were the decade in which our global world took shape, shaking the foundations of American politics.

Many Republicans who began to repudiate aspects of postwar conservatism did not immediately break with its prevailing economic orthodoxy. Nineties partisans from Newt Gingrich to Dinesh D’Souza continued to support a Reaganite agenda of tax cuts and retrenchment of social programs. It was not until Donald Trump’s 2016 campaign that conservative populists openly denounced free-market conservatives’ plans to cut, say, Social Security. Economic policy is therefore not Hemmer’s main focus.

In contrast, for Lily Geismer, economic policy is the main story of the 1990s—and this isn’t a story about peace and prosperity. While incomes did grow even for the bottom quintile of workers and nearly eight million Americans were lifted out of poverty, Geismer would have us understand that the Democratic Party’s ideological project of orienting liberalism away from the state and toward the market made lopsided, unfair economic gains inevitable. This argument builds on and dramatically expands the scope of a decade of scholarship and commentary on the modern Democratic Party.

Since the 2011 Occupy Wall Street movement, political commentators and academics alike have described the modern history of the Democratic Party with what I consider to be their “liberal betrayal narrative.” This now-familiar narrative goes roughly as follows: chastened by political setbacks and economic slowdown in the 1970s, a new generation of Democratic leaders sought to distance themselves from the big government of New Deal liberalism, while moving to accommodate the conservative movement’s free-market ideology. By the early 1990s, they were known as New Democrats.

Parts of Left Behind excavate this material, tracing the New Democrats’ evolution from the reform-minded “Watergate babies” elected to Congress in 1974 to 1980s “Atari Democrats” ensorcelled by high technology to the Democratic Leadership Council (DLC) founded in 1985. One union organizer in the mid-1980s described New Democrats as “crypto-Republicans.” Their foil, in Left Behind, is Reverend Jesse Jackson, the charismatic civil rights activist whose 1984 and 1988 presidential primary campaigns urged Democrats to embrace a multiracial “Rainbow Coalition.” Typically, critics argue that the New Democrats simply betrayed the New Deal by surrendering ideologically to the free-market Right.

Geismer, however, argues that New Democrats’ promotion of market-oriented policies was not a “defensive reaction” to Republicans. Indeed, Left Behind is at its strongest when chronicling, in exacting detail, the shortcomings of specific Clinton-era initiatives such as Housing Opportunities for People Everywhere (HOPE VI) and the Personal Responsibility and Work Opportunity Reconciliation Act (welfare reform). In Geismer’s account, the lubricious Bill Clinton emerges as not so much the Democratic Eisenhower—accommodating his party to, and sanding the radical edges off, a new consensus—but as the Democratic Reagan: shaping and even leading this new market-oriented consensus. Left Behind is a mirror image of the first histories of postwar conservatism that began to emerge (when else?) in the 1990s. Just as those histories essentially asked how we got to Reagan, historical accounts of the Democrats such as Left Behind ask the question, “How did we get to Clinton?”

Geismer identifies the Clintonian turn to the market as growing out of American liberalism’s longstanding commitment to the market, to public-private partnerships, and to technocratic expertise. This commitment harked back to the New Deal and even the Great Society more than it resembled free-market conservatism. Indeed, years ago, in The Truly Disadvantaged (1987), the sociologist William Julius Wilson quoted an antiwelfare conservative to make such a point: “The main impetus of Great Society policy … was to give the disadvantaged the income and skills they needed to function in the free market, not change the economic rules in their favor.”¹

Yet Geismer does not consistently follow through on this line of analysis. Having pointed out continuity between “old” and New Democrats, Geismer nonetheless represents Clinton’s presidency in the 1990s as essentially a departure from its antecedents (Left Behind repeatedly contrasts Clinton with President Lyndon B. Johnson). Arguably, this undersells Geismer’s own argument. Taking the point about ideological continuity, from the New Dealers onwards, seriously could lead to a fuller accounting of how the New Democrats emerged. As their genuinely ambitious plans for an industrial policy modeled after that of Japan suggest (plans that Geismer dismisses somewhat peremptorily), the first New Democrats in the 1980s were pointedly working in a liberal tradition of state-guided economic development.

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And the lines between ostensibly old and New Democrats were more blurred than we might believe. Walter Mondale’s 1984 presidential campaign, always identified as the last stand of the New Deal Democrats, convened a business advisory council to formulate plans for new public-private partnerships and broke new ground in the type of corporate fundraising most often associated with the DLC. Jesse Jackson himself, criticizing so-called “boundless liberalism,”² emphasized public-private investment and economic opportunity as the answers to conservative-inflicted inequality, especially in his second (1988) presidential campaign. Finally, there were also differences between those commonly thought of as New Democrats. The DLC, for example, was only the most successful of a number of New Democrat groups or tendencies. Its members may have shared sympathies with politicians such as Gary Hart or Michael Dukakis, but they were not part of a single project; indeed, they often found themselves opposed across regional lines in presidential primaries.

