Evil Geniuses: The Unmaking of America

by Kurt Andersen

As it turned out, the 1980s were the ’30s but in reverse: instead of a fast-acting New Deal, a time-release Raw Deal.

Economic progress ended, and cultural innovation stagnated except in information technology, where unchecked new industrial giants arose—resembling those of that first Gilded Age. The morphing of the nostalgia addiction into cultural paralysis in the 1990s helped to keep us shackled in an unpleasant perpetual present ever since. That cultural stasis, almost everyone and everything looking and sounding more or less the way they did a generation ago, provided daily reinforcement of the sense that the status quo is permanent and unchangeable across the board—in other words, a kind of fatalistic hopelessness of the kind that was standard before democracy existed, before revolutions, before the Enlightenment. We’ve thus been discouraged by the culture as well as by much of politics from imagining that the economy might be radically redesigned and remade once again, encouraged to think that fundamental change is either no longer possible or no longer desirable or both.

Earlier I called the rich right and big business and libertarian ideologues highly rational. Selfishness is rational up to a point, even extreme and cruel selfishness, and this elite confederacy won its war by means of cold-blooded rationality. On the other hand, their increasingly essential political allies in this project are among the most irrational, emotional, unreasonable, and confused Americans of all—religious nuts, gun nuts, conspiracy nuts, science-denying nuts, lying-blond-madman-worshiping nuts. The response to the pandemic showed vividly how this unholy alliance operates: for months early in 2020, right-wing media and the president pursued a two-track propaganda effort that made a catastrophe worse. Fantasyland’s magical thinking and conspiracism and mistrust of science fueled the widespread denial of and indifference to the crisis, and fused with the evil geniuses’ immediate, cold-blooded certainty that a rapid restoration of business-as-usual must take precedence over saving economically useless Americans’ lives.

Daniel Bell wrote in the 1970s, around the time he taught a seminar I took in college. “One forgets that in the late 1940s and 1950s,” it was labor leaders “and other liberals [who] had attacked the steel companies and much of American industry for being unwilling to expand capacity. The idea of growth has become so fully absorbed as an economic ideology that one realizes no longer how much of a liberal innovation it was.”

What Marx and Engels had written 120 years earlier about capitalism’s collateral impacts was coming true, too true—all fixed relations swept away, all new-formed ones antiquated before they can ossify, all that is holy profaned, all that is solid melts into air.

He lost by a landslide to President Lyndon Johnson, of course, whose share of the vote remains the largest ever. At the time one takeaway was that right-wing economic ideas were a total political nonstarter, anachronisms that would remain so. But in fact the Goldwater campaign was just the first rollout of a new American political template, an unsuccessful beta test. It tried to exploit popular unease with the culturally new as a way to get a green light for the rollback that Goldwater and the serious right really cared about—a restoration of old-style economic and tax and regulatory policies tilted toward business and the well-to-do. That lashing of cultural fear to political economics was just ahead of its time.

It was before wallowing in nostalgia for a lost Golden Age ruined by meddling liberal outsiders from Washington and New York, previously a white Southern habit, became such a common white American habit.

Going forward, the masses would be permitted as never before to indulge their hedonistic and self-expressive impulses. And capitalists in return would also be unshackled, free to indulge their own animal spirits with fewer and fewer fetters in the forms of regulation, taxes, or social opprobrium. “Do your own thing” is not necessarily so different from “every man for himself.” That could mean calling it quits on a marriage more quickly—the divorce rate doubled in the 1970s—or opting out of marriage altogether, or smoking weed, or wearing blue jeans every day, or refusing to agree to gun regulation—or rich people paying themselves as much as they wanted, or banks misleading borrowers and speculating recklessly.

Forty years after the cascading flood of change that gushed forth during the 1930s, the New Deal had lost its propulsive power as it widened into a big boring American reservoir on which everyone depended but lately took for granted or held in contempt.

Reagan was a conservative but was so far right he came across as a renegade. “The one unifying thing about the baby boomers,” a Republican strategist told a reporter back then about that younger generation, “is that they are anti-Establishment and anti-institution,” and “the Reagan appeal is to people who don’t go for the Establishment and for big institutions.”

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.

As never before, very conservative politicians and commentators now had a large and rapidly growing body of fresh scholarly argument and research to which they could point to justify and rationalize pro-big-business, antiregulation, antitax, anti-social-welfare instincts and desires.

