The American Prospect

Twenty-Fifth Anniversary Issue A Radical Pope E.J. Dionne

Elena Kagan, Redeeming justice Lincoln Caplan

l i b e ra l i n t e l l i g e n c e

Spr i n g 2 015

Plutocracy forever? the political roots of Inequality Robert B. Reich rebuilding a Middle Class Robert Kuttner How Gilded Ages End Paul Starr PLUS

Teresa Ghilarducci • Harold Meyerson • Andrea Campbell • Stephanie Coontz

The Political Challenge Stan Greenberg • Heather Hurlburt • Rachel M. Cohen • Jacob Hacker & Paul Pierson

PLUS

Randall Kennedy: Movement and Memory • Alan Blinder: the Improving Economy Joshua Kroll: the Cyber Conundrum

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contents

volume 26, number 2 Spring 2015 Twenty-Fifth Anniversary Issue A RADICAL POPE E.J. DIONNE

ELENA KAGAN, REDEEMING JUSTICE LINCOLN CAPLAN

S P R I N G 2 015

PLUTOCRACY FOREVER? THE POLITICAL ROOTS OF INEQUALITY Robert B. Reich REBUILDING A MIDDLE CLASS Robert Kuttner HOW GILDED AGES END Paul Starr PLUS

Teresa Ghilarducci • Harold Meyerson • Andrea Campbell • Stephanie Coontz

THE POLITICAL CHALLENGE

2015

1990

LIBERAL INTELLIGENCE

Stan Greenberg • Heather Hurlburt • Rachel M. Cohen • Jacob Hacker & Paul Pierson

PLUS

Randall Kennedy: MOVEMENT AND MEMORY • Alan Blinder: THE IMPROVING ECONOMY Joshua Kroll: THE CYBER CONUNDRUM $7.95 WWW.PROSPECT.ORG

columns 5 prospects What We Know Now by Paul Starr & Robert Kuttner 132 Comment The Opportunity Dodge by Larry Mishel

notebook 9 The Cyber Conundrum by Joshua A. Kroll 16 The Marriage Cure by Rachel M. Cohen 20 Anxiety Itself by Heather Hurlburt 22 Why Public Silence Greets Government Success by Jonathan Cohn

Features 26 cover Package Rolling Back Inequality America’s top economic and political challenge 27 The Political Roots of widening Inequality by Robert B. Reich 31 How Gilded Ages End by Paul Starr 41 The Wealth Problem by Robert Kuttner 46 Senior Class: America’s Unequal Retirement by Teresa Ghilarducci 50 Raising Wages from the Bottom Up by Harold Meyerson 56 The Junior Justice by Lincoln Caplan 66 A new Formula for a Real Democratic Majority by Stanley B. Greenberg 71 No Cost for Extremism by Jacob S. Hacker & Paul Pierson 78 The Civil Rights Movement and the Politics of Memory by Randall Kennedy 86 A Radical Pope by E.J. Dionne 94 Poised for Prosperity? By Alan S. Blinder 100 The High Road Wins by Ann Markusen (with SideBar by Sam Ross-Brown)

Reviews 109 The Real Story of the American Family by Stephanie Coontz 113 piety and Politics in America by Susan Jacoby 119 It's All About the Money by David L. Kirp 122 Has Child care Policy Finally Come of Age? by Andrea Louise Campbell 125 How the Bankers Destroyed the Dream by Peter Dreier 129 The Evolutionary Roots of Altruism by Melvin Konner Cover art by Victor Juhasz

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contributors

Robert B. Reich is a co-founder of the Prospect and former U.S. secretary of labor.

He examines the political underpinning of the U.S. economy and finds it explains a significant part of widening inequality. “If you really want to understand what’s happened to American incomes and wealth,” he says, “you have to look at where the power lies to make and remake the economic rules.”

E.J. Dionne is a columnist for The Washington Post.

A lifelong Catholic, he writes about Pope Francis. “Catholics and everyone else who loved Pope John XXIII and the changes he instituted in the Church have good reason to be elated over Pope Francis,” he says.

“He is reminding the world that Catholicism never stopped being about achieving social justice and lifting up the poor.”

Stephanie Coontz is director of research at the Council on Contemporary Families. She reviews two books about the changing working-class family. Fifty years ago, the Moynihan Report argued that the root cause of inequality and poverty is family breakdown.

“Reviewing these books provided welcome respite from the spate of commentaries recycling Moynihan’s inaccurate analysis,” she says.

Randall Kennedy, a contributing editor and board member of the Prospect and professor at Harvard Law School, writes about the collective memory of the Civil Rights Movement. “I am in the midst of writing a history of the civil rights revolution,” he says.

“One of the most enjoyable features of this project is that it prompts me to visit and revisit inspirational figures, some of whom have been overlooked.”

Lincoln Caplan, a senior research scholar at Yale Law School and a former New York Times editorial writer, writes about Justice Elena Kagan, who is completing her fifth term on the Supreme Court. “Even the best-written opinions by justices are rarely well written from top to bottom,” he says. “Kagan’s are, which is why I wanted to write about her as a writer and a justice.”

Susan Jacoby is the author of the forthcoming Religious Conversion: A Secular History.

She reviews two books about the role of religion in American politics.

“I am always compelled by the contradictions between the outsize role of religion in American politics and the fact that the United States was the first nation founded upon the separation of church and state,” she says.

Stanley B. Greenberg, chairman and CEO of Greenberg Quinlan Rosner and co-founder of Democracy Corps, offers a prescription for how Democrats can achieve a new majority. “I wrote this piece after realizing that the old formula of turning to the ‘Reagan Democrats’ was finished,” he says.

“This is a new era where the new American majority and its struggles become inescapable.”

Teresa Ghilarducci is the Bernard L. and Irene Schwartz Chair in Economics at at The New School for Social Research. She writes about the growing inequality in retirement.

“Once, our system enabled rich and poor alike to retire,” she says.

“Now, some older workers will be able to retire, and other older people will have to work for them. It doesn’t have to be that way.”

co-editors Robert Kuttner, Paul Starr co-founder Robert B. Reich editor-at-large Harold Meyerson art director Mary Parsons web editor Adele M. Stan managing editor Amanda Teuscher Deputy Editor Sam Ross-Brown Writing Fellows Nathalie Baptiste, Rachel M. Cohen proofreader susanna Beiser editorial Assistant Justin Miller editorial interns Saahil Desai, Cooper Hewell, Joseph Jung contributing editors Marcia Angell, Jamelle Bouie, Alan Brinkley, Jonathan Cohn, Ann Crittenden, Garrett Epps, Jeff Faux, Michelle Goldberg, Gershom Gorenberg, E.J. Graff, Bob Herbert, Arlie Hochschild, Christopher Jencks, Randall Kennedy, Bob Moser, Karen Paget, Sarah Posner, Jedediah Purdy, Robert D. Putnam, Richard Rothstein, Deborah A. Stone, Michael Tomasky, Paul Waldman, William Julius Wilson, Matthew Yglesias Director of Business Operations Ed Connors Development Manager Joseph A. Gallant Jr. board of directors Janet Shenk (Chair), Sarah Fitzrandolph Brown, Lindsey Franklin, Jacob Hacker, Stephen Heintz, Randall Kennedy, Robert Kuttner, Mario Lugay, Miles Rapoport, Adele Simmons, William Spriggs, Paul Starr, Michael Stern Fulfillment Palm Coast Data subscription customer service 1-888-MUST-READ (687-8732) subscription rates $19.95 (U.S.), $29.95 (Canada), and $34.95 (other International) reprints permissions@prospect.org

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Prospects

What We Know Now

by Paul Starr and Robert Kuttner

I

n 1990, when the two of us started this magazine with Robert Reich, we saw a need and an opportunity. The Democrats had lost three presidential elections in a row, national policy had moved sharply to the right, and liberalism was in dire need of new ideas about the direction of the country. Some of the publications that we once looked to (and wrote for) had grown ambivalent about liberal politics or uninterested in engaging practical choices and no longer provided intellectual leadership. But the Reagan era was waning, and a new generation of writers and intellectuals was ready to pick up the challenge to think through alternatives. We saw the Prospect as bridging the usual divides between journalism and the academic world, and between policy and politics—and as a way to stimulate a public conversation about the substance and strategies of change.

Twenty-five years later, the world is different in crucial ways that factor into our thinking. In 1990, liberal democracy was in the ascendancy in Eastern Europe and other parts of the globe. With Soviet communism collapsing and the Cold War receding into the past, new liberal possibilities opened up abroad and at home. Today, the international picture is more sobering. Since the early 1990s, Russia has reverted to authoritarianism, China has never escaped it, and September 11 has ignited a new global conflict with Islamist fundamentalists. We are more aware of the danger of climate change—and of the danger that

the international community will act too slowly to control it.

By 1990, the information revolution was already far advanced, and we knew that liberal ideas about the economy, government, education, and other institutions had to be recast in light of the emerging post-industrial realities.

Again, there were good reasons for optimism, and there still are.

Digital innovation is essential for a more productive economy as well as cleaner growth and for reforms that can strengthen civic life and democracy. But the digital revolution has also had an underside—threats to privacy and security on a larger scale than ever, cyber warfare, the loss of middleclass jobs, and indirect damage to such institutions as the press. We are more conscious now of all that needs to be done politically to see that technological change serves progressive ends.

American politics has also evolved in ways that have made some earlier notions obsolete. In 1990, the species “liberal Republican” had not yet become extinct, and moderates in the GOP were open to working with Democrats, instead of simply throwing boulders in their path. Under those circumstances, many of our writers offered ideas with potential bipartisan appeal for changes in health care, the environment, education, and other areas of social policy.

But just as polarization has affected politics, so it has affected the plausibility of bipartisan reforms. Compromise in Congress is necessary just to keep the machinery of government running,

but it is increasingly difficult to see the basis for common ground on the nation’s biggest challenges. If you want to control climate change, there is no splitting the difference with people who deny it is happening. If you want to reduce economic inequality, there is no way to join forces with those who favor policies that help the rich and hurt the poor. If you see big money as a corrosive force in democracy, there is little chance that the beneficiaries

new president’s first two years, denying Democrats the opportunity to build sustained programs of reform. With their dependence on constituencies that don’t turn out for midterm elections, the Democrats are persistently liable to these reversals. Republican control of the House of Representatives may be particularly lasting. Demographically, there is an emerging majority favorable to the Democrats; that is, if they can

Twenty-five years after we started the Prospect, the challenges of redressing inequality and reviving democracy are even more urgent. of that money will sign up for effective reform. The idea of transcending partisan differences works only when there is some basic agreement on the ends. When there isn’t, each side has to make its case to the public as effectively and persuasively as it can—and that in large part is what we have been doing.

Repeatedly over the past quarter-century, Republicans and Democrats have each thought they had won a decisive, realigning election, only to be set back a few years later. After the defeats of the 1980s, Democrats have come back to win the presidency four out of six times (and won the popular vote in five out of six, counting Al Gore in 2000). But under both Bill Clinton and Barack Obama, Republicans have regained control of one or both houses of Congress after the

awaken it. In life, as Woody Allen says, success may depend on showing up, but in politics it depends on inspiring people to show up. And that has never been truer for liberals than it is now.

None of these developments— the global return of old geopolitical and religious conflicts, the digital revolution, the ideological polarization of American politics, and the difficulty of building a progressive political majority— change our basic beliefs about the good society or about the values and interests that need to be supported to achieve it. Since the 1970s, American society and politics have been out of kilter: Working people and ordinary citizens have lost power, while the wealthy and powerful interest groups have gained it. Restoring the balance

Spring 2015 The American Prospect 5

Prospects

we once had is hardly a radical goal. If it seems radical, it is only a measure of how deep the problems are and how much work it will take to overcome them.

Rolling Back Inequality

The last few years have brought increased recognition of rising inequality, but no agreement about the remedy, even among liberals.

That question—what to do, in particular, about concentrated wealth and power at the top and constricted life chances for the middle class and below—is the focus of this 25th Anniversary issue.

The magazine’s three co-founders lead off. A quarter-century ago, believing that technological changes and globalization were at the root of inequality, Robert Reich saw education and training as top priorities. Now he argues that inequality stems chiefly from political decisions about the rules of the market that reflect the power of moneyed interests. The response to inequality, therefore, has to focus on changing those rules to serve ordinary citizens.

One of us, Paul Starr, argues against counsels of despair about inequality on two grounds: Democratic administrations can check the growth of inequality in the short term—as they have, in fact, done—and the long-term project of rolling back oligarchic dominance is a cause with deep historical roots and potentially wide support. Strategically chosen objectives in three areas—taxes, rules of the market, and rules of politics—can help end the new Gilded Age as they did the original one.

The other of us, Robert Kuttner, then addresses the wealth problem: All of the instruments of the postwar era that allowed people of moderate means to accumulate modest wealth over a lifetime have been weakened or destroyed.

These include policies that supported homeownership, decent pensions, rising real wages, and debt-free college. New wealthbroadening instruments, particularly for young adults, have

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become an urgent priority.

Other articles about inequality treat it over the life cycle, from childhood to retirement.

Stephanie Coontz writes about the destructive impact of inequality on the white, working-class family; Andrea Louise Campbell explores why the United States has long ignored the problems of working parents but may be ready to take up a new “parent agenda.”

David Kirp discusses a highereducation system in which smart poor kids go to college only at the rate of dumb rich kids. In the last years of life, pensions and Social Security once provided greater equality. But, as Teresa Ghilarducci writes, wealthy people now live longer and have more years of retirement, whereas many of the less affluent do drudge work into their golden years out of sheer financial necessity.

Finally, Harold Meyerson provides another installment in the analytical reports about labor and politics that he has been writing in the Prospect for more than a decade. Here he tells a story of wage suppression and its possible cure. In California, a new model of union organizing reaches lowpaid workers in businesses such as car-washing, short-haul trucking, and retailing. The strategy brings together on-the-ground organizing with the regulatory power of friendly governments. The problem, of course, is that there aren’t enough of the latter, which raises the problem addressed in a second group of articles in this issue.

The Political Challenge

In a 1991 Prospect essay widely recognized for its influence on Bill Clinton’s presidential campaign, Stanley Greenberg—who became Clinton’s pollster—explored why Democrats in the 1980s had lost the votes of white, working-class voters. Here he returns to that subject, marshaling evidence for the proposition that motivating those voters requires a robust progressive agenda. Shifting the focus to the Republican side, Jacob

Hacker and Paul Pierson explore the forces behind the radicalization of the GOP. Two articles focus on women in politics. Rachel Cohen points to the emergence of unmarried women as a critical Democratic constituency; Heather Hurlburt argues that Democrats in 2016 will be more identified than ever with women as candidates and as voters— unless Democratic candidates confront public anxieties effectively, Republicans could win by stoking fear and presenting themselves as the “daddy party.” Taking off from the panic over Ebola, Jonathan Cohn explores why the media fall silent when government works and how liberal policies should be designed to get the credit they merit.

What links these articles and the broader mission of the Prospect is a recognition that policy can’t be divorced from politics. David Rolf, the organizer Meyerson profiled in our fall issue, recently described policy as “frozen politics.” At critical moments, political action produces durable reform, energizing democracy and reinforcing the belief that participation is worth the trouble. For a time, that policy endures, the “frozen” fruit of what was once living activism. But as democratic engagement wanes or if reaction gains force, policy tends to “melt” or break down.

(Hacker and Pierson, using a different metaphor, refer to this process as “drift.”) Today, the legacy reforms of earlier eras—Social Security and Medicare, civil rights laws, the right to form a union, wage protection, progressive taxation—are under attack from legislatures and courts reflecting right-wing resurgence.

As several of our articles make clear, American liberalism and the larger project of democracy itself are endangered by a vicious circle. As Republicans hamstring government, they are rewarded by cynicism on the part of liberal constituencies about whether government can deliver. The very groups most inclined to support liberal

Democrats and progressive policies (when they bother to vote) stay home. Reversing this pattern is at the heart of the political challenge— and of the Prospect’s mission.

The Prospect at 25

Like other issues of the magazine, this one also offers a variety of freestanding articles of general interest. Lincoln Caplan profiles Elena Kagan, the emerging leader of the Supreme Court’s embattled liberal bloc. E.J. Dionne profiles Pope Francis as a radical leader confronting a deeply conservative institution. Alan Blinder analyzes the lessons of the past quartercentury for economic policy today.

Randall Kennedy reflects on the uses and misuses of the memory of the Civil Rights Movement.

Joshua Kroll explains why the government’s current cybersecurity strategy puts electronic data at risk of the kind of attack that Sony and other companies have suffered. Ann Markusen shows why the blue-state policies of Mark Dayton’s Minnesota have outperformed the red-state policies of Scott Walker’s Wisconsin.

We are proud of what the Prospect has accomplished in a quarter-century. We were one of the first to embrace web journalism. Our writing fellows program, which provides a two-year fellowship for aspiring journalists, jump-starts careers of people who hope to write stories that combine politics, policy, and narrative.

The more than 40 alumni of the program, which began in 1997, now make up an all-star team of younger progressive writers— from The Washington Post and The New York Times to Vox, Slate, and Talking Points Memo. We will be honoring our former fellows at our Anniversary Gala, May 13 in Washington (tickets are available).

If this is the first issue you’ve read of the Prospect, welcome.

And if you’ve been reading it for many years, thanks for sticking with us. The need and the opportunity that we saw 25 years ago, we still see today.

SALUTES THE AMERICAN

PROSPECT

25 YEARS OF JOURNALISM

IN THE PUBLIC

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notebook

The Cyber Conundrum Why the current policy for national cyber defense leaves us open to attack

by J o s h ua A. Krol l

da ni l m el ek h i n / i stoc k

T

he devastating cyberattacks against Sony Pictures in 2014 resulted in disabling of equipment, release of employees’ sensitive information, disclosure of company secrets and unreleased movies, and ultimately the departure of one of the studio’s top executives. The FBI blamed the Sony attacks on North Korea, and the attackers may have been operating in Sony’s systems undetected for more than a year. Many Americans

were left wondering why their government was unable to detect and stop this foreign threat and whether it can prevent others that may be even more serious.

At the core of the cybersecurity problem lies the cyber conundrum: Should we undermine security systems or bolster them? During the Cold War era, the answer was simple: We did both. We undermined and exploited our adversaries’ communication technologies,

and we protected our own. We could easily pursue these missions simultaneously because our adversaries used different technologies and operated separate infrastructures—damaging one did not harm the other. The National Security Agency excelled at both missions.

“Both” is much harder to achieve now. The economic logic of the Internet, computers, smartphones, and our software-driven world pushed us toward a single

set of technical standards and a shared global infrastructure. Now adversaries use the same technologies that we rely on. The systems we want to undermine often are the very same systems we want to protect—thus the conundrum.

Many believe we must trade off security against privacy, on the theory that enhancing security tends to undermine privacy.

The cyber conundrum imposes a harsher trade-off: Steps to enhance security in one place will often weaken security elsewhere.

The United States government has dealt with this tradeoff by sacrificing the security of the global communications infrastructure to maximize the capacity of intelligence and

Spring 2015 The American Prospect 9

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national-security agencies to track and undermine adversaries. But, with good reason, computer security experts have deep misgivings about the wisdom of current policy.

Undermine First or Protect First?

An undermine-first strategy allows the United States government to intrude into adversaries’ systems, exploiting this covert access to gather intelligence and occasionally to deliver a destructive cyberattack.

The undermine-first strategy tends, however, to leave domestic systems vulnerable and exploitable because their vulnerabilities are the same ones that permit undermining of adversaries. Instead of fixing these vulnerabilities, the government focuses on domestic protection through surveillance, detection, and analysis, hoping that hostile activity can be identified, tracked, and countered before it causes substantial damage.

A protect-first strategy starts by identifying the key technologies that protect our systems and seeks to improve them by developing, vetting, and deploying stronger defenses. This strengthening makes it more difficult to intrude into rivals’ systems and to conduct domestic surveillance, but the upside is that our systems can better resist attacks from all sources, whether hostile nation-states, criminals, or hacktivists.

The National Security Agency was already wrestling with the cyber conundrum in the late 1960s. When the National Bureau of Standards (NBS) first proposed the creation of a standard for encrypting sensitive but unclassified government data, the NSA debated how to respond. According to a now-declassified internal NSA history, “From the SIGINT [Signals Intelligence, i.e., electronic eavesdropping] standpoint, a competent industry standard could spread into undesirable areas, like Third World government communications, narcotics traffickers, and international terrorism targets.” That some within the NSA argued against a standard to secure the U.S. government’s own communications, for fear that adversaries would also adopt it to stymie

surveillance, conveys the severity of the cyber conundrum even in an era before ubiquitous electronic communication.

In 1977, the NBS, with NSA help, issued the Data Encryption Standard (DES), which was widely used inside and outside of government for at least two decades. Nonetheless, because the NSA vouched for the security of DES but insisted on keeping secret the technical rationale for its design, suspicion of an NSA back door in DES took 15 years to dispel.

Between the 1970s and the early 2000s, the NSA planted itself in the undermine-first camp. Its use of surveillance grew with the Internet, exploded after September 11, and today is the central feature of cybersecurity policy.

Through the Back door

Documents leaked by Edward Snowden show that by 2011 the NSA was spending more than $250 million annually on its SIGINT Enabling Project, which included activities to “insert vulnerabilities into commercial encryption systems, IT systems, networks, and endpoint communications devices used by targets” and to “influence policies, standards, and specifications for commercial public key [encryption] technologies.”

This effort to build in vulnerabilities in electronic systems also involved changes in the NSA’s strategy toward U.S. government encryption standards. In the early 2000s, the National Institute of Standards and Technology (the new name for NBS) devised a technical standard, again with the NSA’s help, for a component called a Deterministic Random Bit Generator (DRBG). Despite its unappealing name, the DRBG plays a pivotal role in security because an adversary who compromises your DRBG can decrypt all of your secret data. NIST issued its DRBG standard in 2008.

We now know that the NSA almost certainly inserted a back door into one of the standard’s core components, known as DUAL_EC. The story of how the NSA did this is a case study in the new world of mathematical cloak and dagger.

At its core, DUAL_EC relies on a “magic number” called P. If P is chosen

In contrast to the Cold War, our adversaries now use the same technologies that we rely on. The systems we want to undermine often are the very same systems we want to protect— thus the conundrum.

randomly, the underlying mathematics are believed to be secure, but independent cryptographers realized in 2005 that a party who gets to handpick P can do so in a way that allows that party to compromise DUAL_EC. The P value published in the standard was picked by the NSA; the agency was conspicuously uninterested in any suggestion to generate a new random P that would be more trustworthy. When NIST suggested generating a new P, an NSA consultant replied that “NSA kyboshed this idea, and I was not allowed to publicly discuss it.”

The final standard didn’t mention the possibility of a back door, nor did it say who had chosen P. Private-sector cryptographers already knew that an NSA back door was a possibility, and many avoided DUAL_EC as a result, but NIST declined to change the standard because it trusted the NSA .

NIST changed its position after the emergence of Snowden documents that tended to confirm an NSA backdoor in DUAL_EC. The NSA had reportedly made a secret deal with RSA Data Security, a leading purveyor of encryption software, in which the company was paid $10 million to arrange for its customers to use DUAL_EC by default. After learning all of this in 2013, NIST withdrew DUAL_EC and launched a review of its existing standards and its relationship with the NSA because it now knew that even U.S. government standards could be subject to NSA undermining.

The NSA has also been developing and distributing malicious software that can infiltrate computers and extract information. Kaspersky Lab, a leading Russian antivirus research group, announced in February 2015 that it had captured and analyzed such software developed by “the most advanced threat actor we have seen.”

Kaspersky designated the malware’s author “Equation Group,” but experts believe it to be the NSA’s Tailored Access Operations group. Equation Group software implants were seen in at least 30 countries before they fell into the hands of Kaspersky and other analysts. Now the software will provide a master class in exploitation to programmers around the world.

Spring 2015 The American Prospect 11

Moving to Protect-First

Three months after NIST withdrew the DRBG standard, a review initiated by President Barack Obama called for a shift in policy. Regarding encryption, the President’s Review Group on Intelligence and Communications Technologies recommended that “the U.S. Government should: (1) fully support and not undermine efforts to create encryption standards; (2) not in any way subvert, undermine, weaken, or make vulnerable generally available commercial software; and (3) increase the use of encryption and urge U.S. companies to do so.” But there were few visible signals that policy had changed.

“No foreign nation, no hacker,” Obama said in his 2015 State of the Union speech, “should be able to shut down our networks, steal our trade secrets, or invade the privacy

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President Obama and Homeland Security Secretary Jeh Johnson discussed efforts to improve government collaboration with industry to combat cyber threats at the National Cybersecurity and Communications Integration Center in Arlington, Virginia, last January.

of American families.” But the nearly $14 billion requested for cybersecurity in the president’s fiscal year 2016 budget proposal effectively supports and reinforces current underminefirst policy, a policy that has failed to stop the flood of attacks on American businesses and the government itself by foreign intelligence services, weekend hacktivists, and common criminals.

A protect-first policy of bolstering security technologies would identify the most critical pieces of security infrastructure, invest in making those defenses secure, and support their universal deployment. Such a policy would emphasize support for universal end-to-end encryption tools such as secure web browsing. A website is delivered securely when that site’s address starts with

“https”—the ‘s’ stands for secure—and your browser puts a lock or key icon next to the address. Browsers can load and display secure pages, guaranteeing that while the pages are in transit from server to user, the pages remain confidential and are protected from tampering, and that the user’s browser verifies that the server is not an impostor.

At present, secure browsing is underused and underfunded, leading to troubling security lapses. A notorious example is the Heartbleed bug, disclosed in April of 2014. Heartbleed allowed attackers to reach out across the Internet and extract the contents of a computer’s memory, including encryption keys, passwords, and private information. Two-thirds of the websites on the Internet were vulnerable, along with countless computers

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embedded in cars, wireless routers, home appliances, and other equipment. Because exploitation via Heartbleed usually did not leave a record, the full consequences of Heartbleed will almost certainly never be known.

All of this was due to a single programming error in a software package called OpenSSL , which is used by the majority of websites that provide secure pages. By any measure, OpenSSL is a core piece of our cyber infrastructure. Yet it has been maintained by a very small team of developers—in the words of one journalist, “two guys named Steve”—and the foundation supporting it never had a budget reaching even $1 million per year. Despite its central role in web security, OpenSSL had never undergone a careful security audit.

Matthew Green, a cryptographer at Johns Hopkins University and an outspoken critic of OpenSSL , said after Heartbleed that “the OpenSSL Foundation has some very devoted people, it just doesn’t have enough of them, and it can’t afford enough of them.” Since the Heartbleed attack, a consortium of companies, including some of the biggest names in the Internet business, pledged contributions of a few million dollars to start the Core Infrastructure Initiative (CII), a grant-making process for security audits of important infrastructure components like OpenSSL .

CII’s budget of a few million dollars is nowhere near the few hundred million now devoted to the NSA’s SIGINT Enabling program, but it is a start.

A more proactive government policy would provide ample funding for security audits. By leaving OpenSSL to its own devices, government perpetuates the status quo and implicitly rejects a protect-first strategy.

A similar situation applies to encrypted email, the state of which is well conveyed by a recent ProPublica headline: “The World’s Email Encryption Software Relies on One Guy, Who is Going Broke.” Werner Koch, the author and maintainer of the software Gnu Privacy Guard—the most popular tool for encrypted email and a piece of critical security infrastructure used to verify the integrity of operating system updates on the

most popular operating system for web servers—had been getting by on donations of $25,000 per year since 2001, and a new online fund drive was bringing only modest donations. The ProPublica piece brought attention to Koch’s plight, and a few hundred thousand dollars of donations poured in, enabling Koch to keep maintaining GPG. It was a success, of a sort. But passing the digital hat for donations is not a sustainable way to fund a critical security infrastructure.

The Limitations of Surveillance

The most popular systems for secure web page delivery and encrypted email get only crumbs from the $14 billion U.S. government cybersecurity budget.

Meanwhile, although precise numbers are hard to come by, one estimate is that 0.64 percent of U.S. gross domestic product is lost to cyber crime, an over– $400 billion global growth industry.

Despite the fact that a cyberattack can decimate a company’s operations and pry loose its secrets, and despite billions of dollars in annual direct losses to foreign governments and criminals, the most popular systems for secure web page delivery and encrypted email get only crumbs from the $14 billion U.S. government cybersecurity budget.

Instead, the government usually treats cybersecurity as a military or intelligence problem and therefore tends to look first to the military and the intelligence community for a solution. The result is massive surveillance that gathers situational awareness, hoping to connect the dots to find and stop attacks. Some surveillance happens quietly, coming into the public eye only through leaks and investigative journalism. Some happens more openly, under the guise of “information sharing” between companies and government.

Surveillance of adversaries, both overseas and domestically with an appropriate court order, is prudent and necessary to prevent attacks and inform diplomatic and military decisions. Universal domestic surveillance is harder to justify on the merits. Officials argue that they need all of the data if we want them to connect the dots. But the problem is not a lack of dots. More often, the problem is that the dots can be connected in too many ways. There is no reliable way to tell in advance which pattern marks an impending attack and which simply reflects one of the

endless permutations of human social behavior.

Surveillance data is more useful in hindsight. In the Sony Pictures hack, intelligence and investigation were critical in connecting the dots after the attack had happened, even though they did very little to prevent the attack or to discover it in the year or so that it was ongoing.

Aggressive surveillance has limited efficacy and imposes real costs on U.S. companies. Users who are suspicious of the U.S. government—a group including most foreign users and more than a few Americans—want to steer clear of products and companies that might be complicit in surveillance.

Foreign companies market themselves as more trustworthy because, unlike American companies, they can defy information demands from U.S. authorities. Analysts estimate that U.S. companies will lose at least tens of billions of dollars of business due to users’ surveillance concerns.

At the same time, news of U.S. government demands for data emboldens demands for similar access by other governments—including countries with much weaker civil liberties records. Anything that facilitates U.S. government access will facilitate access by other governments.

Industry worries, too, about direct government attacks on their infrastructures. That is exactly what happened when the NSA tapped into the private communications lines that Google, Yahoo, and other major Internet companies use to move data internally, enabling the NSA to capture information on the users of those systems without any request or notification. Consequently, the Internet companies are seen as either complicit or vulnerable—or both.

The rift between government and industry was visible at the White House Summit on Cybersecurity and Consumer Protection, held at Stanford University on February 13. Obama called for “new legislation to promote greater information sharing between government and private sector, including liability protections for companies that share information about cyber threats,” and announced that “our new Cyber Threat Intelligence Integration

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Center [will be] a single entity that’s analyzing and integrating and quickly sharing intelligence about cyber threats across government so we can act on all those threats even faster.”

After the speech, he signed an executive order implementing these proposals. To the president, cyber defense means collecting more information and using it more aggressively—a policy of undermining and surveillance.

jeff chiu / ap images

An Alternative Strategy

Apple CEO Tim Cook, who spoke before the president at Stanford, called for a different approach, emphasizing the goal of strengthening systems against snooping. “People have entrusted us with their most personal and precious information. …

History has shown us that sacrificing our right to privacy can have dire consequences. … If those of us in positions of responsibility fail to do everything in our power to protect the right of privacy, we risk something far more valuable than money. We risk our way of life. Fortunately, technology gives us the tools to avoid these risks, and it is my sincere hope that by using them, and by working together, we will.”

The CEOs of other companies such as Google and Yahoo turned down invitations to the public event, reportedly due to frustration with White House policy, opting instead to send deputies. To much of the U.S. technology industry, the best policy is to build stronger walls around users’ data.

Obama, in an interview with Re/ code’s Kara Swisher after the Stanford event, recognized this tension, saying, “I lean probably further in the direction of strong encryption than some do inside of law enforcement. But I am sympathetic to law enforcement because I know the kind of pressure they’re under to keep us safe. … Now, in fairness, I think the folks who are in favor of airtight encryption also want to be protected from terrorists.”

It would be a great achievement if we could somehow provide strong encryption against every adversary, except for a loophole only usable with a valid warrant. The same hope has been expressed by FBI Director James Comey, by British Prime Minister David Cameron, and by The

Washington Post’s editorial board, which famously asked for a “secure golden key” for law enforcement.

But if there is a virtual access port that can be opened by a technology vendor on seeing a warrant—as Comey has called for—the same port can be opened by the same vendor without a warrant. The technology cannot tell whether the employee requesting access has been compelled by a lawful court order, or by a blackmailer, or by an extortionist, or by a foreign government.

As far as the technology is concerned, access under a court order is the same as access to data by an insider. And misbehaving insiders often have privileged access that makes their attacks devastating. Consider Snowden’s attack on the NSA or the electronic thefts revealed in February in which thieves impersonating insiders took hundreds of millions of dollars from banks around the world. If we want to lock out insiders, we will also have to lock out those with warrants. We cannot avoid the

In the debate over cybersecurity, much of the U.S. technology industry opposes the government’s current strategy and prefers to build stronger walls around users’ data. Here Apple CEO Tim Cook speaks at the White House Summit on Cybersecurity and Consumer Protection at Stanford in February.

choice between access and security.

The largest Internet companies have been moving to adopt encryption for several years. Google switched its website over to secure access by default in 2010 and 2011.

Microsoft’s outlook.com email service followed suit in 2012, Facebook in 2013, and Yahoo Mail in 2014.

Many of these products later went further, requiring secure access and disabling insecure access. The pace picked up after the Snowden revelations. Apple and Google beefed up encryption of data stored on iPhones and Android devices in 2014. In August 2014, Google announced that it would boost the position of secure pages in search results, treating encryption as an indicator that a site is serious about security.

Meanwhile, citizens who went to Whitehouse.gov to read the text of the president’s Cybersecurity Summit speech could not do so on a secure page because the White House website did not offer even the option of secure browsing. Visitors to “https://

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whitehouse.gov” received a sternly worded security warning from their browsers and had to go to another site such as Google’s YouTube if they wanted to experience the president’s speech on a secure site.

Closing the Gap

The divide between government and industry runs deep, and it is cultural as much as political. The intelligence community, which dominates cybersecurity policy in government, wants a strategy that favors intelligence gathering, which means undermining and surveillance. The technical community, which dominates in industry, wants to strengthen systems, using tools such as encryption to protect privacy. The two communities come down on different sides of the cyber conundrum.

Ideally, both communities would be represented in government and would be at the table when important cyber policy decisions were being made. But the parts of government that run cybersecurity policy, other than the intelligence agencies, have little technical expertise. Under these conditions, the cyber conundrum generates tense meetings and competing speeches, but no solutions.

Is there any escape from the cyber conundrum? The way out, if we can find it, will strive to bolster security of common technical infrastructure, while finding a way to target exploitation of identified adversaries. It will protect globally, and exploit locally.

Strengthening security for everyone will make it harder to exploit adversaries’ systems, but the intelligence community has developed some impressive tools for local exploitation. Thus far government has not been willing to make major investments in strengthening security infrastructure, for fear that this would make broad surveillance more difficult. Until our leaders recognize the full costs of their current strategy, that is unlikely to change.

And the attacks will continue.

Joshua A. Kroll is a doctoral candidate in computer science at Princeton University, where he works on computer security and public policy issues at the university’s Center for Information Technology Policy.

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The Marriage Cure Policies to help the broad range of families are better for kids—and better for progressive politics.

by R a c h e l M . C o h e n

S

everal authors long associated with the idea that marriage is a prime cure for inequality have published a manifesto, condensed in The Washington Monthly. The new wrinkle is an alliance between marriage traditionalists and gay-rights activists. The Marriage Opportunity Council, a spin-off of the Institute for American Values, hopes that by adding same-sex unions to the definition of marriage, they can unite progressives and conservatives in a cause to promote marriage generally. The basic premise of the essay and the broader campaign is that marriage provides economic as well as emotional security; that it’s good for children to grow up in two-parent families; and that a class gap has opened up in the incidence of marriage, which widens inequality and harms the poor, especially the children of the poor. A “growing class-based marriage divide threatens all of us,” the several authors, led by longtime marriage advocate David Blankenhorn, write. “It endangers the very foundations of a broadly middle-class society.”

There is much that is controversial in the premise of the statement. One tricky question is cause and effect.

Does marriage produce improved incomes, or do higher incomes increase the possibility of successful marriages? The evidence that marriage, in and of itself, is better for children is inconclusive. There is plenty of evidence, however, that toxic marriages can do more harm to children than divorces or single parenthood. It’s not at all clear that public policy is competent to promote marriage, even if that were a goal that could unite liberals and conservatives. And by emphasizing marriage per se, the writers ignore marriage-neutral measures that could really help children and parents, such as more supportive work-family policies, more comprehensive child care options, and higher earnings for working people. Progressives would do

better to fight for policies that aid the broad spectrum of kids and families.

But that set of policies, unlike the supposed left-right appeal of marriage, bitterly divides conservatives and liberals. Fiscal conservatives don’t want to spend the money, and “traditional values” conservatives don’t want the state involved in any aspect of child-rearing. The debate goes back several decades, and a pro-marriage manifesto that papers over these political differences is a distraction, at best.

