What Kind of Country?: Economic Crisis, the Obama Presidency, the Politics of Loathing, and the Common Good

Abstract

What Kind of Country?: Economic Crisis, the Obama Presidency, the Politics of Loathing, and the Common Good Gary Dorrien The story of our time is that the common good has been getting hammered for 30 years. Wages have been flat for 35 years, and inequality has worsened dramatically. One percent of the American population controls nearly 40 percent of America’s wealth and a bigger chunk of its politics. The crash of 2008 wiped out $8 trillion of home value, crushing the nest eggs of wage‐earners. The banks that frothed up the crash are doing just fine. Much of the Republican Party is committed to delegitimizing Obama’s presidency, and most of the Republican Party wants to bust public unions and break America’s social contract with the poor and elderly. All of this has created an opening for a democratic surge for social justice and equality. Mercifully, the Occupy Wall Street movement has made a start, but so far, the common good is still getting hammered, and Obama has spent most of his presidency cleaning up an economic disaster. Throughout American history, Americans have debated about the kind of country they want to be. Today, America stands at the crossroads of a decision about the kind of country that America should be, which does not mean that a decision is necessarily imminent, since Americans are deeply polarized. According to the theory of “realignment” favored in political science textbooks, American politics decidedly “realigns” every 30 or 40 years in the wake of a breakthrough election. In 1800, Thomas Jefferson’s Democratic‐Republicans overturned the rule of the Federalists. In 1828, the Democratic‐Republicans split into Democrats and Whigs. In 1860, Abraham Lincoln’s Republicans pulled off the last third‐party triumph, finishing off the Whigs. In 1896, William McKinley consolidated the Republicans as America’s majority party. In 1932, Franklin Roosevelt’s election paved the way to the New Deal. In 1980, Ronald Reagan’s election paved the way to the capitalist blowout of the past generation.1 There is still time for 2008 to be transformational in the sense of these historic elections, ending an era of American politics. But time and opportunity are running out as the Reagan era endures in bizarre forms. Economic inequality, always steep in the United States, got much steeper after Reagan’s policies took hold. In 1981, the top 1 percent of the U.S. population held 32 percent of the nation’s wealth and took in 11 percent of its annual income. Today, these corresponding figures are 39 percent and 25 percent. The top 10 percent of the population hold more than 70 percent of the wealth. The bottom 50 percent hold 2 percent of the wealth. The share of America’s income held by the top 1 percent has more than doubled since 1980, while the bottom 90 percent has, since 1975, coped with flat wages and mounting debt. 2 For thirty years, we have had perplexed debates about how to account for this trend line in an advanced democracy. How could a nation possessing a strong tradition of middle‐class democracy allow the middle class to be eviscerated? Economic globalization, to be sure, unleashed the predatory logic of capitalism, setting off a race to the bottom that feeds on inequality and obliterates cultural values and communities that get in the way. But globalization alone does not account for the American willingness to turn American society into a pyramid. From the late 1940s to 1975, productivity and wages soared together in the United States, creating a middle‐class society. Meanwhile, there were no bank crises, as New Deal reforms kept commercial banks out of the investment business. But wages flattened in the mid‐1970s and have stayed that way ever since, while productivity kept soaring and commercial banks got deeply into the investment business. The rich got fantastically richer in the 1980s and 1990s, while everyone else fell behind, taking on debt to keep from drowning and to keep up appearances, as urged by the advertising industry. During this period, nearly every manufacturing‐oriented society outperformed the United States in income growth and did so with more equitable distributions of...