Since rich people are poorer in votes than they are in dollars, you’d think that, in an election year, the ninety-nine per cent would look to politics to get back some of what they’ve lost, and that inequality would be a big issue. So far, it hasn’t been. Occupy Wall Street and its companion movements briefly spurred President Obama to become more populist in his rhetoric, but there’s no sign that Occupy is going to turn into the kind of political force that the Tea Party movement has been. There was a period during the Republican primary campaign when Romney rivals like Newt Gingrich tried to take votes from the front-runner by bashing Wall Street and private equity, but that didn’t last long, either. Politics does feel sour and contentious in ways that seem to flow from the country’s economic distress. Yet much of the ambient discontent is directed toward government—the government that kept the recession from turning into a depression. Why isn’t politics about what you’d expect it to be about?
Traditionally, class figured less in politics in America than in most other Western countries, supposedly because the United States, though more economically unequal, and rougher in tone, was more socially equal, more diverse, more democratic, and better at giving ordinary people the opportunity to rise. That’s what Alexis de Tocqueville found in the eighteen-thirties, and the argument has had staying power. It has also been wearing thin. During the five decades from 1930 to 1980, economic inequality decreased significantly, without imperilling “American exceptionalism.” So it’s especially hard to put a good face on the way inequality has soared in the decades since. Even if you think that all a good society requires is—according to the debatable conservative mantra—equal opportunity for every citizen, you ought to be a little shaken right now. Opportunity is increasingly tied to education, and educational performance is tied to income and wealth. When it comes to social mobility between generations, the United States ranks near the bottom of developed nations.
Like the competitors on cooking-contest TV shows, writers who are presented with these socioeconomic ingredients do quite different things with them analytically, but nobody approves of the situation and almost everybody blames the élite. Charles Murray points out, in his new book, “Coming Apart: The State of White America, 1960-2010” (Crown Forum), that indices of social disorganization at the bottom of the income distribution—imprisonment, joblessness, divorce, out-of-wedlock childbearing—have been rising substantially. “Coming Apart” reprises elements from all Murray’s previous books, most notably “Losing Ground,” from 1984, which counterpoised a liberal élite and a socially dysfunctional underclass, but the differences are telling. In “Losing Ground,” the underclass being examined was mainly black, and the argument was that the élite had helped to create that underclass by enacting social-welfare programs. Poor people reacted to their perverse incentives by losing an ethic of work and family, and the social fabric of their communities disintegrated. But the social program that was the main villain of “Losing Ground,” Aid to Families with Dependent Children, doesn’t exist anymore, and Murray no longer blames misguided policies for the behavioral problems of the poor.
Instead, the malign influence of the élite is purely a matter of ethos, or moral tone-setting. The élite—who, in Murray’s account, live in unprecedented geographic and social isolation from poor and working people—are themselves hardworking, unlikely to divorce, dedicated to their children, and even comparatively religious, but, unlike the élite of Victorian England, they don’t “preach what they practice.” Somehow this manifests itself in the breakdown of social mores at the opposite end of society.
“Coming Apart” is, in effect, an analysis of inequality that rules out a program of redistribution. In Murray’s view, trying to shift resources away from the élite wouldn’t do much good, because (as Murray and Richard Herrnstein argued, in far more detail, in “The Bell Curve”) the élite are genetically endowed with higher intelligence: as long as the United States is a meritocratic society, and as long as these people keep meeting at selective colleges, marrying, and improving their breeding stock, they’ll keep doing better than everybody else. Anyway, what the non-élite need isn’t money, Murray thinks; it’s better values. Very little of “Coming Apart” is devoted to government policy.