There was a time when Democrats

saw the logic of embracing family diversity. In the 1980s, the Democratic Party platform included commitments like making federal programs “more sensitive to the needs of the family, in all its diverse forms” and barbs like, “in Ronald Reagan’s vision of America, there are no single-parent families.” As political scientists Laurel Elder and Steven Greene have traced in their book, The Politics of Parenthood: Causes and Consequences of the Politicization and Polarization of the American Family, the Democrats’ family rhetoric began to veer to the right under Bill Clinton in the 1990s.

Since then, nontraditional families have been without a political champion, at least in presidential politics.

Politicians have increasingly turned to sticks and carrots to prod people into traditional nuclear families. Conservatives have long worried that giving too much financial assistance to single women might somehow “disincentivize” them from marrying, even though research suggests that those who feel economically secure are more likely to get married, and stay married. Many centrist Democrats, capitulating to the frames pushed by the Republican Party, have backed policies that support poor children but not their poor unmarried parents, which is contradictory, to say the least. It’s hard to imagine thriving kids without thriving parents.

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By emphasizing marriage per se, the manifesto ignores

marriage-

csa pl a stock / istock

neutral

If there were policy interventions that would lead people to feel secure enough to marry, as the Marriage Opportunity Council hopes, that would be great. Stable and loving marriages are to be cherished, and evidence suggests they are salutary for children. But the government is just not very good at promoting such marriages. And poverty corrodes them.

Single parenthood and divorce have continued to increase under conservative rule as well as liberal. Today, more than 40 percent of American children are born outside of marriage.

That’s why making it easier for parents, married or not, to manage their responsibilities is so critical. Economic policies like universal child care, paid family leave, paid sick leave, living wages, child allowances, rent subsidies, affordable health care, and quality public transportation are examples of the types of reforms that

we know would dramatically improve the lives of millions of families.

Some analysts and policy-makers do understand this. Earlier this year, Shawn Fremstad and Melissa Boteach of the Center for American Progress released a new report entitled “Valuing All Our Families.” The authors show why it’s misguided to focus on family structure without also considering family strength and family stability.

Introducing this notion of the “Three S’s”—stability, strength, and structure— they offer us an opportunity to move away from the simplistic binary of oneversus two-parent households, which does little to illuminate how these parents and children actually fare.

The Marriage Opportunity Council argues that “no politically plausible amount of government transfers” can fill the gap necessary to curb inequality. But suggesting that two-parent, married households are remedies for

measures that could really help children and parents.

inequality is suspect—15.2 million impoverished children live in twoparent, married households. Relatedly, children of married parents in the United States are way poorer than children in married households in other countries. Such statements are also too dismissive of other needed solutions.

Demos policy analyst Matt Bruenig has shown how restructuring our child tax benefits could create a far more equitable and efficient system to support families. Reinvesting in our public transit systems would allow parents to save money on transportation costs, reduce long commutes, and have more time to spend with their children. Expanding affordable health insurance and building more subsidized housing would reduce the economic burden weighing on parents—which often acts as a detriment to their physical health, their parenting abilities, and their interpersonal relationship skills. Let’s fix our distribution policies first (including ridding the tax code of marriage penalties), and then perhaps we’ll be in a better place to think about family structure.

It’s time to get beyond the misplaced fear that if we help unmarried families too much we might somehow be “legitimating” their lifestyle and discouraging marriage. Progressive economic policies should be understood as marriage-neutral. They would help single parents and their kids, as well as married parents and their kids. Indeed, by relieving the levels of work-family stress, we would actually be increasing the odds that couples will stay together.

From a political standpoint,

Democrats have much to gain from developing a more inclusive family narrative—one that speaks to both married couples and to single individuals.

Importantly, supporting nontraditional families does not mean ignoring the needs of married couples. It’s not an either/or choice on policy; rather, what’s needed is recognition that we need not champion marriage above all else in order to support strong families.

Unmarried women represent a rapidly growing Democratic constituency: In 2012, they comprised 25.6 percent of the voting-eligible population, an 8.3 percent increase from

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2008. In contrast, married women increased their share of the votingeligible population during this time by 1 percent. Pew Research Center reported in 2014 that a record share of Americans have never married—20 percent of adults ages 25 and older. In 1960, only about 10 percent of adults in this age range had never married.

While a 7–percentage point gender gap was present in the 2008 election (56 percent of women went for Obama compared to 49 percent of men), the “marriage gap” was far greater. Fully 70 percent of unmarried women went for Obama compared to 29 percent for John McCain. In battleground states like New Hampshire, unmarried women voted for Obama by margins of 38 points. It is clear that learning how to better appeal to unmarried women carries immense electoral advantages.

But, of course, there are different kinds of unmarried women. Some have never been married. Some are divorced. Some are under 30. Some are widowed. Some are mothers. And survey researchers have not been great about sorting out all these subgroup details over time.

“Unmarried women under 55 is a new category,” says pollster Celinda Lake. “There have always been lots of widows, and widows have a very high [voting] participation rate. So ideally, you want to break this out by under and over 55, but people often tend to conflate the whole category.”

Lake argues that the rise of this Democratic-leaning, under-55, unmarried cohort can be characterized by three main factors. The first is that those who are not married tend to be less religious, and very religious people tend to be more conservative. Second, unmarried women tend to be more economically marginal. They have only one income to rely on, they tend to work in lowerwage positions, and they are often paid less than men for equal work. Lastly, for more than a decade, polls and surveys have shown that women are more likely to see a greater role for government to play when it comes to fixing society’s problems, while men tend to prefer as little government as possible.

“Greater secularism, greater economic marginality, and greater perception of a need for government role—all

those things are highly correlated with voting Democratic,” says Lake.

So we know that unmarried women break heavily for Democrats, when they vote at all. The problem for Democrats is that while unmarried women vote heavily in presidential years, their turnout drops sharply in off-year elections.

A recent Democracy Corps poll found that unmarried women were the most pessimistic about the country’s future when compared to all the other Democratic base groups—53 percent said they felt the country was headed on the wrong track. This suggests that many unmarried women are skeptical that politics and government can provide much practical help anytime soon, and that the appeal of Democrats—and of politics in general—needs to be more potent if this key constituency is to be activated to its full potential.

The 2014 election marked the Democrats’ most serious attempt yet to target unmarried women. For this cycle, the Democratic Congressional Campaign Committee, the official campaign arm of House Democrats, unveiled a new sophisticated voter model designed to help candidates identify single women and craft messages to reach them.

They called it the ROSIE model, an acronym that stands for “Re-engaging Our Sisters in Elections.”

And yet even with innovations like the ROSIE model, and new research conducted by groups like the Voter Participation Center, Democrats were unable to articulate a compelling message that could connect to the frustration these voters felt. “Microtargeting isn’t a silver bullet by itself,” says Michael Podhorzer, the political director at the AFL-CIO. “Democrats have to stand for things.”

In the future, support for such “things” could mean standing unapologetically for policies that would help all families achieve stability and strength, regardless of marital status.

But crafting an inclusive messaging strategy that represents all families is not something candidates have been particularly good at.

“Whether it was Bill Clinton speaking of the ‘soccer mom’ or George W. Bush appealing to the ‘Security Mom,’” says Susan Carroll, a senior scholar at Rutgers’s Center for

In the new gender gap,

unmarried

women are more

likely to vote Democratic— when they’re motivated to vote.

American Women and Politics, “candidates have too often reduced women’s interests to their roles as mothers, and more often than not, in a caricature of a white suburban mother.”

Encouragingly, the political obstacles that impede inclusive, pro-family goals appear more surmountable than they have in previous decades. “As women have taken on far more roles in our society and people appreciate what that means, there’s a much greater sense of public responsibility for things like child care and paid family leave,” says Nancy Duff Campbell, co-president of the National Women’s Law Center. In other words, an ever-growing number of women in the labor market means an increasing number of people who understand why things need to change.

We can agree that everyone should have the opportunity to marry. New research from the Council on Contemporary Families suggests that boosting incomes may be one way to boost marriage rates because, paradoxically, marriage is often seen as something people must be able to “afford” to do. “There is a clear economic bar to marriage and to the extent people cannot meet that bar they are less inclined to marry,” said sociologist Shannon Cavanagh, in an interview with NBC News. However, apart from income levels, individuals across the Organisation for Economic Cooperation and Development—34 relatively affluent countries that commit themselves to democratic principles and a market economy—are also simply less interested in marriage than they were several decades ago. And despite millions of federal dollars spent on unsuccessful marriage promotion programs, we still don’t really know if it’s possible to reverse this trend.

It’s fine for the Marriage Opportunity Council to continue researching ways to break down barriers to marriage, and it’s good that some marriage traditionalists now support same-sex marriage. However, this effort should not stop the rest of us from adopting a narrative and a set of policies to champion the family in all its diverse forms. Doing so is imperative for children, important for income inequality, and critical for the Democratic Party’s political future.

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Anxiety Itself As a party identified with women, Democrats face a distinctive challenge in 2016.

By H e at h e r H u r l b u r t

T

he success of the Democrats in 2016 will depend on women as candidates and as voters, up and down the ballot, as never before. That identification with women creates distinct political challenges at a time when public worries are high. Unless Democrats confront those anxieties effectively, Republicans may be able to win over voters, including women, by presenting themselves as the more reassuring “daddy” party.

The identification of the Democrats with women starts at the top with presumptive presidential favorite Hillary Rodham Clinton and the leader of the party’s progressive faction, Senator Elizabeth Warren. The number of visible women in the pipeline behind Clinton and Warren is also unprecedented.

Women hold one-third of Democratic Senate seats up for election in 2016. At least seven GOP incumbents also have potential Democratic women challengers, from party stars like Tammy Duckworth in Illinois to Michelle Nunn in Georgia or Alison Lundergan Grimes in Kentucky. Women are stacked deep in the party leadership, from established figures such as House Minority Leader Nancy Pelosi, Senator Patty Murray, and current Democratic National Committee Chair Debbie Wasserman Schultz, to potential future presidential candidates such as Senators Kirsten Gillibrand and Amy Klobuchar.

We know in medicine but have not yet absorbed in politics that women are not simply small men. Whether as a result of genes or upbringing, biology or social norms, women have different political perceptions and patterns of participation than men do.

Stimuli such as political advertising affect women differently. Nowhere are these differences more stark—or potentially catastrophic for progressive values—than in the effect of public anxiety on women’s perceptions of government and on everyone’s perceptions of women as leaders.

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Anxious Days Are Here Again

Whatever the next 20 months bring, we have little reason to expect that the public’s current state of surly anxiety will lift. As pollsters Celinda Lake, Daniel Gotoff, and Matt Ogren write, “Voters’ economic anxiety is deepseated (with few exceptions, majorities have rated the economy negatively going back to 2001) and shows no signs of abating.” The big wars of the Bush era are over, but terror attacks and bombing campaigns continue.

The economy is growing, but wages haven’t increased much.

Even when our own lives are not directly threatened, terrorist violence and fighting abroad affect our political choices through what psychologists call the “mortality salience effect.” By reminding us of our inevitable deaths, such events prompt us to become more cautious, to identify with in-groups and to demonize outgroups, and to be less willing to share resources with people we see as different. In a study published in 2004 in the Personality and Social Psychology Bulletin, researchers led by Mark J. Landau found that raising mortality salience with subliminal images of September 11 raised support for George W. Bush and reduced support for John Kerry. Recently, the videos of executions of Americans and other Westerners by the Islamic State may have triggered the same kinds of emotions that favor Republicans.

Gender politics magnify the electoral effects of anxiety in two ways.

First, in surveys and other studies, women consistently report higher levels of anxiety. In fact, women poll twice as anxious as men, largely independent of the specific topic. Women are more concerned about security, physical and economic, than men.

According to Lake, Gotoff, and Ogren, women “across racial, educational, partisan, and ideological divides” have “heightened concerns” about

Unless Democrats confront public anxieties effectively, Republicans may be able to win over women by presenting themselves as the more reassuring “daddy party.”

terrorism. Those concerns make women “more security-conscious in general and more supportive of the military than they were in the past.”

Walmart-sponsored focus groups found women expressing a significant and steady level of anxiety over the months preceding the 2014 midterms.

At one session, the explanation was Ebola; another, ISIS—whatever had most recently dominated cable-news headlines. The pollsters interpreted the responses as “emblematic of anxiety they feel regarding other issues, including national security, job security, and people ‘getting stuff they aren’t entitled to,’ such as health care and other government benefits.”

The majority of voters express equal confidence in men and women as leaders, but when national security is the issue, confidence in women’s leadership declines. In a Pew poll in January, 37 percent of the respondents said that men do better than women in dealing with national security, while 56 percent said gender makes no difference. That was an improvement from decades past, but sobering when compared to the 73 percent who say gender is irrelevant to leadership on economic issues.

Female Democrats are at a double disadvantage. Many Democrats hoped that the Iraq War debacle and the 2006 and 2008 elections had forever eliminated the advantage Republicans have held on national security. Mitt Romney’s efforts to contest Barack Obama’s national-security leadership in 2012 fell flat. Other Democrats, however, never benefited from Obama’s Bin Laden halo, and that halo has faded with time. Since the Bin Laden mission, the gap favoring GOP candidates on national security has opened up again.

Learning from 2014

These concerns about the effects of anxiety on women as candidates and as voters are not hypothetical. In 2014, Republicans successfully used fear and anxiety to target women.

Each party tried out a women-andfear strategy in the 2014 midterms.

Democrats such as Colorado Senator Mark Udall and Texas gubernatorial candidate Wendy Davis tried making fear over the threat to women’s

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reproductive rights a central focus of their campaigns. Women as well as men responded with a shrug. Meanwhile, Republicans filmed ads with extreme imagery and claims around the threats from the Islamic State, Ebola, and illegal immigration— sometimes all mashed into one. Those ads ran first and heaviest in markets where a female Democrat was running for office, such as Senator Kay Hagan in North Carolina, Nunn in Georgia, or Grimes in Kentucky.

Caught by surprise, Democrats had little response beyond belittling the more ridiculous of the claims. In New Hampshire, where Senate candidate Scott Brown was already laboring under perceptions of inadequacy, mockery worked. But that race was the exception.

Despite Democrats’ emphasis on

and security anxieties, and GOP campaign strategies that played on them, may have tipped two or three percentage points of the women’s vote to the Republicans. In August 2014, GOP pollster Bill McInturff said that Republican efforts to court white and suburban women would mean the difference between a “really good cycle and a huge cycle” in November. Republicans did well with those women, and they had a huge victory.

Plenty of Democratic candidates, male and female, have effectively responded to efforts to paint them as weaklings. The successful candidates do three things. First, they are proactive in addressing voters’ security worries. They don’t wait to be defined by their opponents on economic or national security, and when attacked, they fire back, questioning the attack-

women’s issues in 2014, turnout by women voters fell (as did turnout by men), and women voters turned away from some Democratic Senate candidates by small but decisive margins.

Udall saw his share of women’s votes fall from 56 percent in 2008 to 52 percent as women’s share of the state’s overall electorate dropped from 50 to 47 percent. In national exit polls, women voters reported themselves as more motivated by worries over security issues than the pundits and strategists had anticipated. The numbers suggest that a stew of economic

er’s strength and credibility—as Senator Jeanne Shaheen was able to do effectively against Scott Brown.

Women candidates, in particular, have to treat security as a bar they have to meet from the start. A Democrat who doesn’t have a line in her stump speech about keeping Americans safe, and doesn’t have an anecdote that makes a personal and visceral connection to Americans’ security fears, is a losing candidate. Smart progressives also don’t overcompensate. They know that even though women voters are more anxious about the economy and

Successful female politicians—like these senators assembled at the 2012 Democratic convention— are able to offer their own authentic toughness as the antidote to public anxiety.

Plenty of women running for office have figured out how to evoke the pioneer mother, shotgun in hand.

national security, they consistently favor more government intervention in the economy and less military intervention abroad than do their male counterparts. Women show greater reluctance to send ground troops overseas than men do, even as they evince more anxiety about the Islamic State.

Second, successful candidates, especially women, frame their personal stories as part of an effective critique of opposing candidates and conservative policies. From Barbara Jordan and Bella Abzug to Warren and Gabrielle Giffords, successful female politicians are able to offer their own authentic toughness as the antidote to public anxiety. Plenty of women running for office have figured out how to evoke the pioneer mother, shotgun in hand. Warren references the military service and economic hardship of family members. Klobuchar makes a point of her leadership on veterans’ affairs.

Finally, Democrats must not assume that a focus on “women’s issues” is a substitute for solutions to the sources of anxiety for women voters. Yes, women are concerned about child care, women’s health, and blatant sexism. Yes, statistics say the economy is “improving.” Yes, we are more likely to die in our bathtubs than at the hands of the Islamic State. But Republican strategists have given notice that one of their key strategies for 2016 will be to play on anxieties, especially women’s anxieties, to attack one of Democrats’ presumed strengths, a female candidate’s attractiveness to female voters. The best way to respond to that strategy is for those candidates to respond creatively and substantively to the anxieties themselves. Democrats have seen too many decorated veteran candidates lose on security issues and too many serious economic leaders lose to lightweights.

So, as they plan for 2016, they need to follow the advice that marriage counselors always give to men: Take her anxieties seriously.

Heather Hurlburt is the director of New Models of Policy Change at the New America Foundation. She previously ran the National Security Network, and was a special assistant and speechwriter to President Bill Clinton.

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Why Public Silence Greets Government Success Hardly anyone notices when government works— so how to design policies that get credit?

by J o n at h a n C o h n

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ast October, Obama administration officials, including those at the Centers for Disease Control and Prevention, urged Americans to remain calm as Ebola first appeared in the United States. One person had died from the disease in an American hospital, while new diagnoses had appeared in both Dallas and New York City. But with each new case, critics became louder and more angry—not just at the president, who was resisting calls for travel bans and mandatory quarantines, but at the whole government apparatus, which seemed unable to stop a potentially catastrophic epidemic.

“Ebola has crystallized the collapse of trust in state authorities,” columnist Charles Krauthammer wrote in The Washington Post. Ron Fournier, writing in National Journal, hit the same theme. “Ebola is a serious threat,” he wrote, “but it’s not the disease that scares me. What scares me is the fact that we can’t trust the institutions that are supposed to deal with such threats, and we can’t trust the men or women who lead them.”

By the middle of November, the outlook on Ebola had changed dramatically. Every single person who had contracted the disease in the United States had recovered from it—thanks to care at specially equipped facilities that the U.S. government either had built previously or had, in response to the crisis, retrofitted to handle Ebola cases. The administration’s decision to rely exclusively on light airport screening and self-reporting, pilloried as weak even by some fellow Democrats, had apparently done the trick. Since the imposition of those measures, not one single person had contracted the disease in the United States. In West Africa, where the epidemic had been spreading out of control, health-care workers had finally begun to contain

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it—thanks in part to assistance that the Obama administration had sent.

In short, the Ebola response turned out to be a clear public health success—a model for effective, responsive government action. So, of course, the earlier critics admitted their mistakes, and the media celebrated a great triumph of government policy.

Not exactly. In fact, it’s hard to tell whether anybody in America noticed.

Media coverage of Ebola nearly vanished in November: According to a study by Media Matters, CNN ran 146 stories on Ebola the week of October 14, when panic was peaking. One month later, during the week of November 11, it ran just five. The change at other networks was nearly identical. Public polling on the issue stopped around Election Day, so there’s no way to tell whether confidence in the CDC, which had started falling during October, ever recovered. But the pundits and politicians who had attacked the agency (and the administration) for its supposedly feckless response were in no rush to apologize or hail its good works.

The pattern, alas, has become familiar. Last summer, as tens of thousands of unaccompanied minors from Latin America showed up at the border, critics were quick to blame the Obama administration for having caused the problem (by telegraphing that undocumented immigrants would get some kind of amnesty) and then not solving it (by refusing to block those children or to deport them immediately). The Obama administration, arguing that the influx reflected long-standing U.S. policies and a spike in violence in three Central American countries, decided instead to improve and expedite the process for reviewing such immigration cases. It also used diplomacy, plus economic support for those three countries, to reduce the flow of refugees at the source. Within three months, the

Panic fanned by the media and conservative politicians has undermined public confidence in government— even when government gets the job done.

flow of minors had slowed dramatically. At worst, the administration had reacted a little slowly to a difficult situation; at best, it had handled it as well as a government could handle it. But by the time the “border crisis” had ended, it was no longer a topic of discussion in the media or in Washington. Government had done its job, but the national conversation had long since moved on.

Pretty much the same thing happened after the government’s most spectacular failure of the last few years: the launch of healthcare.gov, Obamacare’s online marketplace. For nearly two months in the fall of 2013, the website simply did not work; people desperate for coverage, in many cases because their old policies had just been canceled, had no practical way to buy insurance. For a while, it looked as if a technical problem—the inability to make a website work— might undermine the entire universal health-care project.

But then the administration managed to pull off a technological rescue job almost as spectacular as the failure itself. More important, the Affordable Care Act began to deliver on its promise of helping millions of otherwise uninsured Americans get affordable, reliable insurance for the first time—while quite possibly contributing to a historic, unprecedented slowdown in health-care costs. But media and political attention to Obamacare’s successes have never rivaled the discussions of its failures, real or imagined. Even today, it’s routine to hear people in Washington speak of the law as a “debacle” or an example of big government run amok.

The people saying those things, naturally, tend to be Republicans and their conservative allies, whose relentless criticism of government has a lot to do with their relentless opposition to Obama. But to dismiss the skepticism about government as a purely partisan phenomenon would be to ignore the evidence of public disaffection. For more than 50 years, Pew has been asking Americans whether they trust their government to do the right thing all or most of the time. In 1958, the first year of the survey, 73 percent said yes; in 1964, the response rated even higher, at 77 percent. For the last

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few years, it’s been hovering between 15 and 25 percent. Similar polling from Gallup, over roughly the same time span, has yielded similar findings. Simply put, faith in government is at an all-time low.

That’s not a problem for conservatives, given their very explicit, pronounced opposition to government.

For liberals, it’s another story. Any list of liberal ambitions is bound to include projects that require an activist government, whether it’s funding public works, helping new parents pay for day care, or stopping climate change from threatening coastal population centers. As long as public confidence in government remains low, rallying support for such programs will be difficult, if not impossible.

So why has faith fallen as much as it has? And what might liberals do to restore it? The big drop in the Gallup and Pew surveys took place in the late 1960s and 1970s—as the memories of the New Deal and World War II gave way to Vietnam and Watergate, and as white Americans, in particular, grew disenchanted with public programs that they believed, rightly or wrongly, took their hard-earned taxes in order to finance programs for low-income African Americans. Since that time, social

scientists tell us, public faith in government has tended to track public perceptions of the economy, rising and falling more or less in tandem with measures like consumer confidence. John Sides, a political scientist at George Washington University, says that confidence about the economy explains as much as three-quarters of the variation in trust in government during this more recent period. As Sides put it at his blog, The Monkey Cage, “More people will trust the government again when times are good, even if government ain’t.”

That’s almost assuredly true. If the economy becomes stronger—not just growing in the aggregate, but also spreading prosperity to the poor and middle class—the public will probably be more favorably inclined toward government again. But even a flourishing economy won’t restore faith in government to the levels of the mid1960s. Not coincidentally, this was the time of the Great Society, the last time a Democratic president and a Democratic Congress were able to enact broad, sweeping programs to address pressing public problems. The decline in confidence since that era can’t simply be the product of economic circumstances—or of partisan opposition to Democratic presidents, or of media

The Obama administration’s response to the Ebola crisis, roundly criticized before the midterm elections, turned out to be a clear public health success.

coverage that habitually, and predictably, hypes bad news more than good.

The changing ambitions of liberalism itself may have something to do with the shift in attitudes toward government. To simplify a bit, Lyndon Johnson, like Franklin Roosevelt, sought highly visible changes in the conditions of American life, including the economy. The liberalism of the 1930s and 1960s aimed to give people jobs, housing, pensions, and insurance—directly through large government programs. These days, the liberal agenda is rarely so easy for people to see or understand.

Take, for example, the Earned Income Tax Credit, which boosts wages for the working poor. It is among the most effective antipoverty policies that the federal government has instituted but is almost invisible to the public. Or consider the home interest mortgage deduction, which benefits nearly every homeowner and also operates through the tax code. As Cornell political scientist Suzanne Mettler shows in her book, The Submerged State, 60 percent of people claiming the deduction say they have never benefited from a government program. The awareness of government is not that much higher even for other programs, such as federally subsidized college loans. A key factor, as Mettler and co-author Julianna Koch demonstrate in later research, is policy design—in particular, whether getting a benefit from the government requires interacting with it directly in some way. If the benefit comes automatically or invisibly, Americans are much less likely to be aware of it.

That insight may help explain why, particularly during the Obama years, successful policy initiatives have failed to get more attention and approval from the public. The 2009 economic stimulus is one example.

Most economists credit the American Recovery and Reinvestment Act, as it’s officially called, with saving the United States from a much deeper recession and, perhaps, an all-out depression. The administration did try hard to publicize the program’s accomplishments, through everything from presidential speeches to project road signs emblazoned with the Recovery Act logo. But direct

Spring 2015 The American Prospect 23

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infrastructure spending was just onethird of the total largesse. The rest was assistance for individuals, primarily through the tax code, and fiscal relief for state and local government.

The larger paychecks saved countless people from financial distress and boosted consumer spending; the transfers to cities and states spared public services from even deeper cuts.

Together, these measures helped save jobs, but few people knew the federal government had anything to do with the jobs that were saved.

Of course, the Recovery Act did not produce the quick, robust recovery that Americans wanted. It took five years for the economy to start generating jobs at a significant, steady rate—and it wasn’t until early this year, with announcements from Walmart and other large retailers, that there were some tangible, if still tentative, signs that wages at the lower end of the income scale might finally start rising.

The Obama administration need only point to Europe, where austerity policies have produced a far weaker recovery, to show that U.S. economic policies have made a substantial difference in the lives of ordinary Americans. But those policies did not produce a good outcome so much as they avoided a worse outcome. And that’s not something for which people are likely to give the government much credit.

A similar dynamic could be at work with the Affordable Care Act. The program’s successes are tangible and significant. Millions of people have health insurance and can now switch jobs or start a business without worrying that a pre-existing medical condition will preclude them from obtaining coverage. Preliminary research suggests that the newly insured are more likely to get health care, and less likely to endure financial distress from medical bills, than they were before. But for many people, Obamacare’s insurance is merely adequate, rather than generous; relief at having finally gotten coverage may be tempered by the realization that it still leaves them with premiums and out-of-pocket expenses. The law has likely contributed to the historic slowdown in health-care costs. (At the very least, it has not led to new inflation, as so many critics

predicted.) But for people who continue to get insurance from an employer, as they did before, the difference may not be visible. They’re paying more for their insurance than they did last year.

The fact that the increase is lower than experts had predicted or than they had seen in the past is simply not something they notice.

These policies didn’t become reality in a vacuum. They reflect severe constraints, political and fiscal. In 2009 and 2010, the short window in which Obama was able to pass major policy initiatives through Congress, he had to contend with a Senate in which more-conservative states had disproportionate power—and in which the filibuster meant no measure could pass without a 60-vote supermajority.

It’s possible to question the strategic decisions that Obama and Democratic allies made. Maybe they could have pushed through a larger stimulus, or a health-care bill with either more funding or more aggressive controls on prices for drugmakers and insurers. But given the narrow margin for political error—with both the Recovery Act and Affordable Care Act, Democrats had literally no Senate votes to spare—it’s difficult to imagine measures of substantially larger size,

The Affordable Care Act’s successes are tangible and significant, but not very visible to the general public.

The Recovery Act measures helped save jobs, but few people knew the federal government had anything to do with the jobs that were saved.

or different shape, getting through Congress. A $2 trillion public works program simply wasn’t going to happen, and neither was single-payer— even though there’s a case that both programs would have been preferable, both as policy and politics.

But as liberals think ahead to the next stage of their domestic agenda, they should be more mindful of how policy design affects perceptions. In Washington, the designers of new programs frequently settle upon less generous or less visible programs to make them harder for political opponents to attack. Once in place, however, those programs may also yield fewer political benefits. To rebuild faith in government, liberals will need a strong economy and news media that report success stories as gleefully as they showcase failures. But it would help a lot to design programs that help people visibly and directly, so no one has any doubt where the credit belongs.

Jonathan Cohn is senior national correspondent at The Huffington Post.

He served as an editor and writer at the Prospect from 1991 to 1997, and is the author of Sick: The Untold Story of America’s Health Care Crisis—and the People Who Pay the Price.

Spring 2015 The American Prospect 25

Rolling back

inequality Inequality in America is an economic disgrace and a political mystery. As the income and wealth of ordinary Americans fall further behind that of the rich, the political system has failed to respond to the interests of the vast majority. The articles that follow address not only the sources and consequences of rising inequality, but also what can and should be done to roll it back.

As always, the Prospect is committed to the proposition that before we can remedy ills, we need to better understand them. art By Victor Juhasz

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The Political Roots of Widening Inequality B y R o b e rt B. R e i c h

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or the past quarter-century—at least since Bob Kuttner, Paul Starr, and I founded The American Prospect—I’ve offered in articles, books, and lectures an explanation for why average working people in advanced nations like the United States have failed to gain ground and are under increasing economic stress: Put simply, globalization and technological change have made most of us less competitive. The tasks we used to do can now be done more cheaply by lower-paid workers abroad or by computer-driven machines.

My solution—and I’m hardly alone in suggesting this—has been an activist government that raises taxes on the wealthy, invests the proceeds in excellent schools and other means people need to become more productive, and redistributes to the needy. These recommendations have been vigorously opposed by those who believe the economy will function better for everyone if government is smaller and if taxes and redistributions are curtailed.

While the explanation I offered a quarter-century ago for what has happened is still relevant—indeed, it has become the standard, widely accepted explanation—I’ve come to believe it overlooks a critically important phenomenon: the increasing concentration of political power in a corporate and financial elite that has been able to influence the rules by which the economy runs. And the governmental solutions I have propounded, while I believe them still useful, are in some ways beside the point because they take insufficient account of the government’s more basic role in setting the rules of the economic game.

Worse yet, the ensuing debate over the merits of the “free market” versus an activist government has diverted attention from how the market has come to be organized differently from

the way it was a half-century ago, why its current organization is failing to deliver the widely shared prosperity it delivered then, and what the basic rules of the market should be. It has allowed America to cling to the meritocratic tautology that individuals are paid what they’re “worth” in the market, without examining the legal and political institutions that define the market. The tautology is easily confused for a moral claim that people deserve what they are paid. Yet this claim has meaning only if the legal and political institutions defining the market are morally justifiable.

Most fundamentally, the standard explanation for what has happened ignores power. As such, it lures the unsuspecting into thinking nothing can or should be done to alter what people are paid because the market has decreed it.

The standard explanation has allowed some to argue, for example, that the median wage of the bottom 90 percent— which for the first 30 years after World War II rose in tandem with productivity—has stagnated for the last 30 years, even as productivity has continued to rise, because middle-income workers are worth less than they were before new software technologies and globalization made many of their old jobs redundant. They therefore have to settle for lower wages and less security. If they want better jobs, they need more education and better skills. So hath the market decreed.

Spring 2015 The American Prospect 27

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by more than 8 percent, and male graduates by more than 6.5 percent. To state it another way, while a college education has become a prerequisite for joining the middle class, it is no longer a sure means for gaining ground once admitted to it. That’s largely because the middle class’s share of the total economic pie continues to shrink, while the share going to the top continues to grow.

A deeper understanding of what has happened

to American incomes over the last 25 years requires an examination of changes in the organization of the market.

These changes stem from a dramatic increase in the political power of large corporations and Wall Street to change the rules of the market in ways that have enhanced their profitability, while reducing the share of economic gains going to the majority of Americans.

This transformation has amounted to a redistribution upward, but not as “redistribution” is normally defined.

The government did not tax the middle class and poor and transfer a portion of their incomes to the rich. The government undertook the upward redistribution by altering the rules of the game.

Intellectual property rights—patents, trademarks, and copyrights—have been enlarged and extended, for example.

This has created windfalls for pharmaceuticals, high tech, biotechnology, and many entertainment companies, which now preserve their monopolies longer than ever. It has also meant high prices for average consumers, including the highest pharmaceutical costs of any advanced nation.

At the same time, antitrust laws have been relaxed for corporations with significant market power. This has meant large profits for Monsanto, which sets the prices for most of the nation’s seed corn; for a handful of companies with significant market power over network portals and platforms (Amazon, Facebook, and Google); for cable companies facing little or no broadband competition (Comcast, Time Warner, AT&T, Verizon); and for the largest Wall Street banks, among others. And as with intellectual property rights, this market power has simultaneously raised prices and reduced services available to average Americans. (Americans have the most expensive and slowest broadband of any industrialized nation, for example.)

Financial laws and regulations instituted in the wake of the Great Crash of 1929 and the consequential Great Depression have been abandoned—restrictions on interstate banking, on the intermingling of investment and commercial banking, and on banks becoming publicly held corporations, for example—thereby allowing the largest Wall Street banks to acquire unprecedented influence over the economy. The growth of the financial sector, in turn, spawned junk-bond financing, unfriendly takeovers, private equity and “activist” investing, and the notion that

c h a r t d ata s o u r c e : e c o n o m i c p o l i c y i n s t i t u t e a n a ly s i s o f c u r r e n t p o p u l at i o n s u r v e y o u t g o i n g r o tat i o n g r o u p m i c r o d ata

Yet this market view cannot be the whole story because it fails to account for much of what we have experienced.

For one thing, it doesn’t clarify why the transformation occurred so suddenly. The divergence between productivity gains and the median wage began in the late 1970s and early 1980s, and then took off. Yet globalization and technological change did not suddenly arrive at America’s doorstep in those years. What else began happening then?

Nor can the standard explanation account for why other advanced economies facing similar forces of globalization and technological change did not succumb to them as readily as the United States. By 2011, the median income in Germany, for example, was rising faster than it was in the United States, and Germany’s richest 1 percent took home about 11 percent of total income, before taxes, while America’s richest 1 percent took home more than 17 percent.

Why have globalization and technological change widened inequality in the United States to a much greater degree?

Nor can the standard explanation account for College Graduates’ Earnings Down why the compensation Average hourly wages of young college grads, 2000–2014 packages of the top exec$21 utives of big companies $20 soared from an average men $19 of 20 times that of the $18 typical worker 40 years All $17 ago to almost 300 times. $16 Or why the denizens of Women Wall Street, who in the $15 1950s and 1960s earned ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 comparatively modest sums, are now paid tens or hundreds of millions annually.

Are they really “worth” Data are for college graduates ages 21–24 who do not have that much more now than they were worth then? an advanced degree and are Finally and perhaps most significantly, the market not enrolled in further schoolexplanation cannot account for the decline in wages of ing. Shaded areas denote recessions. Data for 2014 recent college graduates. If the market explanation were represent 12-month average accurate, college graduates would command higher wages from April 2013–March 2014. in line with their greater productivity. After all, a college education was supposed to boost personal incomes and maintain American prosperity.

To be sure, young people with college degrees have continued to do better than people without them. In 2013, Americans with four-year college degrees earned 98 percent more per hour on average than people without a college degree. That was a bigger advantage than the 89 percent premium that college graduates earned relative to non-graduates five years before, and the 64 percent advantage they held in the early 1980s.

But since 2000, the real average hourly wages of young college graduates have dropped. (See chart above.) The entry-level wages of female college graduates have dropped

Rolling Back Inequality

corporations exist solely to maximize shareholder value.

Bankruptcy laws have been loosened for large corporations—notably airlines and automobile manufacturers—allowing them to abrogate labor contracts, threaten closures unless they receive wage concessions, and leave workers and communities stranded. Notably, bankruptcy has not been extended to homeowners who are burdened by mortgage debt and owe more on their homes than the homes are worth, or to graduates laden with student debt.

Meanwhile, the largest banks and auto manufacturers were bailed out in the downturn of 2008–2009. The result has been to shift the risks of economic failure onto the backs of average working people and taxpayers.

Contract laws have been altered to require mandatory arbitration before private judges selected by big corporations.

Securities laws have been relaxed to allow insider trading of confidential information. CEOs have used stock buybacks to boost share prices when they cash in their own stock options.

Tax laws have created loopholes for the partners of hedge funds and private-equity funds, special favors for the oil and gas industry, lower marginal income-tax rates on the highest incomes, and reduced estate taxes on great wealth.

All these instances represent distributions upward— toward big corporations and financial firms, and their executives and shareholders—and away from average working people.

Meanwhile, corporate executives and Wall Street managers and traders have done everything possible to prevent the wages of most workers from rising in tandem with productivity gains, in order that more of the gains go instead toward corporate profits. Higher corporate profits have meant higher returns for shareholders and, directly and indirectly, for the executives and bankers themselves.

Workers worried about keeping their jobs have been compelled to accept this transformation without fully understanding its political roots. For example, some of their economic insecurity has been the direct consequence of trade agreements that have encouraged American companies to outsource jobs abroad. Since all nations’ markets reflect political decisions about how they are organized, so-called “free trade” agreements entail complex negotiations about how different market systems are to be integrated. The most important aspects of such negotiations concern intellectual property, financial assets, and labor.

The first two of these interests have gained stronger protection in such agreements, at the insistence of big U.S. corporations and Wall Street. The latter—the interests of average working Americans in protecting the value of their labor—have gained less protection, because the voices of working people have been muted.

