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One of the mysteries of the Obama Presidency has been Obama’s inability—or disinclination, I’m not sure which—to give sustained emotional sustenance to a certain slice of his supporters. I don’t mean the “Democratic base,” especially the institutional “interest group” base. And I don’t mean the disillusioned left, which is easily, almost perpetually disillusioned because it has such an ample supply of illusions. (A lot of lefties, notwithstanding their scorn for “the system,” seem to have an implicit naive faith in the workability of the mechanisms of American governance. Hence their readiness to blame the disappointments of the Administration’s first two years mainly on Obama’s alleged moral or character failings—cowardice, spinelessness, insincerity, duplicity, what have you.) Mainly, I guess, the slice I’m talking about is of people like me: liberals who continue to respect and admire Obama; who fully appreciate the disaster he inherited and the horrendous difficulty of enacting a coherent agenda even when your own party “controls” both Houses of Congress; who think his substantive record is pretty good under the circumstances; who dislike some of the distasteful compromises he has made but aren’t sure we wouldn’t have done the same in his shoes (etc.—you get the idea); but who are puzzled that our eloquent, writerly President seems to have done so little to educate the public about his own vision and to contrast it with that of the Republican right—which is to say, the Republicans.
I don’t know how many people watched Obama’s speech today—early afternoon isn’t prime time—but those who did, and who share my general outlook, got a dose of the emotional (and intellectual) nourishment we’ve been craving. It was a strong speech, a good deal stronger than I had expected. (And feared: I hate to admit it, I know it’s silly, but I was a little worried we might get something uncomfortably akin to “We must reject both extremes, those who say we shouldn’t help the old and the sick and those who say we should.”)
Obama spoke powerful words, and spoke them with real feeling. As we all know by now, our President doesn’t “do” anger. Today, though, he did sternness; he did dignified exasperation; best of all, he did argument.
George Washington University isn’t a hearth, but today’s speech had some of the explanatory, narrative qualities of F.D.R.’s fireside chats. Obama began with a historical pageant, the story of how a nation of “rugged individualists” who nonetheless share “a belief that we are all connected” lifted itself to greatness via Whiggish public investments and social insurance. (He didn’t actually mention Whigs, obviously, but he did endorse the dictum of Lincoln, a onetime Whig stalwart, that “through government, we should do together what we cannot do as well for ourselves”.)
Warming up, Obama outlined the moral basis of progressive taxation. Without rancor, but without mercy, he explained how the big Clinton surpluses became the gigantic Bush deficits (though the only Bush he mentioned by name was the first one, whom he praised). He explained why a burst of stimulative borrowing was necessary to stave off a second Great Depression. He gave a topography of the federal budget, noting how little of it (twelve per cent) goes to almost everything most people think of as “government.” And he unpacked Congressman Paul Ryan’s budget and deficit plan—the one the House Republicans seem to have decided fits them as snugly as a suicide vest—as a “deeply pessimistic” vision of “a fundamentally different America.”
A sample (emphases mine, to give a hint of the incredulity and disgust in Obama’s voice):
Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than a trillion dollars in new tax breaks for the wealthy. Think about it. In the last decade, the average income of the bottom ninety per cent of all working Americans actually declined. The top one per cent saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes? They want to give people like me a two-hundred-thousand-dollar tax cut that’s paid for by asking thirty-three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.
The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America. As Ronald Reagan’s own budget director said, there’s nothing “serious” or “courageous” about this plan.
Deft move, that last line—summoning the ghost of Reagan past to say boo to the Republicans and deliver a well-deserved rebuke to the many media chin-pullers, some of whom should have known better, who initially rushed to laud Ryan for his supposed bravery and grown-upness.
By the time the President got to his own four-step proposal, which calls for higher taxes on the rich (euphemized as lowering “spending through the tax code”) the Republican alternative was a smoking ruin. Given the position his own reluctance, until now, to stake out a clear ideological divide had left him in, Obama succeeded in constructing a reasonably solid fortification for the fiscal battles to come. Even Paul Krugman was pleased. Me, too.
The answer to the question “Is America a plutocracy?” might seem either trivial or obvious depending on how one defines the term. Plutocracy, says the dictionary, simply means “rule by the rich.” If the query is taken literally to mean that the non-rich—the vast majority of American citizens—have no influence in American democracy, or that the country is self-consciously ruled by some hidden collusive elite, the answer is obviously “no.” On the other hand, if the question is taken to mean, “Do the wealthy have disproportionate political influence in the United States?” then the answer is obviously “yes”, and that answer would qualify as one of the most unsurprising imaginable. Wealthy people have had disproportionate influence in most polities at most times in history.
Of course, one can argue endlessly over who qualifies as being rich, whether the rich constitute a social class capable of collective action, how open or closed that class is, what constitutes real political power in today’s America, and so on. But if the question remains as simple as those articulated above, the basic answer will not change or be of much interest.
This is not, however, what this issue of The American Interest means by plutocracy. We mean not just rule by the rich, but rule by and for the rich. We mean, in other words, a state of affairs in which the rich influence government in such a way as to protect and expand their own wealth and influence, often at the expense of others. As the introductory essay to this issue shows, this influence may be exercised in four basic ways: lobbying to shift regulatory costs and other burdens away from corporations and onto the public at large; lobbying to affect the tax code so that the wealthy pay less; lobbying to allow the fullest possible use of corporate money in political campaigns; and, above all, lobbying to enable lobbying to go on with the fewest restrictions. Of these, the second has perhaps the deepest historical legacy.
Scandalous as it may sound to the ears of Republicans schooled in Reaganomics, one critical measure of the health of a modern democracy is its ability to legitimately extract taxes from its own elites. The most dysfunctional societies in the developing world are those whose elites succeed either in legally exempting themselves from taxation, or in taking advantage of lax enforcement to evade them, thereby shifting the burden of public expenditure onto the rest of society.