Murray’s élite live in an archipelago of “SuperZips,” mainly blue-state inner-ring suburbs, like Chevy Chase, Maryland. They are a type that sounds awfully familiar: Obama-supporting, kitchen-renovating professionals with graduate degrees, who, unable to rest comfortably in the knowledge that they have passed economically dispositive high I.Q.s on to their children at conception, obsess relentlessly over education. In David Rothkopf’s “Power, Inc.” (Farrar, Straus & Giroux), we encounter an even more exalted “Superclass”—a group Rothkopf introduced in a previous book by that title—whose members are the sort of people one might encounter at the World Economic Forum, in Davos. They are rich, rooted primarily in global banking and business rather than in any particular communities or set of social values, and ideologically committed to unimpeded markets above all else. Unlike Murray’s élite, they are not merely the product of inexorable natural processes. They flourish in a world they deliberately built for themselves, by expertly altering the rules. Rothkopf, who was a Deputy Under-Secretary of Commerce during the Clinton Administration and is now a globe-trotting consultant, writes as a quasi-penitent member of this group.
Rothkopf’s book is astonishingly ambitious. It traces the relationship between state and market—a relationship that, he says, has succeeded the relationship between church and state as the dominant conflict in societies—from the thirteenth century to the present. During the past thirty years, he says, we’ve adopted the view that politics and markets were actually allied: freedom in one realm meant freedom in the other. The result of this idea, along with the increasing influence of business within both political parties, was a series of policies that deregulated national currencies and banking systems and enabled the globalized economy of the Superclass.
Meanwhile, the overwhelming majority of people still live in specific places and depend on local and national governments for social benefits, beginning with items as basic as stable currencies. Globalization, in its present form, strengthens a cadre of very large businesses that Rothkopf calls “supercitizens,” and diminishes government, which is becoming, in his nice phrase, “too small to succeed.” The result is that “there has been a decoupling of the interests of supercitizens and those of the ordinary people around them, between those who represent the views of people who must necessarily live within borders and those for whom borders no longer have meaning, between those who require jobs and capital flows and those who view people, villages, cities, and states as economic options, part of a constantly changing calculus in which efficiencies and profits rule.”
Rothkopf writes as a grand strategist, not as a reporter, but there are a few moments in his book when he visits members of the Superclass whom he obviously knows from having worked with them. Both Robert Rubin and Lawrence Summers explain to him that the globalization and deregulation of finance that they helped to bring about when they were in government was a historical inevitability, not a policy choice. And Hank Greenberg, of A.I.G., bitterly describes the government’s rescue of his company, in September of 2008, as having been simply a way of protecting the interests of Goldman Sachs, which had a substantial stake in A.I.G.’s fate. Rothkopf doesn’t get very specific about what he proposes to do to reverse the power imbalance between governments and markets, but he makes it clear that he thinks that political decisions created the present situation and that only different political decisions will alleviate it.
Tony Judt—who died in 2010, of amyotrophic lateral sclerosis, a degenerative disease that completely disables the body while leaving the mind intact—shares with Rothkopf an insistent disapproval of the current apotheosis of global finance. Immobilized and understandably in an elegiac mood, he dictated his book “Ill Fares the Land” (Penguin) to assistants. Because he has so much less historical ground to cover than Rothkopf, he is able to pay close attention to the vanished heyday of social-democratic politics in the West, a subject that Rothkopf skates past quickly to get to the present. The result is a startling reversal of our political common sense. If there’s anything we all think we know, it’s that Britain and the United States were in terrible shape just before Reagan and Margaret Thatcher came to power: drab, inflationary, prone to shortages and delays, incapable of dynamism, crippled by organizational failure. Not so, Judt says. Actually, those were wonderful days.
Some of Judt’s argument is particular to Europe. When American conservatives declare the “European model” to be obsolete—as Charles Murray does—they overlook how miraculous it seemed, during the second half of the twentieth century, for the blood-soaked ground of the Continent to be free of war, free of public ethnic hatred, democratic, and prosperous. In the United States no less than in Europe, the welfare state’s benefits—health care, old-age pensions, public transportation, and education—hadn’t existed as universal guarantees before the twentieth century. Dramatic increases in longevity and health coincided with rising and more evenly distributed prosperity. The achievements of social democracy were large, and its failures, by comparison, relatively minor.
