Double Trouble: The Political Collapse that Preceded the Economic Collapse
By Steven Hill, Montréal Review, March 2012
Excerpt from the Introduction to “10 Steps to Repair American Democracy: A More Perfect Union, 2012 Election Edition ” (www.10Steps.net)
“We are fortunate to have Steven Hill’s latest book, Ten Steps to Repair American Democracy, to help us find our political compass. He identifies ten critical problems with our democracy and offers concrete solutions to each one. Ten Steps is a blueprint for a reinvigoration of our republic.”
–Hendrik Hertzberg, The New Yorker, from the Foreword
In 2008, an economic earthquake of historic proportions shook the world. That was followed by numerous aftershocks whose effects are still being felt years later. In the middle of the economic crash, a new audacity of hope arrived in the form of the first African American president elected in U.S. history. It was a jubilant moment showing America at its best, taking a giant step toward the dream of a multiracial society.
The very campaign of Barack Obama, which drew in unprecedented numbers of young people, seemed to auger a new era in politics that held out the potential for a badly needed transformation. Time magazine featured the face of President-elect Obama on its cover, photoshopped into a likeness of President Franklin Roosevelt complete with tipped cigarette holder and grey fedora. It seemed that a new New Deal was on the horizon for an America suffering from the ravages of a historic economic collapse.
Yet, within a short time, the Obama administration found itself flat-footed on nearly all policy fronts. Confronted by intractable challenges and difficult choices presented by the economic crisis, and hindered by a polarized Congress more interested in political brinksmanship and deploying cheap, anti-majoritarian strategies like the filibuster, the Obama administration responded with timid proposals that failed to realize its promise. It turned out that America’s antiquated political system was so creaky and sclerotic that it was impervious to even the most talented of its politicians.
We now know that the economic crash was caused by a hyper-deregulated U.S. financial system that, without sufficient political and administrative oversight, had spun out of control. Without a politics that could rein in the economics, Wall Street honchos at Goldman Sachs, Lehman Brother and others had turned our banks and financial system into their personal casinos to be bailed out by taxpayers when their bets tanked. Wall Street’s brand of capitalism meant we had to socialize the losses yet privatize the profits. And so it fell to the American political system, which had failed to rein in the runaway train to begin with, to re-regulate the economy and try to make the country safe again for capitalism.
Yet following President Obama’s inauguration in January 2009, not only did he continue many of the Bush administration’s policies but the people he chose as his cabinet members and regulators were industry insiders who were not going to change things fundamentally. Wall Street executives, at first cowed by their own incompetence and the sudden systemic instability that forced them to accept government handouts, rediscovered their bravado and began digging in against fundamental reform. The Obama administration and other key authorities, such as the New York Federal Reserve, stood back while Wall Street and the corrupted ratings agencies resurrected much of the ultra-complex trading system that had led to such a spectacular global collapse. New regulations eventually were passed, especially the Dodd-Frank legislation, but many financial experts felt that certain key defects were never adequately addressed. After the dust had settled, the banks and financial institutions that remained were even bigger than before the crisis, having swallowed those that failed. Wall Street was back to its high-flying ways, and a smoldering anger rumbled across the nation as it became clear that Main Street had been swindled by Wall Street, and government had done little to protect everyday people.
The Weakening Pulse of Democracy
But this spectacular economic collapse was just the climax of a long downhill slide for America, the last remaining superpower of the Cold War era. Long before the Great Recession struck, American workers had been some of the most productive in the world yet the wealth they produced had not gone into their pockets. Instead, as various scholars and journalists have documented, the wages of average Americans had been stagnant for three decades, necessitating ever greater levels of borrowing and debt for individuals and families to maintain their living standards. The number of Americans without health insurance had risen to 49 million, one-sixth of the nation, even before the economic collapse. Since the start of the Great Recession, the number of Americans living in poverty has risen to 45 million, nearly 15 percent of the nation, approaching 1960s levels that spurred President Lyndon Johnson’s national war on poverty. Over 2 million Americans have lost their homes due to foreclosure, and millions more have lost their jobs. At the same time, the wealth of the richest Americans has reached astronomical levels. Forbes magazine reported that the net worth of the 400 richest Americans increased in 2010 to $1.4 trillion, meaning the Fat 400 had wealth totaling more than the gross domestic product of the entire country of India and its billion people. Higher levels of inequality mean that the United States suffers from higher rates than other developed nations of related social ills, such as mental illness, homicide, crime, imprisonment, and diminished levels of trust.
The crash of the economy exposed the ugly truth: The forces that have drastically increased economic insecurity and risk for so many Americans are rooted in fundamental shifts over the last thirty years. These longer-term trends, which culminated in the Great Recession, mark one of the great social transformations of the postwar era. But how could such alarming concentrations of wealth be possible, more than eighty years after the lessons we thought we had learned from the Great Depression? How could there be so much poverty and inequality within a nation that has so much wealth and power? And how could those who wrecked our economy end up profiting so brazenly from the destruction they created? These are the questions on many lips and minds today, not only in the United States but around the world, where a struggling Uncle Sam has lost much of its narrative appeal and sizzle as an international beacon.
