observations and opinion
Tomorrow night, President Obama goes on television to try and save his administration and with it, most of the work of the last 80 years of U.S. federal government. This is no overstatement. Make no mistake, the GOP has every intention of tearing down the edifice of the New Deal, the Fair Deal, the War on Poverty, even the little-remembered “New Covenant” promised by Bill Clinton in 1992.
How is this possible? How can the Republicans have even the slightest chance of destroying all that was built? One answer is: memory loss. Or more accurately, the loss of people who remember why the U.S. government operates anything other than its Armed Forces. With the exception of historians and surviving senior citizens, we have a weak grasp today of what government meant to people in the 1930s and 1940s, and how that has shaped our world today. Many who were taught, have forgotten; and many more, have never been taught.
The world slid off a precipice in 1929. Capitalism collapsed and soon afterwards, democracy teetered. People don’t remember that by 1932, there was a solid constituency in the United States, among other places, favouring some form of dictatorship. When Franklin Roosevelt came to the Presidency, many expected (and he hinted) that such power might be required to seize the country and lift its head out of the water. Fortunately, that wasn’t necessary, because FDR had a grip on the public imagination and on Congress, which enabled him to create the New Deal.
The FDR experiment, and efforts like it in other western states, breathed hope and life into democracies that were by 1932 very fragile (for a most bracing account of this, check out Conrad Black’s great tome, Franklin Delano Roosevelt: Champion of Freedom). When World War II burst open, the powers of the state were exercised even more liberally and aggressively – the percentage of GDP spent by government increased exponentially, and with it, the general well-being of the broad mass of citizens.
One can hardly imagine the psychological effect of this on millions of people who hitherto had wandered through a decade of privation and depression. The fact was, the state unleashed the power of the citizenry through concerted action; the state showed that the vast natural and human wealth of the western states could be harnessed for the general good. By the end of World War II, even the most crotchety loyalists to 19th century tradition, such as Winston Churchill, had to admit that “the welfare state” was a necessity, if not a pure good.
The generation that emerged from this experience became the most “liberal” in human history. It supported parties which added to the welfare state: in Canada, the CCF (precursor to the NDP) was at the top of the polls in the mid and late 40s. The Conservatives added the word “Progressive” to their name, in order to evade extinction. The Liberals borrowed policy from everyone, expanding what the government did for people, and by extension, what government took from people (by way of taxes). On balance, there were losses of personal liberty and also huge increases in personal liberty, purchased through the greater health and welfare of classes of people who previously simply did not have a benefactor in life.
Times were good. Although little understood today, the United States knew some of its most productive and prosperous years when taxes were relatively high (the 1950s and 60s), but those were also years of huge comparative advantage for the U.S. As governments began borrowing and boosting tax rates, most people could not object to an activist, big-spending government. The 60’s and 70’s leaders (JFK, Johnson, Nixon, Trudeau, Wilson & Heath) taxed and spent rather liberally, because it all seemed “free.” And it almost was, in a growing economy.
Starting in the late 1970s the Americans squandered their relatively secure position, particularly through a refusal to develop alternatives to its incredibly expensive, unstable dependence on foreign oil.Over time, however, spending led to a massive, fossilizing state welfare program that re-directed wealth not to the desperate , but to the affluent. Opportunity was choked out of economies by sclerotic state institutions, inflation, energy costs and debt.
The inevitable backlash, presented most sharply in the person of Margaret Thatcher (“The problem with socialism is that eventually you run out of other people’s money”) led to a correction. Western Governments used punitive interest rates that bled the inflation out of their economies, creating crushing unemployment to pull down labour costs. Coupled with technology gains, a renewed appetite for debt and relatively stable energy costs, the 8os were an optimistic if poorly-dressed time. Most of the bands sucked, too.