Because I’d lived through the 1980s and definitely noticed in real time, plain as day, the rapid and widespread uptick in deference to business and the rich and profits and the market, I’d neglected afterward to take a close, careful look at the various pieces of that shift. During the 1980s and ’90s, my focus as a writer and editor was really on the cultural effects of this new America revealing itself—the primacy of selling and celebrity, the mixing of fact and fiction, the shameless ostentation, this ridiculous character Donald Trump. I wasn’t thinking hard about the political economy at the time.

In the 1980s it wasn’t yet clear to most people that the political economy was being changed from a more or less win-win game to one that was practically zero-sum, that over the next few decades, at least three-quarters of them would be the economic casino’s suckers, that their losses and forgone winnings would all go to the luckiest 20 percent, and that thenceforth in America only the rich would get much richer.

The Harvard Business School political scientist Gautam Mukunda has a lucid explanation for how extreme financialization happened. “Real power,” he wrote recently in the Harvard Business Review,

Paul Volcker, the former chair of the Federal Reserve and of a Wall Street investment bank, said not long before he died recently that “a kind of contagion [was] at work,” the profligacy symptomatic of a mass hysteria emanating from Wall Street. Do the CEOs of today’s top banks (or other financial institutions) really contribute five to ten times as much (in price-adjusted terms) to the success of their institution, or the economy, as their predecessors did forty or so years ago? I have my doubts. At least, it doesn’t show up in the economic growth rate, certainly not in the pay of the average worker, or, more specifically, in an absence of financial crises.

Buybacks effectively became obligatory in corporate America, done by 85 or 90 percent of big public companies. The cost lately has been around $1 trillion a year, three times what businesses spend on research and development.

And speaking of dogma, if the stock market at large isn’t correctly valuing a company, thus requiring its CEO to step in and correct that mistake by spending billions on stock purchases, doesn’t that cast doubt on our absolute faith in the efficient free market? 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. But if you sincerely think the market is undervaluing your stock because investors just don’t get your amazing company, then why not buy all of your shares back and go private?

With their new power, institutional investors decided for the rest of us that companies should be as big as possible, regardless of any damage that caused to our economy and society. Because if the stock price is everything, whatever got companies to that end—less competition and thus less innovation and lower salaries, draconian cost-cutting—was justified.

The enormous increase in the number of professional financial people neither made stock prices more rational nor improved corporate management. And they conclude it’s also bad, “costly to society,” that all the easy money going to the finance industry “lure[s] talented individuals away from potentially more productive sectors” such as science and engineering.

A final disturbing effect of financialization can’t be proven with statistics or experts’ quotes. It’s the damage to the human spirit that comes from making everything everyone is or does literally and strictly reducible to dollars and cents, and how such a cynical system makes everyone in it more cynical. A finance-obsessed society makes us each a little less human, a lot more of an abstraction. An employee of an LBO’d company is only a cost that needs to be kept down or eliminated. A shopper is a credit rating. Somebody with a home mortgage is an anonymous revenue stream—and barely that after she’s transmogrified into one infinitesimal bit of a mortgage-backed security. In all this, financialization has done what people back in the 1950s and ’60s and ’70s worried and warned that the Communists would do if they took over: centralize control of the economy, turn Americans into interchangeable cogs serving an inhumane system, and allow only a well-connected elite to live well. Extreme capitalism resembles Communism: yet another whopping irony.

Until 1980, America’s national split of “gross domestic income” was around 60–40 in favor of workers, but then it began dropping and is now approaching 50–50. That change amounts to almost $1 trillion a year, an annual average of around $5,000 that each person with a job isn’t being paid. Instead, every household in the top 1 percent of earners has been getting $700,000 extra every year. It undoubtedly has been the largest and fastest upward redistribution of wealth in history.

the American 1980s amounted to the 1930s in reverse.

“In the 1980s,” says Adam Cobb, a University of Pennsylvania Wharton School business professor who studies this sudden change in norms, “you started to see healthy firms laying off workers, mainly for shareholder value.”

Throughout U.S. corporate culture, it was as if a decent civilization abruptly reverted to primitivism, the powers-that-be in suits and ties propitiating the gods with human sacrifice—which in addition to increasing profits had the benefit of making the survivors cower before the ruling elite.

“a tax [on] all unreasonable profits, both individual and corporate.” That was 1944, Peak Leftism for Democrats on economics.

In response to economic Reaganism, the national liberals were committed to preserving the social welfare status quo for old people and the (deserving) poor, and to convincing America that Democrats were now modern and pragmatic, not wasteful bleeding-heart suckers or childish protesters or comsymp fools. Very few believed anymore that unreasonable profits could even be a thing.