Rising job insecurity can also be traced to high levels of unemployment. Here, too, government policies have

played a significant role. The Great Recession, whose proximate causes were the bursting of housing and debt bubbles brought on by the deregulation of Wall Street, hurled millions of Americans out of work. Then, starting in 2010, Congress opted for austerity because it was more interested in reducing budget deficits than in stimulating the economy and reducing unemployment. The resulting joblessness undermined the bargaining power of average workers and translated into stagnant or declining wages.

Some insecurity has been the result of shredded safety nets and disappearing labor protections. Public policies that emerged during the New Deal and World War II had placed most economic risks squarely on large corporations through strong employment contracts, along with Social Security, workers’ compensation, 40-hour workweeks with time-and-a-half for overtime, and employer-provided health benefits (wartime price controls encouraged such tax-free benefits as substitutes for wage increases). But in the wake of the junk-bond and takeover mania of the 1980s, economic risks were shifted to workers. Corporate executives did whatever they could to reduce payrolls— outsource abroad, install labor-replacing technologies, and utilize part-time and contract workers. A new set of laws and regulations facilitated this transformation.

As a result, economic insecurity became baked into employment. Full-time workers who had put in decades with a company often found themselves without a job overnight—with no severance pay, no help finding another job, and no health insurance. Even before the crash of 2008, the Panel Study of Income Dynamics at the University of Michigan found that over any given two-year stretch in the two preceding decades, about half of all families experienced some decline in income.

Today, nearly one out of every five working Americans is in a part-time job. Many are consultants, freelancers, and independent contractors. Two-thirds are living paycheck to paycheck. And employment benefits have shriveled. The portion of workers with any pension connected to their job has fallen from just over half in 1979 to under 35 percent today. In MetLife’s 2014 survey of employees, 40 percent anticipated that their employers would reduce benefits even further.

The prevailing insecurity is also a consequence of the demise of labor unions. Fifty years ago, when General Motors was the largest employer in America, the typical GM worker earned $35 an hour in today’s dollars. By 2014, America’s largest employer was Walmart, and the typical entry-level Walmart worker earned about $9 an hour.

This does not mean the typical GM employee a half-century ago was “worth” four times what the typical Walmart employee in 2014 was worth. The GM worker was not better educated or motivated than the Walmart worker.

The key to rising inequality isn’t technology or globalization.

It’s the

power of

moneyed interests

to shape the rules of the market.

Spring 2015 The American Prospect 29

The underlying problem, then, is not that most Americans are “worth” less in the market than they had been, or that they have been living beyond their means.

Nor is it that they lack enough education to be sufficiently productive. The more basic problem is that the market

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itself has become tilted ever more in the direction of moneyed interests that have exerted disproportionate influence over it, while average workers have steadily lost bargaining power—both economic and political—to receive as large a portion of the economy’s gains as they commanded in the first three decades after World War II. As a result, their means have not kept up with what the economy could otherwise provide them. To attribute this to the impersonal workings of the “free market” is to disregard the power of large corporations and the financial sector, which have received a steadily larger share of economic gains as a result of that power. As their gains have continued to accumulate, so has their power to accumulate even more.

Under these circumstances, education is no panacea.

Reversing the scourge of widening inequality requires reversing the upward distributions within the rules of the market, and giving workers the bargaining leverage they need to get a larger share of the gains from growth. Yet neither will be possible as long as large corporations and Wall Street have the power to prevent such a restructuring. And as they, and the executives and managers who run them, continue to collect the lion’s share of the income and wealth generated by the economy, their influence over the politicians, administrators, and judges who determine the rules of the game may be expected to grow.

The answer to this conundrum is not found in economics. It is found in politics. The changes in the organization of the economy have been reinforcing and cumulative: As more of the nation’s income flows to large corporations and Wall Street and to those whose earnings and wealth derive directly from them, the greater is their political influence over the rules of the market, which in turn enlarges their share of total income. The more dependent politicians become on their financial favors, the greater is the willingness of such politicians and their appointees to reorganize the market to the benefit of these moneyed interests. The weaker unions and other traditional sources of countervailing power become economically, the less able they are to exert political influence over the rules of the market, which causes the playing field to tilt even further against average workers and the poor.

Ultimately, the trend toward widening inequality in America, as elsewhere, can be reversed only if the vast majority, whose incomes have stagnated and whose wealth has failed to increase, join together to demand fundamental change. The most important political competition over the next decades will not be between the right and left, or between Republicans and Democrats. It will be between a majority of Americans who have been losing ground, and an economic elite that refuses to recognize or respond to its growing distress.

c h a r t d ata s o u r c e : b u r e a u o f e c o n o m i c a n a ly s i s

The real difference was that GM workers a half-century ago had a strong union behind them that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members.

And because more than a third of workers across America belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they would be unionized if they did not come close to matching the union contracts.

Today’s Walmart workers do not have a union to negotiate a better deal. They are on their own. And because less Corporate Earnings Up than 7 percent of today’s Corporate profits after tax, as a percentage of GDP private-sector workers are 15% unionized, most employers 2012 9.7% across America do not have to match union contracts.

10% 1960–2012 average 6.3% This puts unionized firms at a competitive disadvan5% tage. Public policies have Recession enabled and encouraged Years this fundamental change.

0 More states have adopted ’60 ’65 ’70 ’75 ’80 ’85 ’90 ’95 ’00 ’05 ’10 so-called “right-to-work” laws. The National Labor Personal Earnings Down Relations Board, underPersonal wage and salary income, as a percentage of GDP staffed and overburdened, has barely enforced col55% lective bargaining. When workers have been harassed 50% or fired for seeking to start 2012 42.6% a union, the board rewards them back pay—a mere slap 45% 1960–2012 average 46.7% on the wrist of corporations that have violated the law.

40% The result has been a race ’60 ’65 ’70 ’75 ’80 ’85 ’90 ’95 ’00 ’05 ’10 to the bottom.

Given these changes in the organization of the market, it is not surprising that corporate profits have increased as a portion of the total economy, while wages have declined. (See charts above.)

Those whose income derives directly or indirectly from profits—corporate executives, Wall Street traders, and shareholders—have done exceedingly well. Those dependent primarily on wages have not.

Rolling Back Inequality

How Gilded Ages End B y Pau l S ta rr

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ising inequality seems to pose an insurmountable political problem. If the underlying causes are technological change and globalization, the forces appear to be unstoppable. Alternatively, if the causes are primarily political and involve the power of corporate and financial interests, the forces driving inequality may also appear to be overwhelming. Some people may conclude in despair that, for all practical purposes, nothing can be done.

That conclusion, however, is unjustified for two reasons—first, because things have been and can be done to check increased inequality even in the short term; and second, because limiting the political power of concentrated wealth is a cause with deep American roots and wide support that is a difficult but achievable long-term goal.

While economic inequality has risen since 1980, the trend has not been steady. As in previous decades, Democratic administrations have had a better record on equality as well as growth than Republican administrations. Moreover, Democratic presidents have been able to advance a wide range of liberal and egalitarian objectives during this period, and the support for stronger measures is growing. It would be a colossal error of judgment to believe that Democratic policies (and judicial appointments) make no difference.

The historical record in the United States is consistent with comparative evidence on other wealthy democracies, which also shows that public policies can limit inequality while promoting growth, even under the pressures of technological change and globalization. The most visible of those methods involve taxes, spending programs, and monetary policy, but just as important are all the ways in which government sets the rules of the market and thereby affects the incomes that people derive from it.

These are the rules that shape labor relations, credit and debt, financial institutions, corporate structure, antitrust, international trade, intellectual property rights, liability, and other aspects of economic life. As Robert Reich argues elsewhere in this issue, changes in those rules during recent decades in the United States have been primary causes of rising inequality, and any hope of reversing that

process depends on redressing the imbalance in political power that lies behind it.

Fifty years ago, to talk about inequality was to talk about the persistence of poverty in an affluent society.

Now, inequality raises an additional challenge: stagnant incomes in the middle class and runaway gains among a small elite. Reducing poverty is an inherently tougher political problem because it involves asking the majority to agree to policies, including taxes, that benefit the poor and minorities. Rallying the majority of Americans on behalf of their own economic interests should, in principle, be easier.

Many critics have taken to calling our time a second Gilded Age, recalling Mark Twain’s term for the late 19thcentury era when a veneer of refinement covered the brutal realities of industrial capitalism. The analogy should actually be encouraging. As daunting as the political challenges were at the time, the Gilded Age came to an end with the reforms of the Progressive era and the New Deal. Those years saw countless changes in the rules of economic life as well as new taxes and social spending that gave the great majority of Americans a better life.

But behind the myriad of specific reforms was a common recognition—a collective revulsion against the privileges of great wealth allied with great power. The challenge now is to mobilize that kind of moral sentiment on behalf of a new age of reform.

America’s Slide Back toward Oligarchy

Wealth and power often go together, but being observed in each other’s company has sometimes been a scandal.

During the final week of the 1884 election campaign, the Republican presidential candidate James G. Blaine attended a lavish fundraising dinner with 200 of the nation’s economic elite at Delmonico’s Steakhouse in New York City. Among Blaine’s dinner companions was Jay Gould, the financier who controlled the Union Pacific Railroad, Western Union, and other companies. The next day, Joseph Pulitzer’s New York World carried a cartoon across the entire front page, titled “Royal Feast of Belshazzar Blaine and the Money Kings,” showing the candidate and the tycoons dining on such dishes as “lobby pudding,” “navy contract,” “monopoly soup,” and “patronage cake.” The New York Times commented, “Blaine’s political sagacity is impeached by his willingness to be seen in the company of these people and to take their money openly at Delmonico’s.” The explosion of disgust at the banquet, according to some historians, may have cost Blaine the election, which he lost to Grover Cleveland by a narrow margin.

Today, fundraising events like the one at Delmonico’s have become routine, and any sense of embarrassment about them seems to have vanished, at least among Republicans. (Democrats also take the money when they can get

Spring 2015 The American Prospect 31

In the election of 1884, a fundraising dinner held

by Jay Gould and other tycoons for the Republican presidential candidate James G. Blaine created a firestorm. The cartoonist Walt McDougall captured this emblematic event of the Gilded Age in Joseph Pulitzer’s New York World.

In one resort town after another—Rancho Mirage, Calif.; Sea Island, Ga.; Las Vegas—the candidates are making their cases to exclusive gatherings of donors whose wealth, fully unleashed by the Supreme Court’s 2010 Citizens United decision, has granted them the kind of influence and convening power once held by urban political bosses and party chairmen.

tion, reaching back to Aristotle). Oligarchy aptly describes the direction of change in America during the past four decades. The idea is not that oligarchy has replaced democracy; rather, the two have become fused in a system where those at the pinnacle of the economy are able to tilt politics and law sharply in their own favor.

This is the argument developed by Jeffrey A. Winters in his 2011 book Oligarchy, which analyzes material wealth as a source of political domination in a wide range of societies from ancient Greece and Rome to the modern world.

The United States, according to this analysis, is a “civil oligarchy,” where those in command of great wealth use it to shape policy but do not rule directly. On many issues such as abortion, gun rights, or the environment, the wealthy come down on different sides. They are far less likely to

The reference to “urban political bosses and party chairmen” in the Times makes it sound as though one unrepresentative group has merely followed another. But by assembling coalitions and candidates capable of winning majority support, party leaders perform work that’s essential in a democracy. There is no comparable democratic function performed by billionaires, even though they may sincerely believe their interests are no different from the majority’s.

The screening of presidential candidates by the superrich is only one aspect of the heightened role of big money in politics that has provoked some political scientists to adopt an old word to characterize the new realities of power. That word is oligarchy, conceived as the political domination by the wealthy few and roughly similar to the term “plutocracy” (but with a deeper theoretical tradi-

cancel each other out, however, on questions such as taxes that bear directly on their shared economic interests. In this interpretation, oligarchic dominance is specific to redistributive issues, and rather than being inherent in capitalism, depends on laws and policies that affect the concentration of wealth and the conversion of wealth into power.

This understanding of American politics is different from the view that capitalism always means control by a ruling class or that all societies are run by unrepresentative elites. During the past century, popular movements in the advanced democracies, including unions and political parties allied with them, enabled ordinary people to share in the gains of economic growth and to enjoy both more security and more freedom. Changes in legal doctrines subordinating property rights to the general welfare allowed for

32 WWW.Prospect.org Spring 2015

o h i o s tat e u n i v e r s i t y b i l ly i r e l a n d cartoon libr ary & museum

it, though they may be more sensitive about appearances.)

In the “wealth primary” that has become the first step to national office, Republican candidates openly make pilgrimages to Sheldon Adelson, the Koch brothers, and other billionaires. No one is the least startled to read stories like the one that appeared in The New York Times on February 28, “G.O.P. Race Starts in Lavish Haunts of Rich Donors”:

Rolling Back Inequality

stronger regulation of the economy. These developments bore fruit in the three decades after World War II, when both prosperity and political power were widely shared in Western Europe and North America.

In the United States, the relatively balanced pluralism of the postwar decades has increasingly given way to a more polarized political economy. The long decline of unions has probably been the single most important factor in the slide toward greater inequality in power and economic rewards. Beginning in the 1970s, while business interests mobilized, the engagement of ordinary citizens in civic and political life atrophied. Rather than relying on local volunteers going door to door, political campaigns became increasingly dependent on paid media and consequently on financial donors. And since money is distributed less equally than time, the pursuit of office has increasingly sent candidates in pursuit of patronage by the affluent.

A series of empirical studies have demonstrated the consequences of these changes for political participation and government responsiveness. Union members accounted for 25 percent of political activity in 1967 but only 11 percent in 2006, according to an estimate by Kay Lehman Schlozman, Sidney Verba, and Henry E. Brady in The Unheavenly Chorus, a 2012 study of trends in participation. (The title is an allusion to a well-known line by E.E. Schattschneider: “The flaw in the pluralist heaven is that the heavenly chorus sings with a strong upper-class accent.”) Surveying the representation of group interests in Washington as of the early 2000s, Schlozman and her colleagues find those interests to be overwhelmingly weighted in favor of business.

An “upper-class accent” is an understatement of the bias of policy. In Affluence and Influence, also published in 2012, Martin Gilens uses data from nearly 2,000 questions in public opinion surveys about proposed policies from 1981 to 2002 to measure the government’s responsiveness to people at different income levels. The policies adopted, Gilens finds, were strongly related to the views of upperincome people, but not at all to the preferences of poor or even middle-income Americans. Expanding the analysis to include interest groups, Gilens and Benjamin I. Page find the same pattern of elite domination. Whether individually or through groups, average citizens had no independent effect on what government actually did.

This research, it should be stressed, concerns a period —1981 to 2002—when Republicans dominated national policy-making; Democrats had control of both the presidency and Congress for only two years (1993–1994). Even in regard to the “age of Reagan,” the findings do not prove Winters’s argument about oligarchy, which is about the influence of the .001 percent on policies that impinge on their fortunes. A recent study of the wealthy elite in the Chicago area confirms, however, that the truly wealthy are highly active in politics

(often in direct touch with their senators and other political leaders) and that their views on key economic questions diverge markedly from those of the public at large.

As campaigns have made candidates increasingly hungry for contributions, the views of those who can satisfy that hunger gain importance. This is an era when not only the practical demands of politics but the rules of the game have changed. If the degree of oligarchical power depends on the concentration of wealth and rules governing the conversion of wealth into power, two developments in recent decades have pushed American politics in that direction: The gains from growth have gone overwhelmingly to the top, and the Supreme Court has effectively eliminated legal barriers to the use of money in political campaigns.

The resulting realities of campaign finance affect Democrats as well as Republicans. All politicians have to be what Schlozman and her co-authors call “rational prospectors” and go hunting where the ducks (and the bucks) are. But that does not mean their choices about policy are the same.

Checking Inequality in the Short Run Despite the trends in power and inequality, it has made a difference in the United States which party is in power.

The consistent pattern, even in recent decades, is that middle- and low-income people have fared better under Democratic administrations, and high-income people have fared better under Republicans. But the effects have not canceled out. Democrats have reduced inequality a little, while Republicans have increased it a lot.

The best evidence on the partisan effects on inequality comes from the work of Larry Bartels. In his 2008 book Unequal Democracy: The Political Economy of the New Gilded Age, Bartels estimates the effects on inequality of the administrations of the five Democratic and five Republican presidents from 1948 to 2005. Under the Democrats, incomes grew slightly faster for poor than for rich families, modestly reducing inequality. Under the Republicans, incomes grew much faster for the rich than for the poor, greatly increasing inequality. Families at the 95th percentile did equally well no matter which party was in office, but those at the 20th percentile saw their incomes grow three times faster under Democrats.

These findings are especially striking because they concern pre-tax income. For the entire period from 1948 to 2005, Bartels finds that the partisan differences in pre-tax income growth resulted chiefly from substantial differences in unemployment rates (30 percent lower on average under Democrats) and in GDP growth (60 percent higher under Democrats). Lower unemployment and higher growth rates under Democrats raised incomes far more for people near the bottom of the income distribution than for people near the top.

Wealth and power often go together, but being observed in

each other’s

company has sometimes been a scandal.

Spring 2015 The American Prospect 33

The period from 1980 to 2005, however, was significantly different from the period from 1948 to 1980 because rates of economic growth were lower. According to Bartels, the differences between Democratic and Republican administrations in inequality in pre-tax income growth disappeared, but the differences continued to show up in post-tax income growth. Low- and middle-income people again did better under Democrats. These were the years when taxes on the top income brackets were cut sharply under Ronald Reagan and raised modestly under Bill Clinton.

Even with the unrelenting increase in inequality in recent years, Bartels has continued to find significant partisan differences in the effects of presidential administrations.

Updating his analysis for the post-1980 period through 2012, Bartels acknowledges that the middle class and the poor “experienced somewhat lower growth rates” than the affluent, even under Democratic presidents. But, he finds, “they clearly fared much better under Democrats (Clinton and Obama) than under Republicans (Reagan, Bush, and Bush).

The difference amounts to about 1.5 percent per year for poor families and 0.8 percent per year for middle-class families—

34 WWW.Prospect.org Spring 2015

substantial sums when they are compounded over decades.”

These statistics understate the differences between Democratic and Republican government because measures of income, even post-tax income, don’t capture all the distributive consequences of public policy. For example, they don’t include the value of non-cash benefits for lowincome people, such as the value of Medicaid coverage, which, if taken into account, would show Democrats to have done more to reduce inequality at both the federal and state levels. The difference between red and blue states in expanding Medicaid under the Affordable Care Act is a perfect example of that pattern. Indeed, the ACA generally illustrates how Democrats have sought to advance egalitarian goals against Republican resistance.

The same pattern applies to other policies on which Democrats and Republicans typically differ, such as support for the public sector. When government provides public services to all—public schools, public parks, public libraries—it reduces economic inequalities even though the free access to those services does not show up in data on income. In addition, measures combating discrimination on the basis of race, gender, sexual orientation, and other characteristics diminish economic inequality since people who encounter discrimination tend to be worse off than those who do not.

Still, these policies have failed to reverse the distinctive pattern of income inequality—surging incomes at the top, lagging incomes for the middle and below—that began in the 1980s. To broaden the gains from growth, Democrats increasingly recognize that they have to do more than recent Democratic administrations have done. Policies aimed at strengthening the education and skills of workers, for example, are not going to close the widening gap between the one percent and everyone else. The rising support for stronger measures is apparent in the changed views of centrist Democrats such as Lawrence Summers, the former secretary of the Treasury. In January, a committee co-chaired by Summers at the Center for American Progress released a report calling for more sharply progressive taxes and more government spending to create a “high-pressure, high-productivity economy” that would raise wages by increasing the demand for labor and investing in infrastructure and other public needs. A tight labor market was a crucial factor in the steady increase in earnings in the three decades after World War II. “If we had the same income distribution in the United States that we did in 1979,” Summers said recently, “the top 1 percent would have $1 trillion less today [in annual income], and the bottom 80 percent would have $1 trillion more. That works out to about $700,000 [a year less] for a family in the top 1 percent, and … about $11,000 a year [more] for a family in the bottom 80 percent.”

Rolling Back Inequality

Returning to the income distribution of 1979 would be an astonishing achievement for the vast majority of Americans. The challenge is especially daunting in light of the special historical circumstances that made possible the reduction of inequality in the mid-20th century. As Thomas Piketty argues in Capital in the Twenty-First Century, the “shocks” of two world wars and the Great Depression devastated inherited wealth and enabled labor to claim a larger share of national income in both Western Europe and the United States. War and depression didn’t inherently have these equalizing effects. As Piketty recognizes, the reduction in inequality depended on the responses that governments made to the shocks through taxes, labor laws, and other measures. What Piketty doesn’t emphasize, however, is that even before the shocks hit, political changes in the late 19th and early 20th century prepared the ground for greater equality. In Europe, those changes took the form of growing labor unions and socialist parties and the adoption of social insurance and other reforms by both liberal and conservative governments. In the United States, the corresponding political changes took place through the reforms of the Progressive era that began to bring down the curtain on the Gilded Age. Overturning Oligarchic Power There was no single solution, no silver bullet, for the economic and political inequality of the Gilded Age— although silver was exactly what some reformers believed the bullet should be made of at a time when the gold standard and “hard money” were the targets of populist wrath. The steps that ultimately mattered took place in two phases during the Progressive era and New Deal and fell into three areas: taxation, the rules of the market, and the rules of politics. Behind them lay a common sentiment that democracy was at risk from unacceptable combinations of wealth and power.

The changes in taxes in the Progressive era illustrate more clearly than anything else how that period created the instruments that the New Deal would use more decisively. In 1913, the 16th Amendment was ratified, giving Congress the power to tax income “from whatever source derived, without apportionment among the several states,” thereby nullifying an 1895 Supreme Court decision that had declared an income tax unconstitutional.

The approval of an amendment for a new federal tax by three-fourths of the states—actually 42 of 48 in the case of the income tax—seems inconceivable today. It may seem even more unimaginable that the core support for the amendment would come from the South and West. A hundred years ago, however, these were the areas of the country that opposed high tariffs and saw a graduated income tax as an alternative that would fall mainly on

the Northeast, where wealth was concentrated. The temperance movement also favored an income tax as a way to wean the federal government off taxes on alcohol and prepare the way for Prohibition.

But the 16th Amendment would have never been so widely approved—even New York ratified it—without a general shift in sentiment against the extreme inequalities of the time. Only the top 3 percent of the income distribution were subject to the income tax originally enacted after the amendment’s ratification in 1913. Three years later, with World War I under way in Europe, Congress established the federal estate tax and also applied it initially only to the wealthy few. Republicans cut both taxes in 1926, but under Franklin Roosevelt in the 1930s and especially during World War II, Congress made the taxes highly progressive. (In 1940, estates were taxed at a rate of 70 percent, except for a $40,000 exemption; the next year, Congress raised the rate to 77 percent.) As Piketty points out, the United States was a pioneer in redistributive taxation. Maintained at relatively high levels until the 1980s, those taxes helped to produce the “great compression” of incomes in mid-20th-century America.

The same general pattern of political breakthroughs in the Progressive era culminating in more thorough change in the New Deal also applies to the rules of the market.

The idea that America went from a free market in the 19th century to a regulated economy in the 20th is misconceived. Government at both the state and federal levels set the economic rules even in the 19th century, especially through the courts.

But the interests represented in the rules began to change. With the adoption of workers’ compensation, for example, employers were forced to share in the costs of injuries on the job. The states began curbing the exploitation of child labor. The development of antitrust law and regulation of “natural monopolies” limited concentrations of economic power. In these and other areas, the changes in the Progressive era also began to shift regulatory powers from the states to the federal government to correspond to the increasingly national scope of business. With the establishment of the Federal Reserve in 1913, the idea began to take root that the national government had responsibility for the condition of the national economy. Again, the Progressive era prepared the institutional ground for measures in the 1930s—Social Security, collective-bargaining rights, financial regulation, the minimum wage, and eventually the adoption of Keynesian economic policies—that put liberal ideas into practice more effectively.

The Progressive era also inaugurated changes in the rules of politics that are especially relevant to the history of efforts to limit oligarchical power in America. Up through the 1892 election, both parties raised funds for national

The steps that

rolled back

inequality fell into three areas: taxes, rules of the market, and rules of politics.

Spring 2015 The American Prospect 35

Rolling Back Inequality

campaigns almost entirely from the moneyed elite of the Northeast. As the dinner at Delmonico’s in 1884 illustrated, Republicans usually dominated that fundraising.

They solidified their financial advantage in 1896, when the Democrats nominated the candidate of their populist wing, William Jennings Bryan.

But as corporate contributions increased in importance, they became a matter of concern even among Republicans.

During the year after the 1904 election, a New York investigation of financial abuses in the life insurance industry uncovered evidence that the big insurance companies had dipped into their enormous assets to make large, secret donations to the presidential campaign of Theodore Roosevelt. These exposures led to the bipartisan passage in 1907 of the Tillman Act, which banned corporate political contributions. Roosevelt signed the legislation, although his role in its passage is often exaggerated. The following year, to match a pledge by Bryan (running for the third time), the Republican presidential nominee William Howard Taft agreed to release the list of his campaign donors.

Two years later, Congress passed the Publicity Act, requiring disclosure of contributions.

Since these regulations of official party finances did not close all possible loopholes (such as what are now called “independent expenditures”), they might have had no effect. But in his superb recent history of campaign finance, Buying the Vote, Robert Mutch shows that the Progressive-era reforms did have an impact: “Elite donors resigned themselves to the fact that their names would be made public and made smaller contributions, and party committees began searching for new donors whose much smaller contributions would look good on their reports.”

The changes weren’t “transformative,” Mutch adds. The GOP continued to enjoy a financial advantage in most elections because of the party’s deep support among the affluent as well as the truly wealthy. But the reforms checked oligarchic dominance and led both parties to look more widely for contributions as well as votes.

The 1908 election prefigured another change. The American Federation of Labor had generally avoided involvement in elections, but that year it gave Bryan its full support because of his backing for pro-labor legislation. Although the AFL later again withdrew from an active role in electoral politics, the political mobilization of labor became critical for the Democrats in 1936, when the Republicans raised an unprecedented campaign fund from the country’s richest families in an attempt to defeat Franklin Roosevelt. From that point on, the unions assumed a key role in providing the money and foot soldiers that helped Democrats keep up with the Republicans’ greater support from the wealthy—that is, until recently, when the decline of unions and a string of Supreme Court

decisions striking down the Tillman Act and effectively allowing unlimited “dark money” brought back the specter of oligarchy to American politics.

Overturning Oligarchy Again The “shocks” of war and depression were crucial for the transition to greater economic and political equality in the mid-20th century. But they weren’t sufficient in and of themselves. War doesn’t always produce more progressive taxes; during the Iraq War, George W. Bush persisted with regressive tax cuts. The breakthroughs on taxation in the early 20th century, however, laid the basis for progressive finance through the two world wars and the Cold War. A depression doesn’t necessarily strengthen labor organization. But by the 1930s, progressive labor laws were already percolating up from the states. And because the Great Depression brought the Democrats to power nationally, they were able to enact federal legislation that facilitated union organizing, and labor reciprocated with crucial political support.

There was no inevitability to this process, and no one should expect the United States to roll back inequality in the 21st century the same way it did in the 20th. Certainly, no one wants a repeat of the shocks of war and depression. But shocks will come, and the question then will be whether liberals and progressives have prepared the ground to achieve lasting change. To paraphrase a warning from 2009 not sufficiently heeded at the time of the financial crisis, a shock is a terrible thing to waste. Although we have no way of knowing whether America will restore greater economic and political equality, we can be clear about what it will take.

As in the 20th century, the three critical domains for curbing oligarchic dominance in the 21st will be taxation, the rules of the market, and the rules of politics. Every idea about changing policy is also a choice of political strategy.

Rolling back oligarchy will first of all mean focusing on tax privileges—the various ways in which the wealthy have escaped taxation. A prime example is the “carried interest” provision that allows hedge-fund and private-equity partners to pay a tax rate of only 20 percent on their income.

Another example is the provision that allows unrealized capital gains to escape taxation when assets are passed on to heirs—the so-called “trust fund loophole” that President Obama has targeted in his budget proposal this year.

According to a Federal Reserve study, unrealized capital gains account for 55 percent of estates worth more than $100 million. The Congressional Budget Office estimates that the current loophole (the “step up in basis” for inherited assets) will cost the Treasury $644 billion over ten years.

The bigger issue is the preferential lower tax rates for dividends and capital gains enacted under Republicans.

Every idea about changing policy is also a choice about

political

strategy.

Spring 2015 The American Prospect 37

The old norms that used to provide employees a semblance of

equity have

completely broken down.

The top income-tax rate for capital is 20 percent; the top rate for labor, 39.6 percent. Historically, the taxes supporting Social Security and Medicare have fallen entirely on labor. As part of the ACA , however, Congress broke with that tradition, extending the Medicare tax of 3.8 percent to dividends and capital gains for individuals with incomes over $200,000. That measure set an important precedent for resolving the long-term fiscal problems of Social Security on a progressive basis.

Today, no effort to make the wealthy pay their fair share of taxes can ignore the means by which many of them use offshore tax havens to hide assets and income. According to a 2014 report from the U.S. Senate Permanent Subcommittee on Investigations, the United States loses about $150 billion a year in tax revenue because of assets hidden abroad. (To put that loss in perspective, it is more than a quarter of this year’s projected federal deficit.) Although Americans are required to report income from outside the United States, the evidence is overwhelming that voluntary reporting is ineffective.

To deal with the massive levels of tax evasion, Congress in 2010 passed the Foreign Account Tax Compliance Act. Under FATCA , as the law is so suggestively abbreviated, taxpayers must report accounts held abroad worth more than $50,000, and foreign financial institutions are required to report on the accounts of their U.S. clients. Implementation has been slow, however, in part because of the need for new treaties with some countries to obtain the soughtafter financial data. Senator Rand Paul has single-handedly blocked ratification of a treaty with Switzerland on the grounds that disclosure of foreign bank accounts violates the privacy rights of American citizens. The Republican National Committee has called for FATCA to be repealed.

Multinational corporations also avoid paying U.S. taxes through a variety of legal subterfuges, such as shifting debt from low-tax jurisdictions to their American subsidiaries and by indefinitely deferring repatriation of profits earned abroad. Many U.S. companies pay no tax at all on their foreign profits. A report by the Congressional Research Service released in January says that the revenue losses “may approach, or even exceed, $100 billion per year.”

An army of lawyers, accountants, and lobbyists—Winters calls them the “wealth defense industry”—work assiduously to develop methods of evading and avoiding taxes and to convince Americans that nothing can or should be done to stanch the losses. After September 11, when the United States wanted to block financial transactions of suspected terrorists, it obtained international agreements for that purpose. Offshore tax havens undermine the solvency of all the world’s economic powers. As of 2010, according to an estimate by the Tax Justice Network—an international agency fighting tax evasion—offshore assets

38 WWW.Prospect.org Spring 2015

reached between $21 trillion and $32 trillion. Many governments could help reduce their fiscal woes and achieve a more just distribution of tax burdens through international agreements that controlled the use of tax havens.

This has to be an imperative for progressive diplomacy in the 21st century.

In focusing on tax privileges, preferential tax rates, and the use of offshore tax havens, I am, of course, not just talking about policy ideas. Each of these is as much a message about justice as a practical way of raising revenue and rolling back inequality. Some liberals and progressives have called for entirely new taxes, such as a carbon tax, a value-added tax, or a tax on financial transactions.

While there is a rational case for each of these, they would generate more broadly based opposition. Historically, the introduction of an entirely new tax on a mass basis is a rare event. Equitable rules for existing taxes and enforcing the laws against tax cheats are a better means of both reducing inequality and communicating that purpose.

As the example of tax evasion illustrates, many aspects of rulemaking for markets in the 21st century will need to move from the national to the international level, just as rulemaking in the Progressive era began moving from the states to the federal government. This is especially important if the interests represented in the rules are to include those of workers and the wider public. In a world where capital moves in a keystroke across borders, economic regulation at the national level has lost some of its effectiveness. The rules have to catch up with the realities, whether in dealing with climate change, taxes, or the rights of labor and consumers.

Rolling back oligarchic dominance will also require rethinking the relaxation of antitrust law and other changes in recent decades that have fostered the concentration of economic and political power. The narrowed conception of antitrust as being only about price competition and narrowed criteria for enforcement doesn’t take into account the harm by companies that have the power to impose their terms arbitrarily on consumers and to steamroll opponents in the public sphere. We will also need to rethink the rules of corporate governance that have allowed top corporate officials to pay themselves staggering salaries while denying their employees any share in productivity gains. The old norms that used to maintain a semblance of equity have completely broken down. Without the countervailing power of unions, corporations are like private governments with no effective checks and balances, nothing to check self-enrichment at the top, and nothing to balance the interests of the executives and shareholders with those of other stakeholders. German “co-determination” provides an instructive alternative model; corporate boards

Rolling Back Inequality

in Germany represent workers as well as owners, and its companies not only have been enormously successful but have also distributed the gains from higher productivity more equitably.

Without changes in the rules of politics, however, none of this is going to be feasible. In its decisions about campaign finance, the Supreme Court has, in effect, made it a constitutional requirement for elected officials to depend on wealthy donors for their political survival. In Citizens United, the five conservative justices ruled that corporations—actually, top corporate officers—could use their treasuries to finance candidates because money is speech and corporations have unlimited free-speech rights; in McCutcheon, the Court eliminated limits on a donor’s total contributions to all candidates in an election cycle. These were oligarchy-empowering decisions.

From the standpoint of effective reform, the most discouraging of the Roberts Court rulings may have been its 2011 decision striking down Arizona’s “clean money” public financing law. Under the law, which had been passed by a voter initiative, candidates for statewide office could qualify for public funds by collecting a minimum number of $5 contributions. A distinctive feature of the Arizona program was that if outspent by a privately funded opponent, a participating candidate could get additional, matching funds, up to twice the initial amount. To the conservative majority on the Court, however, the Arizona law substantially burdened the privately funded candidate’s right of free speech by balancing that candidate’s resources. Political equality, in the majority’s view, is not a permissible justification of campaign finance law, even though, in this case, the government didn’t limit money or speech—it provided more money for more speech.

The Arizona case shows just how difficult it will be to overcome the Court’s oligarchy-empowering decisions with policies that empower ordinary citizens. I am not optimistic about the chances of a constitutional amendment to allow the regulation of campaign finance or about legal strategies for challenging the Court’s reasoning in these cases (though the latter could become relevant if a new liberal justice replaces a conservative one). Ultimately, this is a question about the fate of democracy that will need to be fought out politically as well as legally. A country that recognizes the principle of one-man, one-vote and expects time to be fairly allocated to opposing sides in legislative debates and courtrooms should constitutionally be able to create an institutional framework for the fair distribution of resources in election campaigns.

What democracy requires in the financing of elections are methods that provide sufficient grassroots and public funds to free candidates and officials from dependence on concentrated wealth. The proposal of Bruce Ackerman

and Ian Ayres for “democracy vouchers”—governmentfunded vouchers that individuals could contribute to the party or candidate of their choice—would be a step in that direction. Another possibility is to refashion the existing, voluntary $3 check-off on the income tax for presidential campaigns. Although the check-off doesn’t increase an individual’s taxes, the proportion of people agreeing to it has declined precipitously. Reformers could try to rebuild support for the idea and expand the options to include $50 and $100 contributions to a fund that would be for both presidential and congressional campaigns. The power of money cannot be abolished, but it can be attenuated, and that can be enough.

In these as in other areas, we cannot let the perfect be the enemy of the good and expect that progress on equality must wait for the distant day when new popular movements have arisen and opened the door to a new era. As the past two Democratic administrations have shown, liberal and egalitarian goals are achievable even within present constraints. There is also no alternative to policies that advance those goals incrementally. Without delivering material gains in the short term, there will be no way of getting to long-term progress.

I said earlier that, in principle, rallying the majority on behalf of its own interests should be easier than winning support for policies that benefit the poor and minorities.

But by taking the side of the poor and minorities in the 1960s, liberals made what ought to be the easier task more difficult. This was the right choice, but it has had a cost.

Ever since, working- and middle-class whites, particularly men, have been suspicious of liberal government as no longer working for them, and consequently building broad, bottom-up majorities for progressive politics has become more difficult. The backlash against the changes in racial and gender relations has provided the votes for the revival of the right, while business and the wealthy have provided the money. Now the hope for fundamental change depends on the backlash petering out as the generations turn over, demographic patterns shift, and some of the difficult social changes of the past half-century are integrated into the fabric of American life.

For many liberals, equal rights for all, regardless of race, gender, and sexual orientation, have been the great moral and political causes of the past half-century. It is too soon, and perhaps it will always be too soon, to declare victory in those struggles. But if the effort to roll back oligarchic dominance is to succeed, we must invest in it the same degree of passion and commitment. Democracy is not only a form of government. It is also a renewable political faith.

Reformers have awakened that faith in the past to win victories against enormous odds, and we must do it again.