We therefore raise a different and more interesting set of questions regarding the relationship between money and power in contemporary America. All these questions come together, however, in a paramount puzzle: Why has a significant increase in income inequality in recent decades failed to generate political pressure from the left for redistributional redress, as similar trends did in earlier times? Instead, insofar as there is any populism bubbling from below in America today it comes from the Right, and its target is not just the “undeserving rich”—Wall Street “flip-it” shysters and their ilk—but, even more so, government policies intended to protect Americans from their predations. How do we explain this?
Let us start by describing the contemporary landscape in which this question arises. It is well established that income inequality has increased substantially in the United States over the past three decades, and that gains from the prolonged period of economic growth that ended in 2007–08 have gone disproportionately to the upper end of the richest layer of society. A study by Thomas Piketty and Emmanuel Saez shows that between 1978 and 2007, the share of U.S. income accruing to the top 1 percent of American families jumped from 9 to 23.5 percent of the total. These data point clearly to the stagnation of working class incomes in the United States: Real incomes for male workers peaked sometime back in the 1970s and have not recovered since.1
The growing disparity in outcomes has coincided with a period of conservative hegemony in American politics. Conservative ideas clearly had to do with the rise in inequality: The liberal (in the original 19th-century meaning of the term) economic model favored by Ronald Reagan was intended to open the doors to greater competition and entrepreneurship, which necessarily meant that gains from growth would go disproportionately to those best prepared to create wealth. Periods of rapid growth nearly always increase concentrations of capital and hence income inequality, but, as pro-market advocates have repeatedly told us, growth also nearly always trickles down over time to all or nearly all class cohorts.
As the years went by and those outsized gains at the top of the income distribution pyramid failed to trickle down in any substantial way, one would have expected growing demand for a left-leaning politics that sought, if not to equalize outcomes, then at least to bound their inequality. That did not happen. The Democratic Party, which one would have expected to be the principal focus of such political advocacy, floundered. It managed to regain majorities in the House and Senate, and it did hold the presidency between 1993 and 2001 (and, of course, regained it in 2009), but its electoral successes have not turned on economic fairness issues. To an unexpected degree, Democrats drank the Kool-Aid of market fundamentalism during the 1990s and in so doing reflected larger intellectual trends. (Indeed, when Al Gore’s 2000 campaign deigned to invoke class inequality issues as one of its themes, it arguably backfired.)
The financial crisis of 2008–09 has only deepened the mystery. The crisis laid bare some unpleasant facts about American capitalism. The banking industry lobbied heavily in the 1990s to further free itself from regulation, a trend that began in earnest with the Depository Institutions and Deregulation and Monetary Control Act of 1980. This resulted in, among other things, the 1999 Gramm-Leach-Bliley Act, which enabled the emergence of large “universal” banks and a non-transparent market in derivatives. Before the bust in the U.S. housing market, the rapidly expanding financial sector took home some 40 percent of all corporate profits, and yet it was responsible for an implosion that not only wiped out the banks themselves but imposed huge costs on innocent bystanders both in the United States and abroad. It also cost U.S. taxpayers an enormous sum in bailouts.
What was truly troubling, however, was that the collapse undermined the fundamental moral justification for material inequality in a politically egalitarian society. Basic to the legitimacy of market capitalism is the efficient market hypothesis—that is, the notion that in a truly competitive market everyone earns something close to his or her “social” rate of return. This means, in other words, that if your investment banker earns 100,000 times as much as your plumber, it’s because he or she is contributing roughly 100,000 times as much to society’s total pool of wealth.
The crisis made it glaringly obvious that the efficient market hypothesis was wrong: Oversized returns were flowing to innovative financial entrepreneurs who, in their avidity to create new and more complex financial instruments and products, were destroying rather than creating value for society as a whole. The crisis also shed bright light on the fact that corporate America was doing very well for its officers and shareholders (many of whom were not American citizens), but much less well for those Americans awaiting the trickle as jobs were outsourced and automated by the millions. Perhaps corporate America’s social rate of return approximated the expectations of the efficient market hypothesis, but only if “social” no longer referred to American society alone.
The crisis, exploding as it did in the midst of the 2008 presidential election, clearly helped Barack Obama at the expense of his Republican rival John McCain, in part because the public associated Wall Street with Republicans, and also, of course, because the debacle broke forth during the tenure of a Republican President. The new Administration went into office believing, however, that its victory signaled a fundamental realignment of American politics along the lines of the 1932 election that swept Franklin Roosevelt into power. Administration principals thought they had a mandate to move the country sharply to the Left—hence the fiscal stimulus bill, a bailout of the auto companies that left the government owning a large share of them, a major healthcare reform initiative, and an attempt to design a new regulatory framework for the banks.
But as it turned out, Obama was not riding a tide of left-wing populism. While the Democratic majorities in Congress succeeded in moving this ambitious legislative agenda forward, the results fell far short of expectations. The stimulus package did not produce stunning economic successes. The healthcare bill did not include a public option, and failed to address the real sources of cost inflation. Above all, the Dodd-Frank financial regulation reform bill did not change the perverse incentives that led to the crisis in the first place. Indeed, while Wall Street brought considerable opprobrium on itself, it was arguably the sector of the U.S. economy that suffered the least in the long run. Bank earnings were restored after a couple of quarters. And though the banks now face tougher regulation, Congress failed to do anything about the fact that investment banks are still too large and too interconnected to fail, and will surely be bailed out again when they get in trouble. Indeed, the U.S. financial sector is now concentrated in fewer hands than it was before the crisis.
