Turning the American Ship of State: Historical Reflections
January 2, 2011
It doesn’t take a genius to figure out that Americans are displeased with their government. Gallup’s Congressional Approval Poll hit an all-time low of 13% in December of 2010. While Republicans might be expected to oppose a solidly-Democratic Congress, Congressional support from self-identified Democrats fell from 38% in October of 2010 to a paltry 16% in December. With numbers like that, it’s astounding that the Democrats didn’t lose the Senate as well as the House in the midterm elections, but, in all actuality, it matters little who’s running the ship of state these days. Americans are more aware than ever that the government does not represent the majority of the citizens of this nation. The “illusion” of democracy is slipping away.
Neither Democrats nor Republicans believe that our government is truly “representative,” and this feeling is reflected in Gallup’s most recent polling. Evidence supporting this deeply-held belief is abundant. Most Americans opposed the recent Federal bail-out of the financial industry, but our representatives ignored the people and did it anyway. Most Americans wanted a public option in Obama’s recently-enacted “health insurance reform” package, but our representatives ignored us and, instead, merely passed a law ordering us to buy insurance from private companies, further enriching the vampiric health insurance industry that is the principal driver of the skyrocketing costs of health care. Most Americans opposed extending Bush’s budget-busting tax cuts for wealthy Americans, but Congress ignored the people and extended them anyway. It strains credulity to argue that our government actually represents the American people when one honestly compares the expressed desires of the people to the actions of those we elect to represent us.
What’s important to realize, though, is that this is not a new phenomenon. Our government has never represented the American people, as a whole, nor was it designed to do so. Jonathan Trumbull’s famous painting of the signers of the Declaration of Independence is illustrative of this fact.
A cursory examination of this picture shows exactly whom our government serves—the nation’s “stakeholders,” all of whom are wealthy and powerful. Whereas all the signers in 1776 were wealthy white men, to our credit, we have extended our definition of “stakeholder” to include women and people who are not Caucasian, but wealth and power are still requirements for entry into the exclusive club of “movers and shakers” that I have called the American political caste. Originally, in many states, ownership of property was required to vote, and even then, the property owner was only entitled to vote for a member of the House of Representatives. In most states, Senators were originally chosen by their respective state legislatures, and the President, of course, was chosen by the electoral college. Our founders created a republic that was distinctly anti-democratic, vesting in the political caste the power to control who rose to power and, thereby, insuring that the government would serve the nation’s political caste exclusively. Ours is a nation of the rich, by the rich, and for the rich. It was designed that way, and despite the fact that we have modified our Constitution to give voting rights to women and non-Caucasians, the result is the same. Our representatives serve the wealthy. Now they do so without regard to race or gender, and that is an improvement.
The idea that property owners should guide our political affairs is not new, nor is this idea waning. George W. Bush echoed this view in his ramblings on the ownership society that he wished upon America. From the simple point of view of Bush, America would be a better place if we were all rich. If we all had “ownership” in this society, none of us would be poor, none would be tempted to steal from the already-wealthy, none would require state assistance to live, and none would be a threat to the society that allowed a man who barely graduated college to become the President of the United States. Ignore the fact that if we were all members of Bush’s “ownership society,” there would be no one to wait tables, collect the garbage, build roads and bridges, or pick the crops that feed America. In Bush’s simplistic view, all the people need to do is become stakeholders, and then we all can have political power and a happy life. Membership in the nation’s political caste came so easily to Bush that he could not fathom the structural barriers that prevent the majority of Americans from having access to power and influence. Like Marie Antoinette inviting the people to eat cake, Bush’s solution to the incredible and growing disparity between the rich and the rest of us in America is to encourage “the rest of us” to be rich—owners, just like him. Voila! Problem solved.
Despite his obvious naiveté, Bush implicitly recognized that “ownership” remains a prerequisite to real political power in the United States, and while it is, perhaps, kind of him to wish that all Americans enjoyed the political and economic power into which he was born, the fact remains that his policies further enshrined the power of the already-rich at the expense of the majority of Americans. That is what our government of the rich, by the rich, and for the rich does—by design. Marx and Engles called the modern state “a committee for managing the common affairs of the whole bourgeoisie,” and it’s amazing how effective our government is in that role. Nothing else explains the Federal bail-out of the financial sector while the majority of Americans were opposed to mortgaging our future to save the fortunes of the very crooks who created the problem in the first place. As usual, our government served its “stakeholders” without regard to the will of the majority of the nation’s citizens. This is not new, nor has it changed in the past 224 years.
