Understanding Our Century: How We Got Here (in two short acts)

The American Presidency is a fascinating institution and one that has grown and changed over its two-and-a-quarter centuries. Like any complex social phenomenon, it has both manifest and latent functions. We all learn in school, for example, that the president is the commander-in-chief of the armed forces, as specified in the Constitution, but did you also know he is the chief priest of the state religion?

Don’t believe there is one? Go visit the National Archives sometime and walk into the rotunda housing the Declaration of Independence and the Constitution. Note the architecture and the hushed voices, like the passing of the host before the altar at communion. On the walls you’ll see the pictures of the holy saints of the American faith — Washington, Jefferson, Lincoln.

And the president is the head, called upon to deliver a sermon to Congress once a year (and to the people regularly), expected to console the nation in times of disaster, and to eulogize the passing of any notable citizen. This, incidentally, is why it is so easy for people to accept the “separation” of church and state in the modern era. The one simply ate the other.

But despite his military and priestly roles, the president is primarily a political figure. He — and I am using the masculine pronoun simply because the office has been one big sausage fest to date — is the chief executive of the government and the second arbiter of the national agenda (the first being the news media).

Trends in the presidency, then, are evidence of larger political trends in the country, and indeed they often track with the increasingly shared sociopolitical development of the English-speaking world at large. This is not exact of course, but there is a reason why the conservative Reagan/Thatcher regimes rose together and were followed, with or without interruption, by the “centrists” Clinton and Blair.

This being a presidential election year, I thought it would be worth it to review how we got where we are.

The Pew Research Center issued a report not too long ago that suggested income inequality — to say nothing of wealth, which is different — has reached levels not seen since the 1920s, the end of the aristocratic era, thus erasing the middle class gains of the 20th century. And that’s where our story begins, in the 1920s.

At the time, most of the western world did not live under democratic capitalism. It lived under an aging aristocratic capitalism, which imploded in 1929. This came after a decade of post-war prosperity — the Roaring 20s — where the United States was manufacturer to Europe, whose infrastructure at home had been devastated by WWI and whose colonies overseas were becoming increasingly costly and difficult to manage.

To say the Great Depression was a shock is an understatement. Reading the op ed pieces of the 20s, you would have expected the party to go on forever. But what got people most was how their money just vanished. Poof! It didn’t seem possible. They had earned it. It had existed. No one stole it. So where did it go?

Remember, at this time there was no such thing as government-insured deposits. (The FDIC wasn’t created until 1933.) Individual deposits were, of course, taken by the banks and invested, loaned at interest to someone else. In other words, banks use your money to make more money for themselves.

Then they want a bailout — taken from taxes on the people — when it all falls apart. But I digress.

After 1929, people saw their cash deposits disappear along with their hopes, and they inaugurated a shift, or realignment as the political scientists say, in American politics. The Republicans — once the party of Lincoln, the Great Emancipator — sided with business on the theory that when businesses were happy, everyone was happy. Democrats, led by a wealthy aristocrat (of all people), Franklin Roosevelt, gave the country a New Deal.

From this point, and for roughly the next forty years, American politics staggered left. We were not a leftist country. We have never been a leftist country. But the national agenda was more liberal than not — from the FDIC to Social Security to the integration of the armed forces to Medicare to the Voting and Civil Rights Acts, and so on.

The office of the presidency mirrored that shift. Roosevelt and Truman were Democrats, as were Kennedy and Johnson. And Eisenhower, the lone Republican, was completely unlike his contemporary colleagues. He believed in a 90% marginal corporate tax rate, created a huge national interstate highway system, and sent the National Guard to Little Rock to forcibly uphold racial integration of schools. (The former Supreme Commander of the Allies even coined the term “military-industrial complex” and warned people about it in his farewell speech.)

So what happened? Well, success for one — or I should say nominal success. The New Deal was never intended to make America socialist, and it accomplished what it set out to do. Banks were reformed. A basic social safety net was created. Overt racism was, at least by the letter of the law, illegal. Government agencies like HUD and the EPA were created to keep an eye on things. The nation was prosperous.

Thus, by the end of the 60s, the liberal consensus that had governed the country for almost 40 years fell apart as a diverse array of interests sought to define the next agenda. The result was the 1968 Democratic National Convention, famously a complete chaos where no one could agree on anything.

Nixon was elected, and in the 1970s the country turned right, not least because the prosperity that underwrote the creation of large government entitlement programs vanished as our natural resources — ample for two hundred years — dwindled at home and the rest of the world finally emerged from the long shadow of WWII. Japanese cars eroded the long American dominance of the auto industry. OPEC shocked the world with price controls. And a new word, “stagflation” — the seemingly paradoxical simultaneous occurrence of both inflation and economic stagnation — hit the cultural lexicon.

Enter Ronald Reagan, who promised everyone that it was “morning again in America” and then proceeded to deficit-spend his way to the destruction of the Soviet Union. Carter, the lone Democrat of this era, only won because of Watergate and was swept away as soon as that fell from the national consciousness.

I say lone Democrat because Clinton — the first Boomer president — was not really a Democrat. He was the champion of the so-called third way, and his major accomplishments in office were to make business-friendly treaties like NAFTA and to curtail some of the reforms of the earlier era, such as kicking people off welfare and the repeal of the Glass-Steagall Act.

The latter, in particular, is important. Passed after the 1929 crash, it forbade retail banks from engaging in risky investments — a fair requirement given that, in return, the government assumed all liability by insuring their retail deposits! After the repeal, it took all of ten years for the major banks to create another major global economic crisis.

It is significant that the Boomers — Clinton, Bush II, Obama, and now Clinton II — have all responded to the collapse of liberalism in 1968 by moving right. The Clintons are proud of it. And twenty years ago, when the Soviet empire expired, the internet burst to life, and the government held a surplus, a third way didn’t seem like a bad idea.

But it’s been a helluva ride since then: Enron, WorldCom, 9/11, two wars, Guantanamo, Abu Graib, Hurricane Katrina, the housing collapse, the auto company bailouts, and Justin Bieber, just to name a few. Obamacare has helped, some, but it seems to have helped the insurance lobby more than anyone else, and in any event, there are still millions of uninsured Americans, as I discovered personally earlier this year. If the sitting president were lit by a great motivation to lick that problem, rather than a mere centrist political expediency, why has he stopped fighting?

So back to the Pew study. 40 years of right-leaning government, along with a host of global factors outside anyone’s control, has erased the middle class gains of the 20th century. The choice before us now is: more of the same or try something different. I can’t see why any rational person would think another decade of supply-side tinkering will lead anywhere but further down the road of greater gains for fewer people.

But that raises the question, after a tumultuous fifteen years, are we now poised for another political realignment? It doesn’t appear so. It seems things will have to get worse before people are motivated to act. Such are the limitations of democracy.

But let’s hope I’m wrong.