One of the reasons for all these political shortfalls is that populist momentum swung sharply to the Right, as evidenced by the rise of the Tea Party movement and the Republican capture of the House of Representatives in the 2010 midterm elections. This swing did not happen all by itself. Wall Street spent a huge amount of money lobbying to make sure that the inevitable financial regulation was as weak as possible. This led former IMF chief economist Simon Johnson to argue that the United States was dominated by an oligarchy not too different from the ones he encountered in Russia and a variety of developing countries. Huge pharmaceutical companies and their lobbyists loomed over the healthcare legislation, as well, to the point that the White House, sensing their clout, deferred before the fact to most of their preferences.
But money alone does not create political trends in the United States. Within a year of Barack Obama’s inauguration, the most energized and angry people on the American political scene were not the homeowners with subprime mortgages who faced foreclosure as a result of the crisis, but rather those who faulted the government for taking steps to protect those homeowners, and to prevent the crisis from deepening. It was a strange phenomenon that saw many of those most deeply injured by the crisis become, in effect, objective allies of those who caused it.
This, then, is the contemporary context in which we raise the question of plutocracy in America: Why, given the economic history of the past thirty years, have we not seen the emergence of a powerful left-wing political movement seeking fairer distribution of growth? Why was Obama pilloried during the 2008 campaign for even using the word “redistribution”, when all modern democracies (including the United States) already engage in a substantial degree of redistribution? Why has anti-elite populism taken a right-wing form, one that sees vast conspiracies not among private-sector actors like bankers and hedge-fund operators, but among government officials who were arguably trying to do no more than protect the public against real collusions if not outright conspiracies? Why have there been so few demands for a rethinking of the basic American social contract, when the present one has been revealed to be so flawed? How can it be that large numbers of congressional Democrats and arguably the most socially liberal President in American history are now seriously considering extending, and even making permanent, the Bush tax cuts of 2001 and 2003? Is this not prima facie evidence of plutocracy?
There are several possible answers to these questions. The most frequent response from the Left is “yes”—corporate America can protect its interests through lobbyists and campaign contributions, and money does lock in their advantages and defeat all efforts at campaign finance reform. The American plutocracy, they add, has also profited from a pliant Supreme Court, which in its Citizens United decision of January 2010 ratified the view that corporations are tantamount to individuals with constitutionally protected rights not only to be a party to business contracts but also to political speech.
There is no question that money buys political influence in ways large and small in contemporary America, and that lobbying has become a form of legitimized corruption in many cases. But there are a number of problems with seeing this as the sole explanation for the absence of a cohesive political Left. Corporate America is not the only source of campaign donations; labor unions, Hollywood moguls and many liberal Wall Street financiers donate generously to their favored causes. Corporate America, moreover, is not a monolithic actor, but represents a huge variety of often-conflicting interests. Money often follows grassroots political trends rather than creating them.
A second explanation has to do with American exceptionalism. Many observers through the years have noted that Americans are much less bothered than Europeans by unequal economic outcomes, being far more concerned about equality of opportunity. The classic explanation for this has to do with the fact that America was (for recent immigrants, at least) a land of new settlement with few inherited status privileges, imbued with a Lockean liberal belief in individual opportunity. Americans tend to think that individuals are responsible for their own life outcomes; they often distinguish between the “deserving” and “undeserving” poor, the latter of whom are poor as a result of their being, in Locke’s phrase, “quarrelsome and contentious.” Americans care less about equality of outcomes than the possibility of social mobility, even if such mobility takes generations to achieve.
This Lockean emphasis on individual responsibility manifests itself in several distinctive ways. Large numbers of Americans, for example, favor abolishing all inheritance taxes (commonly denounced by the Right as the “death tax”), even though only a very small minority of them can ever hope to leave the world with sufficient assets to be subject to it. It also explains why Congress, with the support of President Clinton, abolished the New Deal program Aid to Families with Dependent Children as part of a broad welfare reform, under the rubric of legislation tellingly labeled the “Personal Responsibility and Work Opportunity Reconciliation Act of 1996.”
This aspect of American political culture is insufficient, however, to explain why there has been so little left-wing populism in the early 21st century. For despite their Lockean beliefs, Americans of past generations have supported substantial redistribution, not just during the New Deal and Great Society eras, but when the nation first imposed a highly progressive national income tax around the time of the First World War.
Moreover, while there is no evidence that America’s rate of intergenerational social mobility has declined over time, that rate is not nearly as high as many Americans believe, and indeed it is not as high as the rate in some other developed countries. The distinction between equality of outcome and equality of opportunity is in any event not as clear as it might first appear: Better-off people employ all sorts of strategies for passing their status on to their children, from the sorts of neighborhoods they can afford to live in to legacy admissions to elite universities. So we need further explanations for why there has not been more of a backlash from those left behind.
A third possible reason for the absence of redistributionist populism is much more time-specific: Americans have learned to distrust big government in a way they had not in the period from 1933 to 1969. Like taxpayers in Latin America, but unlike various Swedes, Danes and Germans, Americans don’t want to pay taxes because they are convinced that the government will waste whatever it takes in. Whether this is a fair assessment of our state capacity is a different matter; the efficiency of the U.S. government varies tremendously depending on level, geography, function and the like. It has both excellent agencies (the Marine Corps) and terrible ones (the former Immigration and Naturalization Service). Since the Reagan years, however, many Americans have come to believe that the experience of the New Deal and Great Society demonstrated the inability of “big government” to spend money wisely, or indeed to spend it at all without producing harmful unintended consequences. They are therefore unwilling to countenance expansion of the state into areas like health care even if they do not object to such spending in principle.
A fourth explanation is offered by Raghuram Rajan in his recent book Fault Lines: How Hidden Fractures Still Threaten the World Economy (2010). Rajan argues that the working and middle classes whose incomes either stagnated or fell during the past generation were in effect bought off by cheap credit: The flood of capital coming in from Asia and other surplus countries, creatively packaged by the banks and quasi-public institutions like Fannie Mae and Freddie Mac, allowed people to borrow against the future and enjoy standards of living that were in the end unsustainable. In his view, the day of reckoning has finally arrived: Cheap credit masked inequality at least in the sense that it enabled many people to increase their consumption, even if they could not keep up with richer cohorts who were increasing their consumption even faster. Now that easy credit has dried up, people grow angry when confronted with the stark reality that their bankers have done far, far better than they.