But how, then, does one explain the great, liberal achievements of the 20th century? If our government serves only the rich, then how did we get the minimum wage law, the end of child labor, public education, the right to unionize, social security, Medicare, Medicaid, and a host of other laws designed to improve the lot of the many, sometimes at the expense of the rich? The simple answer is that our government moves left when the political caste believes, collectively, that it’s useful or necessary to do so. It is inaccurate to say that our government usually supports the political caste, but that it occasionally does something good for the people. It is far more accurate to say that our government always supports the political caste, but that, occasionally, the political caste decides that it’s necessary to do something good for the people. The purpose of this essay, then, is to define the conditions under which the political caste becomes “convinced” that a leftward move is appropriate and necessary. Armed with this knowledge, one hopes that ordinary Americans can work to create such conditions in order to improve their lot now and in the future.
Here, some historical reflection is necessary. Since Reconstruction, there have been three, distinct periods during which the Federal government undertook significant, liberal reforms. The first such period of reform occurred during what’s known as the Progressive Era, 1890-1920. Here is a partial list of that era’s liberal achievements: the 1887 Interstate Commerce Act and the 1890 Sherman Anti-Trust Act (neither of which was regularly enforced until progressives, Theodore Roosevelt and Woodrow Wilson, came to power); the Presidential primary system; establishment of the Federal regulatory system--including the Interstate Commerce Commission, the Federal Trade Commission, the Food and Drug Administration, and the Federal Reserve System; the 16th Amendment (1913), establishing the Federal Income Tax and progressive taxation; the 17th Amendment (1913), establishing the direct election of Senators; the 18th Amendment (1920), establishing prohibition—curbing the effects of alcohol abuse was a progressive goal; and the 19th Amendment (1920), establishing voting rights for women.
The American political caste, like all social groups, responds to stimuli. The stimulus that allowed progressives to modestly reform American capitalism during the Progressive Era was the rise of socialism in Europe and in the United States. Labor unrest, and the brutal use of government force to control that unrest, were hallmarks of the Gilded Age, as American industry expanded and great fortunes were made off of it, but there was little reason for the political caste to fear an outright revolution until the second decade of the 20th century. At that point, socialism became a serious cause for concern. The 1912 Presidential election is illustrative of the extent to which socialism affected the political landscape of the early 20th century in America. That election was a four-way race between Woodrow Wilson (the somewhat-progressive Democrat), Howard Taft (the conservative, laissez-faire Republican), Theodore Roosevelt (the progressive Republican), and Eugene V. Debs (the Socialist). Roosevelt, the most vocal and prominent progressive of the era, wrote the Progressive Party Platform of 1912 in which he said, “Behind the ostensible government sits enthroned an invisible government, owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day." Incidentally, Julian Assange, founder of Wikileaks, quoted this passage in an epigram to his 2006 Manifesto. For his efforts, Julian Assange has, with few notable exceptions, including Brazil, enraged the global political caste to the point that public figures are calling for his assassination. The situation was similar in 1912. Roosevelt survived an assassination attempt shortly before the election. For better or for worse, the somewhat-progressive Democrat, Woodrow Wilson, won the election with 41.8 % of the vote, but the progressive Republican pulled 27.4% of the vote compared to only 23.2% for the conservative, laissez-faire Republican, while the Socialist garnered 6.0% of the national vote. At the height of the progressive movement in 1912, the Progressive candidate, the Socialist candidate, and the somewhat-progressive Democratic candidate amassed a whopping 75.2% of the national vote, while the laissez-faire defender of wealthy interests captured only 23.2%.
