politics (not about this week)

Just read a fascinating interview by Ezra Klein with historian Gary Gerstle. Some points I either found enlightening or want to expand on:

The New Deal was very much a Democratic party thing, but in 1952 Dwight Eisenhower beat Robert Taft for the Republican nomination, largely by going along with it. The Cold War demanded not only that we "beat the Russians" militarily and technologically, but also win the battle for hearts and minds by actually making life better for our people; if we didn't, the Commies would promise to do so.

Eisenhower won the Presidency and didn't cut taxes on rich people (the top marginal tax rate had been raised to 91% to pay for WWII, and he kept it there). Eisenhower supported unions, and major US corporations were willing to compromise with unions if the alternative was full-on Communism. Eisenhower supported spending gazillions of US tax dollars to build the Interstate Highway System, ostensibly for military-defense purposes (and with the widths of the highways determined by the landing gear of a B-52), but oh look, it's making our consumer economy ever so much more efficient! Eisenhower and other Republicans reacted to Sputnik by spending gazillions of US tax dollars on math and science education, because the alternative was falling behind the Russians. The New Deal, with government taking an active role in reducing inequality and improving ordinary people's lives, was now the bipartisan consensus.

That consensus started falling apart because of racial conflict in the 1960's, the Vietnam War, the rise of Japanese car companies as a credible competitor, and the Arab oil embargo of 1974 (which led to simultaneous inflation and unemployment, which all the textbooks said was impossible). People across the political spectrum lost faith in the ability of government, and "experts" in general, to do anything right. The most well-known exponent of this shift was Ronald Reagan ("The nine most terrifying words in the English language are 'I'm from the government' and 'I'm here to help'"), but even Jimmy Carter, in 1978, said

Government cannot solve our problems. It can’t set our goals. It cannot define our vision. Government cannot eliminate poverty or provide a bountiful economy or reduce inflation or save our cities or cure illiteracy or provide energy. And government cannot mandate goodness.

Over the next ten years, the gradual (and then sudden) failure of the Soviet Union was taken as demonstrating the inevitable triumph of free-market capitalism, if only (according to the new "neoliberal" theory) government would get its hands out of the economy and Smith's invisible hand to work its optimizing magic. Reagan was neoliberalism's first full-throated supporter in the White House, but Clinton played the same role in the Democratic Party that Eisenhower had in the Republican, officially acquiescing to the new bipartisan consensus.

The neoliberal consensus replaces FDR's "Four Freedoms" -- of speech and expression, of faith, from want, and from fear -- with four kinds of freedom of movement: by people, goods, information, and capital, all untrammeled by political boundaries. Frankly, I have a lot of respect for those freedoms too, and my life is richer for meeting people, buying goods, and retrieving information from around the world. But these are more abstract, less connected to people's everyday lives.

Here I have to point out the neoliberal syllogism

The free market produces optimal results; the free market produces these results; ergo these results must be optimal. If you perceive a 'market failure', you're simply wrong because there's no such thing; markets cannot fail.

(Yes, people have said that to me in so many words in online arguments.) Many people on the right define optimality as "whatever a free market produces", abdicating their own, and society's, moral responsibility to decide what's good. They argue that government can't set our goals and define our vision, but the market can, changing Capitalism from an economic theory into a religion (as its "ism" suffix would suggest). It's an ironic divergence from Adam Smith, who wrote about the benefits of a free market from a deep Protestant notion of making ordinary people's lives better, and pointed out situations in which a free market might fail to do so.

And, of course, almost nobody wants a completely free market, without a common currency or a judicial system that enforces contracts, punishes fraud, etc. so we're left with a "free-ish market", which is non-uniquely-defined and therefore leads to a non-unique definition for "good".

Gerstle also points out the influence of Ralph Nader, who persuaded the government to regulate certain things (most famously car seatbelts) by elevating the role of the consumer above other interest groups such as employees. In place of FDR's view of government counterbalancing big business to keep it from getting "too big", corporations were now allowed to get as big as they wanted as long as economies of scale outweighed the loss of market competition and benefited consumers on net.

