During the Great Recession and its immediate aftermath, there was serious concern about whether the world would see a turn away from the rule of law, with totalitarian movements rising in response to economic catastrophe.
That concern was well founded, based on historical experience. The high-water mark of the Communist Party in the United States was during the Great Depression, when this country also saw millions of its citizens attracted to various fascist movements. Political extremism was an understandable reaction to the extreme economic disaster that had led to empty factories, foreclosed farms, and long breadlines in every major city.
That political cataclysm never came, however, in no small part because President Franklin Delano Roosevelt figured out how to save capitalism from its own excesses. Saving the economy in turn saved our constitutional democracy. Great Britain similarly maintained its democratic traditions. Other countries, to the world’s great detriment, did not.
Because the United States in the 1930s avoided the fate of Germany and Italy (and the many countries that were conquered by the Axis military machine), it has been all too easy for Americans to think that it could not have happened here, that it is simply impossible for American democracy to be drowned by economic and political tidal waves. It would certainly be comforting to believe that is true.
But is it? From 2009 through roughly 2011, I wondered every day whether the extremism that was beginning to emerge here and especially in many European countries would lead to radical political change. The 2010 mid-term elections, with the rise of an anger-fueled movement against “others” (labeled at the time as “losers” who were supposedly being bailed out by corrupt politicians), was not a promising development.
But when the 2012 and 2014 elections proceeded along fairly normal lines (with Democrats getting the upper hand in one election cycle, while Republicans dominated the other), it looked as though we could breathe a sigh of relief once again. Even what seemed like deep political dysfunction – typified by ongoing budget gridlock and brinksmanship over contrived political crises like the debt ceiling – was not able to prevent the U.S. economy from showing signs of health, especially compared to other countries. With economic disaster avoided, political disaster would be avoided, too.
Unfortunately, it now appears that we might have declared victory too easily. The return to something approximating normal economic and political functioning in this country masked what might be an even deeper, long-term fundamental threat to the political stability of the United States.
The Seeds of Discontent Are Sown Not Only in Recessions
Economists distinguish between trends that are cyclical versus those that are secular. The analysis that I described above is a cyclical analysis: The Great Depression was an enormous cyclical downturn (followed by an enormous cyclical recovery, fed mostly by military spending in World War II), and it led us to the precipice of political breakdown. Hence, the Great Recession raised legitimate fears that the breakdown that we narrowly avoided eighty years before would finally happen on our shores.
A secular trend, by contrast, develops notwithstanding the vicissitudes of the business cycle, even though it might (or might not) be masked by cyclical trends. The increase in U.S. living standards that began with the Industrial Revolution in the mid-nineteenth century was interrupted by various downturns (then called “panics”) and the Great Depression, but the secular trend was unmistakably upward.
What is interesting about the Great Depression, in fact, is that it was preceded by a period of great prosperity. The decade that came to be called Roaring Twenties earned its name honestly, with the country (and much of Europe) experiencing a wave of economic abundance that had never been seen in human history.
When the Great Depression hit, the human misery was profound, but that deep downturn was not an extra kick to an economy that was already staggering. Instead, it was a shocking reversal of what had seemed a wonderful new world of reduced want and spreading middle-class comfort. (I am, of course, leaving out the ugly racial aspects of this history, which certainly deserve to be discussed in a separate column – or book.)
The contrast with the recent situation in the U.S. could not be more worrisome. Although in 2008-10 we used Keynesian economic tools (that had been developed during the Great Depression) to prevent a repeat of the 1930s, we quickly returned to the grindingly slow non-prosperity that had prevailed since the beginning of Ronald Reagan’s presidency.
The secular trends from the 1980s onward have been nothing but bad, at least if we think that the consent that is needed to sustain constitutional democracy rests on the people’s confidence that their lives will not get worse.
By now, the litany of indicators of secular stagnation is numbingly familiar. Wages and salaries, adjusted for inflation, have been almost completely flat since 1979. Families faced with stagnant incomes have tried to make do by having both spouses go into the workplace (making family life more stressful) and taking on ever more debt (also making family life ultimately more stressful).
A middle-class family’s hope for a prosperous or even comfortable future has been dashed from all sides. Support in retirement used to be based on a “three-legged stool” of pensions provided by breadwinners’ lifetime employers, savings set aside from a growing paycheck each week, and Social Security benefits that were earned through payroll taxes.
Now, private pensions are almost unheard of, and the possibility of building up savings – notwithstanding Congress’s constant tinkering with tax-favored methods of saving, such as IRAs and 401(k) accounts – is a cruel joke in an economy where there is not enough income to pay the bills, much less to set aside money for the future.
And even though Social Security is actually (and actuarially) quite sound, political opportunists (almost entirely on the Republican side of the aisle) have convinced far too many people that even that modest support will not be there for future retirees. It would be bad enough to know that two of the three legs of the stool are gone, but Republicans have convinced people that all three have disappeared.
No wonder, then, that a typical American worker would look at his or her prospects and conclude that the future is bleak. And because that worker has also learned that the United States no longer has the largest middle class in the world, with millions of our formerly middle-class workers now among the working poor (or not working at all), people are looking at the world with suspicion and fear.
Do the children of today’s workers have a chance to improve their lives? Even though it is truer than ever that college education pays off in much higher incomes over the course of a lifetime, access to even community college is becoming beyond most people’s reach. Budgetary austerity at the federal level has led to cutbacks in federal grants and loans, and state-level cuts to public universities have raised the cost of even in-state tuition to previously unseen levels.