During the Progressive Era, the American political caste demonstrated an interest in modifying our basic economic practices in order to create a more just society, and the ascendancy of socialism played a significant role in creating that desire for reform. In 1912, the Socialist Party “claimed more than a thousand locally elected officials in 33 states and 160 cities.” They were making inroads into the American political caste, and they could not be ignored. Neither could the American political caste ignore the Russian Revolution of 1917 that prompted the First American Red Scare and led Wilson, the good servant of the political caste he was, to brutally crack down on union activities, deport thousands of foreign-born people for alleged “anti-American” thought, and to outlaw such thought to the furthest extent possible in the 1918 Amendments to the Espionage Act, said amendments sometimes called “The Sedition Act of 1918.” Eugene V. Debs was arrested for allegedly violating the Sedition Act and spent three years in the Atlanta Federal Penitentiary after being convicted and having his appeal rejected by the Supreme Court. In 1920, Debs received 3.4% of the national Presidential vote, as a write in candidate, while he was imprisoned. In 1922, President Harding, though he would not issue a pardon, commuted Debs’ sentence to time served and then warmly greeted Debs at the White House. The First Red Scare was so real that A. Mitchell Palmer, who was running for the Democratic nomination for President, warned that there would be a national worker’s rebellion starting on May Day, 1920. Palmer had been fed this information by none other than J. Edgar Hoover, and even though Hoover knew quite well that the rhetoric of the workers he sought to control did not match their capabilities, Palmer was quite willing to exploit national fears of a revolution in service to his own political ambitions. His mistake was in naming a specific date, and when that date passed without the promised uprising, Palmer was roundly ridiculed and subsequently lost his party’s nomination. Demagogues these days are more careful, as shown by our “Homeland Security Department’s” nebulous “terror warnings” which never refer to a specific date.
Despite Palmer’s demagoguery, which served to fuel the fears of the political caste, the fact of the matter is that by 1920, progressivism and socialism in the United States were all but dead. WWI had put an end to Wilson’s ambitions to improve the lot of America’s citizens, and Wilson’s pro-American jingoism had led to the arrest and imprisonment of the leading lights of the Socialist Party and numerous labor leaders. In a pattern that has played out repeatedly since Wilson’s time, the war became an excuse to punish dissenters as calls for reform suddenly were interpreted as threats to national security. Ultimately, though, it may have been prohibition that put the final nail in the coffin of the Progressive Era. America enjoyed a booming economy throughout the 1920s as many poor people, for the first time ever, could make money in the illicit alcohol trade. Just as the manufacture, distribution, and sale of illegal drugs now constitute a significant portion of the economic activity of America’s urban poor, so prohibition created new, unimagined wealth for many members of the American working class. Fears of a socialist revolution in the United States abated in the 20s, and socialists came to be seen as radical extremists. Government went back to its ordinary business of enriching the already-rich, and America waited for twelve years before her political caste again made some effort to address the nation’s economic injustices.
The second significant period of liberal, American political reform occurred under the leadership of Franklin Delano Roosevelt, who served from 1933 until his death in 1945. The actual policy-lurch to the left only lasted for five years, from 1933 to 1938, after which time Roosevelt, who was consumed with WWII, enacted no significant, liberal legislation. Again, the advent of war put an end to progressive reform, but during that brief period between 1933 and 1938, American capitalism was reformed, significantly, to make it more humane and more responsive to the needs of America’s citizenry. Among other measures, Roosevelt managed to pass the WPA which employed two million Americans; the Glass-Stegall Act which limited risk-taking by banks; the Social Security Act; The National Labor Relations Act which legalized unionization and collective bargaining; and the Fair Labor Standards Act which established the minimum wage and limited child labor.
While Roosevelt’s achievements were monumental given this nation’s conservative (i.e. pro-rich) political history, they are fewer than most people realize. Arguably, the NLRA (which allowed unionization) and the FLSA (which established the minimum wage and limited child labor) literally created the American middle class of the 1950s, 60s, and 70s and, thereby, allowed America’s citizens to enjoy the highest standard of living of any people in the history of the planet. It’s important to note that Roosevelt, despite overwhelming Democratic majorities in both houses of Congress, was unable to achieve as much as he had hoped. He was regularly stymied by conservative Democrats and the Supreme Court. If that sounds familiar, it should. The Democratic Party has never been liberal, as a whole, not even during the height of Roosevelt’s power. Roosevelt was unable to enact his Second Bill of Rights by which he sought to establish the right of every American to a home, a job, a good education, adequate recreation, adequate medical care, and economic security from the ravages of old age, sickness, accident, and unemployment. Roosevelt, despite his power, could not persuade Congress to act upon the Second Bill of Rights. One would be laughed out of the halls of power, today, if one were to even suggest that every American is entitled to a home and a job. Nevertheless, Roosevelt, who is regularly ranked as one of the greatest Presidents in American History, deserves credit for the few things he was able to accomplish during this rare period when American politics lurched to the left.