There are many potential responses to those questions, but overwhelmingly one factor is looming larger: The economic collapse was preceded by a long-standing political collapse. Unfortunately, the antiquated American political system is desperately broken, mired in antiquated ways that have resulted in political paralysis in the face of urgent new challenges. Even today, policies that will exacerbate the inequality, unemployment and sluggish economy, such as tax cuts for the wealthy and the slashing of Social Security and Medicare, retain considerable political momentum among political elites, despite their unpopularity in opinion polls. The political system has become unresponsive to “We the People.” At this point, the economic system – and those who dominate it – have captured the political system.
The Way Forward
Understandably this has prompted great outrage and frustration among the American people. These passions crystallized into a right-wing populist movement known as the Tea Party, and later into a youth-inspired protest encampment in the belly of the beast called Occupy Wall Street (which eventually spread to other cities around the United States). Both of these populist insurrections struck a chord when they said, in effect, that it is time for Americans to take back our government. More than two hundred years after our national “birthquake,” government of, by, and for the people remains an unfulfilled promise.
Today, the antiquated American political system finds itself plagued by partisan polarization, a rigidly divided Congress, superficial debate, and paralysis in the face of new global challenges. Even before the economic crisis, the U.S. was beset by choiceless elections, out-of-control campaign spending, backward voter registration laws, a filibuster-gone-wild U.S. Senate, mindless media, even a partisan Supreme Court. Americans are increasingly frustrated and have tuned out, causing the middle to collapse and allowing the partisans and apparatchiks to take over.
Fortunately, there is a better way than the status quo, one that can lead us toward a brighter national future. That better way involves making fundamental changes to our basic political and media institutions, bringing them into the 21st century. It involves not only crafting laws to cope with new assaults on American democracy- such as the horrendous US Supreme Court ruling known as Citizens United, which has opened up the spigot for corporate donations and unlimited spending in our elections-but also figuring out how to transform our increasingly creaky and antiquated political institutions.
In 10 Steps to Repair American Democracy (www.10Steps.net ) I provide a blueprint for renewing the American republic. I outline ten essential steps that can repair and modernize American democracy including: ways to allow more people to register and vote and to make sure voting equipment counts our ballots properly; replacing winner-take-all elections with alternative methods like proportional voting and ranked choice voting (also known as instant runoff voting) that give better representation, promote higher voter participation and encourage constructive debate and coalition building rather than scorched-earth tactics. I propose that presidents be elected by a national popular vote, and I advance reforms for the sclerotic Senate, which increasingly exaggerates the power of sparsely populated, conservative “red” states, and its arcane rules like the filibuster that undermine majority rule. I also propose reforms for the U.S. Supreme Court, which now resembles an unelected legislature of nine members that not only is badly out of step with mainstream America but where “five votes beats a reason any day.” And I promote the advantages of publicly financed elections, free media time for candidates, more vigorous public broadcasting and media reforms that will produce a more robust debate in the free marketplace of ideas.
Not only do I propose specific reforms, but I discuss ways to enact them and provide at the end of each chapter a list of organizations that already are working on these reforms. By parsing the big picture into smaller bite-size pieces suitable for activism, 10 Steps provides a blueprint for a reinvigoration of our republic.
So it’s time for American patriots to roll up our sleeves and get to work. I believe these are commonsense changes, most of them are already working in other nations and in some parts of the United States. I’m certain that the Founders and Framers of our nation, being the enlightened pragmatists that they were, would have applauded efforts to modernize their eighteenth century political creation and make it into one that lives up to the lofty rhetoric and aspirations of their astonishing age. The challenge before us of remaking American democracy is an epic one. The brightness of our national future depends on our success. But Americans have risen to great challenges before, and I believe we will again.
Steven Hill (www.Steven-Hill.com) is a political writer, cofounder of FairVote and former director of the political reform program at the New America Foundation. His articles and commentaries have appeared in dozens of newspapers and magazines, including the New York Times, Washington Post, Wall Street Journal, New York Daily News, Los Angeles Times, Toronto Star, Guardian, The Nation, Financial Times, International Herald Tribune, Ms., Salon and many others.
His previous books include the internationally-praised “Europe’s Promise: Why the European Way is the Best Hope in an Insecure Age” (www.EuropesPromise.org) and “Fixing Elections: The Failure of America’s Winner Take All Politics” (www.FixingElections.com), which has been called “the most important book on American democracy that has come out in many years.” He has lectured widely in the United States and Europe, and has appeared on C-SPAN, Fox News, National Public Radio, the BBC, Austrian Broadcasting Corporation, Pacifica, Sirius and numerous radio and television programs across the United States and Europe.