A final explanation lies in the realm of ideas, and comes closest to a Marxist plutocracy-conspiracy theory. Simon Johnson’s view that Wall Street constitutes an oligarchy manipulating the political system in a manner uncomfortably similar to the Russian oligarchs or other developing country elites does not ring true because it does not take account of ideas. At some level, corrupt developing-country elites know they are getting away with murder (sometimes for real); they rarely try to justify their self-enrichment to themselves in moral terms. American elites, however, tend to believe they are helping society as a whole even as they help themselves. Thus the centrality of the efficient market hypothesis: Financiers proudly see themselves as “value creators”, not as highbrow pickpockets of widows and orphans.
Standing behind this moral view is the entire edifice of modern neo-classical economics, which has played a hugely important role in legitimating the contemporary, finance-heavy version of market capitalism. The intellectual turn taken by the economics profession from Marxist or Keynesian models to strict monetarism and the Chicago School occurred right about the time that Reagan and Thatcher emerged on the political scene, and served to provide a seemingly scientific justification for market liberalization. As Seth Colby and I have argued, much of this framework was empirically justified with regard to trade and investment, but little empirical ground existed for believing that capital market liberalization would have beneficial effects.2 (Indeed, as Kenneth Rogoff and Carmen Reinhart’s book This Time Is Different demonstrates, data from the past two hundred years shows that hasty liberalization of the financial sector is highly dangerous.) Well-founded microeconomic theories concerning the efficiency of single markets were blown up and applied to all sectors of the macroeconomy, despite the fact that at an aggregate level many get rich by taking advantage of market failures, asymmetric information or political influence. The mathematization of modern economics, too, gave it the aura of a true science, the only one of the social sciences whose practitioners believe they stand in the same league as physicists. Ben Bernanke’s “great moderation” of the 2000s was in effect just the latest iteration of the mantra “this time is different.”
So here is the evidence for an American plutocracy of a narrow and discrete but hardly harmless sort. Wall Street seduced the economics profession not through overt corruption, but by aligning the incentives of economists with its own. It was very easy for academic economists to move from universities to central banks to hedge funds—a tightly knit world in which everyone shared the same views about the self-regulating and beneficial effects of open capital markets. The alliance was enormously profitable for everyone: The academics got big consulting fees, and Wall Street got legitimacy. And it has kept the system going despite the enormous policy failures it has generated, not to exclude the recent crisis.
Another set of ideas was of even more direct help to the wealthy: Reaganomics. Supply-side economics provided a principled justification for the rich paying lower taxes on the grounds that entrepreneurial incentives unleashed by lower marginal tax rates would not merely trickle but pour down both via public finance and through the creation of employment. This argument was likely true at the near 90 percent marginal rates that prevailed after World War II, but those rates were reduced in several waves beginning in the 1960s. Clinton’s tax increases of the early 1990s brought rates up only slightly, and didn’t have the growth-killing effects widely predicted by Republicans—just the opposite, they preceded one of the great economic expansions of recent memory. The benefits of the Bush-era cuts flowed overwhelmingly to the wealthy, and yet were promoted on the grounds that lower rates would redound to everyone’s benefit. This is still a gospel that many people continue to believe, including, oddly enough, all too many of those left behind.
These different explanations are not, of course, mutually exclusive. In the end, they do not make a simple, straightforward case for or against the existence of American plutocracy. They do, however, point to the fact that money, power and class continue to play out in American politics in highly complex and puzzling ways.
The first impression that many Americans had of Barack Obama was that of a great storyteller. His 2004 DNC speech was memorable oratory that linked his complex, multiracial, international, bicoastal personal narrative to a broader national identity—one that he described saying, “in no other country on Earth, is my story even possible.” Four years later, the 2008 Obama for America campaign repeatedly made rhetorical history with the “Yes We Can” New Hampshire concession, the Philadelphia “More Perfect Union” race speech, the memorable DNC nomination acceptance and, of course, the extraordinary November speech in Chicago’s Grant Park.
Candidate Obama had an ability to tell a story of America that captured national striving, greatness, accomplishment, and triumph without ignoring struggles, disappointments, disagreement, and loss. Take, for example, the night he was elected president of the United States. Barack Obama told a story about an African-American woman, Ann Nixon Cooper. Cooper was 106 years old, lived in Georgia and vigorously supported his candidacy. She was born in 1902, a time that President-elect Obama described as “just a generation past slavery; a time when there were no cars on the road or planes in the sky, when someone like her couldn’t vote for two reasons—because she was a woman and because of the color of her skin.” During her life Cooper was a civil rights advocate, a community leader, a mother and a wife.
As he marked the moment of his historic victory, Barack Obama chose Cooper as the lens through which to tell the story of America. He tied her personal story both to the arc of the nation’s history and to the future embodied in his own African-American daughters. Never before had a president invited us to see our national history through the lens of a disenfranchised black woman, but in doing so Obama gave us a way of understanding our national story as one rooted in growing inclusiveness and active government action on behalf of equality.
Whatever one thinks of the foreign and domestic policy outcomes of the past two years, it is clear that the Obama administration has stumbled in its ability to tell a compelling story.
Many progressives kept waiting for the great storyteller to emerge throughout the summer of the health care reform debate. The Tea Party effectively rewrote American history as they equated efforts of an enthusiastically elected government to pass a popularly mandated reform with the founding struggle against an oppressive monarchy. But there were few effective, penetrating tales of Americans who needed, wanted and supported reform. The Democrats proved incapable of linking health reform to great American traditions of civic responsibility or care for the vulnerable.
