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The economy is weather, the political economy is climate.
I’m inclined to believe the theories that American history tends to run in cycles, sociopolitical and economic eras that last for decades before the pendulum swings in a different direction. My hunch and hope is that we’re at the end of the long era that began forty-odd years ago, and that America may now be on the verge of positive change and a bracing cascade of the wildly new and insanely great. But it won’t happen by itself. Pendulums must be pushed.
America’s tragic flaw is our systemic racism,
Back in the 1950s, when vintage applied only to wine and automobiles, the Beats and beatniks had bought and proudly worn used clothes from the 1920s and ’30s. Jack Kerouac’s On the Road, the classic cutting-edge Beat novel, is actually an exercise in nostalgia, as the critic Louis Menand says, published and set in 1957 but actually “a book about the nineteen-forties,” the “dying…world of hoboes and migrant workers and cowboys and crazy joyriders.” His cool 1950s characters, Kerouac wrote, all shared “a sentimental streak about the old days in America,…when the country was wild and brawling and
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Two ascendant countercultures, the hippies and the economic libertarians, shared a brazen prime directive: If it feels good do it, follow your bliss, find your own truth.
In other words, as the 1970s played out, behind and beneath all the fervent and wonky ideological arguments for unfettered capitalism lay a particular type of animal spirit—piggishness.
And 1978 was also a tipping-point year in the economic right’s crusade to persuade people that because government now sucked, all taxes paid to all governments by everyone, no matter how wealthy, were way too high and also sucked.
Beginning right then, in fact, the suspicion and contempt between less-educated white people and the liberal white bourgeoisie was what the American class struggle was most visibly and consciously about. And it would define our politics as the economy was reshaped to do better than ever for yuppies and worse and worse for the proles, regardless of their ideologies and cultural tastes.
The American ideological center of gravity was plainly undergoing a rightward shift, but wouldn’t the 1980s just turn out to be some kind of modest course correction, like what happened in the late 1940s and ’50s, part of the normal endless back-and-forth pendulum swing from center-left to center-right? We had no idea. Almost nobody foresaw fully the enormity of the sharp turn America was about to take. Nobody knew that we’d keep heading in that direction for half a lifetime, that in the late 1970s big business and the well-to-do were at the start of a forty-year-plus winning streak at the
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Modern liberals prided ourselves on not being ideologues, on entertaining all sorts of disparate policy ideas for improving the world, whereas the economic right really has one big, simple idea—do everything possible to let the rich stay rich and get richer.
Simon had been Ford’s button-down Republican treasury secretary, but in the 1980s he let his Mr. Moneybags freak flag fly, returning to Wall Street as a new-style greedhound and bumptious right-wing propagandist.
As movements, originalism in the law and libertarianism in economics were fraternal twins. Both were born of extreme nostalgia, fetishizing and distorting bygone America, so both more easily achieved mass appeal in the everything-old-is-new-again 1970s and ’80s.
At the very moment when Martin Luther King, Jr., was leading the watershed pro-civil-rights March on Washington in August 1963, Bork published an article in The New Republic arguing that any law requiring businesses to serve people of all races would be “subversive of free institutions” by “self-righteously impos[ing] upon a minority”—that is, upon racist white businessmen—“the morals of the majority.”
In other words, while the fox did not start guarding the henhouse, he was definitely now employing and training the guard dogs.
Look a little closer, however, and you see why LBOs so often are, in several ways, caricatures of capitalist rapacity.
In this way, massive stock buybacks are like the capitalist version of Christians who shake and scream to prove that the holy spirit is real and inhabiting them.
When the Nobel economist James Tobin gave that lecture in 1984, he described financial professionals’ suddenly ballooning pay as “high private rewards disproportionate to social productivity.”
The evidence in study after study is that active management of financial portfolios by professionals “is not directly beneficial to investors on average…especially after taking into account fees.” In 2016, for instance, two-thirds of the professional portfolio managers buying and selling shares in the four hundred biggest companies did worse for their investors than if the clients had simply bought shares in all those four hundred companies.
Blame Marx for the horrors of Communism if you want, but the guy had some prescient insights about the capitalist future.
Once again, it’s remarkable how much the American 1980s amounted to the 1930s in reverse.
several important ways, he was another prototypical Republican for the new age: an asshole personally, a conservative hard-liner, and a critical figure in turning the party away from reason and science and common sense toward full-bore denial of climate change.
Plus ça change, plus c’est la même chose
Nostalgia starts getting problematic only when it becomes reflexive and total, congealing into an automatic antagonism to the new or unfamiliar. Nostalgia is problematic when it becomes the fuel for a politics based on fantastical or irrecoverable or unsupportable parts of the past.
At the same time, the Kochs and their gang spent more time and money on their new political dominion, organizations that run attack TV ads against insufficiently right-wing candidates, operate impressive propaganda sites, and mobilize angry citizens to agitate on behalf of the antigovernment economic agenda—a kind of grassroots politics funded and coordinated from Washington that had just come to be known as Astroturfing.
For Greenspan, however, the problem isn’t extreme inequality per se, or the newly extreme inequality between the great majority and the rich, but rather the envy of the poor for the middle class. And his proposed solution to that, honest to God, was to contrive to pay middle-class workers even less, to bring their incomes down closer to those of the poor.
The unambiguously rich 1 percent—the million and a half households with a net worth of roughly $10 million or more—own 39 percent of all the wealth, almost twice as large a share as they had in 1980. Since the late 1980s, that wealthiest 1 percent have become $21 trillion wealthier, an average increase of about $12 million per household.
Inequality got worse all over the rich world—but at the end of the day only a bit worse everywhere except America. Because in most other rich countries, the people used politics to soften the blows, share the pain, adapt together. They governed themselves responsibly.
You don’t need a theory of the perfect shoe to feel where your shoe pinches, and you don’t need a theory of perfect justice to grasp the injustice of the boot on your neck.