Popular opinion holds that the Great Depression was the principal cause of Roosevelt’s election and the collective decision of the American political caste to address the crushing poverty of ordinary Americans, and while this is true, it assumes unwarranted benevolence. It’s not that the political caste particularly cared about the suffering of the masses. Rather, the political caste saw its own wealth devastated by the depression, and Herbert Hoover, who had three full years in office to address the problem, seemed unable to do anything about it. The political will to make a change in the government’s direction was widespread, and Hoover paid the price in 1932. One man from Illinois wrote in a letter to Hoover, “Vote for Roosevelt and make it unanimous.”
Post-Hoover, American politicians have been reticent to take any action that might threaten the wealth of the political caste. The 1932 election showed that the political caste is loyal to no party and to no politician. When their wealth is threatened, they can and will make significant changes at the expense of the party in power. The 1932 election ushered in a twenty-year period of Democratic control of the Presidency. In 1933, one of the first things Roosevelt did in office was to repeal the gold standard, thereby “floating” the dollar, and allowing the Federal Reserve to expand the money supply. The U.K., Canada, New Zealand, and Australia had taken their currencies off the gold standard in 1931. This had the effect of halting the deflationary spiral that was the principal cause of the depression. The economy rebounded shortly thereafter, though the 1933 repeal of prohibition likely lengthened the depression as it crushed the underworld economy that had sustained many during the roaring 20s. Historians are sharply divided over the efficacy of Roosevelt’s reforms to combat the depression, but his efforts to relieve the poverty of ordinary Americans were numerous and expansive. It’s likely that the political caste was surprised by Roosevelt who was able to use his personal magnetism, his “fireside chats,” and his overwhelming Democratic majorities in Congress to effect substantial change. In 1932 the political caste was looking for someone—anyone—to protect its wealth and to combat the depression, and they were willing to give Roosevelt a shot, but his reforms went farther than they had hoped, such that by 1938 the “Conservative Coalition” of Republicans and mostly-Southern, conservative Democrats effectively blocked any further reform. So effective was the Conservative Coalition that many of Roosevelt’s reforms were repealed after the outbreak of WWII when unemployment was virtually eliminated, and, once again, calls for reform were regarded as un-American and a threat to national security. Thus ended the second, great period of liberal reform in modern American politics.
The third, significant lurch to the left in modern American politics occurred during the administration of Lyndon Baines Johnson who served as President from late 1963 to 1968. Among Johnson’s liberal achievements are Medicare; Medicaid; Legal Aid; federal funding for education including creation of the National Endowment for the Humanities, the National Endowment for the Arts, and the Public Broadcasting Act; the Revenue Act of 1964; the Economic Opportunity Act; the Civil Rights Act of 1964; and the Voting Rights Act of 1965. Johnson enjoyed solid majorities in both the House and the Senate, but he too was stymied by conservative Democrats who opposed his plan to create “The Great Society.” It goes without saying that the vast majority of Republicans opposed Johnson’s reforms. Despite such opposition, Johnson was able, during a very short period, to enact significant legislation that actually served the interests of the majority of Americans and not just the nation’s political caste. By 1967, the “Conservative Coalition” had been re-invigorated and managed to block further reforms, but Johnson enjoyed three years during which the political will existed to move American politics to the left, and Johnson exploited that will for the benefit of working Americans.
Undoubtedly, John F. Kennedy’s assassination played a role in creating the necessary political will to enact liberal reforms, but, more likely, it was the ascent of the Soviet Union that caused America’s political caste to embrace reforms designed to improve the lot of ordinary Americans. After WWII, the Soviet Union emerged as a superpower, complete with nuclear weapons and a foreign policy dedicated to aiding the global revolution of the proletariat. Nikita Khrushchev famously pounded his shoe on the podium as he declared in 1956 that, “We will bury you,” an allusion to the Communist Manifesto in which Marx and Engles called the proletariat the “undertaker of capitalism,” destined to bury (in the grave) the bourgeoisie. The Soviets launched Sputnik in 1957, reminding the American political caste that it had the technological savvy to deliver its nuclear weapons around the globe. Kennedy launched the “space race” in direct response to the achievements of the Soviet space program. Indeed, Kennedy’s 1960 campaign focused on the Republicans’ having allowed the nation to fall behind the Soviet Union, both militarily and economically. In his inaugural address, Kennedy challenged the American political caste by suggesting that America should join in a global effort to combat “the common enemies of man: tyranny, poverty, disease, and war itself.” While Kennedy’s “New Frontier” promised “federal funding for education, medical care for the elderly, economic aid to rural regions, and government intervention to halt the recession,” Kennedy accomplished little on the domestic front. Lyndon Baines Johnson, on the other hand, enacted significant legislation to combat poverty and prejudice in America. The American political caste was forced to respond, not only to the Soviets who guaranteed food, housing, and medical care to all their country’s citizens, but to the economic misery of the poor in America as expressed in urban riots throughout Johnson’s administration, starting in Harlem in 1964 and Watts in 1965. Six days of rioting in Newark in 1967, left the inner city a “burnt our shell,” while rioting in Detroit left ruins in areas of the inner city that have yet to be rebuilt.
