THE PARTY’S OVER: Welcome to the “New Normal”

Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class
Jacob Hacker and Paul Pierson

(Simon & Schuster, 2010)

In a famous editorial in Life magazine of February 17, 1941, Henry R. Luce, founder of Time Inc., called upon Americans to abandon their deep-seated fear of international entanglements and support Britain through lend-lease during the early days of World War II. The son of Christian missionaries spreading the gospel in China, Luce was infused by an abiding belief in the “white man’s burden.” He called for an American Century to fulfill the nation’s international and domestic promise. The decades of post-WWII prosperity confirmed his vision of a promise fulfilled.

Now, more than a half-century later, Americans are asking whether the American Century is over. In their new book, Winner-Take-All Politics, Jacob S. Hacker and Paul Pierson paint a grim picture of the nation’s present state of affairs. Sadly, the authors, well-meaning academic liberals, dare not say what their book recognizes and a growing number of their fellow Americans know all too well: The party’s over.

The book joins a growing number of valuable studies examining the Great Recession that officially started in December 2007 and ended in June 2009. (For those still un- or under-employed, like those who have lost their homes to foreclosure or health care costs, the recession grinds on.) The author’s assessment of the current situation is pretty straightforward: “The Wall Street of well-heeled bankers are thriving, while the Main Street of ordinary workers struggled amid the worst economic downturn since the Great Depression.” Going further, they detail how, since the early ’80s, the U.S. has “drifted away from a mixed-economy cluster and traveled a considerable distance toward another: the capitalist oligarchies…” of Latin America.

Hacker and Pierson, political science professors from Yale and Berkeley, respectively, have written a carefully reasoned, impeccably footnoted, and compelling account of the crisis. They provide three valuable insights.

First, the current crisis is the result of nearly four decades of economic and social restructuring driven by the demands of the rich and super-rich, especially of the financial sector. Second, this capitalist class, working through a well-financed operation of think tanks, lobbyists, “astroturf” shills, co-opted consumer groups, media blowhards, and hired politicians, have not only taken control of the Republican party but the leadership of the Democrats as well. And third, as a result of the first two factors, ordinary Americans, whom they identify as the middle class, have not only lost their economic shirts over this period, but their political influence and interest in politics as well. In essence, they argue that America’s “winner-take-all” economy determines today’s winner-take-all politics.

The decades following WWII provided the short-lived American Century, with not only wide-scale prosperity shared by working class people (excluding African Americans) but a genuine opportunity for class mobility. However, with the onset of the 1970s oil crisis and recession, the American Century began to unravel.

The most informative section of the book is its detailed account of what only can be called the capitalist counter-revolution of the ’70s and ’80s. In response to the social and political tumult of the ’60s, the forces of reaction undertook a long war to retake control of the economy and political process. The authors effectively argue that the political failures and compromises of the Carter presidency, not the nefarious policies and practices of Nixon, created the framework for today’s winner-take-all society.

The so-called Reagan Revolution ended the era of middle class prosperity, replacing it with wage stagnation hidden by the two-income household (women entering the labor market) and mounting debt. By the mid-’80s, abundance was a thing of the past. As David Bloom, a Harvard economist, warned in Time in 1986: “There has been a thinning of the middle class. … As society becomes more polarized, it has more ‘haves’ and ‘have-nots,’ with fewer in between.” Reagan’s firing of the air-traffic controllers signaled the end of America’s long contained class war. It was also a direct assault on the Democratic Party’s power base, from which the labor movement and Democrats have never really recovered.

Among the wealth of data that Hacker and Pierson use to substantiate their carefully-crafted argument, one point stands out as most illuminating: “The share of [national] income earned by the top 1 percent of Americans has increased from around 8 percent in 1974 to more than 18 percent in 2007.... The only time since 1913 ... that this share has been higher was 1928.” Going further, they note that the annual income of the nation’s top 1/10th of 1 percent (some 10,000 households) jumped from $4 million in 1974 to $35 million on average in 2007. Making this situation all-the-more galling, the income of 90 percent of American families has been essentially flat since the 1970s.

Equally telling, the American Century was predicated on a progressive or equitable income tax system. However, between 1963 and 2003, the top bracket saw their tax rate decline to 35 percent from 91 percent. Reagan championed a further reduction in the income tax rate for the rich and super-rich; in 1988 and 1989 the rate for the rich fell to 28 percent.

The authors carefully link the shifting structure of the U.S. economy and the growing concentration of wealth to changes in the political process. They detail how the most reactionary elements of the corporate class gained control of the Republican Party as the landscape of national politics shifted from the East and North to the South and West. The restructuring of the Republic party went through three phases: (i) Reagan’s capture of white working-class Democrats; (ii) Gingrich’s “Contract with America” and the integration of evangelical Christians; and (iii) the current Tea Party calls to cut the debt, shrink government and cut corporate and personal taxes of the rich.

Today, the U.S. economy is in free fall. Republicans, conservatives, and a growing number of Democrats (e.g., New York and California governors, Andrew Cuomo and Jerry Brown) are calling upon Americans to tighten their belts and accept wage cuts, higher levels of unemployment, and a declining standard of living. And all while the rich get even richer. This new reality has been labeled the “new normal.” It is a “normal” that should be resisted.

Don’t look to this book to give you any ideas as to how to resist either the growing concentration of wealth and power commanded by the rich or the deepening immiserating suffered by more and more ordinary Americans. The authors suffer from a blindness not uncommon among academics. Their analysis, while clear and cogent, carefully taking the reader through a complex and many-decade process, has a disturbing inevitability to it. Everything is lined up to lead to the current crisis.

The authors’ method of reading history backwards is compounded by two additional factors. First, their book lacks recognition of the world beyond the nation’s borders, of the American empire and the power of the military-industrial complex; the current wars in Iraq and Afghanistan and 700 foreign bases are not discussed. Second, it lacks any consideration of personal psychology, thus it cannot explain why white working-class voters (from Reagan Democrats to Tea Party activists) have embraced a politics that has made their lives worse off.

These factors contribute to the authors’ inability to propose any meaningful political actions to counter the tyranny of finance capitalism. Their analytic pessimism would make it difficult for them to make sense of a series of recent polls that report that most Americans prefer increasing taxes on the rich and cuts in military spending—as opposed to cutting Medicare benefit or reducing Social Security—to bring down the national debt.

Winner-Take-All Politics is a valuable book that provides a well researched and carefully reasoned analysis of our current economic and political crises. It is clearly written and the authors know the enemy. However, in the face the overwhelming evidence they muster documenting how the rich and their minions have systematically raped and pillaged our country, one would have hoped that Hacker and Pierson would have expressed more outrage for surely a reader feels it. For in this outrage a new politics might well be borne, one that does not succumb to the end of the American Century, but envisions a new America for the 21st century.

Contributor

David Rosen

David Rosen regularly contributes to AlterNet and CounterPunch and can be reached at drosennyc@verizon.net.

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