Judt candidly acknowledges that individual choice and economic growth weren’t the primary goals of social democracy; it was trying to create order and predictability, by building universal systems that bound people together. He evidently didn’t mind that when he was a child Britain had only one, government-owned broadcast network, which aimed for uplift, that London taxis had to be black, and that soccer teams were proudly local and uncommercial. The eclipse of social democracy resulted not from any failure on its part, Judt says, but from other factors—such as the rise of the individualistic New Left, the exaggerated preoccupation of influential Austrian economists like Friedrich Hayek and Ludwig von Mises with the dangers of a powerful state, and the inexorable process by which social democracy’s beneficiaries, as their situations improved, began to think of the system as a burden. Of course, all these considerations would similarly explain why inequality hasn’t flourished as a political issue. Judt also cites the fall of Communism and the end of the Cold War. It’s clear in retrospect that the existence of the Soviet empire was a spur to social democracy, in the United States and in Europe, because it was a serious competitor whose main selling point was generous social provision. The West had no choice but to compete.
The United States never had a BBC or a National Health Service, but other, now diminished or vanished features of American society had some of the same effects. Before the late nineteen-seventies, corporations were not managed for “shareholder value” to the extent that they are today, and many of them offered de-facto lifetime employment and generous health benefits and pensions. The more regulated and localized American economy had all sorts of inefficiencies and trade barriers that created safe harbors for institutions like banks, department stores, insurance companies, fixed-commission stock brokerages, and middlemen in supply chains. Unions were more powerful. In the “new economy,” each line of business tends to have one dominant, global, mainly non-union player, such as Apple, Facebook, or Google. Judt isn’t naïve enough to believe that people will simply come to their senses and reinstate social democracy as it was during its prime, but he does insist, like Rothkopf, that we will have to find ways to shift power from the market and back toward the state.
At the top of most liberals’ list of what to do about inequality is to use the tax system to redistribute income—first of all by raising the top income-tax rate and the capital-gains rate. In “The Great Divergence,” Noah describes a number of other possible remedies: increase government employment, regulate Wall Street more tightly, strengthen labor unions, cut the price of higher education. President Obama has at least made gestures toward most of these. But, if these are the natural responses, at least from a Democrat, why aren’t such remedies at the center of political debate this year?
The left and the right give completely different answers to that question. On the left, Tony Judt complains that intellectuals “have shown remarkably little informed interest in the nitty-gritty of public policy, preferring to intervene or protest on ethically defined topics where the choices seem clearer.” Young people with activist inclinations may mistakenly believe “that, conventional avenues of change being hopelessly clogged, they should forsake political organization for single-issue, non-governmental groups unsullied by compromise.” Idealistic, rights-oriented campaigns soak up some of the energy that used to go into old-fashioned liberal politics.
In a bleak article published in The National Interest last fall, the Harvard economist Benjamin Friedman took a more systemic view. Whenever the country is in an economically stagnant period, he suggested, the result is deep, bitter social fragmentation; people try to protect what they have against perceived attempts by others to take it away, and this defensive mistrust becomes a central theme of politics. “The unwillingness to entertain compromise with one’s political opponents on the central issues of the day is a phenomenon all too familiar in times when participants in a democratic society lose the sense that that society is delivering any material improvement in their lives,” he wrote. Americans supported a large expansion of government during the New Deal only because the Great Depression had an unusually wide impact: “Americans had a sense of everyone’s going down together—a condition certainly not shared in the most recent financial crisis, nor in the general stagnation of incomes and living standards that set in more than a decade ago.” So now we’re back to normal. Public-employee pensions and employment contracts, which Tony Judt thinks of as a socially binding force, are now—from Athens to Madison, Wisconsin—the object of hostility by people who don’t have them and of fierce, to-the-barricades protectiveness by people who do. None of this bodes well for a politics aimed at alleviating inequality.