Spring 2015 The American Prospect 39

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Rolling Back Inequality

The Wealth Problem B y R o b e rt K u tt ner

T

he postwar boom was a time of broadly shared prosperity, when working- and middle-class people not only enjoyed steadily increasing incomes but were also able to accumulate lifetime wealth. The measures that made possible this wealth-broadening included expansion of homeownership under a reliable, well-governed system of mortgage finance; the development of a retirement system, with Social Security complemented by private pensions; debt-free higher education; and rising real wages. Each of these instruments interacted with the others.

Today, these mechanisms have all gone into reverse.

Meanwhile, the capacity of the already-rich, the parentally endowed, and the well-situated to accumulate financial wealth has only intensified. Wealth inequality gets less attention than income inequality, but it is every bit as important. And the two are related. Wealth helps generate income and the capacity to earn income. Decent income increases the capacity to save and to amass wealth. As public systems for wealth-broadening collapse, private wealth within families provides asset endowments to the young and positions the next generation to become upperincome earners like their parents.

Economist Thomas Piketty called overdue attention to wealth extremes in his celebrated book, Capital in the Twenty-First Century. Assembling more than two centuries of data from several countries, Piketty demonstrated something close to an iron law of capitalism: The return on capital tends to exceed the rate of GDP growth. Thus, as a matter of simple arithmetic, wealth becomes ever more concentrated. But the most interesting and least developed part of Piketty’s book was his discussion of the mid-20th century—an anomalous period when wealth and income became more equal.

Piketty—more of a virtuoso historical statistician than a political economist—attributed this temporary reversal primarily to accidental and mechanical factors, most importantly the fact that a lot of wealth (largely owned by the wealthy) got wiped out in two world wars and the Great Depression. Thus, wealth distribution became more equal.

But that weakening of concentrated capital had political

implications. It opened the door to a different constellation of power and to more egalitarian social contracts in the major democracies.

In the United States, policies were put in place that promoted wealth building for the middle and working classes. Now, 70 years later, those policies are eroded and the capital-owning class once again enjoys concentrated wealth and the power that goes with it. What policies might restore balance?

Interestingly, in the early postwar era there was no explicit policy goal or field of inquiry called wealth building. Rather, egalitarian policies in different realms broadened wealth in several mutually reinforcing respects.

A pension provided secure retirement in old age. Financial assets in pension funds were not under the direct control of the pensioner but were held on his (and occasionally her) behalf, and spun off income that was contractually guaranteed. Many pensions also extended to widows.

Some critics contended that pensions made it too easy for people to neglect individual savings, but research suggests that the institutionalization of retirement via public and private pension systems has the opposite effect. If you expect to retire, you are more likely to plan for retirement.

You become aware that a pension may not be sufficient to maintain your standard of living. By focusing attention on retirement as a social institution, the pension system actually encourages complementary personal savings. In line with that evidence, personal savings rates rose during the postwar boom; they declined only when incomes, job security, and free higher education began collapsing.

Rising real wages made supplemental savings possible.

Working- and middle-class families were not spending every nickel of income making ends meet. They had discretionary income to save. (The memory of the Great Depression probably helped promote the savings habit, too.)

Debt-free college for the vast majority allowed some portion of discretionary income to flow to savings rather than paying off debt accumulated before full-time employment even began. The need to pay off college loans not only depresses the capacity to save but also delays or prevents the purchase of a house, diminishing another form of lifetime wealth accumulation.

Progressive taxation provided the resources for public funding of such programs. Tax cuts deplete resources for wealth-broadening programs. State governments, however, now provide less than 15 percent of the funds for state universities, forcing students and their parents to bear an increased share of the cost. Failure to adequately fund public pensions for state and municipal employees has left such pensions at a tipping point where they are losing both broad public support and solvency.

Homeownership became the single most important

Spring 2015 The American Prospect 41

source of asset accumulation over the life cycle. For the first two postwar generations, housing values rose faster than inflation. For tens of millions of lucky homeowners of that era, the “equity” created by the windfall of increasing real estate prices exceeded the equity created by paying off the mortgage.

The policy area now known as “asset development,” funded by foundations and promoted by several advocacy groups and occasionally by government, dates only to the late 1980s.

It became a public concern and a policy goal when earlier wealth-broadening policies began to peter out, and as part of the perception that the wealth benefits of the postwar boom had excluded many poor people and minorities. The policy ideas that now parade under the asset-development banner offer a clue to how we might go about restoring wealth accumulation for the working and middle classes.

The political challenge, however, is that the redistributive policies of the postwar era were tacit. Aspiring to own a home and pursuing an education were and are quintessentially American ideals, more conservative than radical. Social Security quickly became accepted as a mainstream American institution as well. None were promoted as redistribution per se. As candidate Barack Obama discovered in his 2008 campaign exchange with Joe the Plumber, it is harder to sell policies explicitly packaged as spreading the wealth around.

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Wealth Accumulation and the Long Housing Boom Homeownership is a logical place to start because it is the single most important source of wealth-broadening.

Broadly held property wealth, initially rooted in the yeoman farmer, has a long American pedigree that goes back to Thomas Jefferson and beyond. Since the financial collapse of 2008, some critics have argued that as a society we place too much faith in homeownership and that we “over-subsidize housing.” The critics are right that too much of the subsidy goes to further enriching the rich, but that mix could be shifted. The goal of broad homeownership remains valid, both for its own sake and as a source of lifetime wealth building.

Critics of the package of incentives for homeownership that began in the New Deal often overlook the fact that the ideal of a broad, property-owning democracy is deeply American. The Homestead Acts beginning in 1862 produced homeownership (family farms) rates as high as 75 percent in some of the newer states of the Midwest and Northwest. Before the Homestead Acts, Jefferson called for a republic of small freeholders as the social basis for republicanism, and his land-tenure policies deliberately favored owner-occupant farmers over large speculators. More than a century before Jefferson, the Massachusetts Charter offered

Rolling Back Inequality

a deliberate model of broad property ownership, based on carving the Commonwealth into townships designed for small farmers, complete with common schools and town meetings. Massachusetts is a deep blue state today because its political culture has been egalitarian for more than three centuries, in contrast to the states of the old South, which had quasi-feudal systems of land tenure quite apart from the complication of slavery. So there is more to the value of owner-occupied housing than just wealth-broadening.

And speaking of slavery, one of the legacies of slavery and segregation was that blacks had a much harder time than whites getting on the homeownership ladder. The “40 acres and a mule” promised as part of Reconstruction never materialized. In the North, blacks were victimized by the contract-sales system, which excluded many from standard mortgage finance. Instead, aspiring Negro homeowners were compelled to rely on a form of credit that accumulated no equity and no ownership until the debt was paid in full. You could faithfully pay on the sales contract for ten years and lose everything you had put in if you were late on a single payment.

Even the Federal Housing Administration deliberately enforced policies of racial exclusion. Not until the late 1960s did the federal government become a sometime friend of black homeownership—but often in the context of FHA-enabled realtor blockbusting, which only fueled racial tensions and discouraged stable, racially mixed neighborhoods. The government-abetted subprime debacle—a catastrophe of wealth destruction in black communities—is only the latest chapter in a disgraceful saga. The gross disparity of black wealth and white wealth (which has worsened since 2006) is in part a function of depressed black homeownership rates.

Because of foreclosures during the Great Depression, homeownership rates had fallen to around 40 percent at their nadir in the late 1930s. The mix of the New Deal housing-finance programs and rising real incomes combined with cheap land prices and the interstate highway system increased that rate to about 64 percent by the mid1960s. City dwellers could acquire suburban homes for less than the cost of rent. But recently, homeownership rates have come back down from a peak of over 69 percent to under 64 percent.

Homeownership during the postwar boom allowed people of modest means to accumulate real financial assets.

The combination of rising incomes, memories of Depression hardship, and strict government regulation meant that borrowing against one’s home to subsidize current consumption was off-limits for that generation. There was no such thing as a home equity loan or a home equity line of credit; if people did refinance, it was usually to pay for home improvements. In the disinflation of the 1990s that

followed the inflation of the 1970s and early 1980s, people refinanced to take advantage of falling interest rates on mortgages. But it was only in the 1990s and the 2000s that it became common to “take out equity” to pay for current consumption in the context of stagnant or declining wages and rising college tuitions. Thus did three trends— bad housing policy, wage stagnation, and debt-financed education—combine to strip middle-class financial assets.

Did We Rely Too Much on Housing to Build Wealth?

Since the subprime debacle caused a housing bubble followed by a collapse, we have seen an intriguing debate in which many critics contend that we put too many eggs in the housing basket. Interestingly, one can find these critics left, right, and center. The argument comes in three parts.

First, even if housing was once a source of easy wealth accumulation, the windfall years are over. In the 1950s and 1960s, housing values rose slightly faster than inflation as real estate development bid up land prices. In the more serious inflation of the 1970s and 1980s, people deliberately put their money into housing where it was likely to hold its value. That bid up real estate prices even further. In the 1990s, as inflation and interest rates subsided, cheap money was capitalized into higher asset values: The low rates on mortgages meant that people could afford more expensive homes, and demand pushed up prices yet again.

Owners who sold the family home in that era gained far more from inflation than from amortization. But by the early 2000s, the end of cheap land and housing inflation itself had driven up prices to the point where they outstripped incomes. People observed that they could not afford to purchase the homes in which they lived. In most metro areas, the median-priced house far exceeded the purchase capacity of the median income. Many economists accurately warned of a bubble.

Dean Baker of the Center for Economic and Policy Research, putting his money where his mouth was, sold the family home and moved into a rental.

The subprime scam tried to disguise the unaffordability of housing with very low-rate “teaser” loans that reset after a few years. Lenders and purchasers bet that prices would keep appreciating so that the loans could be refinanced or the house sold before the interest rate rose. But obviously, if the median-income household in most metropolitan areas cannot afford the median-priced house, prices will not continue to appreciate faster than inflation. The bubble was destined to burst. The subprime collapse caused prices to fall back to earth, abruptly but very unevenly. Even for those whose mortgages are not underwater, housing is no longer a sure bet to hold its value. That psychology itself dissuades many potential buyers, thus moderating housing

Broadly held property wealth has long been a

social basis of American democracy.

Spring 2015 The American Prospect 43

Let’s redirect the

$300 Billion government

spends every year subsidizing wealth accumulation, mostly for the haves.

demand and housing inflation. So it is very unlikely that future generations will enjoy the windfall appreciation captured by their parents and grandparents.

Economist Robert Shiller argues that the inflationadjusted appreciation in housing prices from 1890 to 1990 was about zero and the boom after World War II was an anomaly. He contends people would be better off investing in the stock market. In an article in the libertarian magazine The Week, Ryan Cooper describes homeownership as a “malignant symbol of the American Dream” that should “die a quick, quiet death.”

A second reason to be skeptical of housing as a financial asset, say critics such as economist Baker, is that a house is a poor investment for Americans who move around a lot. “The high transactions costs associated with buying and selling a home mean that anyone who does not stay in a home for a substantial period of time is likely to end up losing as a result of owning rather than renting.” Baker is right, of course, but that still leaves a lot of people who could benefit from homeownership. (After the bubble burst, Baker bought back in as a homeowner again, and has probably done well as real estate values have stabilized and resumed rising.)

Despite the widespread assumption that the new economy and the end of the lifetime job have produced higher rates of mobility, the Census Bureau reports that increased rootlessness is a myth. In fact, the rate of annual mobility has steadily declined from a modern peak of 20 percent in 1985 to under 12 percent in 2011, and has ticked up only slightly since then.

Third, many argue, if we want to promote accumulation of wealth, it’s time to de-link that goal from homeownership and promote the acquisition of financial assets directly. Richard Florida points to the fact that many rich nations with income and wealth distributions more equal than ours have lower rates of homeownership, including Switzerland, Germany, and New Zealand, and few subsidize homeownership as much as we do. People, Florida reports, are less likely to own their own homes as nations become richer. Egalitarian Europe relies on other measures to promote greater equality.

There is surely a case for developing other measures to broaden wealth, of which more in a moment. Even so, there is a lot to be said for promoting homeownership both for its own sake and as a means to wealth accumulation for people of modest means.

Let’s assume no more windfalls. Even if a home appreciates only at the rate of inflation, after 30 years the family will own an asset worth several times its annual income.

A house combines the “use value” of having a place to live with the financial value of accumulating wealth. There is no use value in a 401(k) plan. Economists like to point out that homeowners get the benefit of the value of “imputed

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rent.” Sending in a monthly check that accumulates equity still beats sending that check to a landlord. In principle, Shiller may be right that people, over a lifetime, would be better off in the stock market. But in practice, few young adults can afford both a monthly rent check and a monthly payment to a nest egg. A mortgage payment achieves both.

The fact that the financial-industry sharks who came up with subprime lending managed to spoil the dream of owning your own home for much of a generation is not a good reason to give up on homeownership as a national policy goal. On the contrary, it’s a reason to retool housing policy to make it possible for the young to aspire to the dream once again. We need strict controls on the practice of turning mortgages into securities. Ideally, we should recreate the original secondary mortgage market of the era when Fannie Mae (before 1969) was a public institution, and there were no exotic “private-label” mortgage-backed securities, no scandals, no bubbles, and hardly any losses.

Yet, as desirable as homeownership is, the critics are right that we should not limit our efforts to housing.

According to a study by the Urban-Brookings Tax Policy Center, the government spends about $300 billion a year on wealth accumulation subsidies, via the tax code. Most of that goes to housing tax deductions and to tax-sheltered retirement benefits, and all of that is tilted toward the upper brackets. The third-largest category is favorable tax treatment of capital gains, which is even more tilted to the rich. If we spent those funds differently, we could help the non-rich accumulate wealth.

For starters, we could limit and reprogram the mortgage interest deduction. Canada and Australia no longer allow tax deductions for mortgage interest, and have suffered no reduction in rates of homeownership. Cutting that subsidy (which gets capitalized in the value of the house) would also restrain bubble effects of low mortgage interest rates.

Repealing that tax break outright would be a very hard sell, but we might cap it at the value of a median-priced home in any given metro area.

Suppose we redirected $250 billion of that tax subsidy a year. That would leave $50 billion a year in the housing sector to subsidize first-time homeownership for moderate-income households, either though down-payment subsidies or mortgage interest subsidies with caps. The mortgage interest tax deduction is almost useless for the bottom 50 percent of homeowners, who tend to take the standard deduction.

A retirement system aimed at broadening wealth would be a good place to start. It’s not enough, however, to have a more portable system of 401(k)-style savings, as many conservatives propose, because lower-income people can’t afford to put in enough money. Whereas Social Security is deliberately redistributive, tax-favored individual savings

Rolling Back Inequality

accounts such as IRAs, Keoghs, and 401(k)s mirror the unequal distribution of wage and salary income. They leave lower-income workers with insufficient savings for retirement. In addition to workers and employers putting money into a retirement system, government could inject direct subsidies as an explicit strategy of wealth-broadening.

(Elsewhere in this issue, Teresa Ghilarducci describes the mechanics of a universal and adequate retirement system.)

Spreading the Wealth Around This brings us to explicit systems of wealth-broadening. As noted, this presents a tougher politics. In “asset development” circles, advocates have placed a lot of faith in Individual Development Accounts (first proposed by Michael Sherraden in 1991) and other subsidized forms of individual savings intended to demonstrate that even the poor are capable of saving and to cultivate the habit. At least 27 states have implemented some version of IDAs. But there are two big problems. First, at the current scale, this strategy is not sufficiently redistributive to make much of a difference. Second, the idea has never been able to get serious political traction. Programs come and go, they demonstrate moderate promise, and then are never taken to scale.

One interesting proof-of-concept is the phenomenon of remittances. Immigrants, among the poorest of workers in the United States, send surprisingly large sums to their families (with no subsidies or tax credits, thank you). Some very poor nations, such as Haiti, rely on remittances for about 22 percent of their GDP. So desperately poor people are unquestionably capable of saving, in this case to help even more desperately poor people back home. The question is whether this form of self-exploitation of the poor should be seen as an attractive social model.

One universal version of the strategy of a savings subsidy is what the British call “baby bonds.” The basic idea is that government sets up a savings account when a baby is born.

Periodically, the government contributes to the account, and parents get a tax break if they add to the savings. The subsidy is tilted downward. In some versions, the funds are available to the beneficiary at age 18 or 21. In other versions, they may be withdrawn for approved uses, such as home purchases, starting a business, or retirement. This idea was a favorite of New Labour, and a modest form of it was enacted by the Blair government in January 2005, with each child getting an initial savings voucher worth 250 pounds. The scheme was repealed in 2010 by the incoming Tory-led government.

It would be a shame to have a scheme of wealth endowments at birth only to have all the money and more consumed by tuition payments. Restoring debt-free public higher education could be done in a number of ways. Taxes could be raised on the wealthy, and the federal government

could create an incentive plan to match state spending on public universities to encourage states to follow suit. Plans for debt-free higher education financed by a surcharge on the income tax are more progressive than the current system, but they still amount to a kind of debt. They can be made less onerous if combined with a general subsidy.

Another promising idea is debt forgiveness in exchange for national service. But genuinely free public higher education is the best idea of all.

A far more robust variant of the baby-bond approach has been proposed by two American social scientists, Darrick Hamilton and William Darity Jr. They envision a wealth endowment program for roughly the bottom three-quarters of the income distribution, with initial accounts of between $20,000 and $60,000 per child, which would double or triple by the time the child turned 18, depending on the rate of return. The program would cost about $60 billion a year, or about one-fifth of the subsidies currently spent on wealth accumulation (which is now tilted to the top).

An even more radical version of this general idea entails giving all citizens a stake in the capital part of our capitalist economy, and not just via subsidized or tax-favored individual savings accounts. This idea has been around since Henry George (who wanted to tax unearned appreciation in the value of land); and before him, since Thomas Paine, who proposed that every 21-year-old man and woman receive 15 pounds, financed from inheritance tax. In With Liberty and Dividends for All, Peter Barnes cites the Alaska Permanent Fund (which gives every Alaskan a share of oil profits) as the germ of a broader idea for giving everyone a stake in the financial wealth generated by the commons.

From the conservative populist side of the spectrum, Louis Kelso promoted the idea of a “second stream” of income for workers, based on shares in the profits of their employers.

Kelso sold the idea to Senator Russell Long, and the Kelso plan was domesticated into tax-favored Employee Stock Ownership Plans, or ESOPs. For the most part, ESOPs have been used less by workers than by capitalists, as tax-sheltered forms of financing. Only a relative handful have resulted in genuinely worker-controlled or -owned companies.

With more and more corporations relying on contingent or “distributed” workers, the promise of worker ownership of stable firms has mutated into the precarious gig economy. A task rabbit or Uber driver is a kind of workerentrepreneur, but not the sort who is likely to accumulate wealth. Nobody has even deigned to ask the newly rich owners of Uber to share their vast stock-market windfall with drivers, who are not even employees.

An intriguing question is whether the task-rabbit economy could coexist with new forms of profit-sharing, as a partial remedy for the insecurity. Uber drivers, after all, take the risks of petty entrepreneurs, but the owners get

It would be a shame if a new program of

wealth

endowments ended up being consumed by college debt.

Spring 2015 The American Prospect 45

all the upside gain in the value of Uber shares. Modest profit-sharing has been used in the U.S. by some corporations since the late 19th century. The practice went into eclipse with the Great Depression, and never recovered except via the very limited success of ESOPs. Enthusiasts of the worker-owned corporation, such as Joseph Blasi, Chris Mackin, and Richard Freeman, believe this is the moment for a broad rebirth.

Four decades ago, an influential Swedish trade union economist, Rudolf Meidner, proposed a wealth-broadening plan that would have transferred a growing share of the wealth in the Swedish stock market to the citizenry.

Meidner, one of the architects of the Swedish welfare state, proposed that corporations issue new shares every year equal to 20 percent of their profits, to capitalize and then gradually increase the value of the funds. Over time, workers would, through these funds, own the majority share in a still-capitalist economy. There was nothing wrong with the plan technically, but it provoked a huge political outcry, and that was back in an era when trade unions had more influence than they do today. The Social Democratic government briefly approved a version of the plan in the early 1980s, but it was quickly killed when a conservative government took power.

Here at home, Ta-Nehisi Coates, in a widely read essay in The Atlantic, has revived the radical idea of reparations for the descendants of slaves. One can debate whether wealth transfers to African Americans ought to take priority over wealth-broadening measures for all Americans, but there is no shortage of possible mechanisms.

Any of these approaches could broaden wealth and they deserve to be on the agenda. I particularly like the baby-bond idea, financed by taxes on the wealthy, to make explicit the idea of sharing the patrimony that’s now available only to the children of the rich. I also like Barnes’s notion of finding other forms of wealth generated by the commons and giving everyone a dividend in it. But these ideas are more exotic than good old homeownership and good old free public education, not to mention the norm that wages should rise with productivity. Those ideals, once so familiar that we didn’t give them a second thought, are still the low-hanging fruit of this debate.

Even so, the wealth gap is now so extreme that circumstances require us to make explicit what was once tacit.

Wealth-broadening, with the right leadership and narrative, can become good politics. Young adults in particular should welcome national policies, in housing, education, earnings, and asset-building, that could made it as feasible for them to accumulate lifetime wealth as their parents and grandparents once did—not through heroic self-sacrifice but simply through playing by the rules. It’s the rules that need changing.

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Senior Class: America’s Unequal Retirement

By Teresa G hilard ucci

I

nequality has been increasing in multiple ways.

But one little-appreciated form is the inequality of retirement time. That’s the number of years between retirement and death. It’s not surprising that divergent retirement time should reflect other forms of growing inequality. The poor have lower earnings and often work longer out of necessity, not choice. They are less likely to have decent pensions or private savings. On average, they suffer poorer health and tend to die younger.

On all counts, the affluent get to enjoy more years of retirement in relative comfort.

This is just what one would expect in a market economy of rising inequality. What is surprising, however, is that there was once a broadly equal distribution of retirement time across divisions of class and race. This greater equality was a product of several egalitarian policies and institutions created in the mid-20th century, all of which are now under assault—Social Security, Medicare, pension plans, and disability policy. Thanks to these measures, as recently as the 1980s, low-income people who spent roughly the same number of years in the workforce as high-income people obtained approximately the same years of retirement.

In addition, many blue-collar and service-sector workers, especially those in unionized jobs that required hard physical and tedious labor, like miners, autoworkers, truckers, and nurses, had bargained for defined-benefit plans, many of them so-called thirty-and-out plans. They could retire at a substantial fraction of their final earnings after 30 or so years on the job. But today, most workers have lost the traditional pensions that once covered about half the workforce.

Meanwhile, the affluent are more likely to be healthier as well as wealthier in their golden years—all of which adds up to the elderly rich being able to control their quality of life to a far greater degree than middle-class and poor elders.

As traditional pension coverage has declined, those who still have adequate retirement packages are likely to be professionals, business executives, and the wealthy. To the extent that middle-class and poorer Americans have access

Rolling Back Inequality

81.3% Black Female

69.9% Black Male

White Female

88.3%

White men and women survive to age 65 in greater numbers than Blacks.

81.2 %

The Growing Gap in Life Expectancy The remarkable increase in the average American’s life­ span since World War II conceals a growing racial and class disparity in life expectancies. Social Security economist Hilary Waldron, in a 2007 study, compared two generations of male workers. For men born in 1912, who reached their prime earning years when the pension system was still healthy and the income distribution was more equal, the top half of those who survived to age 60 lived only 1.2 years longer than those in the bottom half. But for men born in 1941, who hit peak earning years around the turn of the 21st century when inequality was widening and pensions were decaying, the top half lived 5.8 years longer than the bottom half. The longevity gap between the top and bottom had dramatically widened.

In 2014, a Brookings Institution study by researchers Barry Bosworth and Kathleen Burke confirmed Waldron’s findings that class longevity gaps are growing. Men born between 1920 and 1940 who survived to age 55 and were in the bottom tenth of the income distribution could expect to live to age 79.2, while men in the top tenth of the income distribution could expect to live much longer, to age 89.3.

Low-income women had longer life expectancies than men with equally low incomes. But though women’s life expectancy has generally exceeded men’s, men and women in the top tenth of the earnings distribution remarkably had the same life expectancy at age 55; they were expected to live until age 89.3. Class trumped even the long-standing fact of greater female longevity.

The retirement gap continues to widen. For men born in 1920, according to the Brookings study, the class difference in how long people could expect to collect Social Security

benefits was considerable, due to divergent mortality. Men in the bottom tenth could anticipate collecting benefits for 16.6 years, while men in the top 10 percent of lifetime earnings were expected to collect for 20.7 years. But among men born just 20 years later, in 1940, the gap had widened considerably. Those at the bottom could expect to collect benefits for 18.2 years, but those at the top expected to collect for 26.4 years. In less than a generation, a 4.1-year gap turned into an 8.2-year gap.

Life expectancy is actually declining for women in the bottom 10 percent—and rising for those at the top. Women born in 1920 who remained in the bottom 10 percent of lifetime earnings could expect to collect benefits for 21.2 years, but those born in 1940 and also in the bottom 10 percent could expect to collect for only 19.2 years because their average lifespan had decreased. In contrast, lifespan increased for the top 10 percent: Those born in 1920 had 24.5 benefit years, and those born in 1940 had 27.5 years. So the class difference in benefit years increased from 3.3 years for those born in 1920, to 8.3 years for those born in 1940.

Not surprisingly, retirement inequality is also widening by race. America once had greater racial equity in one very narrow respect. In 1950, both blacks and whites who managed to survive to age 65 were expected to live to age 77. By 2010, white men at age 65 were projected to live almost two years longer than black men and white women a year longer than black women. Blacks, then and now, are much more likely than whites to die before age 65. Today, less than 70 percent of black men survive until age 65, compared to more than 80 percent of white men.

The racial gap between black and white women is not as great but is still significant; 81.3 percent of black women survive to 65 compared to 88.3 percent of white women.

The increasing divergence in life expectancy between whites and blacks, and between low- and high-income people, matters—not just for its own sake but in the debates over Social Security. Any policy that cuts Social Security benefits, such as by raising the “normal” retirement age—at which covered workers can collect their full Social Security benefits—will hurt blacks and lower-income people more because both groups die sooner than whites and higher-income people. African Americans and lower-income people also tend to suffer poorer health, which affects both their capacity to work and their quality of life.

white male

to retirement plans at all, they are typically 401(k) or similar plans that depend on optional contributions from workers and employers. For most workers, these ersatz pensions are inadequate. The median retirement account balance is just over $110,000 for people near retirement, aged 55 to 64.

That’s sufficient for just a few years of retirement. And the majority of workers in the bottom two-thirds of the income distribution don’t even have any retirement savings. Moreover, because of the lopsided way that 401(k)s and their cousins, Individual Retirement Accounts, are treated under the tax code, the contributions and earnings of the highest paid participants are subsidized with more favorable tax breaks.

Social Security makes up only part of the gap. The average Social Security benefit is only about $1,200 per month.

That’s why the idea of raising the retirement age or extracting other forms of cuts in Social Security is perverse at a time when voluntary employer pensions, home equity, and personal savings—the other layers of the retirement system—are withering.

Widening Inequality in Health Health gaps by income and race are their own strand of this story of who gets to control the pace and quality of their life before they die. Lower-income people have more difficult jobs in many ways. They are more likely to be subordinate at work; they face higher risks of losing pay, hours, and jobs, all of which are sources of social and psychological stress

Spring 2015 The American Prospect 47

The elderly rich enjoy more years in

leisurely retirement living off assets, while the non-rich are working longer for less.

that damage health. According to a 2010 Canadian study, poverty by itself doubles the risk of diabetes. Smoking is notoriously correlated with class, as is the availability and quality of treatment for heart disease. Class disparities in health—caused in part by differences in access to quality health care—interact with retirement disparities in another respect: Older people in ill health, though desperately needing to retire, increasingly can’t afford to stop working. Yet lower-income older workers in poor health are less desirable to employers and often have trouble finding jobs.

Once, traditional defined-benefit pension plans combined with disability payments provided a bridge—a source of income until people could begin to collect Social Security at age 62. Some people can use disability payments to retire early, but qualifying for disability benefits is increasingly difficult. It takes two years of not working, and legal and medical experts have to declare that a person is completely unable to do any work for pay—which is an extremely high bar.

Like the other inequalities of aging, these disparities have a racial dimension. In 2013, the Centers for Disease Control and Prevention reported the average African American man can expect to live 61.1 years free of activity limitations caused by chronic conditions. By comparison, the average white American man can expect to live until age 67 without such limitations. If blacks retire in their early sixties or later, a majority will spend all of their retirement with some form of activity limitation. Among people of the same race at comparable ages, those with lower incomes have worse health.

Elders Who Must Work and Those Who Can Afford Not To If the groups with shorter average lifespans could be accommodated by more generous early retirement and disability benefits, the nation could keep one aspect of a fair retirement system. Ideally, people who start work at older ages because of more schooling—and who live longer because life treats them better—would retire at older ages. Workers with less education, earlier entry into the labor force, and shorter life expectancies would be able to retire at earlier ages.

Yet the opposite is occurring. Because of the erosion of pensions and the attack on retirement, the vast majority of Americans over 65 in the bottom 90 percent of the income distribution will likely have to work longer than the affluent even as they also expect to die sooner. This is not a fair retirement system. Yet it seems that the racial and class gap in retirement time is already baked into retirement policy.

The most widely used model to project retirement income, the “MINT Model,” maintained by the Urban Institute and funded by the Social Security Administration, takes the unequal distribution of work as a given. The model projects that middle-class retirement-age Americans 30

48 WWW.Prospect.org Spring 2015

years from now will receive 24 percent of their income from working—compared to 67-year-olds in 2002 who got only 14 percent of their income from work.

Currently, the Social Security Administration assumes that middle-class 67-year-olds in 2040 will get less of their income from assets and retirement plans and almost twice as much of their income from working as they did 40 years earlier—because they can’t afford not to work. But for those in the top 20 percent, the SSA model assumes the younger cohort will not have to work more. The top 20 percent’s share of income coming from wealth, defined-benefit plans, and retirement accounts will grow substantially, from 63 percent to 73 percent. And increased work is assumed for the non-rich well past retirement age as well. Social Security economist Mitra Toossi projects that by 2022, about 14 percent of men and 8 percent of women aged 75 and older will work, compared to 7 percent of men and 2 percent of women in 1992. The bottom line: Increased work is proposed as the solution to reduced retirement income for the middle-class workers, but not for the affluent.

But complicating the projected solution of increased work for middle-class elders who have inadequate pensions are the realities of employer demand for older workers. Older workers often have difficulty finding employment. Age discrimination in hiring, training, and wages and salaries, though illegal, is on the rise. This is the price we pay as a society for the absence of a comprehensive pension system, consistent norms for the proper age to retire, and decent pensions above the essential Social Security.

As 401(k)-type plans replace traditional defined-benefit pensions, and as other forms of employer-based retirement plans stagnate, pension income is expected to fall for middle-class as well as lower-income workers. Workers in a 401(k) world, which now is only available to about half of the labor force, will need to work longer and cut their retirement time. Unlike Social Security, which is deliberately redistributive, 401(k) assets and income mirror the growing inequality of wage and salary income. As the 401(k) system matures, one of the key equalizing mechanisms of the American retirement system, which let people who died sooner retire sooner, will be lost. Retirement time and retirement income will become more unequal.

In 1992, the elderly in the top 20 percent had almost three dollars in retirement income for every one dollar the middle-income retiree had. By 2010, retirees at the top had almost five dollars for every dollar a middle-class retiree had. The ratio of the middle-class retiree’s average income to the top quintile’s average was 35.7 percent in 1992 but only 22.4 percent in 2010. This gap will only widen if we continue the same set of policies, and it will worsen further if Social Security benefits are cut.

A more subtle form of inequality in the years after 65

Rolling Back Inequality

reflects why people in different social classes choose to remain in the paid labor force. There are those who work for love, and those who work for money. People in the elite professions are likely to keep working because they gain satisfaction, prestige, or influence from their jobs. People with routine jobs may be eager to retire, but increasingly find themselves still in the labor force because they need the money. The unequal income distribution among retirees only means that the difference between those who work past age 65 for love and those who work for money will get wider.

The Remedy: Expanded Social Security and Universal Pensions Currently, Social Security–eligible workers may start collecting benefits at any age between 62 and 70. The earlier they take benefits, the smaller their checks are. If people can wait until age 70 to collect, either because they have other sources of money or can work, there is a huge financial gain. The Social Security benefits at age 70 are 76 percent higher than the benefits collected at age 62. However, the person waiting to collect at age 70 chose to forgo a check for eight years—either because he or she did not need the money, or because of a wager on a long life expectancy. If everyone lived the average lifespan, then the system would

be actuarially fair; the worker who collected at age 62 would have the same lifetime benefit as one first claiming at age 70. But people with lower incomes have worse job prospects in old age and tend to die sooner. So it makes a great deal of sense for them to collect at earlier ages—and many do.

By contrast, those more affluent people who defer collecting until age 70 will likely live longer than average; they are more likely to have jobs they enjoy; they may well have investment and pension income—and they also get larger Social Security checks. Lucky them. The policy goal embedded in the current system is to ensure that, based on average life expectancy, people who take a lower benefit early receive about the same amount in total benefits over their lifetimes as those who wait to receive higher monthly benefits later. But the system doesn’t achieve that because it assumes away life-expectancy gaps of class, educational attainment, and race. A higher normal retirement age would only compound those inequities.

Proposals to raise the full retirement age to 70 (and even 76) from age 67 (which it will be in 2022) would drastically reduce benefits collected at earlier ages. Discussions about the retirement age are typically based on averages. But increases in average longevity obscure the wide differences in life-expectancy gains by race and class. Reducing benefits by raising the age at which one can collect full benefits would only intensify economic and racial inequalities. It would make low-income elders even more vulnerable by cutting their income and forcing many to compete in the low-income labor force.

The period at the end of one’s life in which one can live in peace, free from the toil of work, has become an essential part of the American social contract. Until recently, our system delivered on that contract. Raising the Social Security retirement age would serve to diminish the quality of life for all older Americans. For blacks, women, and the bottom 90 percent of income earners, the reduction would be more severe.

Rather than cutting Social Security, we need to increase it, as Senators Elizabeth Warren and Sherrod Brown and others have proposed. In addition, we need to complement Social Security with a fully portable retirement plan for all American workers, with subsidies for low earners. The combination of enhanced Social Security and a universal pension plan would need to offset the inequality of earned income during working life, not reinforce it.

Teresa Ghilarducci is the Bernard L. and Irene Schwartz Chair in Economics at The New School for Social Research. Her books include When I’m Sixty-Four: The Plot against Pensions and the Plan to Save Them.

Spring 2015 The American Prospect 49

Raising Wages from the Bottom Up B y H a r o l d m e ye rs o n

I

n 1999, while he was working at a local immigrant service center in Los Angeles, Victor Narro began encountering a particularly aggrieved group of workers. They were the men who worked at carwashes, and their complaint was that they were paid solely in tips—the carwashes themselves paid them nothing at all.

At first, the workers came by in a trickle, but soon enough, in a flood. Narro, whose soft voice and shy manner belie a keen strategic sensibility, consulted with legal services attorneys and discovered that while every now and then a carwash was penalized for cheating its workers, such instances were few and far between. “There were no regulations overseeing the industry,” Narro says. The state’s labor department conducted no sweeps of the carwashes to investigate what looked to be an industry-wide pattern of violations of basic wage and hour laws. When Narro took a new job at UCLA’s Labor Center, he had researchers survey L.A. carwashes. They reported that roughly one-fourth of the industry’s 10,000 workers were paid only in tips.

The workers who did get a paycheck weren’t raking it in, either. Wage theft was the norm in the industry, and the carwasheros (as the workers, almost entirely Mexican and Central American immigrants, have come to be called) had little recourse—especially since so many were undocumented. Oscar Sanchez, a tall, sober-faced carwashero who came to Los Angeles from Guatemala in 2000, recalls working a ten-hour day and routinely getting paid for five hours. Workers at his carwash, in South Central L.A., got no lunch breaks; the owner would “bring us burgers and we’d have to wash cars and eat at the same time.” The owner also had a mini-mart on the property, and rented the two rooms upstairs as living quarters for four of the workers—one of them Sanchez. “She wouldn’t pay us on time, but she demanded the rent on time,” Sanchez says. “When we fell behind, she said she couldn’t pay us because we owed her rent.”

Under California law, employers in a few industries in

50 WWW.Prospect.org Spring 2015

which wage theft was endemic—farm labor contracting, garment work, and construction—were required to register with the state and post surety bonds every year to cover any back-pay settlements and penalties that authorities assessed on them. Armed with data from his researchers, Narro asked legislators to get carwash owners added to the list. The bill, signed into law by Governor Gray Davis, required owners to register with the state and to post a $15,000 bond to cover labor-code violations.

But the new law changed nothing. Davis’s successor, Arnold Schwarzenegger, had no interest in strengthening it when it came up for renewal at two-year intervals.

“We’d win cases, but we were still swamped with violations,” says Narro.

In 2006, the national AFL-CIO had established a partnership with a union of day laborers, and Narro reasoned that the Federation might be interested in trying to foster a union of carwasheros, too. He approached the AFLCIO, which responded enthusiastically and sought out an established union willing to undertake the campaign. The United Steelworkers—which had expanded into other sectors as the U.S. steelmaking industry continued to shrink— took up the cause. Steelworkers Local 675, an L.A.-based union that chiefly represented oil refinery workers, agreed to undertake the campaign and welcome the carwasheros into the local. “If you can’t make steel,” says Dave Campbell, the local’s secretary-treasurer, “you might as well wash it.”