The Vietnam War precluded further reform as, once again, calls for reform were equated with treason. Those who advocated reform were seen as threats to national security--subject to Federal wiretapping, or worse. Urban rioting and massive protests against the war eroded the political caste’s will to support further reform, and, with the possible exception of Nixon’s passage of some notable environmental legislation, there have been no significant, liberal reforms of the American economic system since 1966. The question is why not? Or, more importantly, what was it about the three periods discussed here that created an environment in which progressive reform was possible?
First, let’s dismiss what’s not essential—and that’s the Democratic Party. What has become obvious to liberals who have watched two, successive, Democratic Presidents (Clinton and Obama) regularly betray the interests of ordinary Americans is that periods of progressive reform are anomalies and not the rule, and they are not exclusive to the Democratic Party. I have argued elsewhere that neither Democrats nor Republicans actually serve the interests of the American people who elect them. By and large, both parties serve the American political caste—almost exclusively. The Democratic Party is not now, nor has it ever been, as a whole, “liberal.” Instead, it appears that for brief periods during the past hundred years, the Democratic Party has sometimes served as a vehicle for the enactment of liberal legislation, but political will to enact reforms, on the part of the political caste, is an absolute prerequisite to governmental action for the general welfare, no matter which party controls Congress or the White House. Take, for example, the recent debate over reforming “health insurance.” Although Barack Obama proclaimed while campaigning that he considered health care “a right” of every American, the “health insurance reform” legislation he passed leaves millions uninsured and does not even guarantee health care to those who are actually insured. A single-payer system that would have guaranteed some level of health care to all Americans was “off the table” from the very beginning. But why? The answer is simple. Barack Obama, being the savvy politician that he is, determined that the political will did not exist within the American political caste to enact a law that would guarantee all American citizens the right to some level of health care. Who cares that 59% of physicians support a single-payer approach, according to one survey? If the political will does not exist within the political caste to enact such legislation, we get an expensive band-aid that further enriches those who are already profiting mightily from the status quo. Liberal legislation that actually benefits the majority of Americans is only possible when the necessary political will exists within the political caste. While campaigning, Obama proclaimed his desire to see health care enshrined as a right. The American people responded positively and gave him an overwhelming House majority and sixty votes in the Senate. Despite this, we are stuck with the status quo because the political will does not exist within the political caste to make dramatic changes.
Given this dynamic, it’s no wonder that so few Americans actually bother to vote. What’s the point? It’s obvious that our political caste controls the direction of our country—as it always has. If this is so, and the evidence suggests that it is, the question becomes this: how can Americans of ordinary means actually affect the group-think of the American political caste and force it to take action for the benefit of us all, and not just for itself? What can ordinary Americans do when it’s clear that voting does little or nothing to change the nation’s political direction? What are the conditions under which reform occurs? We did, after all, get FDR and LBJ. But how?
The three short periods during which America’s political caste allowed liberal reform each featured unique circumstances. In the first, deplorable working conditions for the masses and their children in the expanding industries and mines of the late nineteenth century created the social impetus and the necessary climate for the rise of socialism, such that real fears of a global revolution of the working class forced change in America, as it did in other industrialized nations. In 1917, Russian Bolsheviks actually revolted and created the first state inspired by socialist ideology. WWI effectively put an end to progressive reforms in America, and fears of a revolution here abated. The emerging Socialist Party in the United States was crushed, never again to match the power and prominence it enjoyed in 1912.
