The current disconnect between overall economic growth and the fortunes of typical Americans is, as far as I can tell, unprecedented in modern U.S. history. Inequality was high during the Long Gilded Age, but because inequality was stable, most workers saw their standard of living improve steadily as the economy grew. Growth in the great postwar boom that ended in 1973 was broadly shared. Even after inequality began rising at the end of the 1970s, a growing economy continued to translate into gains for almost everyone. Thus inequality was rising in the 1980s, but the expansion of the economy from 1982 onward was still strong enough to let Reagan declare “Morning in America” in 1984, and to get the first George Bush elected in 1988. Inequality continued to rise during the 1990s, but there was still a dramatic improvement in public sentiment as the economy recovered from the 1990–92 slump.
Now, however, the stagnation of wages and median income in the face of overall economic expansion has become so clear that public perceptions of how the economy is doing no longer seem linked to standard measures of economic performance. That is, the years since 2001 have been Bill Gates walking into a bar: The average has gone up, but that means nothing to most people. Or to be less metaphorical, corporate profits have soared—they’re now at their highest level, as a percentage of GDP, since 1929—and so have incomes at the top of the scale. But the wages of most workers have barely kept up with inflation. Add in a growing sense of insecurity, especially because of the crumbling health insurance system (of which much more in chapter 11), and it’s perfectly reasonable for most people to feel pessimistic about the economic situation.
Polls also suggest that the public both understands the role of growing inequality and supports government action to do something about it. A massive Pew survey of trends in public opinion found that the fractions of the public agreeing that the rich are getting richer while the poor get poorer, that the government has a responsibility to help those in need, that everyone should be guaranteed enough to eat and a place to live, have all risen to levels not seen since the early 1990s.[3] All this suggests that there’s an opportunity for a major push toward policies that address inequality and/or economic insecurity.
The fact that polling numbers today resemble those from the early 1990s may raise some warning flags. After all, economic discontent got Bill Clinton elected in 1992, but when he tried to push through health care reform—which, as I’ll argue at length in chapter 11, has to be the centerpiece of any progressive reform agenda—he failed utterly. This legislative defeat was followed by electoral defeat, in the 1994 rout that put Republicans in control of Congress. This raises the question of whether history will repeat itself.
There are, however, several reasons to think that it won’t, or at least doesn’t have to.
The first is that Clinton’s failure on health care looks, even in retrospect, far from inevitable. Better leadership, better communication with Capitol Hill and the public, and Clinton might well have been able to go into 1994 with a major domestic policy achievement under his belt. Even after the initial Clinton push had run aground, a group of moderate Democrats and Republicans offered a compromise that would have covered 85 percent of the uninsured, but Hillary Clinton rejected their overtures.
A more fundamental point is that today’s economic discontent is much less likely to be replaced by other concerns than that of the early 1990s. Americans were depressed about the economy in 1992 in large part because the economy as a whole was depressed, with an unemployment rate well over 7 percent. Once the economy recovered, the economic issue lost much of its force. Among other things, as more people got jobs with health care benefits, pressure for health care reform faded away. (There was also a secondary reason for declining concern: For much of the 1990s HMOs seemed to be containing costs. Again, more on this in chapter 11.) Today, however, people are worried about their finances and the state of the economy even after years of fairly good economic growth, with the unemployment rate not far off historic lows. It seems likely that demands that the government do something for working Americans will grow more, not less, intense.
Meanwhile, something else has changed: both long-term trends in American society and recent events have damaged the ability of movement conservatives to change the subject, to mask the reality that they are on the side of the privileged by turning the nation’s attention to other issues. One major source of that change is the way Bush has damaged the right’s credibility on national security.
As Chris Hedges documented in his 2002 book, War Is a Force That Gives Us Meaning, even the Argentine junta of the early 1980s, a government that presided over hyperinflation and economic collapse, became briefly popular when it started a senseless war with Britain by invading the Falkland Islands.[4] George W. Bush’s extremely high approval ratings after 9/11 reflected the same rally-around-the-flag effect: Governments always get an initial boost in public support when they go to war, no matter how incompetent and corrupt the government and no matter how foolish the war.
Still, it’s doubtful that a Democratic president would have received as big a political boost as Bush did. During the Reagan and Bush I years, Republicans had solidified a reputation as being stronger then Democrats on national security. Never mind the question of whether that reputation ever had any justification; the point is that 9/11 fitted in with a preexisting script. Questions about whether Bush had ignored warnings about the threat were brushed aside. Initial success in Afghanistan was treated as a huge achievement for the Bush administration, as if tipping the balance of power in a third-World civil war were the equivalent of D-day. Minor details like Osama bin Laden’s escape from the mountains of Tora Bora were ignored.
In the normal course of events, the national security issue would gradually have receded in political salience, much as it did after the first Gulf War. But Bush and those around him found a way to keep the war psychology going. We have a fairly clear picture of how the Bush administration sold America on war with Iraq: cherry-picked intelligence, insistent rhetorical linkage of Iraq with 9/11, and so on. What’s less clear is why the administration wanted to attack a regime that had nothing to do with 9/11. It seems almost certain, however, that the perceived domestic political advantages of a splendid little war played an important role in the decision to invade. The now infamous “Mission Accomplished” photo op, with Bush’s staged landing on an aircraft carrier, was, to a large extent, what the war was all about. And the war worked to Bush’s advantage for a surprisingly long time. In spite of the failure to find WMD and the rising U.S. death toll, it took more than two years into the war before a majority of Americans began consistently telling pollsters that invading Iraq was a mistake.
At this point, however, public disgust with the Iraq War has become the central fact of American politics. That could be just a short-term phenomenon; the question for this book is whether the Iraq debacle will have a longer-term influence in changing the political landscape. I think it will.
Ideally the public will conclude from the debacle that if you want to win a war, don’t hire a movement conservative. Hire a liberal, or at least an Eisenhower-type Republican. Failure in Iraq may have been inevitable, but whatever slim chances of success the United States might have had were dissipated by errors that were inherent to movement conservatism. In particular the Bush administration’s overoptimism and its attempt to fight a war on the cheap, with minimal numbers of ground troops, flowed naturally from its commitment to cutting taxes. A frank admission that war is a risky, expensive business would have prompted calls for shared sacrifice; remember, taxes on the rich went up and inequality declined during both world wars. But the Bush administration planned to use the war to further its inequality-enhancing domestic agenda. The script called for a blitzkrieg, a victory parade, and then another round of tax cuts. This required assuming that everything would be easy, and dismissing warnings from military experts that it probably wouldn’t work out that way.
3.