In 2008, the AFL-CIO and the Steelworkers commenced their campaign. The Federation staffed the carwasheros’ worker center, named CLEAN, with organizers under the direction of Justin McBride, a veteran of multiple union campaigns. The Steelworkers loaned organizers to the effort and announced it would negotiate contracts and service the new members.

By 2013, however, the campaign had stalled. Of the estimated 500 carwashes in Los Angeles County, just four had gone union. Part of the problem was that the industry itself was fragmented. CLEAN’s research determined that the 500 carwashes had 450 different owners; no one owned more than five. Worse still, a number of carwashes seemed to be operating like Walter White’s carwash in Breaking Bad—less as a business than as a money-laundering operation. Finally, no individual carwash employed more than a handful of workers, which made organizing both costly and labor-intensive.

To succeed, a completely new strategy was needed. In 2013, with the carwash law set for renewal, McBride proposed to greatly increase the bond carwash owners had to post—unless they established a formal grievance procedure, the kind that, by law, can only exist under a union contract.

Schwarzenegger had by then returned to Hollywood, and his successor, Jerry Brown, had long supported the

Rolling Back Inequality

c o u r t e s y u s w lo c a l

67 5

cause of low-wage workers. Brown’s labor commissioner, Julie Su, had begun sweeps of carwashes that routinely turned up violations. Democrats, following the 2012 elections, had two-thirds majorities in both houses of the legislature. The stars were aligned for McBride’s proposal, though he had “to compile data showing that the $15,000 bond was inadequate” to protect workers, says Caitlin Vega, the state AFL-CIO’s lobbyist who was shepherding the bill that codified McBride’s proposal. Fortunately, she adds, “Justin is very good at math.”

In a rather elegant solution, the bill that passed the legislature and that Brown signed simply added a zero to the $15,000. (It also eliminated the original act’s two-year sunset provision.) Starting in January 2014, carwash owners would have to post a bond of $150,000—unless they agreed to let their workers go union.

As the new year dawned, Labor Commissioner Su and Los Angeles City Attorney Michael Feuer convened a raucous meeting of more than 100 L.A. carwash owners to explain the new statute. “We heard some complaints about the law,” Su says, but the purpose of the meeting was to make clear both the terms of the law and Su and Feuer’s intention to enforce it with ongoing and widespread inspections.

Several months later, 16 carwashes announced they were going union. Today, Local 675 represents workers at 25 carwashes in Southern California. The unionized carwasheros work under contracts that their union representative, Manuel Ramirez, acknowledges are “very basic.”

They make roughly 2 percent above minimum wage, they have shaded places where they take their breaks, they have lunch breaks, fresh water, time clocks, regular paychecks— the merest basics of a work relationship, but ones routinely denied their nonunion brethren. The unionized carwashes are chiefly those that couldn’t afford the new surety bond, located disproportionately in the poorer sections of the city.

Still, both the new law and the increased inspection regimen have improved conditions across the industry. “Now,” says Narro, “hardly any carwasheros are paid only in tips.”

The victories of the carwasheros, limited though they be, are a clear example of what Rutgers University sociology professor Janice Fine terms “regulatory unionism”—the enactment or enforcement of laws that not only better workers’ lot but also enhance their ability to organize in their workplace. The latter, of course, was the intent of the National Labor Relations Act, the federal law passed in 1935 that created a clear process through which workers could form unions. Over the past four decades, however, the NLRA has largely become a dead letter, as employers have found multiple ways to violate the terms of the act with impunity.

Though Obama labor officials have improved enforce-

ment efforts, conservative pressure at the federal level has thwarted all efforts to strengthen the NLRA itself. But with the heightened profile of the economic-inequality issue, the burgeoning of low-paying jobs, and the demonstrations of low-wage workers for higher wages and greater justice, state and city governments have proved more responsive to the new proletariat’s plight. With the lion’s share of major American cities now firmly in liberal control (25 of the nation’s 30 largest cities currently have Democratic mayors), municipalities have raised the local minimum wage and required employers to provide their workers with paid sick days and, for part-time retail workers, an advance schedule of their hours. Only seven states, how-

ever, have Democratic governors and Democratic control of both houses of the legislature, so the number of such pro-worker statutes emerging from statehouses is smaller.

But the one thing that progressive states and cities have generally not been able to do is enact measures that help workers organize into unions. The NLRA specifically preempts most such endeavors. That’s why the case of the carwasheros is so remarkable.

Nonetheless, the carwasheros’ victory illustrates one of the three ways in which cities and states can currently boost not just worker income but worker power. These paths, to be sure, are narrow—but not so narrow that they can’t accommodate more campaigns from creative strategists and dedicated workers. The three paths are: ■ Using a city or state’s purchasing, financial, regulatory, or wage-setting power to foster worker organization;

Though the longest of long shots, the carwashero campaign has unionized two dozen Los Angeles– area carwashes—with the crucial assistance of state government.

Spring 2015 The American Prospect 51

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Rolling Back Inequality

■ Giving worker organizations the authority to help enforce and monitor city or state labor ordinances; and ■ Cracking down on the misclassification of workers so that those mislabeled as “independent contractors” can become unionizable employees.

The first strategy, pioneered by the Los Angeles Alliance for a New Economy (LAANE) and copied in multiple cities, is to condition city approval of new projects seeking tax abatements, public funds, or other municipal assistance on those projects meeting labor criteria that benefit the city’s residents: the payment of living wages, the hiring of women and minorities, the adherence to environmental standards—and the ability of workers in the project to join unions.

No one has done more to foster unionization through such policies than Madeline Janis, LAANE ’s founding director and now the head of Jobs to Move America, which seeks to bring the manufacture of rail cars and buses—an industry almost entirely offshored in recent decades—back to the United States and back to unionized American workers. In 2008, Los Angeles voters levied a tax increase on themselves to fund the construction of an ambitious rail system. When L.A.’s transit authority began looking for a rail-car manufacturer, however, virtually all were overseas. Even more problematically, the federal Department of Transportation conditioned its considerable financial support for such transit projects on conventional lowestbidder criteria. Janis managed to persuade the department to add a “best value” criterion that gives points to bidders who hire veterans and workers from neighborhoods with high poverty rates. Able to choose a bidder by those criteria, the L.A. agency selected a Japanese manufacturer that pledged to build a factory in L.A. County and, with further prodding from Los Angeles Mayor Eric Garcetti, not to oppose its workers’ efforts to unionize. Transit agencies in Chicago and Maryland have now adopted contract criteria similar to those in Los Angeles.

LAANE and its many offshoots have most often been founded and, initially, funded by their cities’ hotel unions— locals of UNITE HERE . Beginning in the 1990s, that union succeeded in conditioning many city governments’ approval of new hotel projects that sought some form of financial assistance on the hotels agreeing to let their workers choose whether to join a union. A new wrinkle in this strategy appeared in 2005, when the East Bay Alliance for a Sustainable Economy (EBASE) won the approval of voters in Emeryville—a small city wedged between Berkeley and Oakland—to require a minimum wage, higher than California’s, for employees of that city’s hotels, on the theory that the local taxpayers’ support for public infrastructure around the Bay Bridge was really the key to the hotels’ suc-

cess and, indeed, existence. LAANE followed up in 2007 by persuading the Los Angeles City Council to enact a similar ordinance for the hotels lining Century Boulevard, the approach road to LAX, and again last year, when it convinced the city council to set an hourly wage of $15.37 for workers at every hotel in the city with at least 150 rooms.

Each of these statutes contained one crucial “supercession” (or escape hatch for employers): They allowed hotels that reached collective-bargaining agreements with their workers to waive the wage requirement if their employees, through their contracts, agreed to it in return for other benefits. With this option clearly serving as an incentive to unionization, UNITE HERE was able to organize the large hotels of Emeryville and five of the 12 hotels on L.A.’s Century Boulevard. The citywide Los Angeles ordinance, which covers 63 hotels, many of them already unionized, takes effect later this year.

Such “carve-outs,” as they are also called, not only can pressure owners and managers but also give workers some choices in the bargaining process. “Collective bargaining supercession cuts both ways,” says Ken Jacobs, who chairs the Center for Labor Research and Education at the University of California, Berkeley. The waitstaff in some Bay Area hotels, he says, made enough in tips to trade away a higher legislated wage in return for better benefits. When unions are strong, supercession can work to employees’ advantage; when unions are weak, it may not.

When San Francisco enacted the nation’s first Retail Workers Bill of Rights late last year, requiring managers to provide their employees with their work schedules two weeks in advance, the city’s leading unions of retail workers, for instance, chose not to lobby for an exemption for retail establishments that had union contracts.

For one thing, the vast majority of the city’s retail outlets had no such contracts and the union, even with a carveout, believed it lacked the capacity to organize them. For another, a number of the union’s existing contracts contained no such provision for advance scheduling; many of its own members would plainly benefit from a straightup application of the law. The bill was enacted with no supercessions. “If your union doesn’t have much leverage,” says one labor lawyer, “you usually want just a law that sets a standard.”

Jacobs argues that even without carve-outs, such laws still advantage unions. “From an organizing perspective, setting a $15.37 wage for all large hotels reduces the differential between union and nonunion hotels, which has grown very large as the cost of health benefits has gone up. You have to raise wages across the board to narrow the difference in labor costs between union and nonunion establishments. Legislating labor standards can be a way to reduce one of the barriers to unionization.”

The new union campaigns require massive community and electoral

(not just

workplace) organizing.

Spring 2015 The American Prospect 53

Truckers picketing the port of Long Beach, before a federal court ruled that Green Fleet drivers weren’t independent contractors but actually employees.

contracted with and funded a range of community-based organizations, most of them rooted in particular minority communities, to augment the office’s own outreach and monitoring efforts.

The most notable success these efforts have achieved came at Yank Sing in Chinatown—the James Beard Award–winning establishment considered one of the nation’s foremost (and highest-dollar) dim-sum restaurants. In 2013, some Yank Sing workers, who were protesting pervasive wage and hour violations, approached the Chinese Progressive Association (CPA), one of the groups with which the city had contracted to monitor labor standards. Interviewing workers in their homes, CPA identified a number of worker-leaders who persuaded nearly 100 of the restaurant’s 280 employees (virtually all of them Chinese immigrants) to file legal claims for back pay and to

54 WWW.Prospect.org Spring 2015

pressure management to end other abusive labor practices.

The workers established a committee to negotiate with the owners, and the following autumn, in a process overseen

by Levitt’s office, won a settlement awarding them more than $4 million in back pay and providing them health insurance (as required by city law) and vacations. Though they were already functioning in the manner of a union, the workers chose not to form one.

In fact, while there are a number of worker centers that organize workers to help monitor ordinances, and even collect dues from some of their members, few if any have been able to take the crucial step of helping workers form unions. The problem is that once workers’ organizations elect representatives to bargain over pay and working conditions with private-sector employers, they fall under the not-very-protective jurisdiction of the NLRA—and thus become easy prey for employers seeking to retain nonunion status.

What’s the most, then, that worker organizations helping enforce labor standards can do? One labor leader, speaking on background, criticizes the San Francisco model of funding multiple worker centers for fragmenting the already attenuated power that such organizations wield. If the city funded just one omnibus group that also received dues payments from members, he argues, that group might amass enough resources to become a force in city politics—still not a union, but something more than a monitor, and a more forceful advocate for workers’ interests.

The third way that cities and states can build worker power is to stop the illegal practice of worker misclassification. Over the past several decades, many U.S. companies have relieved themselves of the obligation to provide their workers with benefits or pay them an adequate wage, through the expedient of declaring their workers not to be their employees. One common practice is to contract with employment agencies that claim the workers are formally theirs, even though the workers may labor for years at the same company. (Such practices are the norm at the massive warehouses of retailers such as Walmart, and at the factories of Japanese auto manufacturers in Southern states.) Another dodge, prevalent in trucking, is to claim drivers are independent contractors even though they work for just one company, a notable example being the case of the port truckers who move containers from the nation’s harbors to retailers’ warehouses.

Byron Monzon, who has worked as a port trucker for the past 13 years, has actually had weeks where he drove full time and ended up owing the company. As Monzon explains, the company routinely deducts from his paycheck all the expenses for which he, as an “independent contractor,” is held responsible: gas, maintenance, tires,

kevork djansezian / reuter s / l andov

The second form of city or state policy that enhances worker power is giving worker organizations the authority and funding to monitor and educate workers about the labor-standard laws that those governments enact. In 2007, San Francisco passed an ordinance requiring employers to provide their employees with health insurance and paid sick days. Last year, the council established advance scheduling for retail workers, and city voters enacted a $15 minimum wage. The city’s office of labor standards enforcement, says Donna Levitt, its manager, has recognized that “workers feel more comfortable going to a community group than a government agency” when they experience mistreatment on the job, and has

Rolling Back Inequality

insurance. Despite this, the port truckers’ loads, routes, and hours are set by their trucking company, and they are expressly forbidden to use their truck for any other company, or purpose.

Since the 1980s, a range of unions have sought ways to have those mislabeled truckers (estimated at 50,000 nationally) legally redefined as employees. Nearly a decade ago, the Teamsters, LAANE , and a number of environmental and community groups initiated a joint campaign at the adjoining ports of Los Angeles and Long Beach, where 40 percent of the nation’s imports arrive, mainly from Asia. While the groups won stricter emissions standards for trucks, it wasn’t until two years ago that their efforts to reclassify and organize truckers began to show some movement.

What made the difference—just as with the carwasheros—was in large part a supportive state labor commissioner. For years, individual workers had gone to court alleging wage theft—fruitlessly, since their status as independent contractors meant they weren’t protected by wage and hour legislation. But with the election of Brown as governor and the appointment of Su as his labor commissioner, the state’s labor department began to rule that the truckers fit the legal description of employees. At that point, says Roxana Tynan, Janis’s successor as LAANE’s executive director, the Teamster-LAANE strategy shifted to “focusing on ever larger numbers of wage and hour violations, building up a big penalty for the trucking companies.”

The penalties indeed grew bigger. This year, a court upheld a state labor department ruling that seven drivers for Pacer Cartage were actually employees, and ordered that they receive $2 million in back pay and penalties. A 2014 report by LAANE and two other groups estimated that the total amount of back pay—excluding penalties— that California trucking companies owed the port drivers was roughly $850 million.

Emboldened by the settlements, more and more port drivers have filed misclassification actions with the state labor commission; to date, they’ve won every one. Since the cascade of rulings has not in itself been sufficient to build unions, however, the Teamsters have also called a series of one- and two-day strikes against targeted trucking companies—a considerable risk for the drivers, since there’s no law against firing an “independent contractor” for striking.

The strikes have proved a stunning success. By picketing the companies’ trucks at the port terminal gates where trucks line up, the striking drivers were able to stop the flow of trucks into the terminal yards—compelling the terminals to announce they’d no longer do business with those companies. And in a groundbreaking decision, a federal appellate court ordered one company, Green Fleet, to rehire two “independent contractors” it had discharged

for striking, on the grounds that the drivers were really employees and thus protected by labor law.

Confronted with mounting financial penalties, unfavorable legal rulings, and business shutdowns, some companies have begun to acknowledge that they are actually employers. Last September, Shippers Transport Express, one of the largest companies that drivers had sued, told its drivers it would acknowledge their status as employees, and this February, it signed a contract that entitled them to a $21 hourly wage, paid sick days, and employer-provided medical, vision, and dental care. The Teamsters are currently in negotiations with other companies that would still have to make good on drivers’ back-pay claims, but could waive the additional penalties if the drivers agreed—provided the truckers were deemed employees and could vote on whether to join a union. A bill currently pending in the California legislature would exempt companies from such penalties if they made good on the worker’s claims and reclassified them as what they are—employees.

All three of these paths to worker power require clear-eyed strategies, a core of crack organizers, and workers willing to take some considerable risks—the more so since all these endeavors involve workers who are largely immigrants, many undocumented. But they also require the political support of state or local governments. In that sense, they conform to what former organizer Rich Yeselson terms a strategy of “fortress unionism”—of continuing to keep unions strong in those locales where they already have some support, in the bluest cities and states.

But nothing about these endeavors resembles a “hold the fort” strategy. On the contrary, they rely on organizing the immigrant populations that have transformed American cities, in coalitions with other progressive groups, to elect local and state governments concerned with the plight of low-wage workers. They necessitate the painstaking worksite, home-visit, and community organizing always required to build unions, this time in industries where state or local government may have just enough authority to empower workers, the deficiencies of the NLRA notwithstanding.

Absent changes in the NLRA , absent a sea change in the nation’s balance of political power, these will remain niche campaigns—but niche campaigns may be the best labor can do just now. They offer a hopeful new model in a larger labor environment that often feels hopeless. “The movement is changing,” says California AFL-CIO lobbyist Vega. “Increasingly, we’re focused on the fight of low-wage workers for basic justice—super-exploited workers who in the face of every kind of abuse and intimidation are brave enough to fight back. For people in today’s union movement, that’s what inspires us.”

Facing rising

financial penalties, some port trucking companies now concede they’re actually employers.

Spring 2015 The American Prospect 55

Elena Kagan is rewriting the role of a Supreme Court justice in American democracy.

B y L incoln Ca pla n

56 WWW.Prospect.org Spring 2015

The Junior

Justice

alex br andon / ap images

O

n the last day of Elena Kagan’s first term as a justice, in 2011, the Supreme Court announced an important decision about government limits on money in politics.

The Court struck down the Arizona Citizens Clean Elections Act, which provided public funding for candidates who agreed to limit their overall spending in state campaigns.

When a privately funded candidate spent money on advertising, for example, the state gave publicly funded candidates roughly the same amount up to specific limits.

The Court majority held that the matching funds that these candidates received “penalized” opposing candidates as well as groups making independent expenditures, and, as a result, “burdened their ability to fully exercise their First Amendment rights.” No interest of the state, not even ending an epidemic of corruption, the Court ruled, was vital enough to justify the burdens. The vote was 5–4, reflecting the Court’s general polarization along party lines for the first time in American history: The five conservatives in the majority were appointed by Republican presidents, the four moderate liberals in dissent, by Democrats.

Kagan wrote the dissenting opinion, a dissent that helps define her as a justice. The Court’s decision was the fifth in five years striking down a restriction on campaign finance, but the first since the momentous ruling in Citizens United a year and a half before, in which

the Court held that the government could not limit independent spending by corporations in elections. Justice Anthony Kennedy wrote the majority opinion that released billions of dollars into American politics.

In the Arizona clean elections case, Arizona Free Enterprise Club v. Bennett, Chief Justice John G. Roberts Jr. assigned himself the majority opinion. It had the single-mindedness of a first-rate legal brief. Suppose a “privately funded candidate spent $1,000 of his own money to conduct a direct mailing,” Roberts hypothesized. “Each of his publicly funded opponents would receive $940 ($1,000 less the 6 percent offset).” The prospect of that matching money burdened the privately funded candidate, whether or not he did the mailing and his publicly funded opponents actually received the match.

By Roberts’s Alice-in-Wonderland logic, if a candidate decided not to do a mailing so as to keep opponents from getting the matching funds, it was the fault of those undisbursed funds that he was deprived of the speech he would have expressed through the mailing.

Or if he went ahead with the mailing and opponents got the funds, the funds reduced the impact of his mailing and therefore of his speech. In other words, a law intended to increase speech would paradoxically retard it.

It made sense for Justice Ruth Bader Ginsburg, as the senior dissenting justice, to assign the dissenting opinion to Kagan. When she was

a law professor, Kagan had a particular interest in free speech under the First Amendment.

As solicitor general for the Obama administration, her first argument before the Supreme Court (her first argument before any appeals court) was in Citizens United in 2009, defending the part of the campaign-finance statute restricting corporate spending in elections that the Court soon struck down. But none of that predicted how fresh, lucid, and powerfully cogent her dissent would be in the Arizona campaign-finance case.

“Imagine two States, each plagued by a corrupt political system,” she began, addressing the reader directly and adding to the sense of immediacy by using the present tense. “In both States, candidates for public office accept large campaign contributions in exchange for the promise that, after assuming office, they will rank the donors’ interests ahead of all others. As a result of these bargains, politicians ignore the public interest, sound public policy languishes, and the citizens lose confidence in their government.”

One state adopts campaign finance measures approved by the Supreme Court: caps on contributions to campaigns; disclosure of big donations; and a limited public funding program. The measures don’t work and corruption continues to reign. The other state concludes that “the greatest hope of eliminating corruption lies in creating an effective public financing program, which will break

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candidates’ dependence on large donors and bundlers,” and that candidates must “receive sufficient funding to run competitive races.”

The program, using matching funds, “accomplishes its mission of restoring integrity to the political system.”

Arizona was the second state. It adopted public matching after AzScam, a public corruption scandal of gargantuan scale in which “nearly 10 percent of the State’s legislators were caught accepting campaign contributions or bribes in exchange for supporting a piece of legislation.” Kagan explained, “If an officeholder owes his election to wealthy contributors, he may act for their benefit alone, rather than

clarity, frankness, and solicitude for us, the readers. Her closing section went like this: “This case arose because Arizonans wanted their government to work on behalf of all the State’s people. On the heels of a political scandal involving the near-routine purchase of legislators’ votes, Arizonans passed a law designed to sever political candidates’ dependence on large contributors. They wished, as many of their fellow Americans wish, to stop corrupt dealing—to ensure that their representatives serve the public, and not just the wealthy donors who helped put them in office. The legislation that Arizona’s voters enacted was the product of deep thought and care. It put into

Nothing in the thousands of pages of writing that Kagan submitted as a Court nominee truly foreshadowed the eloquent voice that she is developing as a justice. on behalf of all the people.” With its program, Arizona met “the challenge that bedevils all public financing schemes: Fixing the amount of the subsidy.” It was “the Goldilocks solution, which produces the ‘just right’ grant to ensure that a participant in the system has the funds needed to run a competitive race.” Rather than restricting speech, the program did the opposite: “What the law does—all the law does—is fund more speech.”

But the candidates for office in Arizona who had challenged the law were demanding “essentially a right to quash others’ speech through the prohibition of a (universally available) subsidy program. Petitioners are able to convey their ideas without public financing— and they would prefer the field to themselves, so that they can speak free from response. To attain that goal, they ask this Court to prevent Arizona from funding electoral speech—even though that assistance is offered to every state candidate, on the same (entirely unobjectionable) basis. And this Court gladly obliges. If an ordinary citizen, without the hindrance of a law degree, thought this result an upending of First Amendment values, he would be correct.”

Kagan’s dissent carried on with the same

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effect a public financing system that attracted large numbers of candidates at a sustainable cost to the State’s taxpayers. The system discriminated against no ideas and prevented no speech. Indeed, by increasing electoral competition and enabling a wide range of candidates to express their views, the system ‘further[ed] … First Amendment values.’” (The quote is from another Court opinion.) “Less corruption, more speech. Robust campaigns leading to the election of representatives not beholden to the few, but accountable to the many.

“The people of Arizona might have expected a decent respect for those objectives. Today, they do not get it.”

Kagan is the only justice on the current

Court with no prior experience as a judge. That turns out to be a notable plus. She is increasingly recognized as an outstanding writer of judicial opinions after almost five years on the Court. In a point-by-point comparison of conceptual insight, persuasiveness, eloquence, and argumentative verve, Kagan surpasses the other current justices in the quality and logic of her prose. It is premature to compare her with Justices Oliver Wendell Holmes Jr.,

Louis D. Brandeis, Robert H. Jackson, or other Olympian writers of the Court since it first sat in 1790, but, in one way, she already stands out even in that company.

Alone among the current justices and different from any before, Kagan in her major opinions addresses the American public as her readers, as if being a justice obliges her to say simply and directly why what the Court has decided matters for us. That is so whether she is writing for the majority, as she has in about twothirds of her opinions, or in dissent, in about one-fourth of them, and is often expressed in small turns with large implications.

Last May, for instance, in Town of Greece v.

Galloway, a major ruling about the role of religion in government, there were five different opinions, including a Kagan dissent. The Constitution was referred to as “the Constitution” in each of the other opinions, as it normally is.

In Kagan’s, on the other hand, it was “our Constitution,” as in “Our Constitution promises …” and “our Constitution makes a commitment ….”

In a public conversation at Princeton University last November, she was asked what her toughest decision had been so far as a justice.

She answered in the vernacular familiar from her opinions: “It was a case about whether kids could buy violent video games without their parents’ permission.” California had passed a statute saying that they couldn’t. The Supreme Court struck down the law 7–2, with Kagan in a majority of five holding that the First Amendment fully protects depictions of violence, from Dante’s Inferno to Grimm’s Fairy Tales and now to violent video games like “Grand Theft Auto: Vice City.”

Kagan said that she is “not usually an agonizer,” adding, “I don’t do a lot of Hamlet sort of stuff,” but in this case she had. To the justice, if a parent doesn’t want her kids to buy violent video games, she deserves the backing of the law. But the California law was at odds with well-established law under the First Amendment, and she could not figure out how to square that law with the state restriction.

She finished her answer by trailing off, “That’s the one case I kind of think, I just don’t know, I just don’t know if that’s right.” The answer identified her with California parents and, by proxy, with anyone truly affected by a ruling of the Court against them.

pete souza / white house

Along with Roberts, Kagan is the only justice who can be entertaining without seeming to work at it. She is usually upbeat and down-to-earth, with a high-wattage smile and a wisecracker’s sense of humor. She keeps that in check most of the time, with an affable manner. At Princeton, surprisingly, she was asked if she had been hazed when she first arrived on the Court. Even more surprising, Kagan said yes, answering in a way that was both tonguein-cheek and informative.

The newest member of the Court, she reminded the audience, is called the “Junior Justice.” At meetings of the Court to decide cases, Kagan explained, only the justices attend. “So somebody has to do two things.

The first is that somebody has to take notes, so you can then go out and tell people what just happened, and I take notes. That’s the Junior Justice’s job. The other thing is that you have to answer the door when there’s a knock on the door. Literally, if there is a knock on the door and I don’t hear it, there will not be a single other person who will move. They just all stare at me until I figure out, ‘Oh, I guess somebody knocked on the door.’ These two jobs, the note-taking and the door-opening—you can see how they can get in the way of each other, right? You might say, what do people knock on the door for? Why does anybody knock on the door? Knock, knock—I’m not going to name names—‘Justice X forgot his glasses.’ Knock, knock, ‘Justice Y forgot her coffee.’ There I am, hopping up and down. I think that’s a form of hazing, don’t you?”

Appearances like Kagan’s Princeton visit, which all the justices make, are attempts to humanize a Court that is increasingly distrusted. In the past 15 years, the Court’s approval ratings have trended downward significantly (from 62 percent to 44 percent) and its disapproval ratings have trended upward even more (25 percent to 48 percent). In cases where law and politics seem to fuse, the kind decided by five Republicans over four Democrats, politics often appears to shape the law explicitly— making the Court seem more like the elected branches of government in a period when their standing is starkly low.

The Court has had two big opportunities in recent years to earn public trust by making itself more accessible and more account-

Obama met with Kagan in the Oval Office in April 2010; in May, he nominated her to replace Justice John Paul Stevens.

able, and has pointedly declined both. The first is to allow cameras in the courtroom, as other supreme courts have done throughout the United States and in other countries. The second is to require the justices to follow the code of ethics that is binding on other federal judges and to adopt a formal process for handling motions that ask justices to recuse themselves from hearing a particular case.

The justices are the only American judges not bound by an ethics code. Each proposal enjoys bipartisan support and has been framed to respect the dignity of the justices and the Court. Its high-handedness in rejecting both has reinforced the perception of its remoteness. That is symbolized by the decision to close the Court’s bronze front doors, which Justice Stephen Breyer, in an unusual dissent from that choice, called “a metaphor for access to the Court itself.”

Against this backdrop, Kagan is engaged in a remarkable democratic experiment. In a

voice that is sometimes closer to journalism than to judicial prose, her opinions are locating cases and controversies in the fundamental currents of American history, as well as in the thickets of the legal process. Speaking directly to Americans, Kagan offers inspiration when it is unexpected and sounds off against unfairness. She marks the path to redemption in areas of law that seem battered by politics. In unhurried, unstuffy, and unadorned prose, her opinions are, by turns, serious, combative, cheeky, and elegiac, while addressing the law with warmth and intelligence. Her opinions seem crafted to gain, or regain, trust. They are easing those doors open again.

Kagan’s first memory of writing involves

her mother. At home in New York City where Kagan was born and grew up, the two would go over her elementary school reports due as homework, line by line. Her mother, Gloria, was short, hyper-energetic, and brainy, as Kagan is.

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(Above) Kagan’s 1981 Princeton yearbook portrait. (Below) Kagan graduates from Harvard Law School in 1986.

The title of Kagan’s thesis was “To the Final Conflict: Socialism in New York City, 1900– 1933,” referring to “The Internationale,” the left-wing anthem with the refrain: “’Tis the final conflict/Let each stand in his place/The International Union/Shall be the human race.”

The paper addressed the question of why there wasn’t an influential socialist movement in the United States, given what she described as the “American discontent with the nation’s hardening corporate order” in that period.

Three leading historians had found answers in external factors, like the lack of rigid class distinctions in the United States. Kagan brazenly rejected those arguments.

She answered the question by looking

closely at New York City and what “caused the strange death of socialism” there. The answer was internal factors and, basically, self-destruction. A “right-left cleavage arose” among socialists over “the very fundamentals of socialism itself,” such as the class composition of a socialist party or the attitude the party should take toward non-radical reforms.

The two camps engaged in “constant and acid debate” and doomed the Socialist Party.

Kagan graduated summa cum laude and Phi Beta Kappa from Princeton in 1981. Writing about socialism was the first of a series of life choices indicating that, when defining her own politics, she looked to the left.

It is also evidence that she was prodigiously young when she demonstrated her “tenacity of investigation” and what Wilentz called her “historical consciousness”—her understanding of large national choices in the context of American history.

Her accomplishments between Princeton and the Supreme Court went like this: an M. Phil. from Oxford in 1983; a J.D. magna cum laude from Harvard Law School in 1986, where she was second-in-command of the Harvard Law Review (and runner-up for president to Carol S. Steiker, now a Harvard law professor); a clerkship with an old-fashioned liberal, Judge Abner Mikva of the U.S. Court of Appeals for the D.C. Circuit, from 1986 to 1987; a clerkship with the civil rights hero Justice Thurgood Marshall, during the 1987 term of the Supreme Court; two years as a junior lawyer in Washington, D.C., at Williams & Connolly, an elite firm specializing in litigation; four years as an assistant professor of law at the University of Chicago Law School; four years in the Clinton administration, first as associate counsel under Abner Mikva, by then counsel to the president (Clinton nominated her to the D.C. Circuit in 1999, but Republicans refused to let the Senate consider her), and then as deputy assistant to the president for domestic policy; two years as a professor of law at Harvard from 2001 to 2003; appointment as the first female dean of Harvard Law School; appointment as the first female solicitor general in 2009; and a year and five months later, appointment as a justice in August of 2010.

To some, this journey suggests that Kagan is a creature of power. She is, more importantly, a

a b o v e : c o u r t e s y p r i n c e t o n u n i v e r s i t y ; b e lo w : c r e at i v e c o m m o n s

At Hunter Elementary School, where the justice went before going to Hunter High School, Mrs. Kagan taught language arts: grammar, punctuation, and writing. She had a rich, precise vocabulary, a former student of hers said recently, which she did not dumb down for her fifth- and sixth-graders. She taught her students the practice of looking closely, whether at the words and meter of a Keats poem or at the images on a Chinese scroll. She also taught them how to fold a newspaper so it was easy to read on the subway. She was a demanding, often prickly teacher, but she occasionally gave a word of praise that reassured her students how well she knew each one. Some adored her.

How she taught her students suggests how she taught the future justice. “She had very high standards,” Kagan told Bryan Garner, the word maven and legal editor. “But I learned a lot from her and can count many years’ worth of students who learned a lot from her.”

The mentor who helped Kagan become a writer was Sean Wilentz, a Princeton professor who won the Bancroft Prize for The Rise of American Democracy. In his second year on the history faculty in 1980, when he was 29 and Kagan 20, he advised her on her senior-year thesis about socialism in New York City. He was from the city (his father owned the Eighth Street Bookshop in Greenwich Village) and was also doing research about New York for his first book, which was about the city and the rise of the American working class.

Kagan said to Garner, “That experience was probably the first time in my life when somebody who himself was a fabulous writer spent so much time, sentence by sentence, telling me what I could do better.” When she was nominated for the Court in 2010, Wilentz talked about her on the Charlie Rose show. Doing history takes “a tenacity of investigation,” he said, and Kagan had it. “She has an ability to enter into other peoples’ arguments,” he went on.

“That’s a special kind of brilliance, to understand what your adversaries are talking about, to understand what they are saying. To pick up an object and look at it from all the angles, top to bottom. That is something Elena can do with great detachment. That requires not just smarts. It requires self-confidence—selfconfidence in your own position—to do that.

She has plenty of that.”

elise amendol a / ap images

student of power, as a practitioner and a scholar, with a liberal bent and a principled turn of mind. As an oral advocate before the Court and a leader of the solicitor general’s office during her brief tenure, she exceeded expectations.

But her relationship with the justices during the six arguments she made was sometimes testy, a result of her combativeness and the chief justice’s reported perception that she did not defer enough to the bench.

In the 20 years before she got there, she spent 14 as a problem-solver and six as a scholar. As a justice, she is both. Her judicial opinions are fresh in part because they reflect what she has learned by immersing herself in what is often for her a new area of law and thinking her way to a resolution of the case. Her approach as a justice is strikingly deliberate: In the four Court terms before the current one, she wrote fewer opinions than any of her colleagues—60 percent of the average for the other eight justices.

Kagan’s openness of mind serves her well on a court that is deeply conservative yet led by a chief justice who, by most accounts, is concerned about the Court’s legitimacy and pursues common ground. The justices did that last term to a surprising degree, with twothirds of the cases unanimously decided. (On the other hand, the University of Chicago’s David Strauss told The New York Times, “A lot of the unanimity is ersatz,” because many of the decisions were narrow, to avoid surfacing severe disagreements among justices.)

Kagan’s undogmatic approach means that she, like Roberts, tries to find opportunities for common ground. A case may bitterly divide the Court, but the next one brings a new day. She is eager to be influential on the Court.

For that reason, her dissenting vote has been missing in cases where you might expect to find it. In 2013, the Court denied an appeal to review the outrageous practice in Alabama of state trial judges having the power to overrule juries that don’t impose the death penalty on a convicted criminal. Justice Sonia Sotomayor responded with a powerful dissent joined in part by Breyer, in which she listed each of the 95 cases where judges had overridden juries and turned a life sentence into a death sentence. During a public conversation at Yale Law School, journalist Linda Greenhouse asked

Harvard president Lawrence Summers (center) picked Kagan to be dean of the law school in 2003, replacing Robert C. Clark (left).

Sotomayor why Justices Ruth Bader Ginsburg and Kagan hadn’t joined so there were enough votes to hear the case. “People don’t join for a variety of reasons,” Sotomayor said. She made very clear that not joining did not necessarily mean not agreeing.

The most dramatic example of a missing Kagan vote was in 2012 in the Affordable Care Act case. In a ruling that will be part of the chief justice’s legacy, Roberts defied almost all predictions by joining the moderate liberals to uphold the statute, 5–4. The Court also ruled on a Medicaid provision of the statute, aimed at covering 17 million people who were uninsured.

The act provided that the federal government would fund the expansion if a state committed to undertake it—but the government would no longer fund the state’s current Medicaid program if it refused. By 7–2, the Court ruled the provision unconstitutional as being coercive.

Kagan and Breyer joined the conservatives in that decision. To some Court-watchers, Kagan had abandoned the president who appointed her and was a traitor to the liberal bloc.

There was another ruling buried in the case, however: By 5–4, again with Roberts joining the moderate liberals, the Court majority upheld the Medicaid expansion as a voluntary program. The chief justice: “The question here is whether Congress would have wanted the rest of the Act to stand, had it known that States would have a genuine choice whether to participate in the new Medicaid expansion. … We are confident that Congress would have wanted to preserve the rest of the Act.” It is now widely understood that the chief justice was preparing to overrule the entire statute, but changed his mind, leaving the four other conservatives in the minority and joining the moderate liberals to uphold most of the act. Kagan and Breyer did something similar with their Medicaid votes. By joining Roberts in holding that the Medicaid expansion was constitutional as a voluntary program, they saved part of the expansion. As of March 2015, 28 states plus the District of Columbia, roughly half the country’s population, had opted for the expanded Medicaid program, and six

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other states were considering doing the same.

It remains to be seen how the Roberts court will use this ruling to constrain federal mandates in other joint federal-state programs.