Still, progressives have certainly tried to devise a political program of this sort. Dylan Ratigan, the MSNBC host, does so in “Greedy Bastards: How We Can Stop Corporate Communists, Banksters, and Other Vampires from Sucking America Dry” (Simon & Schuster). Ratigan started as a television business reporter, but, he says, he became so angry that he switched to the talk-show side of journalism. In his book, he makes a number of the standard cable-news moves: he rages, he oversimplifies, he invents social categories so that he can vilify them. He makes politics and government look easier than they are by proposing, for example, that business can be neatly divided into productive and blood-sucking categories. But he’s also fascinated by the details of how the political system works. He conducts public-policy reviews of banking, trade, currency, health care, education, and energy, telling us what’s wrong and how to fix it.
Ratigan’s engagement with the details of government—unusual for someone in his job—only deepens the mystery of why American politics is the way it is. Why aren’t more Americans furious about derivatives trading and the devaluation of Chinese currency, the way he is? Tea Partiers find fuel for anger in the Federal Reserve Board and the direct election of U.S. senators—what makes those issues take? You can feel an adept liberal politician like President Obama struggling to find a way to talk about the financial crisis and inequality. There must be some means of doing so that will resonate with most Americans, without driving away the considerable funding base that Obama has among one-per-centers or opening himself up to caricature as a socialist. But the formula hasn’t presented itself yet.
On the conservative side, Mark Meckler and Jenny Beth Martin, the founders of the group Tea Party Patriots, declare in their new book, “Tea Party Patriots: The Second American Revolution” (Holt), that, as small-business owners, they were in severe distress during the financial crisis, but did not want any help from the government. “Tea Party Patriots” is suffused with a sense that other people have Washington connections and get things they don’t deserve, while people like them don’t, and that the only solution is to disable government entirely. But we shouldn’t take at face value the stated desire of many conservatives to do away with all the major features of twentieth-century government. The Harvard scholars Theda Skocpol and Vanessa Williamson did extensive interviews for their study “The Tea Party and the Remaking of American Conservatism” (Oxford). They find that the members of the movement, who tend to be older, really don’t want to roll back government pensions and health care for senior citizens (which, according to Benjamin Friedman, make up about three-quarters of all entitlement spending by the federal government). Even Ron Paul didn’t complain much about Medicare during the Republican primary campaign. Still, the idea of “government” as villain clearly resonates. It can’t just be that less affluent conservative voters have been brainwashed by Fox News. Something else must be going on.
For now, the biggest, meatiest available conservative take on American politics is “Spoiled Rotten: How the Politics of Patronage Corrupted the Once Noble Democratic Party and Now Threatens the American Republic” (Broadside Books), by Jay Cost, a young blogger and columnist for The Weekly Standard. Cost has a master’s degree in political science from the University of Chicago, and his book feels like a dissertation topic that was repurposed for the political debates of the moment. Its aim is to present a history of the Democratic Party from the Jackson through the Obama Administrations, and to show how the Party lost its way. Cost hasn’t done any original research, but he has mastered a remarkable range of material, and produced a full-bore, non-caricatural critique of liberalism.
What’s refreshing about Cost is that he has been trained to think about politics not as a battle between good guys and bad guys but as an ever-shifting series of alliances that seek things from government in response to the conditions of the time. This gives his book a real sophistication; he deftly accounts for changes in the Democratic coalition and for the efforts of Democratic Presidents to use policy to strengthen the Party. Andrew Jackson invented the spoils system to reward supporters with government jobs. Franklin D. Roosevelt passed laws that brought labor and African-Americans into the Party, but declined to push for laws that would have driven away the white segregationist South. And so on. But Cost also wants to draw bright conceptual lines between the times (mainly before the nineteen-sixties) when this way of practicing politics was understandable, and the times (mainly after the nineteen-sixties, and especially during the Obama Administration) when it has been malignant.