It was in the late 70s that the American right developed an ideology which equated taxes with oppression and theft, rather than sacrifice and thrift. This seed, once planted in the popular consciousness, was met with cowering fear by the spendaholic Democrats, weakening the capacity of the United States to support its state activity. With suppressed tax rates and the necessity of a huge defence build-up, the Americans began a debt addiction which may have priced the U.S.S.R out of existence, but which set the U.S. itself on a terrible course. The Reagan-Bush 41 era saw skyrocketing government debt. The Clinton prosperity (again, with higher top end marginal tax rates) actually eliminated the deficit, but his Republican successor Bush 43 spent it all and then some, as we know.
Today we face something of a perfect storm: we shifted much of the wealth-producing activity off shore, which made it easier and cheaper to consume – until we ran out of other people’s money (again). We have incurred huge public debts (16 trillion really is a lot of dollars, even for the U.S.A.) which it is necessary to pretend will be re-paid, in order to avoid a collapse of the world’s economy (where that pretense has become difficult, as in Greece and Spain, we see what awaits us). The government doesn’t even print all the new money anymore – it just deposits cash in its own accounts, as required. One fears this is unsustainable.
Meanwhile, Amerian politics has been infected by a magic realism which allows people to believe that taxes must never rise, lifestyles must never change, government must evaporate like the morning mist and people must return to an idealized 1776 State of Nature, only with iPhones (made in China). The greatest power in the world for good has cannibalized its own brain and become, at least temporarily, disabled from offering true leadership to itself or anyone else.
This is a crisis. We need people who are prepared to speak up for what government can do, and speak up about how people are going to have to pay more to get less of it – namely in entitlements. To date, there haven’t been many leaders in America, Britain or Canada prepared to say “the retirement age must rise”, “health money must be re-directed to prevention, not just life extension” or “income taxes must go up” or “new fossil fuel or carbon taxes must be implemented” or “vast parts of the government apparatus must be closed or out-sourced.” The most heroic personage seems to be New York Mayor Bloomberg, who is at least willing to tax big, fattening soda pops in the interest of children’s health. But most of our politicians, having learned to survive on the milk of narrow prejudice squeezed from their loyal legions, not only don’t have the guts to be bold, they don’t have the brains to be bold. We are being governed, generally, by the Feeblest Generation.
The Greatest Generation, that we laud so often, knew that government had to tax and spend in order for modern civilization to work. It knew that people had to labour, and sometimes die, in the defence of liberty. They knew that nothing was free, unless you were prepared to steal it. That is why they accepted, but did not see as a privilege of birth, the welfare state. Perhaps those who came to age in the 1930s and 40s were inherently smarter and braver and wiser than us, but more likely they simply learned some lessons that we, on the whole, have ignored or never been taught.
Barack Obama came to power in the midst of a crisis much like that faced by FDR. Although little understood yet, President Obama took swift and decisive action to staunch the flow of jobs and confidence, through the derided but absolutely necessary “stimulus” program. (we didn’t realize it at the time, his disappointing Inaugural address was probably a symptom of fatigue, induced by relentless work on saving the world.) He did an amazing job, quickly. Within weeks, the Republican hounds were baying for his blood, in a shameful display of self-seeking over citizenship.
Here, he faltered. The President, somehow unable or unwilling to build relationships in Congress or trumpet his own feats, wobbled. He became a lonely man in a big white building, surrounded by worshippers within and enemies without. When not trapped indoors, he alighted to golf courses, willing to hit the ball down the course and wait for another shot later (that’s terrific, except when you’re in the bunker. He’s in the sand, and so are we.) He accomplished much, but not the things people were worried about. He didn’t fight for a big enough stimulus. He didn’t deal with the grotesque financial criminality that had plundered and crippled the country. He would not address the debt and deficit calamity. He lay low, did what he wanted, didn’t explain his program very well and then lost his functional majorities in Congress. Game over.
America is about to drown in a tide of amnesia and ignorance. Yet its President cannot seem to speak above the roar, his magic tongue now tripping over telepromptered prose. One hopes that tomorrow night, in the “town hall” forum so beloved of U.S. cable news networks, Mr. Obama finds his voice again, and reminds us all of who he seemed to be, just four long years ago.