None of these complexities change the fact that the Clinton Administration visited a number of grotesqueries upon American social policy. The welfare reform of 1996 is rightly condemned. Certain Clinton aides, such as the DLC’s Bruce Reed, harbored a longstanding desire to scale back Aid to Families with Dependent Children (AFDC) and replace it with what became Temporary Assistance for Needy Families (although prominent New Democrats such as Senator Bill Bradley of New Jersey opposed welfare reform). Of course, AFDC had already been attacked by conservatives. Indeed, one of the reasons that it was less fit for purpose by the 1990s was that the Reagan administration had increased benefit phaseout rates in a way that cut almost all working recipients off of the program, thus not only immiserating poor working parents, but also providing a cynical basis for conservatives’ invidious (and racially charged) argument that AFDC was an ineffective “handout.” But President Clinton’s reform drove an increase, in the medium- to long-term, of “deep poverty” and failed to renovate a welfare system left ramshackle after Reagan-era neglect.

What the complexities of the New Democrats’ emergence do show, however, is that the party reformed rather than transformed between the 1970s and the end of the 1990s. Left Behind convincingly shows that Democrats helped shape modern American politics rather than only being overwhelmed by the Right. But, contra their critics, they were not simply betraying midcentury and postwar liberalism. Why, then, were the 1990s so pivotal for liberalism?

The answer lies in the broader global context that fundamentally altered the framework of American politics: the end of the Cold War. Though usually remembered as a political conflict, the Cold War was perhaps equally an economic force.

If Hemmer’s conservatives broke apart in the Cold War’s absence, a missing piece of the puzzle for historians of ’90s Democrats is that this absence also denuded economically interventionist liberalism of its political logic. As Gary Gerstle argues in his new survey of the neoliberal era, Cold War anticommunism, counterintuitively, legitimated the postwar liberal state. It presented liberal-capitalism-with-social-democratic-characteristics as a response to the promises of communism, and pushed political and business leaders into a sort of labor-management accord exemplified by the 1950 Treaty of Detroit.³

Moreover, the Cold War logic extended beyond the American-Soviet conflict itself. Consider, for example, that the New Democrats’ 1980s proposals for a new national industrial policy were framed as equipping the US to compete with new global rivals; “The Cold War is over,” Clinton’s New Democrat rival Paul Tsongas commented in December 1991, “Japan won.”

Geismer closes Left Behind with a call for renewing activist government to meet the challenges of the COVID-19 pandemic. And the Biden Administration has undertaken the most ambitious, far-ranging domestic agenda since the Great Society. But, crucially, it has legitimated this agenda on the basis of a new Cold War with China.

The other defining feature of the 1990s was globalization. Ironically, the US had helped create the conditions that would imperil its own economic primacy by building up the industrial economies of allies against communism, notably West Germany and Japan. The breaking down of barriers that followed the Cold War’s end allowed a globalized economy to be fully realized.

Geismer’s richly detailed discussion of microcredit, which offered New Democrats an alluring combination of individual empowerment, entrepreneurialism, and social justice, could offer a way into analyzing how US politicians in the ’90s were enmeshed in a global economy. Geismer quotes Hillary Clinton’s 1997 Microcredit Summit speech in which she identified addressing poverty in the US and poverty in the Global South as two sides of the same agenda. Despite this, Left Behind includes comparatively little about how globalization fundamentally altered the framework within which Democrats had to operate. Globalization appears in Left Behind mainly as an incidental example of New Democrats’ perfidies; Geismer details how they almost universally supported the North American Free Trade Agreement (NAFTA), a trade deal that is legitimately controversial (and already was so in the 1990s).

In a post–Cold War world, US policymakers broadly shared a belief in the benefits of economic globalization, both domestically (for American consumers) and internationally (for the political spread of liberal democracy). The 1990s saw this replace Cold War anticommunism as the structuring consensus of American politics. Partisans shows how this consensus was always unstable on the right, due to deep fissures between economic libertarianism and cultural conservatism. If we take seriously the idea of American liberalism’s ideological continuity, we can see more clearly that New Democrats in the 1990s were not so much betraying midcentury and postwar liberalism as adapting to profoundly changed conditions.

Many commentators are busy writing obituaries for neoliberalism. The COVID-19 pandemic has made well and truly clear the need to, as the Financial Times’s Rana Foroohar puts it, “remoor” the economy with homegrown, regional or local production and more resilient supply chains.⁴ The global financial crisis’s long hangover, populist revolt, and the COVID-19 pandemic have all battered the ’90s consensus.

Significantly, it is not just right-populists or members of a revived Left looking to dismantle neoliberalism, but liberals (especially in the Biden Administration) who once embraced it under different political and economic circumstances. While these are early days, it is mainstream liberals who are pushing initiatives from high-tech-manufacturing repatriation to state-guided economic development of regional hubs in long-troubled parts of the Rust Belt, from the greening of the energy sector to an expansion of the welfare state (on this last point there has been the least progress).

The 1990s were the decade in which our global world took shape, shaking the foundations of American politics. We might now be on the cusp of a similar sea change, with American policymakers, especially Democrats and the broader center-Left, beginning to craft a new industrial policy and seeking to decouple economically from China. This decoupling is accompanied by an ersatz new Cold War with China—reminding us of how an earlier era of more activist liberal government required the Cold War to legitimate and underpin it. Whether such efforts will take hold is, for now, unclear. But understanding what these efforts are designed to overturn requires returning to the pivotal years of America in the 1990s.