No wonder, then, that a person who is lucky enough to graduate from college starts life with more than twice as much debt as did a typical college graduate less than a generation ago. And the day-to-day need to pay bills causes far too many students to give up before they are able to complete their degrees – carrying college debt for years without even the benefit of a salary premium from a post-high school degree.
Again, each of these facts has become all too familiar to Americans, but it is necessary to put them together to understand the extent of the hopelessness that has quite understandably gripped much of America.
The question is what to do next, and there have been two leading responses on offer in the current political season. One, embodied in the candidacy of Bernie Sanders, appears to many people to be an extreme leftist response, even though it is not. The other, in the bully-boy form of Donald Trump, is an extreme rightist response that really does threaten to undermine the future of our country’s constitutional democracy.
The Very Important Differences Between Sanders and Trump
Because Senator Sanders has long applied the label Democratic Socialist to himself, it has been all too easy for pundits to assume that he is an extreme leftist. Indeed, in the context of the historical parallel that I described at the beginning of this column, in which I noted that both Communists and Fascists were disturbingly close to breaking through in the U.S. in the 1930s, it is ever-so-tempting to say that Sanders is the leftist extremist who can be compared to Trump’s obvious rightist autocratic appeal.
The problem is that this is both wrong and dangerously simplistic. Whatever one thinks about how well Sanders’s policies might work, his now-familiar progressive agenda is a direct response to the list of middle-class woes that I described above. He wants to increase middle-class incomes, both by raising the minimum wage and strengthening labor unions. He wants to reduce inequality by taxing the richest Americans and using the money to rebuild the country’s infrastructure. He wants to reduce the ability of the wealthy to control the political system (which is, among other things, the source of the political attack on Social Security). And he wants to provide tuition-free higher education to young people and their families.
Again, one can disagree with various aspects of those proposals, although I must say that I find Sanders’s platform to be quite sensible. But the most important point is that Sanders’s proposals are, as I noted earlier this year, actually quite moderate. Just to note one example, Sanders proposes that we return the estate tax to where it stood at the end of George W. Bush’s presidency in 2009. For a redistribution-loving socialist, Sanders’s proposals turn out to be pretty mild!
Indeed, the troubling vitriol between the Sanders camp and the campaign of Hillary Clinton is outright puzzling when one actually compares their basic proposals. Sanders is consistently to Clinton’s left, but not by much. Sanders, for example, wants a $15 national minimum wage, while Clinton wants a $12 national floor with local upward adjustments to $15. Both would phase in those increases over the space of several years.
There are very real differences in political instincts between Clinton and Sanders, of course, especially Clinton’s career-long tendency to seek to move to the formerly safe center-right positions exemplified by Bill Clinton’s presidency. But times have changed, and the fact is that either Democratic presidential candidate would try to enact center-left policies across the board.
Trump is Not Proposing Solutions, Just Magical Thinking
The bottom line, then, is clear. Faced with the question, “What do we do about middle-class stagnation, retirement insecurity, and increasingly expensive college education?” the Democratic Party’s two candidates responded by saying, “Let’s enact policies that have a decent chance of alleviating middle-class stagnation, that will create retirement security, and that will make college an affordable goal for hard-working young people.”
Or, to put it differently, the Democrats have said: “Here are some important problems, and we have some well vetted proposals that are calibrated to solving those problems, which we should have enacted long ago. Let’s solve these festering problems now.”
The response on the American right could not be more different. Conservatives in the U.S. have now almost completely rallied behind the candidacy of Donald Trump, who espouses the opposite of the problem-solving, can-do American spirit that conservatives claim to hold dear.
Trump’s response to “What should we do about our problems?” is to say, “Let’s find some scapegoats, no matter how disconnected they are from solving the actual problems.” Low wages? Blame Mexicans. Industrial decay? Blame China. Worries about terrorism? Blame Muslims. But most importantly, Trump never even bothers to explain how any of this is supposed to work. His version of “can do” is, “Trust me, it will be beautiful.”
The worry, of course, is that Trump is the leading edge of a movement that would elevate taking misdirected action above all else, unfettered by constitutional limitations. He has already indicated his disdain for the federal judiciary and the press, and it is difficult to imagine that he would be moved by inconvenient facts about, for example, the prohibitive costs or basic inhumanity of trying to hunt down and deport millions of families.
Nor has Trump ever shown any awareness that his supposed solutions (which are, in their details, always changing) would be too costly or simply could not be done at all. Instead, he responds to such substantive criticism by hurling personal insults at people he dislikes.
Fortunately, all of the trends so far (notwithstanding isolated polls) indicate that Trump will never take the oath of office for the presidency. In that way, we will (knock wood!) never be able to see just how far Trump and his Republican enablers would go to undermine our constitutional democracy.
Unfortunately, that will not be the end of the story. As I will explain in my next column, even if 2016 is not the year in which constitutional democracy effectively dies in the United States, the political atmosphere post-Trump could be so toxic that a Clinton presidency would only delay what could be an inevitable slide into an autocratic future.
Huh? You don’t think Trump will take the Oath to the Office? What makes you say that?
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The one thing that has grown markedly throughout the relevant time period is the income and wealth of the top 1% – 3%.
This is because of the changes in the ‘confiscatory’ tax rates formerly in place on upper incomes which have been largely eliminated since the Reagan administration. This has allowed the rich and powerful to direct a far larger proportion of the national income into their own pockets. The change has been contributed to by tax policies that allow many large US corporations to avoid taxes. The combined result is entirely predictable. What is surprising is that so many Americans seem to think that the same policies would reverse the trend IF ONLY someone different – Mr. Trump for now – were driving the same bus on the same road.