In the second, the global depression forced the American political caste to choose a reformer to lead the country, but only after it became clear that the Hoover Administration could not handle the economic catastrophe. Not that the political caste cared much about the suffering of the American people. It was the evaporation of their own wealth that forced their hand. They were willing to try just about anything to bring about a return of the conditions that had allowed them to become wealthy in the first place, even if that also meant relief for suffering Americans—a convenient side-effect, perhaps, but definitely not their principal concern. As prosperity returned under the policies of FDR, the political caste put a rapid halt to his tinkering with the economy, and WWII insured national prosperity without further reform as unemployment was virtually eliminated.
In the third, the United States made an effort to “catch-up” to the world’s other superpower, the U.S.S.R., which had vowed to support workers’ revolutions around the globe and which had guaranteed for its citizens housing, food, and medical care. Inner-city riots, numerous civil rights demonstrations (all of which, for the first time in history, were visible to most Americans through the medium of television), and external pressure from the Soviet Union forced the political caste to consent to some long-needed reforms, but voices calling for reform efforts were soon squelched by both bullets and the Vietnam War.
None of these three historical models gives much hope to people today who wonder why the American political caste refuses to address the growing disparity between the rich and the poor in the United States that is causing the erosion of the middle class. Due to regressive taxation and the obscene greed that characterizes this era (both of which are universally-embraced by the political caste), most Americans work harder than ever, for less money, and with less hope for a secure future. Why, we ask, are our politicians not doing something about this, and why haven’t they done anything about it since 1966?
To put it bluntly, the necessary conditions for progressive reform are absent, and they have been for forty-five years. There is no fear of a global revolution of the proletariat. Americans are well-sedated by both entertainment and prescription drugs. When they’re not sedated, they’re too busy working to spend time thinking about politics. Fear of appearing “un-patriotic” keeps un-sedated people from rocking the boat and expressing a strong desire to change course. Those who do not succumb to jingoistic peer-pressure are ridiculed and marginalized. As a result, the political caste has little fear that the people will revolt. This is not to say that we live in an era free from class warfare, it’s just that most Americans are unaware of it. To quote Warren Buffett, “There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.” As Barack Obama’s confidantes said about single-payer health-care, any serious, liberal reform is “a non-starter” in this environment. In part, that’s because the conditions that prompted reform in the Progressive Era are absent today.
Also absent are the conditions that prompted reform in the 1960s. The slow decline of the Soviet Union paralleled the emergence of neo-liberalism in the Western democracies, particularly in the U.S. and the U.K., evidence that without a powerful, leftist, and global political force to serve as a counter-weight to the basic, selfish instincts of the already-wealthy, the political castes of Western industrial powers have no incentive to actually care about the living and working conditions of the masses. Liberalism within the American political caste has been thoroughly discredited. The Democratic President of the United States is afraid of even appearing to be a lefty, much less actually being one. Without a global super-power advocating for the interests of working people, the politics of the world’s industrial democracies are drifting ever-rightward, and this is unlikely to change in the near future. Socialism is waning around the globe. China is opening its economy to the free market, and the Communist Party of India is thoroughly corrupt and aiding dominant, neo-liberal ruling coalition. These days, only a few governments (Cuba’s, Brazil’s, and Venezuela’s, for example) openly oppose neo-liberalism, and it’s silly to think that the American political caste is afraid of any of those countries. Absent competition on the global stage from a strong, external government that promises to aid global workers and that guarantees its citizens basic necessities (i.e. the U.S.S.R.), the American political caste is free to be as greedy as it likes without regard to the effects of its policies on America’s citizens. The conditions that prompted liberal reforms in the 1960s are simply not present today.
On the other hand, what may soon be present are the conditions that prompted the American political caste to support Franklin Delano Roosevelt for a brief period during the 1930s. Tragically, the opportunity to get FDR-style reform may have already come and gone. What the history of FDR’s era shows is that the political caste will demand change and even embrace reform that benefits the people if, and only if, they are suffering themselves. A recession is a period when the poor and the middle class suffer. A depression is a period when the rich suffer too. They, of course, don’t suffer from homelessness or hunger like the “little people,” but they do suffer--in their own, pathetic way--when they see their wealth evaporate before their eyes, and that is precisely when they demand change. They watched the Great Depression unfold and deepen for three years while Hoover tried, and failed, to combat deflation and restore prosperity. Hoover’s failures gave us FDR.