In the January 2015 issue of the Journal of Legal Studies, Lee Epstein, William M. Landes, and Richard A. Posner update ideological rankings they made of all justices from 1937 to 2009 in their 2013 book, The Behavior of Federal Judges. This time, they included Kagan based on her first three terms as a justice. They found that in high-profile 5–4 cases, Roberts ranks as the fourth-most conservative justice in the last three-quarters of a century—that “he is a reliable conservative in the most closely

she could be a partner in shaping both consensus and a more consensus-driven Court. For many liberals, the more striking fact is that the Epstein, Landes, and Posner analysis of all cases where the justices were divided ranks Kagan as the current Court’s most liberal member, with Ginsburg and Sotomayor a bit more moderate, and Breyer the most moderate of the four. The only former justices since 1937 ranked to the left of Kagan are William J. Brennan Jr., William O. Douglas, and Thurgood Marshall.

When Kagan writes her own opinion, there is no mystery where she stands. Kagan has taught herself how to write judicial opinions

Kagan, the only current justice with no prior experience as a judge, is increasingly recognized as an outstanding writer of judicial opinions after almost five years on the Court. contested cases.” Where there are fewer than four dissents, he ranks 22nd among conservative justices—“moderate when his vote can’t change the outcome.” Similarly, in high-profile 5–4 cases, Kagan is the sixth-most liberal justice, but in decisions with fewer than four dissents, the 10th-most liberal. Sotomayor’s voting follows the same pattern, the authors report: The shift to the right in cases where Kagan’s and Sotomayor’s votes can’t make a difference “makes them look moderate,” the article comments. “A moderate image is attractive to many judges, owing to a general dislike of ‘political’ judges.”

The larger point is that Kagan, like Roberts, appears to be a strategic voter. No case in Kagan’s time on the Court has had greater consequences than the Affordable Care Act case, so it wouldn’t be surprising if her vote on the Medicaid provision was strategic in the sense of paying close attention to the benefit of joining the chief justice versus the cost of joining Ginsburg and Sotomayor in dissent.

Since Kagan wrote no opinion in the case, why she voted as she did remains a mystery.

A common speculation is that she rewarded Roberts’s moderation with her own, showing

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that “reach a multitude of minds from the eminence of the judicial office,” as the legal scholar Paul Freund wrote about the ambition of the justice for whom he had clerked, Louis D. Brandeis, a great justice also with no prior experience as a judge.

This February, a majority of the Court seemed to contort legal logic to overturn the conviction of a commercial fisherman under a federal criminal statute primarily intended to restore trust in financial markets. He was convicted of disposing of evidence, by tossing back into the sea undersized fish he had unlawfully caught. Kagan contended in her dissent that the Court’s main opinion relied on “never-before-propounded, not-readily-explained interpretive theories” to defy “what Congress wrote and what Congress wanted.”

The ruling for the fisherman was a response to “overcriminalization and excessive punishment in the U. S. Code,” she wrote, and she agreed that both are acute problems. The law under which he was convicted is “a bad law— too broad and undifferentiated, with too-high maximum penalties, which give prosecutors too much leverage and sentencers too much discretion.” But, she concluded, “this Court does not

get to rewrite the law.” She was joined in the dissent by Justices Scalia, Kennedy, and Thomas, the first time she had written for that alignment.

Nothing in the thousands of pages of

writing Kagan submitted as a nominee truly foreshadowed the voice she is developing as a justice. The closest harbinger may have been a stirring tribute she wrote to Thurgood Marshall when he died in 1993. She began by describing how “the ordinary people of Washington”—“some 20,000 of them”—paid their respects to him and his flag-draped casket lying in state at the Supreme Court. “One left a yellowed slip opinion of Brown v. Board of Education,” she noted, the historic school desegregation decision that Marshall won as an advocate. She captured his sometimes wicked sense of humor: “He once came back from conference and told us sadly that the other Justices had rejected his proposal for a new Supreme Court rule. ‘What was the rule, Judge?’” she and his other law clerks asked. “‘When one corporate fat cat sues another corporate fat cat,’ he replied, ‘this Court shall have no jurisdiction.’” She conveyed the disquieting truth that “most of the stories, if told by someone else, would have expressed only sorrow and grimness,” because they were about “daily humiliation and abuse” from “growing up black in segregated Baltimore.”

Beyond having a mind that remained “active and acute” when he was 80, the year she clerked for him, Marshall “had the great lawyer’s talent (a talent many judges do not possess) for pinpointing a case’s critical fact or core issue,” which came from “his understanding of the pragmatic—of the way in which law worked in practice as well as on the books, of the way in which law acted on people’s lives.”

And he “believed that one kind of law—the Constitution—was special, and that courts must interpret it in a special manner.” America’s fundamental law, to Marshall, “demanded that the courts show a special solicitude for the despised and disadvantaged.” It had taken the United States 200 years to gain the respect for individual freedoms and human rights now regarded as fundamental. And that came about only because some Americans refused to accept “outdated notions of ‘liberty,’ ‘justice,’ and ‘equality.’” The credit for the prog-

s t e v e p e t t e way / a p i m a g e s

ress, Kagan observed, “belongs to people like Justice Marshall.”

Her most significant majority opinion so far came in June of 2012 in a 5–4 split, this time with Kennedy joining the moderate liberals to make a majority as he had in related cases for many years. The Court ruled that it is a violation of the Eighth Amendment’s ban on cruel and unusual punishment to give mandatory sentences of life without parole for juveniles convicted of murder.

Roberts wrote a stern dissent in which Justices Samuel Alito, Antonin Scalia, and Clarence Thomas joined. He said, “Determining the appropriate sentence for a teenager convicted of murder presents grave and challenging questions of morality and social policy. Our role, however, is to apply the law, not to answer such questions.” But the Kagan opinion had hallmarks of a compromise meant to attract and hold Kennedy’s vote. It left to the states the responsibility for answering those questions. They retained the option of imposing a life-without-parole sentence, after weighing the details of the crime and a young offender’s “immaturity, impetuosity, and failure to appreciate risks and consequences”—factors making a child different from an adult and making unconstitutional the harsh penalty of an irrevocable life sentence.

By the spring of 2013, it was clear Kagan had found her voice as a justice, and, when there was no common ground, she felt no compunction about using it to attack an opinion she felt was deserving of scorn. By 5–3 (Sotomayor had recused herself), the Court ruled that a group of merchants could not bring a class action against a company when each had signed a contract requiring they make complaints through individual arbitration.

“Here is the nutshell version of this case, unfortunately obscured in the Court’s decision,” Kagan wrote. “The monopolist gets to use its monopoly power to insist on a contract effectively depriving its victims of all legal recourse.”

She added, “And here is the nutshell version of today’s opinion, admirably flaunted rather than camouflaged: Too darn bad.”

Kagan’s most impressive opinion came toward the end of last term in Town of Greece v. Galloway, the major ruling about the role

With Sonia Sotomayor, Ruth Bader Ginsburg, and Kagan, the Court has three female justices for the first time.

of religion in government. By 5–4, conservatives over moderate liberals, the Supreme Court ruled that the town of Greece, New York, outside Rochester, did not violate the First Amendment’s ban on government favoring a particular religion when it, for many years, allowed Christian ministers to open town meetings with Christian prayers.

Relying on a 1983 precedent that said it was constitutional for Nebraska’s legislature to begin its morning sessions with nonsectarian invocations by various clergy members, Kennedy wrote for the majority that Greece’s town meetings were like Nebraska’s sessions, with the prayers merely ceremonial, “acknowledging the central place that religion, and religious institutions, hold in the lives of those present.”

After describing the Nebraska session, Kagan wrote, “It is evening in Greece, New York, and the Supervisor of the Town Board calls its monthly public meeting to order.” The first order of business: “The pastor steps up to

a lectern (emblazoned with the Town’s seal) at the front of the dais, and with his back to the Town officials, he faces the citizens present.

He asks them all to stand and to ‘pray as we begin this evening’s town meeting.’ (He does not suggest that anyone should feel free not to participate.)” He prays “for the guidance of the Holy Spirit”—the risen Christ. “After the pastor concludes, Town officials behind him make the sign of the cross, as do some members of the audience, and everyone says ‘Amen.’”

She continued, “Let’s count the ways in which these pictures diverge.” The Nebraska sessions were for lawmakers, the chaplain spoke only to lawmakers, and the prayers were in the Judeo-Christian tradition rather than advancing one faith. “Greece’s town meetings, by contrast, revolve around ordinary members of the community” who are actively taking part in the town’s governance and “the prayers there are directed squarely at the citizens. Remember that the chaplain of the month stands with

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his back to the Town Board; his real audience is the group he is facing—the ten or so members of the public, perhaps including children” and “he typically addresses those people, as

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even the majority observes, as though he is ‘directing [his] congregation.’” To Kagan, “no one can fairly read the prayers from Greece’s Town meetings as anything other than explic-

2 0 1 3 © b u r t o n s i lv e r m a n , c o u r t e s y o f h i s t o r i c a l & s p e c i a l c o l l e c t i o n s , h a r va r d l aw s c h o o l l i b r a r y

This oil painting of Elena Kagan hangs in the Harvard Law School, commemorating the years she served as dean there.

itly Christian—constantly and exclusively so.”

For nine years, all of the Greece monthly chaplains were Christian. When citizens sued the town for favoring one religion, “a Jewish layman, a Wiccan priestess, and a Baha’i minister appeared at meetings” for a short time. Then the town “resumed its practice of inviting only clergy from neighboring Protestant and Catholic churches.”

Why was that unconstitutional? “The government (whether federal, state, or local) may not favor, or align itself with, any particular creed,” especially “when officials and citizens come face to face in their shared institutions of governance.” The town of Greece need not be “religion- or prayer-free.” But it did need to recognize that “we are a pluralistic people” and to “take especial care to ensure that the prayers” offered at the beginning of meetings “seek to include, rather than serve to divide.”

Justice Alito voted with the majority, but wrote his own sour concurring opinion that took offense at Kagan’s dissent: “All that the Court does today is to allow a town to follow a practice that we have previously held is permissible for Congress and state legislatures.” In using “rhetoric and highly imaginative hypotheticals” to suggest otherwise, “the principal dissent goes far astray.” Alito sought to make Kagan’s dissent seem like a radical departure from settled law. It was also the first effort by another justice to call attention to and apparently try to undermine Kagan’s style of opinion-writing, presumably because of its effectiveness. Alito was right about one thing: The opening and closing of Kagan’s opinion employed rhetoric in the sense of eloquence.

“For centuries now,” she wrote, “people have come to this country from every corner of the world to share in the blessing of religious freedom. Our Constitution promises that they may worship in their own way, without fear of penalty or danger, and that in itself is a momentous offering. Yet our Constitution makes a commitment still more remarkable—that however those individuals worship, they will count as full and equal American citizens. A Christian, a Jew, a Muslim (and so forth)—each stands in the same relationship with her country, with her state and local communities, and with every level and body of government. So that

when each person performs the duties or seeks the benefits of citizenship, she does so not as an adherent to one or another religion, but simply as an American.”

For the justices in the majority, for students of constitutional law, and for journalists reporting about the Court, the case was about the role of religion in government. For Kagan, however, it was about what it means to be a citizen in a pluralistic society and why the Founding Fathers were right to limit what government can do to impinge on each citizen’s liberty, by prohibiting it from favoring one religion. Her opinion was about the law, but also about a tenet of the nation.

Here is the closing section of her dissent: In 1790, George Washington traveled to Newport, Rhode Island, a longtime bastion of religious liberty and the home of one of the first communities of American Jews. Among the citizens he met there was Moses Seixas, one of that congregation’s lay officials. The ensuing exchange between the two conveys, as well as anything I know, the promise this country makes to members of every religion.

Seixas wrote first, welcoming Washington to Newport. He spoke of “a deep sense of gratitude” for the new American Government—“a Government, which to bigotry gives no sanction, to persecution no assistance—but generously affording to All liberty of conscience, and immunities of Citizenship: deeming every one, of whatever Nation, tongue, or language, equal parts of the great governmental Machine.” The first phrase there is the more poetic: a government that to “bigotry gives no sanction, to persecution no assistance.” But the second is actually the more startling and transformative: a government that, beyond not aiding persecution, grants “immunities of citizenship” to the Christian and the Jew alike, and makes them “equal parts” of the whole country.

Washington responded the very next day. Like any successful politician, he appreciated a great line when he saw one—and knew to borrow it too. And so he repeated, word for word, Seixas’s phrase about neither sanctioning big-

otry nor assisting persecution. But he no less embraced the point Seixas had made about equality of citizenship. “It is now no more,” Washington said, “that toleration is spoken of, as if it was by the indulgence of one class of people” to another, lesser one. For “[a]ll possess alike … immunities of citizenship.”

That is America’s promise in the First Amendment: full and equal membership in the polity for members of every religious group, assuming only that they, like anyone “who live[s] under [the Government’s] protection[,] should demean themselves as good citizens.”

On a wall at Harvard Law School, there is a lovely painting of Kagan to commemorate the six years she served as dean there, from 2003 to 2009. In a dark pantsuit and rose-colored top, she is sitting at a table with an open book in front of her, looking off into the distance. The expression on her face is not easy to describe: That’s what makes the painting affecting. The painter, Burton Philip Silverman, said he found in her “an elusive psychological dimension” that is “searching and very human” yet “scholarly and reassuring.”

That’s what he tried to capture. She was 53 when the painting was finished in 2013, four years after she left the law school to become

Kagan’s dissent emphasized what it means to be a citizen in a pluralistic society and why the Constitution rightly limits government’s intrusion on religious liberty.

For me, that remarkable guarantee means at least this much: When the citizens of this country approach their government, they do so only as Americans, not as members of one faith or another. And that means that even in a partly legislative body, they should not confront government-sponsored worship that divides them along religious lines. I believe, for all the reasons I have given, that the Town of Greece betrayed that promise. I therefore respectfully dissent from the Court’s decision.

Kagan grounded in history the elementary point about political philosophy as well as law on which the case turned—that the different identities of citizens disappear when they enter the public sphere and become simply Americans. Sean Wilentz said of his former student’s opinion: “It’s rare that anyone in American public life, whether a politician or a judge, understands what words an occasion calls for and rarer still for that figure to be able to rise to the occasion. She is doing both. Eloquence is not a prerequisite for being a great justice, but it is an enormous asset.”

solicitor general, three years after she became a justice. Her face bears signs of hard experience: pouches under her eyes, a gaze reflective but worn and appraising.

A friend of Kagan’s from her Harvard days observed that, comparing what she was like as a new justice at 50 and what she is like now as a five-year veteran about to turn 55, her outlook is both more buoyant as she masters the challenges of the job and more solemn as she lives with the weight of the responsibility. In its depiction of her eyes especially, the painting conveys both. Kagan is young as justices go. If she stays on the bench until she reaches the age of the oldest current justice, she has another 27 years to make her full mark. But she is already expanding the role of Court opinions and, in doing that, of a Supreme Court justice.

The painting is accurate in depicting her as a figure to reckon with in history.

Lincoln Caplan is a senior research scholar at Yale Law School, and a former editorial writer about the Supreme Court for The New York Times. He is the author of The Tenth Justice: The Solicitor General and the Rule of Law, among other books.

Spring 2015 The American Prospect 65

A New Formula for a Real Democratic Majority

The new American electorate could offer a durable majority—if Democrats address economic needs with progressive policies, not centrist ones.

By S tanle y B. G re e nb e rg

W

hat is the biggest obstacle to Democrats truly winning a national election and pursuing a progressive agenda? What is the biggest obstacle to Democrats winning big enough, geographically broad enough, and deep enough to overcome the constitutional barriers to a governing majority in America?

I posed that first question in The American Prospect in a piece titled “From Crisis to Working Majority,” which I wrote at the time Bill Clinton was preparing to run for president.

Focusing on the Reagan Democrats who lived in middle- and working-class suburban communities like Macomb County, Michigan, I came to the conclusion that Democrats needed to address disaffected white industrial workers.

Many of them were union workers, frustrated that Democrats had failed to identify with their struggles and values. They were very open to a Democratic economic agenda that raised taxes on the rich, penalized CEOs, promised health care as a right, and cut middle-class taxes. That openness to government activism, however, required a Democratic Party that would lead the reform of a welfare system that did not

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reward work, and the reform of a government that did not work for the middle class. That allowed Bill Clinton to run as the candidate of the “forgotten middle class.”

Bill Clinton’s formula for winning the national vote and the Electoral College lay in reclaiming enough support of the declining white industrial male workers and combining that with the votes from the Democrats’ growing liberal cultural coalition—a product of the civil rights and women’s movements, the influx of immigrants, and the protests against the Vietnam and Iraq wars.

President Clinton and some in the Democratic Leadership Council described this formula as “running to the center,” though as a pollster and strategist for Clinton, I never did. I described it as a formula for building a

progressive majority from the bottom up—and it did allow Democrats to win again in the industrial Midwest and run better in some parts of the South.

Democrats today have won the most votes in five of the last six presidential elections and are formidable favorites to win the presidency in 2016, yet Republicans hold large majorities in the U.S. House and Senate and have total partisan control in 24 of the states. At the heart of that deeply frustrating contradiction is the 36 percent of the vote Obama won with white non-college-educated voters nationally.

He did get 40 percent of the votes of white workers outside the South and in most rural states, yet that number still limits the scope of Democratic gains.

The same contradiction could bedevil a Hillary Clinton election in 2016. In a simulated run, she won comfortably against Mitt Romney, yet she was getting 32 percent of the white non-college votes, about the same as Obama got with those voters in his last run.

That would be insufficient to produce a Congress with a governing majority.

Some have argued Democrats need to repeat the Clinton formula of proposing more “moderate” policies, running to the “center,” and

downplaying and toning down the appeal to the Rising American Electorate and the new majority of blacks, Hispanics and new immigrants, millennials, unmarried women, and seculars. They also mean toning down the progressive agenda those voters are demanding.

Those who advocate such “centrism” could not be more wrong. The key to both winning today’s white working-class voters and building overwhelming majorities with the Rising American Electorate is a robust agenda of progressive reform and government activism.

The old formula, to be honest, has been made irrelevant by the seismic economic and cultural shifts that are transforming American politics. On the one hand, Republicans have successfully nationalized every presidential and off-year election because they are waging an ever-more-intense and polarized counter-revolution against the country’s national trends. On the other, Democrats are the beneficiaries of these inexorable trends, but Democrats have not addressed the profound wage stagnation and the special-interest corruption of government that leave the middle class out in the cold. That leaves Democrats’ potential majority without a reason to stay consistently engaged—and leaves Democrats short on white working-class votes as well. The key for the Democrats now is a bold reform agenda relevant for these new times.

will become idle and dependent. Accordingly, they value industriousness, conscientiousness, and a strong work ethic. Their beliefs are grounded in their faith. They seek purity before God and admire those who live a sanctified life, uphold faith-based moral absolutes, and respect traditional authority. They honor marriage and the traditional family in which the man plays the breadwinner role.

They value patriotism, love of country, and those who defend us from our enemies. U.S. citizens come first. And they deride those who fetishize diversity and multiculturalism, and

gridlocked, we will likely focus on 2004. This is when Karl Rove decided to join the culture war so as to build Republican support with religious and evangelical voters.

Defenders of traditional values have been able to wage a counterrevolution of increasing ferocity by encamping in the 20 states of the South, the Appalachian valley, and parts of the Great Plains and Mountain West. These are the most race-conscious, evangelical, religiously observant, and rural parts of the country. From this base, conservatives have fervently joined the culture war to reassert endangered values

bill haber / ap images

The Defining Republican Dynamic

The seismic transformations happening in America today—increasing racial diversity, rising immigration, growing secularism, evolving family structures, and swelling metropolitan centers—are not simply economic and demographic changes. They matter so much because they are tied to revolutions in America’s values, particularly the values held among millennials and those living in the cities. These revolutions have produced a furious counterrevolution and battle for America’s values—though it is a counterrevolution that cannot prevail.

Those battling against these seismic transformations in values honor an individualism that is grounded in personal responsibility, self-reliance, self-restraint, and self-discipline.

In their view, an individual who is not encouraged to learn self-direction and self-reliance

Bill Clinton began as the candidate of the “forgotten middle class,” then embraced the more centrist formula of the DLC.

suffer from misplaced compassion. They abhor secularists who cannot understand the primacy of faith in making moral judgments.

These revolutions and the counterrevolution are producing an increasing cultural and political polarization in America, but the polarization is hardly symmetric. History is on the side of the ascendant revolutions, and thus the opponents believe they must never let up. Indeed, they must engage the forces of change with increasing intensity if they are to forestall the Armageddon. When we look back and ask how America became so polarized and

and warn of the high risks of the new mores.

For them, all elections are national.

To stop the revolutions, Republicans are attempting to restrict access to abortion and even contraception, and are fighting demands for equal pay for women. They are defending the institution of traditional marriage as more states accept the legality of same-sex marriages. The Republican Party continues to resist voting rights for blacks and Latinos, and is battling to reverse Obama’s actions to give legal status to undocumented immigrants, including even the Dreamers who came to the

Spring 2015 The American Prospect 67

A stunning two-thirds of “mostly conservative” people and three-quarters of the “consistently conservative” want to live in a community where the houses are larger and farther apart and schools, stores, and restaurants are several miles away. Less than a quarter of consistent conservatives say being near an art museum or theater is important to them. These responses are flipped for the ideologically liberal, whose views reflect the growing preference for urbanism and metropolitan centers. More than three-quarters of the consistently liberal prefer to live in com-

Senator Elizabeth Warren, here speaking at an AFL-CIO summit, appeals to voters who share her view that “the rules are rigged.”

wastefulness and regulation, corporate profits, helping the poor, racial discrimination, immigration, use of the military, environmental regulation, and homosexuality. The Pew study views ideology as an expression of political value choices, though those choices are clearly expressions of deeper attitudes about morality, community, and way of life.

In that context, the battle over values is translating into real-life choices about where to live—what kind of neighborhood with what kind of people—and whether to accept the country’s new diversity and multiculturalism.

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munities where houses are smaller and closer together, with schools and stores in walking distance. Nearly three-quarters of consistent liberals also say living near art museums or theaters is important to them.

The most dramatic cultural difference brought out by this unique national survey is whether you prefer to live with people of different racial and ethnic backgrounds and whether you prefer to live with people who share your religious faith. Those factors are at the heart of America’s accelerating racial diversity and rising secularism, as well as the

conservative reaction. Just a fifth of consistent conservatives say they are looking for that kind of diversity in the communities where they live; almost 60 percent, however, are looking for communities where many people share their faith. In stark contrast, three-quarters of the consistently liberal are looking to live in racially and ethnically diverse communities, but finding those who share their faith is not important to them at all.

That alignment is taking place in a country that is increasingly diverse, immigrant, secular, young, and living in metropolitan centers, which is why conservatives are under siege. Half of consistent conservatives say, “It’s important for me to live in a place where most people share my political views”—15 points higher than for consistent liberals. And even more, 63 percent, say it is important that “most of my friends share my political views”—14 points higher than for consistent liberals.

Conservatives unhappy with these national trends are looking for solidity of friendship and community.

Those numbers do not quite capture the swelling stakes for the supporters of each of the national parties. Increasingly, they think that if the other party gets to advance its values agenda, the country is at risk, though it is Republican conservatives who are leading the country to the edge of this perceived national crisis. Now, 27 percent of Democrats say Republicans “are a threat to the nation’s wellbeing”—but 36 percent of Republicans say that about Democrats. Half of consistently liberal Democrats say Republicans are such a threat, but they are outdone by consistently conservative Republicans, two-thirds of whom say the Democratic Party’s pursuit of its values and agenda puts the country at risk.

Supporters of both major political parties have become ever more hostile to the other party and fearful of where it would take the country, though Republicans and consistent conservatives are in a league of their own on the perceived threat. A stunning 72 percent of consistent conservatives have an unfavorable view of the Democratic Party, and that has jumped almost 20 points since 2004. A majority of consistent liberals—53 percent—are none too fond of the Republicans, but the growth in hostility is half the rate it is for conservatives,

j o s e lu i s m a g a n a / a p i m a g e s

United States as minors. They work to end unemployment benefits and Obamacare subsidies, which they view as welfare undermining the incentive to work.

This is producing a profound, asymmetric ideological polarization, as reflected in the important Pew Research Center study “Political Polarization in the American Public.”

Instead of using voters’ self-placement on a liberal-moderate-conservative scale, Pew measured ideology according to people’s responses to a range of defining political choices on a variety of values issues, including government

and the level of negativity about the other party is 19 points lower.

The launch of the culture war in 2004 brought the thoroughgoing ideological polarization of the two parties. A nearly complete 99 percent of Republicans are more conservative than the median Democrat, and that measure has reached 98 percent for Democrats with respect to the median Republican. That level of partisan ideological unanimity has jumped more than 10 points for the partisans of both parties since 2004, after remaining fairly steady in the prior decade.

The revolutions and counterrevolution have produced political parties that are ideologically polarized expressions of the emerging values conflict, though the shifts in underlying attitudes and fears are hardly symmetrical.

Republicans are more alienated from what they see as the revolutions’ ascendant values, living styles, and multiculturalism, and they want to live in communities where more people share their faith and political views. They are more hostile to the Democratic Party and much more likely to believe the country is at risk if the Democratic Party wins elections.

That asymmetry, and the political mobilization that it stimulates, has allowed Republicans to over-perform in off-year elections since the election of Barack Obama, and to build their base in the more rural states. Republicans sustained high off-year turnout in 2010 and 2014 by constantly raising the specter of Obama and the grave risks to the country’s traditional values if Democrats hold office.

They raised the stakes in order to build turnout among their base, and the predictable consequences played out after the GOP won control of the House of Representatives in 2010. They have also helped produce an off-year, white working-class voter who is older, more religiously observant, more socially conservative, and anti-government.

By winning big in the South and in Appalachian, Plains, and Rocky Mountain states, the Republicans are able to compete for control of the Senate and govern in at least 40 percent of the states, even though the population there counts for only a quarter of the nation.

Their success in mobilizing and governing with this conservative model only makes winning national elections more difficult. After

2010, the actions of the Tea Party–dominated House sent Republican poll ratings plummeting. Even so, Republicans managed to gain control of both houses of Congress in 2014.

After that sweep, Republican leaders promised their base supporters that they would block Obama’s executive action on undocumented immigrants and his efforts to limit coal pollution, and they will still battle to repeal Obamacare. And it has taken just a few months for the party’s brand to get badly tarnished and for Democrats to regain their presidential-year advantage.

The more Republican strategies succeed in animating and motivating their voters to win off-year elections, the more they alienate their party from America’s burgeoning new electorate. Democrats enter 2016 as the favorites to win the popular vote and perhaps an Electoral College landslide.

However, Republicans can also slow the

Confronting the Contradictions of the New America

Barack Obama fully identified with the new America’s growing majority and its values, and that was his formula for Democrats winning national elections in 2008 and 2012. It is a formula that will be available and even more potent for Hillary Clinton in 2016.

The Rising American Electorate of African Americans, Hispanics, millennials and unmarried women will constitute 54 percent of the electorate in 2016. If you also include the seculars with no religious affiliation, this rising share of the electorate will increase to 63 percent. Each of these groups is steadily growing and, as of early 2015, nearly two-thirds of them intend to vote for Hillary Clinton, assuming she is the nominee.

The metropolitan areas are indeed a cauldron for these economic and cultural revolutions, making the metropolitan revolution a

Supporters of each party have become more hostile to the other. But the hostility is asymmetric, with Republicans more ferociously opposed to Democrats. progressive project nationally, with the full electoral advantages that come from having a rural base and a constitutional system that favors ruralism over urban density, as well as a conservative Supreme Court that blunts both popular liberal initiatives and the expanding new electorate. The GOP holds on by fighting ferociously to block government spending for the poor, to stop uncontrolled immigration, to prohibit abortion, and to defend traditional marriage.

The success of these tactics has serious consequences for Democrats and a progressive agenda. It enables the Republicans to pursue a full-throated conservative agenda in the 20 states of the “conservative heartland” and to block major portions of any Democratic president’s agenda in Congress. But those successes come with a huge price tag. They raise the odds that Democrats will win the presidency, executive branch, and eventually even the judiciary.

political one too. A majority of the country now lives in large metro areas, and Obama won 77 percent of votes in the urban core and 62 percent in the inner suburbs. In 2012, Obama won 27 of the 30 most populous cities, and nine of the ten cities with the highest GDP per capita.

The revolutionary changes captured in the large metro areas are moving states out of their traditional Electoral College column and restricting the national Republican Party to the core conservative states. The dramatic changes in metropolitan areas have moved Virginia, Colorado, and perhaps Florida beyond purplestate status and put North Carolina in play, though voter suppression weakened that trend.

Obama embraced the new diversity and changes in gender roles and the family, which builds the Democrats’ electoral support among America’s new majority. Obama could get by with just 36 percent of white working-class votes in 2012 because increasingly, Obama’s Democratic

Spring 2015 The American Prospect 69

formula depends on the two-to-one support the party gets from minority voters, new immigrants, millennials, and unmarried women, as well as the party’s big majorities among professional women and the college-educated.

Obama’s big election victories in 2008 and 2012 were, in the end, the political triumph of the ascendant trends, even though he was propelled across the finish line in 2008 by the economic distress and slowed in 2012 by the limp economic recovery. The huge crowd in Grant Park in 2008 celebrating the election of a young, mixed-race president was celebrating a changed America.

But any new Democratic president will very quickly discover, as Obama did all too soon, that the American mood can easily darken.

Two-thirds will very quickly say the country is headed in the wrong direction. This was Obama’s experience by 2011. Whether that occurs again will depend on how the new presi-

consequences that arise from more and more households being unmarried; from the reality that working-class men today face a dimmer future than their fathers did; and from the lack of public policies that support women who are fully in the labor force. All the while, they are watching the one percent use their money to influence political connections and rig the system so the economy works in their favor, not for that of the working and middle class.

With those problems unaddressed, the public simmers, waiting for political leaders who get it and who will reform government and bring real changes. Large percentages of the new American majority—the progressive base for change—believe the country is headed in the wrong direction and still give Obama high disapproval ratings. So while Republicans are deeply engaged in a battle against the changing trends, the new American majority is much less engaged because they see politics failing them.

While Republicans are fiercely engaged in politics, the potential majority of the new American electorate is disaffected—because they don’t see government delivering. dent decides to address the growing economic and cultural contradictions facing the country—a project Obama did not undertake as the defining challenge of his presidency.

When Obama assumed office after the economic collapse of 2008, he did not view it as a Roosevelt moment, when a Democratic president might have educated the public on the fundamentals of the new economy and advanced a bold reform agenda. But again, that was not his project. He sounded visionary on the campaign trail, but less so as a governing chief executive.

The American citizenry and new majority celebrate the ascendant trends, values, and changing way of life, but they live the contradictions. They struggle daily with the pay gap and work that doesn’t pay enough to live on, piecing together several part-time jobs and participating in the freelance economy while managing work and kids, many of them as single parents. The majority live with the social

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The Rising American Electorate could be the Democrats’ salvation—but that electorate first has to be engaged and motivated to vote.

The formula for a real national majority does not depend on winning the “Reagan Democrats” or the “forgotten middle class.” But we now know that identifying with the emergent trends and joining the battle for American values will still leave the Democrats short of the momentum they need to bring change.

Democrats have to show they get it and finally join the battle over the central contradictions of our times. Then, they will have a majority that defends its gains year in and year out.

I conducted a national survey for Democracy Corps at the outset of the 2016 presidential cycle, which confirmed the public is ready.

A large majority of the country embraces a bold reform narrative that demands leaders confront the special interests’ hold on government and puts the problems of the middle

class center-stage. People get excited by leaders who understand their lives. The new American majority is hungry for leaders who know how hard it is for people to piece together multiple jobs to make ends meet—and so is calling for drastic improvements in wages and employment rights. Voters want leaders who appreciate the horrific cost of college and will make college more affordable, and they want leaders who understand how bewildering and difficult it is to balance work and have a family and will therefore offer adequate social supports.

They are ready to see deep investments to rebuild American infrastructure and modernize the country—if it is serious in scale, longterm, and independent of a Congress dominated by special interests and self-seeking politicians.

And they understand that this is one way that government can produce good-paying jobs.

And the American people are ready to tax the richest and disrupt that group’s special deal with government. They bring to this period a special disdain for overpaid CEOs and the crony capitalism that makes government work for big business and special interests. The rich paying their fair share is nearly a first principle in economic reform and getting to a good society.

They are ready for government to help—if the stables can be cleaned. The government today is bought and sold to the biggest donors, and it wastes hundreds of billions of dollars at the behest of special-interest lobbyists. They are excited when leaders begin with reforms that restore democracy and get government to work for the middle class again.

So, what is the biggest obstacle to Democrats truly winning a national election and pursuing a progressive agenda? It is failure of Democrats to seize the moment and define an appeal that champions the interests of both the Rising American Electorate and the working middle class. Creating and communicating a reform agenda needs to be the Democrats’ top priority.

Stanley B. Greenberg is chairman and CEO of Greenberg Quinlan Rosner research and consulting firm, and a co-founder of Democracy Corps. He was a campaign adviser and senior pollster for President Bill Clinton and Vice President Al Gore, and is the author of the forthcoming America Ascendant.

No Cost for Extremism

Why the GOP hasn’t (yet) paid a political price for its march to the right

By Jaco b S. Hac ke r and Pau l P ie rs o n

A

ccording to the news media, 2014 was the year that the GOP “Establishment” finally pulled Republicans back from the right-wing brink. Pragmatism, it seemed, had finally triumphed over extremism in primary and general election contests that The New York Times called “proxy wars for the overall direction of the Republican Party.”

There’s just one problem with this dominant narrative. It’s wrong. The GOP isn’t moving back to the center. The “proxy wars” of 2014 were mainly about tactics and packaging, not moderation. Consider three of the 2014 Senate victors—all touted as evidence of the GOP’s rediscovered maturity, and all backed in contested primaries by the Establishment’s heavy, the U.S. Chamber of Commerce: ■ Thom Tillis in North Carolina (a “purple” state at the presidential level) moved to the Senate from being Speaker of the House in North Carolina, where he had been a central player in the state’s sharp right turn. A strong ally of multi-millionaire Art Pope, an archconservative and member of the Koch brothers’ inner circle, Tillis sits on the national board of directors of the right-wing American Legislative Exchange Council (ALEC), which in 2011 selected him as its “legislator of the year.”

■ Joni Ernst in Iowa (another purple state), touted for her just-plain-folks demeanor and service in Iraq, also has an impressive record of extremist policy positions. During the primary, she called for abolishing the Department of Education, the Internal Revenue Service, and the Environmental Protection Agency, and indicated her support for a proposal that would allow Iowa officials to nullify the Affordable Care Act and arrest federal officials who tried to enforce it.

■ Tom Cotton, who got the Chamber’s backing in Arkansas, opposed the 2014 farm bill—because it didn’t cut food stamps enough.

About the program’s beneficiaries, he said, “They have steak in their basket, and they have a brand-new iPhone, and they have a brandnew SUV.” He voted to voucherize Medicare and raise the Social Security retirement age to 70, and even opposed a resolution of the debtceiling crisis, saying that to do otherwise would be “cataclysmic” and default would only create a “short-term market correction.”

Indeed, based on voting records, the current Republican majority in the Senate is far more conservative than the last Republican majority in the 2000s. Meanwhile, the incoming House majority is unquestionably the most conservative in modern history, continuing the virtually uninterrupted 40-year march of the House Republican caucus to the hard right.

The GOP ’s great right migration is the biggest story in American politics of the past 40 years. And it’s not just limited to Congress: GOP presidents have gotten steadily more conservative, too; conservative Republicans increasingly dominate state politics; and the current Republican appointees on the Supreme Court are among the most conservative in the Court’s modern history. The growing extremism of Republicans is the main cause of increasing gridlock in Washington, the driving force behind the rise in scorched-earth tactics on Capitol Hill, an increasing contributor to partisan conflict and policy dysfunction at the state level, and the major cause of increasing public disgust with Washington—which, not coincidentally, feeds directly into the Republicans’ anti-government project.

It’s also deeply puzzling. Republicans are

gaining more influence even though Americans seem less satisfied with the outcomes of increased Republican influence. Poll after poll shows that major GOP positions are not all that popular. Among swing voters, there has been nothing like the party’s right turn. Political scientists often suggest that the “median voter” runs the show, but on basic economic issues, people at the center of the ideological spectrum express views similar to those of the typical voter a generation ago. On many social issues, such as gay marriage, middle-of-theroad voters have actually moved left. Yet the Republican Party keeps heading right.

Nor is it tenable to argue that Republicans pay no electoral price because the Democrats have raced to the left as quickly as they’ve headed right. Figuring out exactly where parties stand isn’t easy. But widely respected measures of ideology based on congressional votes show Republicans moving much farther right than Democrats have moved left. (When you look at the positions that presidents take on congressional legislation, you also find that Democratic presidents have become more moderate even as Republican presidents have become more extreme.) While Democratic politicians have tacked left on some social issues—mostly where public opinion has, too—the party is arguably more moderate on many economic issues than it was a generation ago: friendlier to high finance, more venerating of markets, more cautious about taxes. It is the core of the Republican Party that has transformed. And yet, contrary to expectations that swing voters will punish them for their extremism at the polls, they just keep on going.

In a 50-50 nation, Republicans have learned how to have their extremist cake and eat it too.

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Figuring out how they’ve pulled off this feat is the key to understanding what has gone wrong with American politics—and how it might be fixed.

What Happened to the Median Voter?