Once politics is understood in terms of interest groups, it’s difficult to use concepts like “the public interest” and “the national interest” unself-consciously. What makes some groups “special interests” or (Cost’s favorite term) “clients” and others not? James Madison, the patron saint of American political pluralism, warned in Federalist No. 10 against “the violence of faction,” but he was just as worried about small groups being oppressed by large ones as he was by the prospect that the American government would not attend to the good of the whole nation. Nor did Madison imagine that any one actor in the American political system—the President, or the commentariat—would be able to discern and direct government toward “the permanent and aggregate interests of the community.” He did not traffic in modern notions of a readily apparent public interest—but Cost, though he duly quotes Madison, does. He offers breezy formulations like this: “Identifying the public interest seems like it might be a tricky problem. How do we know if something is good for the whole country or merely the projection of our self-interest onto everybody else? In practice, however, it is often pretty easy to figure out, as some issues are obviously urgent national concerns.” This allows him to dismiss the grand initiatives of the early Obama Administration—the economic stimulus package, the health-care bill, the (failed) attempt at legislation to limit carbon emissions, the rescue of the banking system—as cases of “clientelism” that demonstrate that the Democrats today are nothing more than “a fractious group of rent seekers” and “a threat to the American Republic itself.”
The interest groups that led the Democrats astray, according to Cost, have come to prominence in the Party since the Great Society: public-sector unions, elements of Wall Street, feminists, environmentalists, and members of Congress who represent districts drawn to be majority-minority. When modern Democrats are centrist, Cost judges them to be more closely attuned to the public interest; when they are more liberal, he finds them to have fallen prey to clientelism. Thus the early years of the Clinton Administration (think of the unsuccessful health-care-reform plan) were devoted to clients and the later years (think of the elimination of Aid to Families with Dependent Children) to the public interest. Democrats of previous generations are treated more generously. Cost deems Harry Truman’s unsuccessful proposal for universal national health insurance an example of “broad proposals that would benefit the country at large.” By contrast, Obama proposed universal health care “regardless of what the broader public wanted,” because it would “disproportionately aid Democratic clients.” Cost treats political parties as inherently perilous, partly because the Founders didn’t see them as an important part of the system. Yet, because parties are necessarily alliances of disparate constituencies, political scientists have mainly regarded them as a healthy way of counteracting the power of single-issue interest groups. It’s hard not to wonder about an account in which a party is captive to interest groups at some moments but not at others.
Liberals would do well to read Cost’s book, for reasons other than what he intended: it demonstrates how powerful the impulse is to see what you’re for as unself-interested and what the other guy is for as interest-group greed. A full sense of what conservatives object to in the Obama program can be hard to extract from daily conservative discourse. Cost provides this. You can put on his glasses and see that “Obamacare” looks like a set of deals with privileged health-care companies that got a seat at the bargaining table, that the stimulus and the financial rescue were ways of helping banks and unions that contributed to the 2008 campaign, that cap-and-trade environmental legislation was a way of rewarding big environmental groups and corporations. Even the underlying problems that these initiatives were meant to address don’t strike him as having to do with the national interest: you might favor universal health-care as an anti-inequality measure, but Cost views it as just another goody for non-majoritarian groups trying to claw more from the government. The liberal conversation has exactly the same limits: the impulse to see conservative causes as payoffs to interest groups—and conservative political successes as demonstrations of structural flaws in the political system—is well-nigh irresistible.
Because groups with wildly different perspectives dominate politics, the observation that ninety-nine per cent of Americans are being left behind economically isn’t of much use politically. The ninety-nine per cent is too big a category to be an effective political force. For all that, inequality already is a political cause, though in strange and unexpected ways. (Cost is upset about inequality, and comes close to predicting that the Republicans will be the party that takes it on, because the Democrats have become the party of Wall Street.) But if we are to go further—and get the political system to try seriously to reverse the trends of the past thirty years—somebody will have to figure out how to stitch together a coalition of distinct, smaller interest groups that, in their different ways, care deeply about inequality, and, together, can pressure Washington in favor of specific policies. It’s an unlovely business, but if you believe that government is the best instrument with which to address the problem it’s also a morally urgent one.
Source: new yorker
Author: Nicholas Lemann
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