Background Part III: Today

The current moment in American politics is a chaotic one characterized by frequent, unpredictable alternations in power and no clear, dominant vision of governance. A similar moment appears to have occurred in the Gilded Age, when control of the House shifted back and forth for decades after the Civil War, and few presidents left a lasting ideological mark.

On the one hand, the Reagan era vision of government has collapsed. Contrary to the dreams and promises of the Reagan era, the core programs of the New Deal era remain in place, and show every indication of continuing to remain in place, because the American people support them—as President George W. Bush’s failed attempt to privatize Social Security illustrated. In addition, the conservative promise of “smaller government” rings increasingly hollow in the wake of the growth of government spending, and the worsening of deficits, under both Presidents Reagan and the second Bush. Above all, the 2008 financial crisis definitively discredited the economic assumptions of the Reagan era. Financial deregulation led to the crisis, and those who bought into the core economic assumptions of the era failed to see the crisis coming, failed to understand the nature of the crisis as it happened, and continued to make inaccurate predictions in the wake of the crisis. The predictions of generally Keynesian economists were far more accurate.

The Bush administration’s failed response to Hurricane Katrina, and the inequality laid bare in the aftermath of the hurricane, further undermined the credibility of the Reagan-era dream of enhancing freedom by disabling the government.

The economy of the Reagan era has also shown itself to be generally inferior to what preceded it. While the New Deal era was defined by rising wages, decreasing inequality, relatively low unemployment, and decades without a financial crisis in the United States, the Reagan era has offered stagnant middle-class wages, increasing consumer debt, rising inequality, declining or at least stagnating social mobility, and a steadily escalating series of speculative bubbles and financial crises. The economic policies of the Reagan era did not cause all of the weaknesses in the American economy over the last three decades. But it is likely that many of the economy’s pathologies were exacerbated by the Reagan-era embrace of deregulation, and especially financial deregulation; decreased taxation, disproportionately to the benefit of the wealthy; reduced spending on public goods; a smaller safety net; opposition to organized labor; a heavy reliance on corporate subsidies; and in macroeconomic policy, a strong dollar and a greater focus on low inflation than on low unemployment.

On the other hand, no clear vision of governance has emerged to replace the vision of the Reagan era. Instead, poorly defined movements and slogans on the left and right have oscillated in and out of prominence. In the last decade, America has gone from Karl Rove’s plans for an enduring Republican majority based on “compassionate conservatism”; to the apparently decisive rise of a Democratic majority in 2006 and 2008, followed by the landmark passage of the Affordable Care Act, a belated and relatively watered-down expansion of the New Deal vision of government; to the Tea Party’s victory in 2010 based in part on hostility to the Affordable Care Act and on calls for an imagined recommitment to Reagan-era principles; to the apparent rejection of a Reagan-era revival with the defeat of Mitt Romney in 2012.

President Obama is not the next Reagan. His guiding vision of government, to the extent that he has one, cannot engage with or replace that of the Reagan era. He apparently hoped that his unique background, temperament and intellect could help America overcome the cultural divisions that have partly defined our politics since the racially driven realignments of the 1960s. That hope has not been fulfilled; but even if it had, it could not have provided a substitute for the substantive vision of governance that defined the Reagan era. An affirmation that deliberation in a democracy should be conducted in a spirit of inclusiveness and reasonableness, with a recognition that we are all flawed and the world is tragic, does not provide a response to the Reagan era’s general theory that big government is the problem, nor does it provide a set of specific policy proposals to counter the right’s relentless drive for tax-cutting, deregulation, and an ever-smaller safety net. An ideology can only be displaced by another ideology, not a vision of improved public discourse and political cooperation.

[UPDATE 3/29/14: In his first inaugural address, Obama said: “The question we ask today is not whether our government is too big or too small, but whether it works.” This is a good illustration of why Obama’s presidency is not the beginning of the chapter that will follow the Reagan era. Being in favor of a government that “works” is not an ideology. It is not even a politically effective slogan. Democrats who have tried to win by presenting themselves as more competent than their opponents have rarely succeeded on that basis. (The standard example of this is the Dukakis campaign in 1988.) A lack of competence can certainly disqualify an individual candidate, but there will never be an era in American political life that is defined by its commitment to competence in government.]

President Obama’s repeated call for a long-term balanced budget accompanied by near-term investments in the future also cannot provide a substitute for the Reagan era vision of government. In particular, this way of framing the domestic economic agenda seems to accept the Reaganite assumption that conversations about the future direction of the United States should begin with a discussion of deficits, as well as the notion that government activity is presumptively invalid and wasteful, unless proven absolutely essential to future economic growth.

Other candidates for a vision of governance that might replace that of the Reagan era have also fallen short. Cass Sunstein’s call for the increased use of “nudges” in the design of government programs is a valuable proposal, but not a vision of government. (In fact, the use of nudges is just one of many tools Sunstein has proposed for improving government policy-making.) The Occupy Wall Street movement also provides no viable challenge to the guiding principles of the Reagan era. To the extent that any generalizations can be made about the movement, the movement’s focus appears to be primarily procedural, grounded in anarchist ideals of consensus. It lacks both a general substantive vision of what the role of government should be, and specific substantive proposals.

The most politically promising departures from the ideological framework of the Reagan era have probably come from progressives like Elizabeth Warren and Robert Reich—public actors with an understanding of economics, history, and the way that government shapes the economy through law. Warren has apparently said that the issue facing the American public is not big versus small government, but rather whose interest government serves—a compelling challenge to the defining slogan and ideological framework of the Reagan era. For the purpose of advancing progressive policies in the near future, Warren’s and Reich’s populist theme of government serving the middle class may be enough. Above all, this way of framing the issues draws attention to the many ways in which government policies at present serve the interests of wealthy individuals and powerful corporations rather than workers and their families.

But finally displacing the ideological frame of the Reagan era will probably require more. Saying that government should serve the interests of the middle class, or of the 99% instead of the 1% (or the 0.01%), does not imply a vision of how government should do so, or what government looks like when it serves the middle class. Capitalism and Freedom offered all of these things—a picture of what government would look like (“small”) if it were serving a widely shared goal (“freedom”), accompanied by an illustrative list of policies.

So, the question remains: If a progressive today were to write a book like Milton Friedman’s Capitalism and Freedom, what would it say?


7 thoughts on “Background Part III: Today

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