Similar failures of narrative have been egregious during the current budget fight. Once again the extremist elements of the GOP have managed to tell the most legible and convincing stories. Republicans hammered home the idea that the national budget ought to mirror household budgets. “When the going gets rough,” the GOP says, “people have to tighten their budgets, the American government ought to do the same.” This is a compelling story. People hear this and think to themselves, “Yes, yes, I have cut my cable bill, cancelled my vacation, and started cutting coupons; the government should do the same.” This is a false equivalency.
Household budgets are not the same as national ones. In fact, this narrative obscures the reason that Americans are tightening their belts—because the failed, short-sighted fiscal policies of GOP-led governments brought our economy to the brink of disaster. By telling the story this way Republicans effectively dodge the main point that massive tax cuts redistributed wealth to the top 1 percent but failed to stoke job growth. They ignore that disinvestment in educational grants made college more expensive for Americans. They ignore that their deregulation of lending practices foreclosed on the American dream for millions. The government (under Republican direction) created a mess for American households and has an ethical obligation to address the mess it made. To ask poor, disabled and elderly citizens to sacrifice basic needs to underwrite the extravagant choices of their wealthier neighbors is profoundly un-American. In my house, when somebody makes a mess we clean it up. When somebody is sick, we care for them. When somebody needs a hand, we lend it. All of these basic realities are obscured by the good story about household budgets and fiscal responsibility.
And I can’t stand to linger on the most infectious narrative of all from the bards of the right wing: birtherism.
The Democratic Party has largely failed to counter these well-spun fictions. The Democrats’ poor story-telling is going to have long-term consequences. It is a mistake to think false storylines are easily forgotten or that they can be swiftly overturned by simple recitation of countervailing facts. Today’s observance of the Civil War is a perfect example. Reconstruction was a short-lived effort and Confederates were given leave to (re)write the story of the Civil War from their own perspective. Thus Southern states still fly the flag of traitors and school kids are still taught that it was the “War of Northern Aggression.”
So what are we to do? It is time to take back the narrative. Time to tell our stories.
One organization with a commitment to precisely this kind of effective, progressive story telling is The Opportunity Agenda. Just last week The Opportunity Agenda celebrated its fifth anniversary. Their work focuses on framing our pressing national issues in the language and narrative of shared American values and identity. The Opportunity Agenda’s Communication Institute works with nonprofit leaders to give them comprehensive training on a variety of communications skills, including framing and narrative development, using public opinion and media research, and persuasive writing. Community leaders have a keen understanding of our challenges and important ideas about how to solve these problems, but they sometimes lack the ability to convey this information in memorable, convincing stories. The Opportunity Agenda is working to build our capacity to challenge the false narratives of the right and to offer our meaningful, substantive and engaging stories of our own.
Theirs is one of the crucial efforts to take back public space and to tell our stories. We need many more.
So who won the budget shutdown standoff – Obama or Boehner? Interestingly, it seems the more partisan the pundit, right or left, the more they think their own side lost. This probably is a reflection of how the more partisan you are, the more you value what your side conceded, and therefore the angrier you are over the budget deal.
As a card carrying member of the left side of the aisle, I’m not buying the arguments from the pundits on the left that insist Obama “lost” this battle with Boehner.
In any negotiation, it’s all about leverage. If you don’t have it, you need to manufacture it to level the playing field. If you do have it, you have to be wary of over-paying. The inequality of bargaining positions, and the absence of perfect information about what the other side’s price is to reach agreement, creates opportunities for either side to significantly miscalculate.
A key driver is whether either party is willing to walk away from the deal. In the transactional context, there are some who live by the edict of never doing a deal that you are not prepared to walk away from. It can be fatal if the other side detects, from your negotiating behavior, that you must do the deal. But in the litigation context, sometimes you don’t have the luxury of walking away. You must strike a settlement. The trick is striking the best deal possible under the circumstances. Political negotiations share dynamics of both transactional and litigation negotiations.
If one side must do the deal and the other side doesn’t need to, then the metrics for measuring the deal’s success will be 1) did the side who had to do the deal pay less than the other side’s original, undisclosed price, and conversely, 2) did the side who didn’t have to do the deal pay more than the other’s side’s original, undisclosed price)?
For purposes of the budget dynamics, I’ll frame the this issue in terms of “Obama versus Boehner” as each side’s negotiators, even though that obviously wasn’t literally the case.
So who had to do a deal? I say Obama for these reasons:
* His campaign-defined identity demanded it. Obama ran for office as an antidote to the perceived imperial presidency of Bush/Cheney. His broad theme of changing this dynamic in Washington, which had its roots in his 2004 DNC speech, required that he find a way to bring a polarizing debate to resolution. It’s one of the reasons he won independents handily and many disaffected, moderate Republicans in 2008. He lost these voters in the 2010 midterms. Fairly or not, many rational, smart voters around the country believe Obama was far more partisan than they expected in his first two years. Liberals can blame this on the GOP’s constant filibustering and obstructionism during that time, but that won’t change the 2010 election results. Indeed, you don’t even have to look at issues like Healthcare Reform, the Dodd-Frank Act and the energy bill, Obama’s 2011 budget is Exhibit A. That bill was passed by the House, but was successfully filibustered by Republican Senators. Despite the Republican obstructionism, the GOP ran on cutting spending in 2010 and won in a landslide. By the time this new Congress revisited the 2011 budget, the issue was not whether the budget would be cut, but by how much it would be. So while the political environment shifted for Obama, he remained obligated to bridge the partisan divide and find a solution.
* The dynamic of short CRs with cuts had to stop. Boehner was quite happy with the status quo of repeatedly enacting continuing resolutions for short periods in return for spending cuts. He could do it indefinitely. Although short term CRs hurt business by creating uncertainty, to Boehner, that cost is outweighed by the disruption to the Obama agenda.