How the right played the left for suckers becomes especially clear in looking at the 1990s, when after twelve years of Republican presidents, a Democrat was running the federal government. The bad habit that liberals and other Democrats had learned was this: be restrained when it comes to spending to help the less fortunate but simultaneously be reckless when it comes to helping business and the rich.

As soon as Clinton left office, the new Republican president and Congresses, thanks to their antitax fixation (and the war in Iraq two years later), promptly took us from a budget surplus equivalent to $365 billion to a budget deficit of $534 billion, a reckless and unnecessary trillion-dollar swing in three years. Irving Kristol, that mastermind and key promoter of remaking the political economy, had candidly announced this new strategy of the right—right-wing fiscal recklessness, forcing the left into defensive restraint—in a Wall Street Journal column back in 1980, months before Reagan’s election. In the 1930s and the 1960s, Kristol wrote, “when in office the liberals (or social-democrats, as they should more properly be called) spen[t] generously, regardless of budgetary considerations, until the public permit[ted] the conservatives an interregnum in which to clean up the mess” in the late 1940s and ’50s and ’70s, but with the liberals retaining their status as the activist party….The neo-conservatives have decided that two can play at this game—and must since it is the only game in town….What if the traditionalist-conservatives are right and a [huge] tax cut, without corresponding cuts in expenditures, also leaves us with a fiscal problem? The neo-conservative is willing to leave those problems to be coped with by liberal interregnums. He wants to shape the future, and will leave it up to his opponents to tidy up afterwards. From then on the right would be activists, ...

Retro-styled groups had generally been a niche market, for people unhealthily obsessed with a bygone past. But now these heavily indebted bands [such as] The Stone Roses, Oasis, [and] The White Stripes, could become “central.” In the 2000s the pop present became ever more crowded out by the past, [with] bygone genres revived and renovated, vintage sonic material reprocessed and recombined. There has never been a society in human history so obsessed with the cultural artifacts of its own immediate past. Reynolds documents how the new pop musical stars of the twenty-first century, even the best artists among them, continue doing cover versions, de facto when not literally, of soul and rock from the 1960s, punk and rap and synth pop from the ’70s and ’80s. “Is nostalgia stopping our culture’s ability to surge forward,” he asks, “or are we nostalgic precisely because our culture has stopped moving forward and so we inevitably look back to more momentous and dynamic times?” I’m pretty sure it’s both, as it tends to be with big, diffuse causes and effects.

Starting in the 1990s, Internet search (as well as cable TV) provided access to old pictures and sounds that we’d never had before, and then all at once, from 2005 to 2007, comprehensive new digital archives of the old opened up and transfixed us—first the astounding YouTube, then the endless streams of Pandora, Spotify, and online Netflix. When the future arrived, it let us sink further and further into uncanny dreams of the past. As Reynolds writes, “We’ve become so used to this convenient access” to old music and images “that it is a struggle to recall that life wasn’t always like this, that relatively recently one lived most of the time in a cultural present tense, with the past confined to specific zones, trapped in particular objects and locations.” If you’re young, and have grown up only since the Internet has been dissolving the distinctions between past and present and old and new, the sci-fi writer and futurist William Gibson says, “I suspect that you inhabit a sort of endless digital Now, a state of atemporality enabled by our increasingly efficient communal prosthetic memory.” What’s more, I think digital technology has made it so easy for anybody to create and distribute songs and pictures and videos and stories, and for everyone to consume them, that the resulting democratic flood of stuff—each of the 100 million cover versions and impersonations and fan fictions that are nominally brand new—can fool us into thinking the culture is more fertile and vibrant th...

A slightly different expression of the stasis that descended in the 1990s was the disappearance of musical diversity among the most popular pop songs. A 2018 study, by two young data journalists, of the summer hits every year from 1970 to 2015 algorithmically derived each song’s “fingerprint” not from its genre or style but from its underlying sonic components—valence, loudness, energy, and so on. By those measures, from the 1970s through the ’80s and into the ’90s, the hits were extremely different from one another, such as the 1988 songs the researchers deconstructed by Cheap Trick, INXS, and Def Leppard. But then suddenly, in the late 1990s, they discovered, the hits were no longer diverse, and they haven’t been since. Now even when hit songs seem fairly different—such as those by Katy Perry, Eminem, and Lady Gaga in the summer of 2010—their deeper sonic traits (valence, loudness, energy) are actually quite similar. So it isn’t that the most popular new songs now all sound like old songs, but that they all fundamentally sound the same, like one another, thus satisfying the deeper need driving nostalgia—for reassuring familiarity, nothing too strange or challenging.

