E.J. Dionne used his column to argue that it is not just the establishment Republicans who are facing a crisis because of the rise of Donald Trump. He argues that the establishment Democrats also face a crisis:

“Its ideology was rooted in a belief that capitalism would deliver the economic goods and could be balanced by a ‘competent public sector, providing services of quality to the citizen and social protection for those who are vulnerable.’”

This is far too generous an account. The Clinton Democrats were actively steering the economy in a direction to redistribute income upward. This was clear in a number of areas.

First, their trade policy was quite explicitly designed to put U.S. manufacturing workers in direct competition with low paid workers in the developing world, but maintaining or increasing protections for highly paid professionals like doctors and lawyers. The predicted and actual outcome of this policy is a redistribution from ordinary workers to those at the top. This effect of this policy was aggravated by the massive trade deficit that was the predictable result of the high dollar policy promoted by Robert Rubin.

They also pushed for longer and stronger patent and copyright protection both domestically and internationally in trade pacts. This meant more money for the pharmaceutical, software, and entertainment industry at the expense of the rest of society.

They pushed deregulation in the financial industry, which allowed for an explosion in the share of national income that went to the financial sector. Again, this upward redistribution came at the expense of the rest of society.

And, they effectively supported the explosion of CEO pay. Clinton pushed a transparently absurd measure to cap CEO pay. (He pushed a measure that removed the tax deductibility for non-performance related pay in excess of $1 million a year. This green-lighted huge option based packages.)

Clinton also promoted the outsourcing of government services (a.k.a. re-inventing government). This typically meant replacing relatively well-paid union workers with much lower paid contract workers. At the same time it often meant big profits for well-connected contractors, which meant that taxpayers received no benefit from the deal. The fact a Democratic president pushed this process at the national level encouraged many state and local governments to follow the same path.

 

The one truly progressive development of the 1990s came in spite of Clinton rather than because. Alan Greenspan allowed the unemployment rate to fall to far lower levels than nearly all mainstream economists thought possible. This allowed for millions of low and moderate income workers to get jobs and also allowed for tens of millions of workers to get pay increases.

However Clinton never openly weighed in on Federal Reserve Board policy and two of his most prominent appointees to the Board of Governors, Janet Yellen and Lawrence Meyers, argued against Greenspan and urged him to raise interest rates to keep the unemployment rate from falling to levels that would spur inflation. (Clinton did reappoint Greenspan twice.)

It should hardly have been a surprise to any serious person that modest ameliorative policies in the form of promoting education and training could not come close to offsetting all the structural factors Clinton altered to redistribute income upwards.

It's also worth noting that Clinton's cult of deficit reduction and balanced budgets contributed to the victory of austerity politics following the downturn. Many Clintonites absurdly argued that the prosperity of the late 1990s was due to the fact that Clinton balanced the budget and subsequently ran surpluses. Of course the reality was the exact opposite. (The unexpected boom, due to a stock bubble, lead to the surpluses.) Nonetheless, the power of this Clinton myth made it more difficult for progressives to push the case for stimulus following the collapse of the housing bubble.