* Voters needed to see the ideology behind the GOP cuts more starkly. CRs rolling out in the form of relatively harmless cuts of $1B-2B at a time are not enough to win back independents and awaken the Democratic base. CRs allowed the GOP to get what it wanted without paying any serious political cost. The only way for that dynamic to shift was for voters to see the GOP’s broader ideological plans in plain sight. Boehner’s proposals to defund EPA clean water regulation and Planned Parenthood did exactly that. Indeed, the dynamic didn’t really begin to shift Obama’s way until the focus shifted from CRs to the broader plans in Ryan’s 2012 budget to cut these programs. Senate Republicans and even some GOP House members began to publicly back away from the House Republican policy riders. In other words, Boehner was finally forced to pay the political price of his policies that he didn’t have to under the CR scenario.
* Democrats expected Obama to compromise. Pundits focused on polling showing that, in stark contrast to Republicans’ view of Boehner, most Democrats expected Obama to compromise on the budget. They cited this polling to argue that Boehner was at a disadvantage, hemmed in by the Tea Party segment of his base. But what this view missed is that the Democrats’ base had a correspondingly restrictive effect on Obama’s ability to walk away. Short of the GOP demanding devastating cuts on cherished programs, most Democrats would not have accepted Obama walking away and letting the government shut down.
By contrast, Boehner could have walked away:
* As noted, the status quo was working for Boehner.
* Boehner’s Tea Party base wanted him to walk away. Boehner actually would have been cheered as a hero by the Tea Party elements of his base. It would have been entirely consistent with their campaign promise of blocking Obama’s agenda.
With the dynamic established among the two negotiators, who came out ahead? I say Obama.
- The deal breaches Boehner’s pledges to midterm voters. The reason why pundits on the right are angry at Boehner is because he breached the GOP’s midterm campaign Pledge. Boehner promised to return spending to 2008 levels pre-TARP and Stimulus, which they said would amount to at least $100 billion in spending savings in the first year alone (2010). They also promised to add hard caps on discretionary spending, and put an immediate stop to any unspent Stimulus spending (presumably excluding the healthy one-third of that law’s total cost that was composed of tax cuts). That’s not imaginary cuts from Obama’s proposed 2011 budget that was filibustered – it’s $100B cut in actual spending from 2010. None of these things happened in last night’s budget deal. Not even close. I think Boehner saw this coming, which is why they tried adding the policy riders – to make the much more modest reductions more palatable to the base. But Boehner blinked on the policy riders, too. So the deal, by falling so short of his Pledge, comes at a high political price – obviously much higher than his original price disclosed in the Pledge. And remember, he was free to walk away.
- Many Beltway pundits give Boehner a pass for breaking his Pledge because they never took it seriously in the first place. I get that the seen-it-all-before veteran Beltway pundits viewed Boehner’s Pledge cynically, but you can’t have your cynicism distort your evaluation of the facts. Doing so only allows Boehner to escape accountability for his own promise to voters, and tilts the scales in his favor. Boehner set his own bar high. The passionate Tea Party conservatives and libertarians that shouted at town halls and rallied at state capitols took the Pledge seriously, and voted with an expectation that Boehner would, too.
- Some Beltway pundits ignore the Pledge and instead measure the $38.5B cut against what Obama proposed in his budget for 2011, which then magically becomes a cut of $78B, which then appears much closer to $100B. But that’s moving the goal posts for Boehner. The Pledge didn’t use Obama’s 2011 budget as the baseline for its savings of at least $100B in 2011. Obama’s budget never passed in the last Congress, and the Pledge promised “saving us at least $100 billion in the first year  alone.” Pledge at 21. That suggests real savings of $100B against 2010’s actual spending, not theoretical reductions against a prior year’s proposed-but-never-passed budget. I say “suggests” because the Pledge never says it any more clearly – any interpretation that the Pledge’s language meant at least $100B in cuts from Obama’s 2011 budget requires a leap.
- Obama deflected harmful cuts. Boehner blinked on the red meat cuts (with the exception to the restrictions on abortion funding in DC’s budget, although these restrictions are consistent with the Hyde Amendment and not new). Some liberal pundits have argued that Boehner’s proposal to defund Planned Parenthood was probably just a bargaining chip to obtain more cuts, which Boehner ultimately got. Yes, the funding at issue for Planned Parenthood was apparently in the neighborhood of $335M, and the deal terms did seem to go up a billion or two in the end after this policy rider was dropped. But who gave up more here? The policy rider was designed to make Boehner’s base happy. There were protestors staging sit-ins in the Capitol yesterday demanding the Planned Parenthood policy rider remain in the bill. The anti-choice component of the GOP base is a hugely important part of its coalition, and they viewed it as far more important than the $335M price tag. Defeating this policy rider was far more important to Obama than the amount as well. The total budget is in the neighborhood of $3.8 Trillion. In a budget that size, finding a billion or two more to cut to protect Planned Parenthood is an easy call for Obama, and Boehner is the one who sold out for cheap. The extra billion or two tossed in (that is, if it was tossed in) was a face-saving gesture.
So now we move on to the next round. Obama, as he spoke from the Blue Room last night, spoke in calm, reasonable and bipartisan tones. He was the adult, speaking last, and even speaking favorably of the deal and Boehner. In the next round, if Boehner sticks with Ryan’s 2012 budget, then we will see a far greater escalation of the partisan fight of what we just witnessed last night over Planned Parenthood. The GOP’s effort failed yesterday, and I can’t see how plans to destroy coveted social programs will go any better. But by reaching a deal last night, and agreeing to “significant” cuts as framed by his team (although, again, not compared to a $3.8T budget and not seriously affecting cherished programs), Obama is actually in a better position to walk away in the next round. He has gained more flexibility. And if the GOP stubbornly overreaches, it can be framed as their second attempt at inserting partisan ideology into budget negotiations. Boehner’s team already poisoned that well, and have little to show for it.