As a predictable result, corporations became more and more able to capture their regulators and craft government policy for their own benefit. With this increasing coziness, even downright corruption, public faith in government to counterbalance the power of business declined even farther.

Here I interject: A lot of Republican politicians, starting perhaps with Reagan and certainly by the time of Newt Gingrich, actively wanted people to lose faith in government. Even now, decades later, whenever government threatens to make people's lives better, Republicans feel an obligation to sabotage it lest ordinary people get the mistaken impression that government can make people's lives better. They would rather people suffer than thank the government for their non-suffering.

The neoliberal consensus had its problems too, of course, most notably economic inequality. Ronald Reagan famously said "a rising tide lifts all boats," and he probably actually believed it. But it never happened: the rowboats and canoes stayed pretty much where they were, while the luxury yachts headed for the moon.

From this Web site...

Median US income, adjusted for inflation, grew by 28% in the 18 years from 1962 to 1980, and slightly under 28% in the 44 years since.

95th percentile US income, adjusted for inflation, grew by 26% in the 18 years from 1962 to 1980, and almost 57% in the 44 years since.

99th percentile US income, adjusted for inflation, isn't available before 1996, but it grew by 43% in the last 28 years. (Extrapolating linearly, that would be 68% in 44 years.) Even that probably understates things: as DQYDJ points out, upper-income people invest more, and spend less, of their income and are therefore less affected by inflation.



The 2008 financial crisis and government attempts to recover from it made glaringly obvious that when financiers' gambles failed, they didn't pay the price but tens of millions of ordinary people did. At the same time, the opioid crisis killed hundreds of thousands of mostly working-class Americans, while enriching drug dealers both legal and illegal. Donald Trump said a lot of things in his 2016 campaign, most of them nonsense, but he was absolutely right that the system is rigged in favor of the rich and powerful. Of course, he also promised that as one of those rich and powerful, he was uniquely qualified to un-rig the system, without pointing out that he had no incentive to un-rig the system that had treated him so well.

Ezra Klein, referring to the Carter quote above that "[government] can't set our goals. It can't define our vision", adds

I think both parties have come to a view ... that markets left to their own devices are going to trample over values, goals, visions that they should instead be serving.

Both major parties are perceiving, through different lenses and with different slants, that pure individualism and self-interest aren't actually improving most people's lives; they need community, connection, morality, shared values, shared reality. Kids are healthier interacting face-to-face than on social-media apps optimized to keep them scrolling and counting their likes.

But where do community and morality come from? The social-conservative wing of the Republican Party, as usual, sees this as an opportunity to harness the power of government to enforce conservative-Christian morals on everyone else. Many Democrats and institutionalist Republicans would like, instead, to revive a "secular religion" of pluralistic democracy, in which we can disagree respectfully within a shared framework of objective facts and law. Donald Trump, on the third hand, sees no point in morality, preferring a might-makes-right cynicism: as far as he's concerned, the only reason to gain power is so you can use it to reward your allies and punish your enemies, as they would surely do to you if they gained power. In Trumpland, "morality" is an excuse losers give for why they lost, "facts" are whatever the most powerful guy says, and "law" is whatever you have the power to get away with; of course it's different for the strong than the weak.

I don't trust government to choose and enforce individual morality, except at the most basic and widely-shared level (pretty much all the world's religions, and most non-religious belief systems, have something like "thou shalt not kill"). And I certainly don't trust big businesses or "the market" to tell me what's moral. I want to start with the assumption that other people are human, and have similar concerns to mine, even if they look differently, vote differently, have sex differently, or speak a different language. Individual freedom seems like a good axiom, until your individual freedom starts to infringe on mine, because I'm just as human and worthy of consideration as you are.

OK, I'm winding down. I hope I've said or quoted or summarized at least one or two interesting things.