That the Republican Party has grown more conservative is not exactly breaking news. Yet journalists routinely fail to point out just how significant the shift has been. When Senator Richard G. Lugar of Indiana was defeated by a Tea Party opponent in a GOP primary in 2012, commentators lamented the loss of “a collegial moderate who personified a gentler political era,” as the Times put it. Yet, as the political scientist David Karol rightly countered, what moderate? When Lugar joined the Senate in 1977, he was on the conservative end of the party—to the right not only of middle-of-theroad Republicans, but even relatively conservative senators such as Robert Dole and Ted Stevens. By the time of Lugar’s defeat, he was

recently wrote in The New Yorker, he was clearly on the conservative side of the GOP and to the right of his brother George. Jeb was a selfdescribed “head-banging conservative” who said he would “club this government into submission.” He has mellowed a little, but mostly it’s that his party has gotten more hyper.

Today, mainstream Republicans denounce positions on health care, climate legislation, and tax policy that were once mainstream within the party. Leading figures in the GOP embrace rhetorical themes—state nullification of federal laws, the wholesale elimination of cabinet departments, “makers” versus “takers”—that were only recently seen as beyond the pale.

Under pressure to appear neutral and play up conflict, the news media like to focus on the divide at any moment between the GOP’s right fringe and its more moderate members. But look at American politics as a moving picture and you see an ongoing massive shift of the

Today, mainstream Republicans denounce positions on health care, climate legislation, and tax policy that were once mainstream within their own party. indeed at the moderate end of the party, but this had very little to do with any movement on Lugar’s part. The depiction of him as a “moderate” is akin to that eerie sensation you get when a train passes you while your train isn’t moving—scientists call it “vection.” The longtimers aren’t really moving left; they’re being left behind as their party moves right.

You feel political vection a lot these days.

Newt Gingrich went from the right fringe of the party to the center before he was ousted from the leadership. John Boehner, now the Establishment pleader-in-chief, was significantly to the right of Gingrich when he entered Congress. Today, pundits wonder whether the “moderate” Jeb Bush can attract enough GOP conservatives to win the presidential nomination. (He might—presidential nominations are the one place where centrist GOP voters have some sway.) But when he started out in electoral politics in the 1990s, as Alec MacGillis

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whole GOP (and, with it, the “center” of American politics) toward the anti-government fringe.

To understand the puzzle that this raises for political analysts, it helps to be familiar with the most famous concept in American electoral studies: the median voter. The idea comes from the economist Anthony Downs, who in the 1950s drew on research about where stores were located relative to the distribution of consumers. Downs’s simple insight was that politicians in a two-party system have strong incentives to position themselves in the middle, right next to their opponents. The prediction looked pretty good in the age of Dwight Eisenhower and congressional bipartisanship, and the “median voter theorem” was born.

The median voter theorem allowed for a reassuring conclusion: Politicians who win must be pursuing the preferences of the middle-of-the-road voter. In the “equilibrium” created by competitive elections, voter pref-

erences and the aims of elected officials align.

Thus politicians who persistently don’t do what the theorem predicts raise not one but two fundamental questions: Why do they head to the extremes? And how do they get away with it? In other words, you need both motive and opportunity to knock off the median voter.

The Proof Isn’t in the Pudding

The median voter theorem may seem ridiculous today. But, in fact, it lurks behind much of the commentary on elections in professional and popular publications. Implicit in the endless attempts to explain why swing voters side with Republicans is a simple assumption: Republicans are winning elections and so they must be doing what a majority of voters want.

The proof of voter preferences is in the pudding of electoral results.

Consider the recent thoughtful commentary on the 2014 election by John B. Judis, the journalist who (along with Ruy Teixeira) gave Democrats the greatest hope that demographic and economic shifts heralded an “emerging Democratic majority.” In his new salvo, published in National Journal, Judis says the prospect of such a majority was an illusion. Republicans are not just pulling in the usual suspects: evangelicals, working-class whites, Tea Partiers. They’re also attracting the broader white middle class.

These voters would “probably not vote for a Republican who was openly allied with the Religious Right,” says Judis. But they are “willing to support an antiabortion Republican” if that’s not the main selling point. Most important, while “not unbendingly opposed to government,” “they are worried about overspending and taxes” and hence willing to back the GOP. Like most analysts, Judis starts with the unstated belief that if Republicans are winning, they must be reaching moderate voters with their policy stances. But that assumption is unwarranted. First, Judis passes quickly over an absolutely critical aspect of Republicans’ advantage—turnout. If everyone votes, the median voter is the typical American citizen. But not everyone votes, and turnout in midterm elections is particularly low (historically so in 2014). In the past, that did not matter as much as it does today.

The midterm electorate has always been smaller, but it has not always been so disproportionately Republican. High-turnout voters, such as the

aged, have increasingly sided with the GOP, while the young and minority voters in Teixeira and Judis’s “emerging Democratic majority” have the lowest turnout rates, especially in midterm years. This, in fact, is one explanation for Republicans’ big statehouse edge. Though not widely noted, governors are overwhelmingly elected in non-presidential-election years, when turnout is much lower, even across different groups. Only nine states hold gubernatorial elections alongside the presidential election.

And it’s not just turnout that drives a wedge between citizens’ preferences and election

gressional contests and the presidential race.

It’s also the beginning of an explanation for why individual Republicans have the motive and opportunity to move so far right. In many congressional districts and red states, GOP politicians need to worry first and foremost about primary challenges. For these Republicans, the district median voter is less important than the Republican median voter.

Still, this doesn’t explain why even extremely conservative Republicans don’t face challenges from moderates within the party (in contrast, Democrats are routinely challenged by other

joe marquet te / ap images

John Boehner (left), who was significantly to the right of Newt Gingrich (center) when he entered Congress in 1991, is now the Establishment pleader-in-chief. Gingrich moved from the right fringe of the GOP to the center before he was ousted in 1998.

results. In the House, gerrymandering and the electorally inefficient distribution of Democratic voters (with high concentrations in urban areas) give the GOP a sizable structural advantage. In 2012, a high-turnout year, Mitt Romney received a majority of votes in 226 congressional districts versus Obama’s 209. In the Senate, the lean of low-population states toward the Republicans has a similar effect. The 54 Republicans in the Senate won their seats with fewer total votes across the last three elections than the 46 Democrats (who also represent a larger total population). This is another reason why the fortunes of the GOP are so different between con-

Democrats to their right). And it certainly doesn’t mean that the Republican Party faces no electoral risks from its members’ continuing rightward lurch. Parties are collective organizations that balance what’s good for their individual members with what’s good for the growth and survival of the whole. In theory, when individual Republicans adopt stances way to the right of the typical voter, the party brand is tarnished and candidates in contested races lose, especially at the presidential level.

What makes the GOP shift so remarkable, and so harmful to the workings of American democracy, is that it has proved so sustainable.

To understand why, we must first figure out where the motive for heading right is coming from.

The Race to the Base

Conventional images of the two parties see them as symmetrical reflections of each other.

But when it comes to the activist core of the parties, there is no comparison. The Republican base is larger, more intense, better organized, and fueled by distinctive partisan media outlets that make those on the other side look like pale imitations. Strong liberals are often motivated primarily by one issue—the environment, say, or abortion, or minority rights.

Strong conservatives tend to describe themselves as part of a broad effort to protect a way of life. Even during the George W. Bush presidency, liberals wanted Democratic Party leaders to take moderate positions and expressed a strong desire for compromise. Conservatives consistently indicate they want Republicans to take more conservative positions and never, ever compromise with opponents.

Not surprisingly, self-described conservatives also show up when it counts. Whatever the form of participation—voting, working for candidates, contributing to campaigns— the GOP base does more of it than any other group. At the same time, the ideological distance between the party’s most active voters and the rest of the party’s electorate is greater on the GOP side than the Democratic side.

Democratic activists are moderate as well as liberal (and occasionally even conservative).

Republican activists are much more consistently conservative, even compared with other elements of the GOP electoral coalition.

Nonetheless, the imbalance in prevalence and intensity between self-identified liberals and self-identified conservatives hasn’t changed much in 35 years—even as the role of the Republican base in American politics has changed dramatically. Something has happened that has given that base a greater weight and a greater focus on “Washington” as the central threat to American society.

Here, we need to turn our attention from the GOP ’s most committed voters to the organized forces that have jet-propelled the GOP ’s rightward trip. Even the most informed and active voters take their cues from organizations and

Spring 2015 The American Prospect 73

elite figures they trust. (Indeed, there’s strong evidence that such voters are most likely to process information through an ideological lens.) The far right has built precisely the kind of organizations needed to turn diffuse and generalized support into focused activity on behalf of increasingly extreme candidates.

Those organized forces have two key elements: polarizing right-wing media and efforts by business and the very wealthy to backstop and bankroll GOP politics. Pundits like to point to surface similarities between partisan journalists on the left and right, but the differences in scale and organization are profound. The conservative side is massive; describing its counterpart on the left as modest would be an act of true generosity.

At the heart of the conservative outrage industry, of course, is Fox News. Fox’s role as an ideological platform is unparalleled in modern American history. Its leading hosts reach audiences that dwarf their competitors’. The network plays a dominant role for its audience that is unique. And Fox is also distinguished by extraordinarily tight connections to the Republican Party—linkages, again, that have no parallel among Democrats.

What’s most remarkable is that Fox is just the beginning. The other citadel of the conservative media empire is talk radio, and if cable news looks like a lopsided teeter-totter, talk radio is that teeter-totter with a 16-ton weight attached to the right-hand side. Conservative on-air minutes outnumber liberal ones by a ratio of at least 10 to 1, and all of the major nationally syndicated shows are conservative. Just the top three have a combined weekly audience of more than 30 million. Moreover, the number of talk radio stations has tripled in the last 15 years.

The impact of all this is difficult to calculate.

After all, Republicans were moving right even before Fox came on the scene, and much of Fox’s audience consists of people who already have strong political views. Even so, a recent, innovative study by scholars at Emory and Stanford finds that Fox News exposure added 1.6 points to George W. Bush’s vote in the 2000 election— more than enough to cost Al Gore the presidency. And this excludes the impact of talk radio and Fox’s further expansion since 2000. Arguably, however, the bigger impact of conservative media is to increase and focus intensity within

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the Republican base, sending compelling messages that build audience trust while insulating that audience from contrary information.

Flanking conservative media is a vastly expanded political infrastructure advancing a right-wing economic agenda and rewarding politicians who maintain fealty to the cause. Some analysts have stressed divisions between Establishment and Tea Party wings.

But while differing over tactics and a handful of issues, the two large networks dominating GOP finances—the Chamber of Commerce and the Karl Rove–led network, on the one hand, and the Koch brothers network, on the other— overlap and agree far more than they conflict.

These networks have coordinated their efforts in recent general elections and now provide organizational and financial support on a scale that makes them virtual political parties in their own right. The Koch network alone has announced plans to raise nearly $1 billion for the 2016 elections.

In short, the Republican base generates an exceptionally strong gravitational pull, and that pull takes politicians much farther from the electoral center than do the comparatively weak forces on the left of the Democratic Party.

Shark Attacks and Voters

Republicans, then, have a strong motive to move right. And we have seen that they have greater opportunity to do so because of uneven turnout and favorable apportionment. Still, as Judis suggests, Republicans are winning over many centrist voters, including many who express positions on specific policy issues that are relatively moderate. How have Republicans managed to escape the iron law of the median voter theorem: move to the center or lose?

Part of the explanation is that electoral accountability is far from perfect. As the political scientists Christopher Achen and Larry Bartels have documented, politicians are often punished for things they do not control, such as weather and momentary economic shifts. Misplaced accountability is a vital issue in electoral democracies. Where voters systematically make major mistakes, accountability vanishes. And without accountability, politicians don’t have to worry so much about being responsive to voters.

Call it the “shark attack” problem. In July 1916, a series of shark attacks on the Jersey

shore left four people dead and prompted a media frenzy. (Seventy years later, the events would become the basis for the movie Jaws.)

Four months afterward, Woodrow Wilson ran for re-election. On the Jersey shore, his vote was down three points.

Political scientists have found many examples of the shark attack problem: ■ Voters are often only dimly aware of the policy positions and legislative actions of politicians, and politicians can do many things to diminish what awareness they have. (UCLA’s Kathleen Bawn and her colleagues call this “the electoral blind spot.”)

■ Voters often have a hard time distinguishing more moderate candidates from more extreme ones. The mainstream media’s horserace orientation and strong incentive to maintain an appearance of neutrality often make journalists unwilling to describe one party or candidate as more extreme than the other.

■ Voters make decisions on the basis of factors (such as the very recent performance of the economy) that are unrelated to the policy stances of politicians.

■ Voters may be increasingly willing to support the candidate perceived to be on “their” team rather than the one whose policy positions are closer to their own.

■ Given the intensity of the base, extremism may generate compensating support (in money, endorsements, or enthusiasm) that offsets any potential lost ground among moderates.

All these factors suggest that we shouldn’t assume—in the style of evolutionary biology— that Republicans are winning because they are a better fit with voters’ beliefs. But Judis is right about one thing: Voters are a lot more fed up with government. And here we come to another depressing fact about accountability in America’s distinctive political system: The anti-government party has a huge advantage.

Cracking the Code of American Politics

The shark story seems absurd, random, and of limited relevance. But imagine what would happen if political actors could actually make shark attacks happen. And imagine if they could also have those attacks attributed to their opponents.

Sounds preposterous, right? But our political institutions make something like this possible.

In a parliamentary system, legislative majorities govern, and those majorities are accountable for the results. Voters know who is governing and how to reward and punish. Our political system instead combines increasingly wellorganized, parliamentary-style parties with a division of governmental powers. That dispersal of authority simultaneously makes governing difficult and accountability murky. It also creates opportunities for a party that is willing to cripple the governing process to gain power.

And over the past generation, a radicalizing GOP has done precisely that, making American politics ever more dysfunctional while largely avoiding accountability for its actions.

Indeed, the most distinctive and damaging feature of Republicans’ right turn is that they have steadily ramped up the scale, intensity, and sophistication of their attacks on government and the party most closely associated with it. The legal scholar Mark Tushnet calls these tactics “constitutional hardball.” From between-census redistricting to open attempts at Democratic vote suppression, from repeated budget shutdowns to hostage-taking over the debt ceiling, from the routine use of the filibuster to block legislation and nominations to open attempts to cripple executive bodies already authorized by law, the GOP has become, in the apt words of Thomas Mann and Norman Ornstein, “an insurgent outlier in American politics”—a party willing to tear down governance to gain larger majorities in government.

Appropriately for a party increasingly geared not to governing but to making governance impossible, the two leaders of this transformation were not in the White House but in Congress: Newt Gingrich and Mitch McConnell.

Gingrich liked to describe himself as a “transformative figure”—and he was. His political genius was to sense that if voter anxieties and anger could be directed at government and the majority party that ostensibly ran it, power would come. Achieving this goal required simultaneously ratcheting up dysfunction and disgust while more sharply distinguishing the GOP as the anti-government party.

Gingrich and his allies adopted a posture of pure confrontation. The goal was to drag the Democrats into the mud, and if some mud got on the Republicans, well, they were the minority and, besides, they were not the party of

Washington. In 1988, in a speech to the Heritage Foundation, Gingrich described a “civil war” with liberals that had to be fought “with a scale and a duration and a savagery that is only true of civil wars.” He meant it.

Fatefully, Gingrich also went to war with moderate Republicans. (His faction liked to joke that only two groups were against them: Democrats and Republicans.) He led a rebellion against the first Bush administration’s efforts to reach across the aisle, hobbling the president’s 1992 re-election campaign before it had even started.

Once the elder Bush was out of the White House, it became even easier to pursue a strategy of uncompromising opposition and scandal-mongering. Obstruction and vituperation became a twofer. With a Democratic president, the Republican assault not only weakened an opponent but promoted the sentiment that politics and governance were distasteful. Association with “Washington” became increasingly toxic, and

“we had to be against it.” Without Republican willingness to “play,” the imprimatur of bipartisanship was unavailable. Republicans could make the Democrats’ policy initiatives look partisan to voters and produce a pattern of gridlock and dysfunction that soured voters on government—and the party of government.

American institutions, McConnell knew, gave Republicans a lot of capacity to impede governance without a lot of accountability.

On occasions, Republicans have overplayed their hand, as they did with the government shutdowns of 1995, the impeachment of Clinton in 1998, and the debt-ceiling debacle of 2011.

But the GOP has escaped blame for the general decline of effective government. What voters get is a sense that the system is a mess and Washington can do little about pressing problems. If voters place blame anywhere, it is as likely as not to fall on the pro- rather than the anti-government party, and on the president, who is viewed as the

By refusing to compromise, Republicans could make Democratic initiatives look partisan and produce a pattern of gridlock that soured voters on government. the Democrats were the party of Washington.

The second phase of Republicans’ antiWashington strategy was engineered primarily by Mitch McConnell. Personally devoid of mass appeal, McConnell nonetheless has a rare understanding of the American voter. Early on in his leadership, he recognized that American political institutions create a unique challenge for voters. The complexity and opacity of the process—in which each policy initiative faces a grueling journey through multiple institutions that can easily turn into a death march—make it difficult to know how to attribute responsibility.

Even reasonably attentive voters face a bewildering task of sorting out blame and credit.

McConnell fully embraced this opportunity after 2008. He organized the GOP caucus in a parliamentary fashion and worked to prevent individual party members from accepting compromise: “If [Obama] was for it,” “moderate” Senator George Voinovich explained,

country’s leader even if he has no capacity to pass laws or effectively promote bipartisanship when the GOP refuses to reciprocate.

Thus Judis is right to note that many moderately inclined Americans are now open to an anti-government message, fueled by their completely understandable distaste for contemporary Washington. This is not, however, because these voters have become more conservative.

It reflects the GOP ’s success in simultaneously activating and exploiting voter disgust. The deeper message of 2014 is that a radical GOP first drove government into the ditch, generating historically low approval ratings for Congress, and then reaped the benefits.

In short, Republicans have found a serious flaw in the code of American democracy. What they have learned is that our distinctive political system—abetted by often-feckless news media— gives an extreme anti-government party with a willingness to cripple governance an enormous

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edge. Republicans have increasingly united two potent forms of anti-statism: ideological and tactical. And they have found that the whole is much greater than the sum of the parts.

Disrupting the Doomsday Machine

By now, reform-minded commentators have offered every manner of political fix for our present political dysfunction. Some are silly—getting members of Congress to hang out after hours isn’t going to bring back a relatively moderate GOP. Others are sensible. Reducing the role of the filibuster would increase accountability, reduce gridlock, and make government more effective. Many reforms that would increase turnout (especially in midterm years) would also reduce the rewards of extremism. But these reforms are unlikely to be enacted as long as Republicans are in a position to stop them.

That’s why we believe that the vicious cycle of dysfunction, distrust, and extremism will require a long-term effort directed not just at formal rules but also at informal features of American politics. Republicans benefit from the decline of norms of moderation and fair play and from a deep public cynicism about government. To reverse the vicious cycle, Republicans have to be called out when they go too far, and voters need to be dissuaded from their anti-government skepticism and animus. These are Herculean challenges, but not insurmountable ones. The key is to start heading in the right direction now.

Despite the evidence of increasing Republican extremism, elite discourse—in journalism, academia, and foundations—resists the notion that Republicans are primarily responsible for polarization and deadlock. To argue that one party is more to blame than another for political dysfunction is seen as evidence of bias, not to mention bad manners. Foundations will fund nonpartisan vote drives; they will not fund efforts to shame right-wing Republicans for crippling governance. Academics worry about seeming biased when the truly biased perspective is the one that treats the parties as equally extreme. And while Fox News takes an avowedly partisan line, most of the media world retreats into self-defeating denials of the truth that stares them in the face.

Consider what happened in 2013 when Mann and Ornstein, who had probably been

the most quoted observers of Congress during the previous two decades, issued their welldocumented critique, It’s Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism. The book emphasized the responsibility of the GOP for government dysfunction. After it came out, the authors were not quoted in the press or invited to the public affairs shows on which they had regularly appeared. As Mann explained, “I can no longer be a source in a news story in The Wall Street Journal or the Times or the Post because people now think I’ve made the case for the Democrats and therefore I’ll have to be balanced with a Republican.”

Balance is one thing when you are talking about ideological differences; it is dangerous when you are talking about basic facts of American political life. In too many crucial venues, the mainstream media’s desire to maintain the appearance of neutrality trumps the real need for truth-telling. The inevitable complexity of the governing process further increases the temptation to offer narratives that do not help more casual observers of our politics to determine accountability. This isn’t just bad journalism; it’s a green light for extremism.

Nowhere is this more true than with regard to the extreme anti-government tactics that have become such a central part of the GOP strategic repertoire. American political leaders in the past refrained from playing constitutional hardball not because it was legally impossible but because it was normatively suspect. Those norms were costly to breach; violators were subject to both public and private censure. Today, however, the price of hardball is effectively zero. For Republicans, indeed, it is often less than zero because the GOP gains so much from political dysfunction. Raising the price of these tactics requires opinion leaders to call out violations again. Journalists should treat partisan realities in the same way they should treat scientific disputes—by attending to the evidence.

Equally important, those who recognize the dangerous implications of extremism are going to have to make a concerted case for effective governance. Currently, Democrats are caught in a spiral of silence. No one defends government and government looks increasingly indefensible. Public life and government are seen as hopelessly gridlocked and corrupt, so they

become more hopelessly gridlocked and corrupt. Even politicians who know that government has a vital role to play in making our society stronger have little incentive to make what is now an unpopular and unfamiliar case.

Consider the almost complete silence of Democrats about the Affordable Care Act—a law that despite its limitations has unquestionably delivered considerable benefits to the majority of Americans. A 2014 study found that spending on anti-­Obamacare ads since 2010 outpaced money spent for ads defending the law 15 to 1. No wonder public opinion remains doubtful even as actual results of the law look more positive.

As difficult as it surely will be, there is no substitute for restoring some measure of public and elite respect for government’s enormous role in making society richer, healthier, fairer, better educated, and safer. To do that requires encouraging public officials to refine and express that case, and rewarding them when they do so. And it requires designing policies not to hide the role of government, but to make it both visible and popular. A tax cut that almost nobody sees, and which those who do see fail to recognize as public largesse, will make some Americans richer. It will not make them more trusting of government.

We are under no illusion about how easily or quickly our lopsided politics can be righted. But put yourself in the shoes of an early 1970s conservative and ask how likely the great right migration seemed then, when Richard Nixon was proposing a guaranteed income and national health insurance and backing environmental regulations and the largest expansion of Social Security in its history. Reversals of powerfully rooted trends that threaten our democracy take time, effort, and persistence.

Yet above all they require a clear recognition of what has gone wrong.

Jacob S. Hacker is a professor of political science at Yale University, where he is director of the Institution for Social and Policy Studies. Paul Pierson is professor of political science at the University of California, Berkeley, and a senior fellow at the Canadian Institute for Advanced Research. They are coauthors of the book Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class.

Spring 2015 The American Prospect 77

The Civil Rights Movement and the

Politics of Memory As opportunists try to hijack the Movement’s legacy, let’s remember what actually occurred. By Randall Ken nedy

The central question … is whether the White community in the South is entitled to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not prevail numerically?

The sobering answer is Yes—the White community

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is so entitled because, for the time being, it is the advanced race.

There are undoubtedly older conservatives who have sincerely repudiated their earlier opposition to the movement.

There are also young conservatives who have never had to reverse course because they grew up after the civil rights revolution. One would be stupidly naïve, however, to forget that some conservatives who laud the movement in retrospect do so only strategically. They are closeted racial reactionaries.

And occasionally they blurt out what they really think.

Mississippi Senator Trent Lott was speaking candidly in 2002 on the occasion of Senator Strom Thurmond’s 100th birthday party when he got a bit carried away and praised Thurmond’s Dixiecrat rebellion against the Democratic Party’s support for blacks’ civil rights. Lott declared that he was proud of southern support for Thurmond’s presidential bid in 1948 and that “if the rest of the country had followed our lead, we wouldn’t have had all these problems.” Lott was not simply saying that his colleague Thurmond was a fine fellow. Had Thurmond prevailed, segregation, racial suppression, denial of the right to vote, and the rest of the Jim Crow system would have persisted. Lott’s “mistake” was simply being truthful and momentarily forgetting the danger of expressing openly his real feelings and beliefs.

For him, and for a hard-to-determine number of other conservatives, history took a bad turn when the movement came out on top in its struggle against Jim Crow.

One ploy on the part of today’s conservatives is to cel-

w i l l i a m lo v e l a c e / e x p r e s s / g e t t y i m a g e s

R

ecollections of the Civil Rights Movement shape the way we comprehend and respond to a protest that remains sharply contested. The civil rights struggle of the 1950s and 1960s aimed to remove racial barriers that confined, degraded, and marginalized racial minorities, particularly blacks.

After half a century, people today recall the movement in different ways for different purposes. The filter of memory is used to contour the politics of the present.

Many conservatives, with the convenience of retrospect, affirm the movement’s insistence that racial disenfranchisement and legally required segregation were abominations wholly inconsistent with constitutional requirements and that strong remedies were needed to eradicate those evils. It is not unusual nowadays to find celebration of the defeat of Jim Crow in, say, National Review.

Of course, things were different when the movement was in the midst of the very battles that we now commemorate. Siding with segregationists in 1956, National Review denounced Brown v. Board of Education as “one of the most brazen acts of judicial usurpation in our history.”

A year later, defending white supremacists who excluded blacks from the ballot, National Review averred:

ebrate and exaggerate the gains of the movement precisely in order to reverse that progress. We see that in the federal courts. Exhibit A is John Roberts, the chief justice of the U.S. Supreme Court. In Shelby County, Alabama v. Holder, the case that destroyed a key tool of the Voting Rights Act of 1965, Roberts describes the historical context from which that legislation arose—the “entrenched racial discrimination in voting,” which he described as “an insidious and pervasive evil which had been perpetrated in certain parts of the country through unremitting and ingenious defiance of the Constitution.” Then, however, Roberts and a bare majority of justices concluded that the historical record can no longer rationally support key remedial features of the legislation. “At the time”—the mid-1960s—the key disputed provisions of the act “made sense,” Roberts declared. But he insisted that “nearly 50 years later, things have changed dramatically,” obviating the need for the law’s “strong medicine.” The trope of dramatic progress has become a staple of conservative opposition to progressive redistributive racial policies. They concede that back then, long ago, in the bad old days, “special” action was needed to break the hold of racist legislation and custom. But in light of “dramatic progress,” they now insist that “special” action is not only unneeded, but impermissible.

It is possible that Roberts’s understanding of the Civil Rights era is sincere. It is more likely, however, that the sympathetic historical narrative he posits is merely pretext—a way to sanitize the evisceration of civil rights legislation without appearing racially reactionary.

Am I being unduly cynical? Roberts has repeatedly spoken with feeling of his deep admiration for William H. Rehnquist, the justice for whom he clerked and the chief justice he succeeded. Rehnquist was a stubborn opponent of the civil rights revolution. He was also wily and devious. As a law clerk for Justice Robert Jackson when Brown v. Board of Education was argued, Rehnquist favored affirming the constitutionality of legally mandated segregation. He saw nothing fundamentally wrong with Plessy v. Ferguson, the 1896 ruling in which the Supreme Court upheld the constitutionality of a Louisiana statute that required “equal but separate” accommodations for blacks and whites on railroad cars.

Decades later, after Brown had won the day in terms of public opinion, Rehnquist deceitfully denied having argued against Brown when he was a law clerk. He lied during Senate confirmation hearings on his nomination to associate justice in 1971, and then again in hearings on his nomination to be chief justice in 1986. His prevarications constituted an integral part of what Professor Brad Snyder calls the conservative canonization of Brown—the process in which conservatives ceased attacking Brown but worked to restrict its practical reach.

Just as the conservative wing of the Court posited exaggerated racial progress to truncate the Voting Rights Act, they pursue the same strategy when it comes to remedies for racial isolation in public schools. This distorted view of history is then used to disallow racial selectivity to maintain racial integration. In Parents Involved in Community Schools v. Seattle School District No. 1, the landmark 2007 case rolling back remedies, the conservative justices wielded Brown against the ideological descendants of those who initiated Brown. Abjuring the briefs of those who now fill the shoes once filled by Thurgood Marshall, Chief Justice Roberts and the conservative wing ruled that, outside the context of higher education (where promotion of diversity may be allowed on very narrow grounds), the aim of ensuring racial integration in classrooms cannot justify raceconscious means of allocating students. “When it comes to using race to assign children to schools,” Roberts asserted, “history will be heard.”

Yes, but which history will be embraced? The one that permits the continuation of racial separation? Or the one

Rosa Parks, sanitized into a lady with tired feet, was a Movement activist long before the day she famously refused to move to the back of the bus. that encourages racial integration? Roberts and his conservative colleagues chose the former.

A second group that has exerted considerable influ-

ence upon the public memory of the civil rights era is composed of those who seek to domesticate the movement, homogenize it, make it universally palatable. They delete from the movement’s history its troublesome radical outcroppings, subordinate its communal character to tales of individual heroism, and make the narrative into a story of American triumphalism.

An instructive debunking of this tendency is offered

by Professor Jeanne Theoharis in The Rebellious Life of Mrs. Rosa Parks. Theoharis notes that when Parks died on October 24, 2005, at the age of 92, she was accorded an extraordinary measure of public recognition. Her body lay in state at the Capitol Rotunda, where 40,000 Americans (including the President and First Lady, George W. and Laura Bush) came to pay respects. Later, pursuant to legislation, a statue of Parks was placed in the Capitol, the first honoring an African American. Senate Republican Majority Leader Bill Frist stated that Parks’s famous stand—her refusal to surrender her seat to a white man, according to

Spring 2015 The American Prospect 79

racist custom—was “not an intentional attempt to change a nation, but a singular act aimed at restoring the dignity of the individual.” The New York Times described her as the “accidental” matriarch of the Civil Rights Movement.

But as Theoharis shows, the actions of Rosa Parks were neither apolitical, nor adventitious, nor individualistic.

Parks had been an activist long before the day she famously refused to move to the back of the bus. She was a stalwart member of the Montgomery, Alabama, chapter of the National Association for the Advancement of Colored People (NAACP). She took pains to register to vote—a difficult undertaking for blacks in the Deep South in the 1940s. She participated in campaigns to prompt police to investigate rapes of black women by white men. She attended the Highlander Folk School, an interracial, leftwing leadership training school that fell victim to both race-baiting and red-baiting.

Although Parks did not seek a confrontation with segregation aboard that bus on December 1, 1955, she was well prepared when the opportunity arose. She continued her

The dispute over the film Selma is not just an argument about history; it is also a conflict over the distribution of power now. activism after her arrest and throughout the subsequent 381-day bus boycott. Moreover, she continued protesting against racism after she moved to Detroit and joined the staff of newly elected Congressman John Conyers. Parks’s contribution, in other words, consisted not just of one dramatic act of defiance; it consisted of a lifetime of devoted participation in the movement for black liberation and equality. Contrary to what Frist suggested, Parks and her colleagues did indeed seek “to change a nation” and did so to a significant extent through fortitude, courage, tact, and imagination.

The memory of the movement is also contested in

the popular culture and in its commercial appropriation.

Debate has swirled around the portrayal of President Lyndon Johnson in Ava DuVernay’s feature film Selma.

Some have complained that the film slights Johnson by portraying him as a grudging supporter of their movement and even, in some instances, a petty, vindictive adversary.

Some defenders of Selma charge that racism is behind much of the criticism of the film. “The real problem many critics have with this film,” declares Professor Peniel Joseph, is “that it’s too black and too strong.” It is “too

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black,” he implies, because of DuVernay’s self-conscious decision to make black men, and especially black women, central heroic characters of the drama. “I wasn’t interested in making a white-savior movie,” she declared in one of the many interviews she has given pursuant to the deluge of publicity that followed Selma’s release. “I was interested in making a movie centered on the people of Selma,” by which she meant, of course, black people of Selma. Joseph and others imply as well that DuVernay’s identity as an African American is also part of what has made Selma “too black” for the taste of certain detractors.

In “How ‘Selma’ Got Smeared,” which appeared online in Grantland, Mark Harris voices this point strongly: The old saw that history is written by the victors is particularly relevant here, because Selma is the first mainstream movie about this era to raise the question of who, exactly, gets to claim ownership of that victory. To many historians and politicians, the triumph of civil rights is that, after much toil and strife, they were bestowed from above; to many African Americans, however, the victory is that those rights were taken—wrenched, with tremendous will, persistence, and effort, out of a system that was not in an immense hurry to offer them up. The former stance has long been the vantage point offered by most white filmmakers who have tackled this history. So it’s little wonder that DuVernay’s movie, the first on the subject by a woman of color and the first not to view mid-20th-century civil rights purely as an example of presidential, judicial, or legislative beneficence, has distressed those who, even 50 years later, would be far more at home in a room with President Johnson than with Dr. King.

They are unnerved not only that Selma threatens to become “official” history, but that it represents a sea change in who has custody of that history.

Are those who defend LBJ against his portrayal in Selma overreaching? On the one hand, there is reason to be on guard against the propensity to over-praise whites and put them at the center of everything, including struggles for black advancement. All too many commentators, for instance, date the beginning of the Civil Rights era as the moment at which Chief Justice Earl Warren announced the (all-white) Supreme Court’s unanimous decision in Brown v. Board of Education, paying little heed to the story of the plaintiffs and their supporters, the very people whose perseverance and courage brought to the justices the case that enabled them to become judicial heroes. Cultural entrepreneurs with white audiences in mind have insisted upon interjecting into virtually any setting the obligatory white savior. An egregious example is the film Mississippi Burning, in which

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(white) FBI agents are cast as the central, heroic characters, the protagonists who relentlessly pursue murderous Ku Klux Klansmen, eclipsing the blacks whose protests provoked the Klan’s racially motivated violence in the first place, and excusing the longtime racist role of the FBI itself.

Aware that the telling of history is itself a projection of power, politically self-conscious observers should be keenly attuned to the ways in which white privilege manifests itself in cultural productions—plays, novels, monographs, films. They rightly wince upon reading that in directing Selma, DuVernay was unable to have her MLK speak the actual words of the historical MLK because media mogul Steven Spielberg owns the rights to those words (having bought them from the notoriously avaricious King estate), and is hoarding them for his own use.

Impatience with white narcissism and privilege, however, is no excuse for derogating the important, positive, admirable roles that some whites played in the Civil Rights era. As King declared in his “Letter from Birmingham Jail,” it should never be forgotten that there were whites, too, who stood up for racial justice, hazarding beatings and jailing and even death as they challenged segregation. Moreover, no matter how courageous the plaintiffs or brilliant their attorneys, good results would not have been forthcoming in desegregation suits in the absence of white judges who proved themselves willing to listen and to reform the law—jurists such as Justice William J. Brennan, and appellate judges John Minor Wisdom, Frank Johnson, and J. Skelly Wright. Similarly, no matter the bravery and persistence of protesters, their efforts would have been much less successful in the absence of friendly white politicians such as Hubert H. Humphrey, Robert F. Kennedy, and, most notably, LBJ. Johnson was a committed supporter of the Civil Rights Movement. He contributed mightily to breaking the back of congressional segregationist obstructionism, investing more of his own political capital to furthering the aims of racial justice than any previous or subsequent president thus far. We owe it to ourselves to get that history right.

Johnson helped greatly to elevate the movement’s status. In his splendid speech of March 15, 1965, in which he announced that he would soon send to Congress the legislation that became the Voting Rights Act, he famously echoed the mantra “We shall overcome.” He also memorably saluted the activists who, by their tactical acumen and dogged determination, had seized the country’s attention.

“At times, history and fate meet at a single time in a single place to shape a turning point in [humankind’s] unending search for freedom. So it was at Lexington and Concord. So it was … at Appomattox. So it was … in Selma, Alabama.”

I do not think that racism is behind the influential critiques that have been aimed at Selma. The most heated one

was authored by Joseph Califano Jr., who worked closely with Johnson as an aide. Writing in The Washington Post, Califano seethingly charged that Selma falsely portrays LBJ and urged that the film be denied both patronage and honors. In my view, DuVernay was unduly harsh in depicting LBJ. But Califano, too, is excessive. He claims that the Selma campaign was LBJ’s idea, on the basis of a phone conversation with MLK in which the president mused that, in order to mobilize public opinion, racist disenfranchisement would have to be dramatized in a vivid, unmistakable fashion—hardly an original notion. King, moreover, had already shown himself to be a master of just that sort of dramatization. Califano’s assertion that the Selma campaign was Johnson’s idea is ridiculous overreach.

But is his overcharging related to race? Probably not.

If a white person, say Michael Mann or David O. Russell, had been the director of a film impugning LBJ, Califano would likely have responded in a similar fashion. Califano was wrong in his excessive denunciation of Selma. But he was not racistly wrong. That distinction should matter.

In some defenses of Selma, there has surfaced a strong whiff of “How dare you do anything other than praise this film by a young female African American director!” But participation at the big table of American culture will and should entail criticism as well as praise. A realistic understanding of our racial past, present, and future will require a willingness to subject everyone to criticism.

The fight over Selma is not only a historiographical dispute; it is also a conflict over the distribution of power now. It is full of reverberations that indicate the ongoing

LBJ and MLK: The President and the Movement leader recognized that neither could have succeeded without the other.