[Editorially cleaned up on 4/15]
UDPATE 4/15: More facts about how the deal unfolded and what it actually contained dribbled out since I posted this last Saturday. The new facts add more support to this conclusion that the President pwned Boehner (he says modestly).
First, while some Beltway pundits like Chuck Todd speculated that the Planned Parenthood was just a ruse to extract concessions from the Democrats, the new facts undermined this theory. One was a NY Times report that there was an 11th hour confrontation between Boehner and President Obama in the Oval Office late on Friday night over the issue of Planned Parenthood defunding. Boehner tried repeatedly to argue his case, but was met with a firm “No” each time by the President. I don’t see how you can infer from those dramatic circumstances that it was just a ruse. Nor was there any great treasure to show for Boehner’s alleged ploy. Over the course of the week, we learned that budget deal was mainly composed of accounting gimmicks rather than serious cuts to coveted programs. Later, the Congressional Budget Office scored the Budget Deal as cutting $335M in actual spending from 2010 levels (an amount the federal government probably just spent while you were reading this post), and if emergency spending is included, it actually INCREASES spending by $3.3B. These late revelations caused defections in the House Republican caucus, which in turn caused Boehner to breach another promise: to pass the Budget Deal without a single Democratic vote. Ultimately, only 179 House Republicans voted for the Budget Deal, far short of the promised 218.
So the President gave up nothing and got credit for keeping the government open for business, while Boehner damaged his party by alienating independent voters and moderate Republicans with his overreach on Planned Parenthood and betraying the most passionate segment of his base — the Tea Party voters. This was his first big test, and he failed. Suddenly those political gaffes by Boehner during the House Republicans’ first week in office look like a pretty accurate sneak preview of his competency as Speaker.
The technologies that inflicted upon the world the ongoing tragedies in both the Gulf of Mexico and Japan serve a dangerous addiction, an addiction to blind optimism, a habituation of mind that allows us to dwell within provisional comfort zones but renders vast spaces of the world into deathrealms.
After each catastrophe, there ensues a scramble to contain the damage leveled, as, concurrently, the apologist of the present system explain the anomalous nature of the event. Yet, this much should be obvious: Attempting to clean up the mess, after it occurs, as oppose to altering the way of life that incurs the damage, is analogous to an addict believing a few days in detox will serve as a solution to his addiction.
In the same way drug dealers are reliant on an addict’s unwillingness to reflect on the carnage created in his life, as well as, the havoc reaped in the lives of those near him, engendered by his addiction, the small group of hyper-wealthy elites who benefit from the current system rely on collective cognitive dissidence (or, as it has been termed, the fear of fear itself) to dissuade the public at large from peering deeply into the pernicious situation.
One of an addict’s biggest obstacles is his optimism i.e., he is convinced he can figure out somehow, someway to use his drug of choice in a less destructive way…and, by reflex, rebels against the deepening sorrow that he must change.
When large, powerful corporations create messes beyond their ability to control the damage wrought by their institutional cupidity, those in charge spare no expense aggressively confronting the problem…that is, of course, by means of public relations blitzes aimed at the general public, while tsunami-sized waves of campaign contributions flood the coffers of elected officials.
Apropos, a school of thought has developed in which framing the perception of a catastrophe supersedes all other considerations. An after the fact casuistry, possessed of crackpot optimism, similar to the following, is affected: Dated technologies were at fault in that particular mishap, but, not to worry, in the near future, new innovations will safeguard against similar calamities.
Sure thing: The future will be bathed in the benign light of new technological wonders; our dread will be washed away by sparkling clean coal. Magical technological innovations will soon render nuclear power so safe that the only danger to the general public will be posed by the risk of being smothered by its profoundly huggable properties.
Such are the free market capitalist’s versions of End Time belief systems, a variation of the type of magical thinking that induces an individual to scan the empty sky, waiting for Jesus to float earthward and redeem the ceaseless folly perpetrated by mankind.
If we are willing to accept being lulled back into our comfort zones by such fantasies (that are as craven as they are preposterous) we might as well wait around for hazmat crews of leprechauns riding flying unicorns to arrive on the scene and clean up the messes that corporate capitalist greedheads inflict on our increasingly besieged planet.
In a manner similar to how the indefatigable salesmen of the consumer state sell optimism, but, in reality, deliver anomie, the propagandist of the neo–liberal paradigm promise peace and prosperity — yet their shock troops, comprised of the political and media elite, instead level class warfare at home and perpetual war abroad that renders landscapes blighted and mindscapes shell shocked.
Among their most pernicious contrivances has been to convince the passengers seated aboard the runaway train of the corporate state that the blur of landscape out the train’s windows is caused by their own poor vision and the impending crash will be due to their negative thoughts. The implicit message imparted is: “If only you would have thought more optimistically and worked harder, you’d have been one of life’s winners and you would have been cruising above the impending carnage in your private jet. How sad for you, loser. And, by the way,” they lie, “did you know socialists are manning the controls of the doomed train?”
While these practitioners of the art of weasel word wizardry insist they sell hope, in reality, they sell shame.
Growing up in the deep south, being raised, as we say there — not brought up, but raised–like corn, hogs (or Lazarus or zombies from the grave) and socialized there, shame is a subject with which I’m well acquainted; it has taken me a lifetime (and it remains an ongoing process) to sort through and shake out the shame-based sensibility acquired there.
“If you think that I am dumb, There is another universe of stupidity that I can show you!” — comment posted on my FaceBook page when a stubborn, inconsiderate fact would not yield to his rightist umbrage.
What is the origin of such an outlandish, inadvertently self-satirizing statement?