*5 In the 1960s, just a few states had white populations of less than 70 percent: Mississippi, South Carolina, Louisiana, and Alabama. Today the size of the white majority in the whole United States is down to what it was only in the Deep South back then—which I think helps explain why so many white Americans outside the South turned into crypto-Southerners during the last fifty years. As their communities got more racially and ethnically diverse, they got more consciously white and defensive and racist.

Then there’s the remarkable apostasy of the neoconservative political economist and Reagan administration official Francis Fukuyama. The End of History and its celebration of the permanent global triumph of U.S.-style capitalism in the 1990s got him an endowed public policy professorship at George Mason University, the Koch academic headquarters, and although he moved on to Stanford, he remains conservative in some ways. But when he was asked recently what he thought of the apparent new U.S. vogue for social democracy, even socialism, he said, “It all depends on what you mean by socialism,” and then he went off. If you mean redistributive programs that try to redress this big imbalance in both incomes and wealth that has emerged then, yes, I think it ought to come back. This extended period, which started with Reagan, in which a certain set of ideas about the benefits of unregulated markets took hold, in many ways it’s had a disastrous effect. It’s led to a weakening of labor unions, of the bargaining power of ordinary workers, the rise of an oligarchic class that then exerts undue political power. In terms of the role of finance, if there’s anything we learned from the financial crisis it’s that you’ve got to regulate the sector like hell because they’ll make everyone else pay. It seems to me that certain things Karl Marx said are turning out to be true…that workers would be impoverished. —

So the larger truth here is that machines want information to be free. But of course, it wasn’t just printing and information. The industrial revolution was about powered machines enabling people to produce more and more things more quickly and cheaply, over the last two centuries enabling a remarkable, continual increase in prosperity (and, with luck and political will, social progress). So if information wants to be free, that’s just a particular digital-age instance of machines want everything to be free—including the cost of every kind of work. Machines want to do all the jobs.

One of the main challenges will be changing what Harari calls the moral viewpoint. We need to think of his scary wolf, AI and robots, not necessarily as a terrifying predator. Instead, they can be like the gray wolves that we tamed thousands of years ago and turned into humans’ best friend—dogs. Technological unemployment and its approaching endgame are indeed an existential threat, but they’re also a potentially grand existential opportunity. And taking advantage will first require a shift by the United States to some kind of economic democracy, taking the power away from big business and the rich to write all the rules only to serve themselves. There

the average U.S. household income is by the most conservative reckoning nearly six figures, and nonrich Americans spend endless hours on passionate amateur pursuits—noble, delightful, eccentric, stupid—in the way that only aristocrats used to be able to do.

The axioms adopted around 1980—market value is the only value, keep democracy out of economics, government is useless or worse, nothing but thoughts and prayers for the victims—can and must be undone, the political economy renovated, new technologies properly embraced in order to start solving the economic problem for everybody.

“Only a crisis—actual,” like in the 1930s, “or perceived,” like in the 1970s—“produces real change.” Note the tell: a perceived crisis will do. “When that crisis occurs, the actions that are taken depend on the ideas that are lying around,” so you have “to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

Another rich territory of social wealth isn’t a natural resource, but it is ubiquitous and collectively created. It’s the Internet. U.S. government funding was directly responsible for developing the semiconductor industry (and other fundamental pieces of computers) and for inventing the Internet, and after that for Google, Siri, and GPS, among other platforms and technologies. If we behaved like the seed investors and venture capitalists we were and are, we’d now be collecting many billions a year from companies using our publicly funded Internet. But so far, we are not. It’s as if we built the interstate highway system but then, because free markets, let some dudes set up tollbooths along its 49,000 miles and keep all the money they collected for themselves. But it’s even more ridiculous than that. Now without all our ongoing billions of individual hours of daily keystrokes and clicks and pictures and videos, all the data and “content” that we donate to Google and Facebook and the rest of them, they’d have nothing to sell to advertisers—and selling ads is their business. So on the glorious new public digital superhighway we built, we’re also now all working as volunteer staff for the insanely profitable tollbooth-and-billboard businesses that the private companies installed.

In early spring, when COVID-19 had killed only dozens of Americans, Stuart Stevens, a strategist for four of the five previous GOP presidential nominees but now a fierce apostate, wrote that “those of us in the Republican Party built this moment,” because “the failures of the government’s response to the coronavirus crisis can be traced directly to some of the toxic fantasies now dear to the Republican Party….Government is bad. Establishment experts are overrated or just plain wrong. Science is suspect.” He could have also listed Believe in our perfect mythical yesteryear, All hail big business, Short-term profits are everything, Inequality’s not so bad, Universal healthcare is tyranny, Liberty equals selfishness, Co-opt liberals, and Entitled to our own facts