In all likelihood, the conditions were right during the last quarter of 2008 for a collapse of the global financial markets that, had they fallen, would have heralded a true “depression.” Treasury Secretary Henry Paulson got down on one knee in 2008 and literally begged Nancy Pelosi to pass Bush’s TARP legislation, thereby guaranteeing that the American taxpayer would bail out AIG and the banks, buy their toxic assets, and insure their solvency. Had Nancy Pelosi listened to the American people and said no, we may have been gifted with a true “depression” that would have allowed Barack Obama to be a genuine, liberal reformer. Instead, Pelosi caved to the will of the political caste, and we got “the great recession.” Twenty-first century politicians learned a lot from Hoover. They know that if they allow the political caste to suffer, then they and their political party will suffer in turn. This is the impetus behind the “austerity measures” that are all the rage in the industrial democracies these days. Every effort is being made to prevent suffering on the part of the already-wealthy, even if that means creating massive pain for working people and the erosion of the social-safety nets that protect them. If the wealthy were suffering too, it would be possible to turn the American Ship of State to port, as FDR did in the 1930s, but, for the moment, the political caste is doing just fine. The stock market is rebounding, the larger banks seem secure, financiers are getting record bonuses, insurance companies are making record profits, the economy is growing a little, and fears of a true “depression” have abated.
For ordinary Americans, that’s too bad, honestly, because it also means that the American political caste has no interest in implementing reforms that might improve the lives of the people. Instead, working people are going to be subject to “austerity measures” that will insure the prosperity and continued security of the political caste while creating widespread misery for those who, through no fault of their own, happen to be taxpaying citizens. Of course, it’s possible that austerity measures will backfire and create reform conditions similar to those seen in the Progressive Era. Greeks have rioted in response to government cutbacks, English students have protested tuition increases, and it’s likely the Irish will respond similarly when the government in Dublin figures out what it’s going to have to cut in order to guarantee the debts of the nation’s failed banks. If wealth disparity continues to grow and if living conditions continue to deteriorate for most people, fears of revolution may again haunt the political caste, but let us hope not. Revolutions are bloody, nasty affairs, and their results are very unpredictable. Recall that the Progressive Era was characterized by widespread and brutal repression of labor and that it culminated in a bloody revolution in Russia which produced a well-intentioned but ruthlessly repressive totalitarian state. The 1960s were only slightly better. That was an era of national fear bordering on paranoia in which voices critical of the government were suppressed, often with bullets. The sixties were marked by riots in American cities and a senseless war in Asia. The Cold War ultimately bankrupted the Soviet Union, and it strained the American treasury while also strengthening the military-industrial complex and the machine of state secrecy. On balance, the Cold War did more harm than good. Besides which, there is no state that is both capable of carrying the banner of working people and also willing to pick it up.
Frankly, of the available choices, a true depression may be the least harmful means of inducing progressive action on the part of the American political caste. The Great Depression was characterized by calls for courage and shared sacrifice. People got the sense that they were “all in this together,” and they were, for the rich suffered a little too, unlike during the other periods described in this essay in which the political caste took positions in opposition to working people but suffered very little, itself. If the political caste could now be made to truly feel a bit of the economic pain that their greed and recklessness has inflicted upon the working people of America, then they would demand and get reform, as they did with FDR in the 1930s. It matters not whether the reformer is a Republican or a Democrat. Politicians of all stripes are fully capable of serving the political caste in that capacity, and they will again ... when the conditions are right.
The historical course of the American Ship of State has been marked by short, dramatic left turns that have been followed by long periods of stagnation and slow drift to the right. The ship has been either stagnant or drifting right for forty-five years now, but it seems likely that a sharp left turn is on the horizon. Believe it or not, the American people enjoy more political power now than ever before. The internet, in particular, has given people of ordinary means the unprecedented ability to observe the inner-workings of their government and to contact their representatives quickly and inexpensively. The internet has also facilitated political discourse among people who, in another era, would have been excluded from our national, political conversation. Some people even believed they had purchased a President in 2008 when over two million of them made individual contributions to Barack Obama’s 2008 political campaign. Turns out they were wrong and made a bad investment, but that is no reason to believe that the people are utterly powerless in relation to a political caste that regularly ignores the concerns of the nation’s citizenry. Sooner or later, the concerns of the people will become the concerns of the political caste, through one scenario or another, and when that happens, progressive change will come. History shows that eventually the American Ship of State will make a dramatic turn to the left. If it doesn’t, it will sink like the Titanic.