Shame (its flip side being southern pride) arises, descends, converges and intermingles from manifold influences and multiple traumas: The bizarre-as-a-talking-serpent concept of sin passed down through Calvinistic belief systems; the legacy of degradations inflicted from being on the losing (and morally wrong) side of the Civil War; as well as, the degraded social milieu that circumscribes the lives and fates of large numbers of the permanent white underclass residing in the region.
Shame stains southern sensibilities like red clay on Sunday whites.
A large number of the blustering, willfully ignorant, southern men that I grew up around, whether they are khaki clad, country club smoothies or leather jacket-donning punk rock belligerents, were twisted inside out, kicked and stomped insensate by shaming authority figures before they shed their baby teeth. If one listens closely, one can detect the voice of shame-bearing demons hissing in their every utterance.
Yet the knowledge of the origin and source of their suffering remains buried deep within these men. To acknowledge shame (even to oneself) is considered a tacit admission of having something to be ashamed of i.e., “If you ain’t got nothing to be ashamed of, you miserable peckerwood, then you wouldn’t have no need to feel it.” So, more or less, the line of thinking, rather train wreck of pathology, passing for thought, goes.
Accordingly, a strong impulse arises to explain it all away — to claim the entire episode is a misunderstanding, or to dismiss their feelings as being trivial, or merely an indulgence of weak-willed, thin wrist losers, or impugn the motives of those who find grievance in the situation. This mode of mind has made multi-millionaires of the black magicians of rightwing talk shows, experts at performing emotional sleight of hand tricks that displace the shame of their listeners on a host of targets.
The cordiality of my fellow southerners is as facile as it is fragile. In southern culture, a great deal of psychic energy goes into distancing oneself from shame. Brooding beneath southern culture’s superficial charm and gentility is the unspoken threat: “Be nice, now” that often translates to, “ya’ll do as I say — and there won’t be any trouble.”
More often than not, it is all made personal. Affronts are long remembered and resentments cultivated, and being confronted with information outside of one’s realm of experience and field of reference is regarded as condescension.
Being made to feel “less than,” by insults, real or imagined, can bring on a noxious cascade of shame and its concomitant host of desperate evasions and violent displacements to mitigate the feelings of unease engendered.
This is how it was explained to me on FaceBook recently by a feller named Frank who was addressing the issue of his loathing of liberal/socialist tyranny: “My facts are correct. The far left is nothing more than the new set of communists looking to take over. Just a call me a southern god fearing commie killer who cannot wait to put more notches on his weapon if the day ever arises again. I did enjoy killing them so. Your sheep I will never be. That’s a fact. [R]eal Americans have better things to do that listen to your drivel. I’m out of here.”
Just what kind of demented cultural circus produces these crack-brained battalions of killer clowns for Liberty? A culture with a brutal and rigidly enforced (but furiously denied) class structure that inflicts constant humiliation, yet, because of its nebulous structure, remains hidden from view.
Therein exists the allure and tenacity of neo-confederate hagiographic nonsense. Pride is held near, and clutched closely to oneself, because the corporate state has left the white underclass bereft of little else. It is painful to admit to being powerless and devoid of a means to change the trajectory of one’s fate. One feels demoralized and diminished as a result.
Moreover, nationwide, under the present system, riddled with vast economic inequity, the negative repercussions for disobedience and failure are more than most people can endure, economically as well as psychologically. In a culture where success is deemed the end all/be all of all things, failure is devastating. In a corporate structure rigged to benefit a privileged few, and upward class mobility is merely a mind-fogging, cultural myth — then failure is altogether likely.
Combine this, with the pernicious, puritanical/Calvinistic notion that failure is due to flawed character, and you have a troubled population…staggered by self-doubt, roiling in the unfocused rage of the humiliated, and primed and stoked for demagogic displacements.
While nice liberals retreat to their comfort zones, the forsaken laboring class constructs insulating walls of resentment. In the US, more and more, the criteria that forges personality and informs our condition is wrought by the calculus of enclosure: guarded gate communities; isolation in motor vehicles; the insular pixel fiefdoms of the internet; long work hours, often spent in cubicles, comprised of meaningless labor, and cut-off from both the norms of nature and resonate human contact.
These conditions create an existence as redolent of the aromas of existence as plastic covered cheese-food. In cultural terms, it is as if the people of the US have become mummified in plastic packaging wrap… have been rendered — Body Bag People.
Of course, one yearns for the void to be filled. But with hearts and minds mortared closed, sealed off from the shock and humiliation experienced from the daily economic exploitation of a hidden, intractable class system – what penetrates these self-constructed prisons is loud, stupid, even fascistic in tone and theme e.g., violent video games; the empty spectacle of steroid-fueled professional sports hype; the exercise in Rock and Roll imperium that US militarism has become; fundamentalist sermons that long for the blood and thunder of Armageddon. In short, all the Sturm and Drang necessary to pierce protective walls, yet, at the same time, insure one remains ensconced in one’s comfort zone.
Yet the sense of powerlessness is not mitigated for long, a nebulous sense of unease nettles. The world appears to bristle with threats…a low-grade hysteria is maintained and ceaseless war is both convenient and inevitable. Yet all the ramparts and fortifications of the national security state still do not create a sense of safety; instead, its siege mentality increases the interior void of the US populace, and, as a result, the vitality of life is barred entrance.
Blood sacrifices must be made to the god of the inner abyss…corpses are tossed into the void.
Over the top? Given the fact of the hundreds of thousands of corpses the US empire has lain under the native soil of nations from the Persian Gulf to Central Asia (and now North Africa) in only the past decade up to the present — which, in combination with a government that practices and a general public that is indifferent to the use of torture — the image limned above doesn’t seem hyperbolic in the least.
At what point, does it become incumbent upon an individual to seize back his identity, to reject being defined by the exploitive, dehumanizing demands imposed (and small bribes proffered) by corporate/governmental elites?