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“What greater form of patriotism is there than the belief that America is not yet finished?”

—President Barack Obama Remarks on the 50th anniversary of the Selma to Montgomery Marches

process of desegregation, the contemporary resentments inherited from our tragic past, and the current ways in which racial conflict erupts in even the most privileged sectors of our society.

m a r i o n p o s t w o lc o t t / l i b r a r y o f c o n g r e s s

So how should we remember the Civil Rights Move-

ment? We should recall it with admiration, attentiveness to its limitations, and renewed determination to further social justice.

Consider the situation in 1950. In the states of the former Confederacy, officials openly and unapologetically hailed white supremacy as a principle of sound governance. Through fraud, intimidation, and violence, blacks were largely eliminated as voters, jurors, or anything else associated with civic equality. White supremacists consigned blacks to public institutions, including schools and hospitals, that were separate and ostentatiously inferior.

In some domains, blacks were excluded altogether. Louisiana allocated to whites 7,000 acres of parkland for recreation. Mississippi allocated 10,972 acres. Texas, 58,126 acres. Those three states allocated to blacks, by contrast, no park facilities.

In the Jim Crow South, judges ordered blacks to be seated apart from whites in courtrooms, and directed that blacks be sworn as witnesses on separate Bibles. Legislation mandated racial separation in privately owned places of public accommodation. The legal system allowed employers to organize worksites at which the highest-paid black employee could earn no more than the lowest-paid white employee.

The South, moreover, was by no means the only region suffused by anti-black racism; the scourge was national. All of Dixie prohibited marriage across the racial lines. But so, too, did Indiana and Colorado, Utah and Wyoming. Blacks faced violence in Atlanta and Birmingham if they moved into neighborhoods that whites perceived as their exclusive turf. But they similarly faced violence if they crossed residential racial boundaries in Detroit, Chicago, or Cleveland.

At that time, there had never been a black presidential cabinet officer or a black Supreme Court justice. Segregationists were congressional barons with the power and inclination to stymie any meaningful civil rights legislation.

They had thwarted even the passage of federal anti-lynching legislation on behalf of members of the armed forces.

In this daunting environment, it took astonishing courage to challenge American pigmentocracy. Lawyers such as Thurgood Marshall, Robert Carter, and Jack Greenberg gathered together every shred of decency found in American law, stitched them into powerful arguments, and threw them against the racial indecencies that thickly coated social life. Scholars such as John Hope Franklin, Kenneth Stampp, and Herbert Aptheker revised inherited thinking—e.g., the myth of the contented Negro, the purported

villainy of Reconstruction, or the supposed inevitability of segregation—producing new, egalitarian narratives and perspectives. Polemicists such as James Baldwin, Murray Kempton, and I.F. Stone put racism on the defensive. Crusaders such as Diane Nash, John Lewis, and Stokely Carmichael engaged in Freedom Rides to exercise, in action, rights that had been declared on paper. Managers of dissent such as Roy Wilkins, Whitney Young, and James Farmer created an institutional infrastructure that enabled protest to continue despite the vagaries of individuals.

Countless people, remarkably, persisted in demanding racial justice even after it became frighteningly clear that premature death might be the price of their advocacy. Harry and Harriette Moore, effective organizers on behalf of the Progressive Voters’ League, were killed in Mims, Florida, in a bombing of their home on Christmas night 1951, which also happened to be their 25th wedding anniversary. Rebuffing orders that he quit urging blacks to vote, Reverend George Lee was shot to death near Belzoni, Mississippi, on May 7, 1955. Vernon Ferdinand Dahmer, a wealthy black businessman, offered to pay the poll taxes for anyone otherwise eligible who sought to register to vote.

After a radio station disapprovingly publicized his offer, he was killed when his home was firebombed in Hattiesburg, Mississippi, on January 10, 1966.

The accomplishments of the Civil Rights Movement have been massively consequential. The movement de-legitimated legal segregation. Thanks to Brown v. Board of Education and its sequelae, no government in America can lawfully separate people on a routine basis on account of race. The movement extended anti-discrimination requirements to private activities outside the reach of federal constitutional standards. Title II of the Civil Rights Act of 1964 prohibits racial discrimination in privately owned places of public accommodation such as hotels and restaurants. Title VII of that act prohibits racial discrimination in much of the private labor market. The movement also uprooted many of the practices that prevented blacks from voting. The Voting Rights Act of 1965 suspended literacy tests and similar easily abused devices in states and counties—the so-called “covered jurisdictions”—where racial disenfranchisement had

In the Jim Crow South, legislation mandated racial separation in privately owned places of public accommodation, like this movie theater in Leland, Mississippi.

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been most pervasive and entrenched. The law required covered jurisdictions to seek permission from federal authorities before making new changes in voting procedures. (It is this provision of the act that was invalidated by the conservative wing of the Supreme Court in Shelby County v. Holder). The act also authorized federal examiners to supersede local officials in the event that the latter simply refused to carry out their duties lawfully.

The Civil Rights Movement showed repeatedly the substance of symbolism. The bus in which Rosa Parks was arrested would have taken her to her destination no matter what seat she occupied. One might say that where she sat was “merely” symbolic. But wrapped up in the symbolism of Jim Crow seating was an expression of the state’s view of blacks’ status—a dismal daily lesson that affected the hearts and minds of all who witnessed the degradation of African Americans. By nullifying segregation aboard the buses of Montgomery, Parks and her neighbors struck an important blow for black dignity.

Mary Hamilton, an activist affiliated with the Congress

The protests not only elevated black Americans in the eyes of others; more importantly, the Movement elevated blacks in their own eyes. of Racial Equality (CORE), charged with a minor offense stemming from a demonstration, refused to respond to a prosecutor who insisted upon addressing her by her first name when he had addressed white witnesses by their last names. When a judge ordered Hamilton to answer, she refused, whereupon he held her to be in contempt of court and sentenced her to a jail term, which she served, though the federal Supreme Court subsequently reversed her conviction. Hamilton recognized that etiquette can be vitally important—that sometimes resisting a symbolic affront is worth the risk of imprisonment. She demonstrated that symbolism matters!

Protests of this sort elevated black Americans not only in the eyes of others; more importantly, the protests elevated blacks in their own eyes, producing a turnabout in racial consciousness. In the 1950s, “black” was bad even among African Americans. One Negro could insult another Negro simply by describing him as black. The Civil Rights Movement upended that heavy burden of racial self-loathing.

By the end of the 1960s, blackness had attained a new prestige. Dark-skinned women were belatedly selected as homecoming queens at historically black colleges and universities. Straightened hair gave way to “naturals.” And

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soul brother number one, James Brown, reached the top of the charts with an unambiguous paean to African American racial pride: “Say it loud, I’m black and I’m proud.”

The legislation that arose from the Civil Rights Movement made a huge economic difference. Historian Gavin Wright, in Sharing the Prize: The Economics of the Civil Rights Revolution in the American South, notes that Title VII of the Civil Rights Act affected labor markets dramatically, “breaking down segregation barriers and opening a wide range of job opportunities to blacks for the first time.”

The influence of the Voting Rights Act has been even more striking. More blacks were registered in the South during the five years after its enactment than were registered during the prior century. The momentum continued. In the presidential and congressional elections of 2012, African American voter turnout exceeded white voter turnout in five of the six “covered” states. There has been a 1,000 percent increase since 1965 in the number of black elected officials in those six states. Selma, Alabama, for example, has a black mayor. The ramifications of this change extend, of course, beyond one region. Obama could not have been elected president of the United States without the transformation that the Voting Rights Act both mirrored and reinforced.

The Civil Rights Movement should be a source of pride and inspiration. It should not, however, be the basis for uncritical triumphalism. Even its best leaders sometimes erred or displayed deficiencies in character or sensibility.

The movement was marred by retrograde prejudices in its own ranks. Despite the contributions of Rosa Parks, Septima Clark, Ella Baker, Dorothy Height, Fannie Lou Hamer, and countless other women, no woman was allowed to give any of the major addresses at the March on Washington.

Roy Wilkins, executive director of the NAACP, disliked Bayard Rustin and James Baldwin, not just because they were radical, but because they were gay. King put himself and his associates in jeopardy by recklessly carrying on extramarital affairs that gave his enemies ammunition with which to intimidate him. That they failed is partly due to sheer luck. After magnificently challenging racism in the most dangerous precincts of the Deep South, Stokely Carmichael and his colleagues in the Student Nonviolent Coordinating Committee (SNCC) succumbed to the impatience, stupidity, and hubris that gave rise to the Black Power slogan, which mischievously vexed the movement from 1966 onward. Nothing in the history of the civil rights era is more doleful than SNCC’s descent. It began as an organization open to anyone committed to challenging racism through defiant, dignified, peaceful protest. It ended as a clique of narrow-minded, blackerthan-thou ideologues who, having gotten rid of all the white members, proceeded to turn on one another.

Another cautionary lesson can be derived from the story

u n i t e d s tat e s i n f o r m at i o n a g e n c y

of the Black Panther Party. Its founders, Huey Newton and Bobby Seale, rightly perceived police misconduct to be a major problem in black neighborhoods and aggressively sought to address mistreatment, by policing the police.

Unfortunately, the Panthers discredited themselves with obnoxious rhetoric (“Off the pigs!”) and a hankering for association with third-world dictatorships (Mao, Ho Chi Minh, Castro). The Panthers also naïvely underestimated their enemies, dabbling with provocative gestures that gave police—local, state, and federal—all of the cover needed to rationalize a brutal campaign of repression.

We should, by all means, recall the reformers who conducted themselves admirably in ways that beckon emulation. However, we need to remember, too, the bad behavior.

The Civil Rights era teaches yet again that oppression provides to victims no magical inoculation against vice, thoughtlessness, and bigotry.

The movement did not always succeed, even in its heyday. Movement lawyers failed to protect protesters from judicial impatience when polite forms of dissent gave way to dissent of a more assertive variety. Martin Luther King Jr.’s “Letter from Birmingham Jail” is now an iconic defense of civil disobedience. When the Supreme Court got around to deciding the legitimacy of King’s jailing, however, it ruled against him even though the local repressive court order he had disregarded was patently unconstitutional.

Civil rights activists were unable to protect their movement from racist terrorism. A stark indication of this vulnerability was the martyrdom of such figures as Viola Liuzzo, James Reeb, Jonathan Daniels, Andrew Goodman, Michael Schwerner, James Chaney, and, of course, King. Activists were also unable to prevent law enforcement authorities from encroaching surreptitiously upon their leaders and organizations.

Movement advocates failed to create a consensus that overcoming racial injustice and alienation requires not only prospective prohibitions against invidious discrimination, but positive discrimination to remedy the effects of past wrongs, to counteract present but hard-to-identify racial mistreatment, and to facilitate integration. A consequence of that failure has been the long-embattled status of affirmative action. Its opponents often stress that leading racial liberals of the 1960s abjured the idea of positive discrimination favoring racial minorities; those liberals often denounced such initiatives as “reverse discrimination.” With racism still prevalent, the backlash against affirmative action is now in full swing.

The record of the Civil Rights Movement, then, is mixed.

As Professor Tom Sugrue aptly observes, it “is full of paradoxes and ambiguities, of unfinished battles and devastating defeats.” How successful was it? The answer depends on the baseline of measurement. Viewed through the prism

of King’s most ambitious demands, or Malcolm X’s ultimatums, or the agenda of the Black Panther Party, or the reversals being experienced today at the hands of reactionary legislators and courts, the movement’s accomplishments may seem transient and disappointing. On the other hand, viewed through the prism of the demands voiced in the important anthology What the Negro Wants (1944) or the report of President Harry S. Truman’s Committee on Civil Rights (1947), or the protests in Montgomery (1955), Birmingham (1963), and Selma (1965), the movement’s achievements appear much more impressive.

In my view, the Civil Rights Movement is one of the most inspiring examples of mass dissent in world history.

It typically sought worthy ends, fought for those goals with high intelligence and laudable ethics, and succeeded in

attaining major reforms that continue to benefit American society. The limitations of its achievements are evident.

With respect to practically every indicator of well-being, a substantial gap continues to separate blacks and whites.

Narrowing these gaps is a daunting enterprise. We can, however, take heart from what our forebears were able to achieve. The memory of the movement’s history, like all history, will remain contested. But if we are to continue to pursue the movement’s unfinished business, we need to remember accurately what cannot be denied.

Solidarity: The March on Washington of August 28, 1963, brought together civil rights and labor activists.

On the day he was killed, MLK was in Memphis to advance the conditions of sanitation workers.

Randall Kennedy is a contributing editor and board member of the Prospect and professor at Harvard Law School. His several books include The Persistence of the Color Line: Racial Politics and the Obama Presidency.

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A Radical Pope Francis has challenged the Catholic Church. How much can he change it?

T

he philosopher Michael Walzer argues that a passionate approach to politics is always risky, but its hazards “cannot be avoided altogether, unless one gives up the hope for great achievements.” This quest for greatness ends, he adds, “when conviction and passion, reason and enthusiasm, are radically split and when this dichotomy is locked onto the dichotomy of the holding center and the chaos of dissolution.”

Whether or not Pope Francis has read Walzer, this passage offers a key to the success of his papacy and to the astonishing popularity he enjoys around the globe. The pope is not conflicted: His convictions are harnessed to a powerful passion for a merciful God, and he reasons his way to an infectious enthusiasm for life, love, and justice.

But even more important is his rejection of fear—fear that modernity has called forth an onslaught of secularism that threatens to undermine Christianity’s cultural and social role, and fear that Catholicism itself is endangered by these larger forces that might have worked their way into the Church in the name of reform. Francis emphatically does not worry too much about the center failing to hold. He does not court chaos, but he certainly believes in the saving power of surprise.

“If the Church is alive, it must always surprise,” he said in 2014 on Pentecost Sunday. “A Church that doesn’t have the capacity to surprise is a weak, sickened, and dying Church. It

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should be taken to the recovery room at once.”

Michael Gerson, the conservative columnist who writes frequently about social justice, has called Francis a “troublemaker.” He meant it as a compliment.

“Be Not Afraid” was one of Saint Pope John Paul II’s signature exhortations, and it certainly captured his buoyant personal spirit and his fearless opposition to communist dictatorship in Poland. Yet his papacy and also Pope Benedict XVI’s were rooted in a strategy of consolidation and restoration that reflected deep alarm over what had happened to the Church, and what was happening outside its doors.

Theirs was a plausible approach if one assumed that the Church’s central task was to preserve its “deposit of faith” at a time of growing doubt. If those assumptions were true, Catholicism’s obligation was to be “countercultural” in offering an antidote to the acids of modernity and in establishing a community of uncompromising believers who would hold fast to the institution and to the truths it taught. In the West especially, this might lead to a smaller church in the medium term. But by being tough-minded and coherent, the Church would put itself in a better position to evangelize and prosper again in more congenial times. Not for nothing did Cardinal Joseph Ratzinger take the name Benedict—after an earlier pope but also after the saint who founded the religious order that bears his name. Pope Benedict explained that Saint Benedict’s “life evokes the Chris-

jeffrey bruno

By E.J. Dio nne

Pope Francis at the canonization of Popes John XXIII and John Paul II last April.

Spring 2015 The American Prospect 87

tian roots of Europe.” Europe, he believed, was straying far from its Christian underpinnings.

Pope Francis’s Catholicism is also “countercultural,” but in an entirely different way.

What he preaches is decidedly out of tune with the messages of advertisements bombarding contemporary men and women, particularly in the wealthy nations; with the direction of economic globalization; and with a culture of instant gratification—and instant profit. Like his predecessors, he sees the Catholic Church, whose roots long predate the Enlightenment, as necessarily in a dialectical relationship with modernity. It criticizes it and learns from it, but never capitulates to it.

The contrast with his predecessors comes partly in Francis’s less gloomy outlook on the Church’s relationship to our time. He has spoken out against “querulous and disillusioned pessimists,” and is certainly the only pope ever to take people to task for being “sourpusses.” As the columnist Mark Shields has observed, in a Church and a world often divided between those who hunt heretics and those who look for converts, Francis is resolutely a convert-seeker. He seems to be speaking especially to those who identify with Kanye West’s plea: “I want to talk to God, but I’m afraid ’cause we ain’t spoke in so long.”

When it comes to his own institution, Francis most emphatically rejects the idea that “the holding center” should be his priority. On the contrary, Francis sees “the center,” including the Vatican itself and the traditional ways of the Church’s leaders and priests, as in great need of great reform. He speaks of “a conversion of the papacy” itself and has argued that “excessive centralization, rather than proving helpful, complicates the Church’s life.”

If you didn’t know he was the pope,

you’d assume Francis was anticlerical. He has argued that “the spirit of careerism” in the Church “is a form of cancer.” He scores the “theatrical severity and sterile pessimism” and the “funereal face” of those who exercise power in the Church. He has warned against the pursuit of “an exaggerated doctrinal ‘security,’” and has criticized “those who stubbornly try to recover a past that no longer exists.” He sees the Church not as a throne from which to judge sinners but as a refuge for them, “a field hospital after battle.”

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Who ever imagined a pope would use the words “Who am I to judge?” Many of us thought that is what popes do for a living. The quickly famous line won him the broad affection of gays and lesbians even though he has yet to alter a comma in the Church’s formal teaching on homosexuality.

He called for a Church that is “bruised, hurting and dirty because it has been out on the streets.” If Francis is declared a saint someday, he might become the patron of community organizers.

The pope has backed up his words with actions that point down a new path. He tossed away the trappings of piety and might, disdaining the ornate regalia that appeal to so many prelates. The joke in Rome was that as priests got on board with the new Pope’s program, many lacy surplices went on sale at steep discounts on eBay. He gave up the papal apartments and is known to treat the Vatican staff more as co-workers than employees.

On his first Holy Thursday, Francis washed the feet not of the usual group of priests gathered at St. Peter’s or another basilica, but of a dozen young people being held at a juvenile detention center, including two women and two Muslims. In the foreword to Elisabetta Piqué’s biography of Francis, Cardinal Seán O’Malley, the Archbishop of Boston and a close Francis adviser, noted that this act scandalized many traditionalists, much as Jesus’s original washing of the Apostles’ feet stunned them. The pope, O’Malley said, “replicated the surprise and shock of the apostles even as he dismayed those who preferred the stylized liturgy in a Basilica.”

And, yes, Francis also declared that Jesus Christ has redeemed everyone, “including atheists,” even if the atheists might insist they are not interested and many theological conservatives might be horrified at the suggestion of salvation without conversion.

Francis has captured the world’s imagination. Global polling finds his popularity to be nearly universal. He is certainly loved in the United States. A recent Pew survey measured his favorable rating among Americans at 70 percent; only 15 percent had an unfavorable view. (Among Catholics, his favorability hit 90 percent.) Intriguingly, American liberals gave Francis a slightly higher favorable rating (74 percent) than conservatives (67 percent).

This was certainly something new for a pope.

The perception shared across the dividing lines of politics, philosophy, and theology is that the first Latin American and first Jesuit pope is moving the Catholic Church in a progressive direction. This is certainly true by many measures, but it is also incomplete.

A strong case can be made that Francis

is not a liberal but a radical. His radicalism is obvious in his pronouncements on the injustices of capitalism, which please so many on the left.

But Austen Ivereigh, whose recent biography is subtitled “Francis and the Making of a Radical Pope,” takes the R-word in a direction that is not, shall we say, universally associated with liberalism or the left. “Francis’s radicalism,” Ivereigh writes, “is born of his extraordinary identification with Jesus after a lifetime of total immersion in the Gospel and mystical prayer.”

Any attempt to come to terms with who Francis is and what he is doing must bear Ivereigh’s observation in mind. It is a reminder that the pope is motivated primarily by his relationship with Jesus Christ and his faith in a God of mercy. “If you understand that preaching a God of mercy is central to his ministry,” said the Catholic writer Michael Sean Winters, “everything else falls into place.” Much of the discussion of Francis understandably relates to his political views, to his recasting of the Church’s leadership around the globe, and to what is in many ways a break with the last 35 years of Church history. Yet his profound spirituality, of an old-fashioned sort rooted more in popular devotion than in high theology, is central to everything about him. When he takes on “the individualism of our postmodern and globalized era,” he is speaking about more than just economics. And when he describes “a vacuum left by secularist rationalism,” he is reminding us of the Catholic dialectic with modernity.

But neither should his spiritual radicalism be used to downplay how much change he is bringing about, and how he is moving a profound critique of economic injustice to the Church’s center stage. These are other aspects of his radicalism.

He has explicitly denounced “trickle-down” economics by name. It is, he says, a system that “expresses a crude and naïve trust in the goodness of those wielding economic power,” a view

that “has never been confirmed by the facts” and has created a “globalization of indifference.” That conservatives like Rush Limbaugh have declared the pope’s approach “pure Marxism” should not be surprising; yet Francis sent a powerful message when he responded not with defensiveness but with a surprising declaration about the capaciousness of his friendships. “The Marxist ideology is wrong,” he told the Italian daily La Stampa. “But I have met many Marxists in my life who are good people, so I don’t feel offended.”

Lest anyone misunderstand him, he used the interview to give an additional spin to the trickle-down metaphor by way of describing the mystery of economic growth detached from rising wages. “The promise was that when the glass was full, it would overflow, benefiting the poor,” he observed. “But what happens instead is that when the glass is full, it magically gets bigger, nothing ever comes out for the poor.”

Francis worries about not only the market’s injustices, but also its role as the primary source of values and meaning in advanced societies. “We are thrilled if the market offers us something new to purchase,” he said. “In the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.”

And try to imagine an American liberal politician—even Bernie Sanders—who would dare say something like this: “In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.”

“How can it be,” Francis has asked, “that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?”

I have offered only a small selection of Francis’s observations on economic justice but it’s obvious that this cause is central to his papacy.

Yet while he speaks with exceptional passion and urgency, what Francis says is consistent with a long tradition of Catholic social teaching, Both John Paul II and Benedict could be fiercely critical of unregulated capitalism’s injustices. John Paul regularly decried “imperialistic monopoly” and “luxurious egoism,” and he memorialized his friendship with unions and workers in his powerful 1981 encyclical, “On Human Work.” Benedict’s 2009 economic

encyclical, “Charity in Truth,” put him well to the left of Barack Obama. Market systems, Benedict said, needed to be tempered by “distributive justice and social justice.” He condemned “corruption and illegality” in “the conduct of the economic and political class in rich countries,” spoke approvingly of “the redistribution of wealth,” and warned that nations should not seek to become more competitive by “lowering the level of protection accorded to the rights of workers.”

Francis is like his predecessors in another important way: He continues to preach the Church’s opposition to abortion. “Unborn children,” he says, are “the most defenseless and innocent among us.” He insists that the Church’s

Who ever imagined that a pope would use the words, “Who am I to judge?”

Many of us thought this is what popes do for a living. position is not “ideological, obscurantist, and conservative,” but rather is “linked to the defense of each and every other human right.”

So why is Francis’s papacy so different? The key is not only the concreteness and fervor of his language about justice, but also the priority he gives to economic and social questions. He signaled this early on in an interview with Father Antonio Spadaro, published in Jesuit magazines around the world. Here are the words, in English, from the Jesuit magazine America in the fall of 2013, which shook the church, cheered liberals, and alarmed conservatives: “We cannot insist only on issues related to abortion, gay marriage, and the use of contraceptive methods. This is not possible. I have not spoken much about these things, and I was reprimanded for that. But when we speak about these issues, we have to talk about them in a context. The teaching of the church, for that matter, is clear and I am a son of the church, but it is not necessary to talk about these issues all the time.”

He added: “The dogmatic and moral teachings of the church are not all equivalent. The church’s pastoral ministry cannot be obsessed with the transmission of a disjointed multitude of doctrines to be imposed insistently.”

With these words, Francis moved Catholicism decisively away from the culture wars.

His comment about being “reprimanded” was important, too, since conservative Catholics, including key bishops, were unhappy with the papacy’s new focus. They were even more troubled after the interview.

In the American Church in particular, conservative bishops appointed in the John Paul and Benedict years had moved the focal point of public Catholicism away from its longstanding emphasis on social justice and toward what many of them called the “non-negotiable” issues: abortion, euthanasia, embryonic stem cell research, cloning, and gay marriage.

This was a sharp break from where the Church had stood as recently as the 1980s, when Chicago’s Archbishop Joseph Bernardin argued for what he called the “seamless garment” that linked the Church’s opposition to abortion and euthanasia with questions he and his allies argued should also be part of a “consistent ethic of life.” These included opposition to capital punishment, an embrace of economic justice with a “preferential option for the poor,” and a skeptical view of war. The U.S. Conference of Catholic Bishops caused a stir in the mid-1980s with two pastoral letters, one on nuclear war widely seen as implicitly critical of the Reagan administration, and another letter on economic justice that was broadly progressive and even social-democratic in outlook.

Catholic conservatives pushed back then, and they gained considerable ground within the hierarchy in subsequent years as Bernardin-era bishops were replaced by much more conservative appointees. The views of the conservatives were reflected by George Weigel, one of the Catholic right’s leading intellectuals, in his book Evangelical Catholicism, published in 2013, not long before Francis’s election. It was a book for the John Paul–Benedict Era. Weigel has argued that the Church’s public witness should focus on “first principles” and “areas of the Church’s special competence.” He did not place war and peace issues within these parameters. Weigel had taken sharp issue with

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And here, the pope’s status as a son of Argentina and Latin America is key. His radical language about poverty is the language of the progressive wing of the Church in his region. This represents another break with John Paul and Benedict.

In 1968, Father Gustavo Gutiérrez, a Peruvian, wrote a paper entitled “Toward a Theology of Liberation,” urging Christians to take on the economic injustices of Latin America and to battle the privileged. It grew into a book published in 1971. Liberation theology was unapologetically radical and its advocates often found themselves in alliance with Marxists in opposition to right-wing Latin American dictatorships. The repression of the progressive church was brutal. In El Salvador, Archbishop Óscar Romero was gunned down in 1980, and four churchwomen from North America, including two Maryknoll sisters, were killed.

The link between liberation theology and Marxism was certainly troubling to John Paul, a veteran of resistance to the communist dictatorship in Poland, and also to Benedict, a West German who started life as a relative liberal and acknowledged that he—like many

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subsequently neoconservative intellectuals— became more conservative in response to what he saw as irrational and even nihilistic aspects of the student uprising in the late 1960s. John Paul had named Benedict, then Cardinal Joseph Ratzinger, as prefect of the Congregation for the Doctrine of the Faith, the Vatican office that arbitrates orthodoxy.

In 1984, Ratzinger sharply criticized Gutiérrez and criticized liberation theology for its links to Marxism and materialism.

As the leader of the Jesuits in Argentina, Francis, then Jorge Mario Bergolio, was ambivalent about liberation theology—he neither supported nor attacked its advocates— and more radical Jesuits criticized him for

The pope’s status as a son of Latin America is key. His radical language about poverty is the language of the progressive wing of the Church there. failing to come to the defense of two priests sought by the Argentinean junta. (Francis’s defenders insist that he sought to protect rebel priests and the ensuing reporting suggests that he did so.) But as pope, Francis did something quite astonishing in light of the recent past: One of his first acts was to invite Gutiérrez to Rome. They celebrated Mass and had breakfast together. The gesture did not represent a formal revocation of what Benedict had written, but it sent an important signal.

So did the pope’s move to speed the beatification and sanctification process for Romero. It had been blocked. He unblocked it. The importance of this move cannot be overstated.

Leonardo Boff, another liberation theologian condemned by the Vatican in the John Paul years and forced into “penitential silence,” has re-emerged as a staunch defender of Francis. Boff praised Francis as “a pope who comes

from the Great South” and who has a “new view of things, from below.” With this perspective, Francis will “be able to reform the Curia, decentralize the administration and give the Church a new and credible face.”

Boff’s comments speak to the extrava-

gant hopes Francis has inspired. Can he live up to them? He has moved deliberately to reshape the Vatican, to reform a Vatican Bank that had been riddled with corruption, and to appoint new officials sympathetic to his reforms. He has broadened representation from the Third World in the College of Cardinals. He has used his power to appoint bishops to send strong signals to local hierarchies.

The appointment of Blase Cupich as archbishop of Chicago was an especially powerful signal to an American hierarchy that includes many conservatives who have been openly skeptical of the direction Francis has taken.

Inside the Bishops’ Conference, Cupich has been a courageous voice against the culturewar approach championed by so many of his colleagues, and he was as outspoken and candid as any prelate in condemning the crimes committed in the sex-abuse crisis. Breaking with many of his colleagues, he emphasized dialogue rather than confrontation with the Obama administration over the contraception mandate in the Affordable Care Act. In March, Francis followed up the Cupich appointment with another that sent a message, naming Robert McElroy as bishop of San Diego. McElroy has urged the Church to “elevate the issue of poverty to the very top of its political agenda” and has specifically argued that issues such as abortion and same-sex marriage should not eclipse its commitments to economic justice.

Perhaps the clearest sign that Francis’s progressive moves are real and substantive is the pushback he is encountering from conservative prelates. Massimo Faggioli, one of the most important scholars of the changes wrought in the Church by the Second Vatican Council, wrote extensively in Commonweal about the resistance to the new pope’s initiatives inside the Vatican and the Italian Catholic Church. But the unhappiness of the conservatives is no secret, and they began speaking out very early in his papacy.

edgar jiménez

the Church’s opposition to the Iraq War in 2003 and scolded bishops in the process. The Bush White House, he argued, enjoyed the “charism of political discernment,” a gift “not shared by bishops.” Elected officials, he had insisted, were “more fully informed about the relevant facts.”

Weigel did not mention Iraq or who was “more fully informed” in his book ten years later, but he did emphasize “the limits of the social doctrine” and criticized a “lack of discipline in identifying and relentlessly pursuing those issues on which the Church has competence to speak.” Going broader—meaning, in effect, emphasizing the areas related to social justice on which the Church had been historically progressive—“dissipates energies that could be better applied in a more focused way,” Weigel wrote.

Francis’s America interview could only be read as a rebuke to the idea of limiting the church’s witness to the “non-negotiables” and as a rebirth of Bernardin’s “seamless garment” idea. Clearly, Francis does not see his emphasis on economic justice and poverty as a dissipation of his or the Church’s energies.

Francis has captured the world’s imagination. Global polling finds his popularity to be nearly universal. A recent Pew survey measured his favorable rating among Americans at 70 percent.

Archbishop Charles Chaput of Philadelphia, whose city the pope will visit later this year, is one of the most outspoken conservative voices in the Church. In 2013, he said that what he called “the right wing of the church” was uneasy with Francis. “They generally have not been really happy about his election, from what I have been able to read and to understand,” Chaput told the National Catholic Reporter.

Bishop Thomas Tobin of Providence was blunter, declaring himself “a little bit disappointed in Pope Francis,” adding that “he hasn’t, at least that I’m aware of, said much about unborn children, about abortion.”

There is also defiance-in-advance against what conservatives fear will be a strong papal statement on climate change in Francis’s forthcoming encyclical on the environment. It is highly unusual for Catholics to pre-spin against a papal document, but American conservatives who had been down-the-line loyalists to John Paul and Benedict feel no compunction about challenging Francis on issues where he parts

company with the political and economic right.

In January, Robert P. George, a professor at Princeton University and one of the leading intellectual lights of Catholic conservatism, engaged in what might be called papal preemption in a piece for the right-of-center journal First Things. “There is no area of morality in which the papal writ does not run,” George wrote, suggesting he endorsed the same sort of loyalty to Francis that Catholic conservatives had demanded toward Benedict and John Paul. But loyalty in this case came with a magic asterisk. “The Pope has no special knowledge, insight, or teaching authority pertaining to matters of empirical fact of the sort investigated by, for example, physicists and biologists, nor do popes claim such knowledge, insight, or wisdom,” George wrote. “Pope Francis does not know whether, or to what extent, the climate changes (in various directions) of the past several decades are anthropogenic—and God is not going to tell him. Nor does he know what their long-term effects will be.”

Which presumably means that conservatives can dissent to their heart’s content. Liberal Catholics have begun to joke that they are now the true “ultramontanes” preaching loyalty to Rome against conservative dissidents.

And dissent there is. Stephen Moore, a Catholic who is the chief economist at the Heritage Foundation, called Francis “a complete disaster” on public policy who “has allied himself with the far left and has embraced an ideology that would make people poorer and less free.”

John Gehring, the Catholic program director at Faith in Public Life, a progressive group, cited Moore in a recent article on the Faith Street website that made the essential point of why Francis could matter a great deal to American politics—even if the pope is primarily about something other than politics. “The right is rattled,” Gehring wrote, “because a popular pope is shifting the power dynamics in the church and emphasizing priorities that could lead to a different kind of values debate in American politics.”

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If Francis is in many ways radical, there

are limits to how far he wants to go in changing the Church. He has signaled that he will not open the question of allowing women to become priests, though he does seem open to married male priests and has improved the Vatican’s relationship with the American nuns who had been under investigation in the previous pontificate. There are other ways in which he can give women more power and authority in the Church, but this is one issue on which the 78-year-old pontiff is unlikely to be as radical or progressive as many Catholic women might hope.

In a 2014 interview with Corriere della Sera, he was also uncharacteristically defensive and aggressive on the pedophilia question. He insisted that the Catholic Church “is perhaps the only public institution to have acted with transparency and responsibility” and added: “No one has done more. Yet the Church is the only one to have been attacked.” His comments upset advocates of the abused—and many rank-and-file Catholics still angry about the scandal—and the pope has since toughened his approach. Last year, he appointed an eight-member commission on the problem that included four women, one of whom was herself a victim of sexual abuse in Ireland. The commission also included Cardinal O’Malley, known for his efforts at transparency and compassion for victims in a Boston diocese that was badly demoralized by the scandal. Francis now seems to understand far better than when he started how criticial it is, for Catholics of all ideological dispositions, that he get this issue right.

Last fall, at the Synod of Bishops on the Family, a meeting in Rome of bishops from around the world, the pope’s allies were clearly seeking a more conciliatory approach (“pastoral” is the operative Catholic word) to divorced and remarried Catholics, and to gays and lesbians. An initial draft that was strongly welcoming to gays and to the divorced was hardened in its final version, though it still reflected a move in the pastoral direction Francis seems to seek. Francis himself gave a carefully balanced speech in response to the document, which will be discussed for the next year in preparation for a second meeting.

But his openness to change has alarmed conservative Catholics. Ross Douthat, the New York Times columnist, wrote last October that such

changes in practice toward divorced and remarried Catholics “would put the church on the brink of a precipice.” It would “sow confusion among the church’s orthodox adherents” and perhaps even lead to “a real schism.” Douthat, an irenic sort who is not immune to Francis’s charm and simple goodness, softened a bit in an America magazine exchange with Father James Martin, the Jesuit writer. But Douthat’s concern is another marker of the profound nature of the changes Francis is willing to entertain.

For many progressives of a certain age, the model Catholic pope is John XXIII, who called the Second Vatican Council that fundamentally altered the Church’s stance toward

There are limits to how far Francis wants to go. He has signaled he will not open the question of allowing women to become priests. human rights, religious freedom, toleration, and democracy. John’s two encyclicals, “Mother and Teacher” (Mater et Magistra) on the subject of “Christianity and Social Progress,” and “Peace on Earth” (Pacem in Terris) remain touchstones for more liberal Catholics. In one of the magazine’s best-known one-liners, William F. Buckley Jr.’s National Review reflected conservative displeasure with the second document by declaring: “Mater, si. Magistra, no.”

Arguments over the impact of the council raged during the John Paul and Benedict years, with conservatives (notably Benedict) arguing that the “spirit of the Council,” a slogan much invoked by liberals, had wrongly superseded a kind of strict-constructionist reading of the council’s documents. Conservatives often spoke of “reforming the reform.” Liberals saw a retreat from the openness John XXIII had championed, a misreading of its declarations, and an attempt by conservatives to roll back the council’s changes by redefining its meaning.

Thus, one of Francis’s most important signals: his decision to canonize both John Paul II and John XXIII simultaneously on April 27, 2014. At one level, it was a deeply unifying act.

Conservative Catholics—and many others— cheered swift sainthood for John Paul, while progressive Catholics were elated that an overly long process of elevating John to the same status finally reached its culmination. One for one side, one for the other was a good formula for harmony that the Church badly needs.

But more was going on than a quest for unity. Rapid sainthood for John Paul was already seen as inevitable, partly because of widespread devotion to him around the church and not simply in its conservative wing.

But elevating both popes was the best way to signal support for the more progressive reading of the reforms of the Second Vatican Council. It also opened the way for the Church to affirm that John Paul’s greatest achievements—his commitments to human rights, religious liberty, and democracy, as well as a stern opposition to religious prejudice, including anti-Semitism, and an emphasis on social justice and workers’ rights—were all rooted in what John XXIII had started.

By lifting up John, Francis also reinforced the comparisons so many progressives have already made between his papacy and John’s.

Of the earlier pope, the current one once said: “I see him with the eyes of my heart.” What might once have looked like wishful thinking on the part of progressive Catholics for their church’s re-engagement with Pope John’s purposes now seems to be nothing more—or less—than an accurate reading of where the new pope wants to lead.

Pope John once said: “Distrustful souls see only darkness burdening the face of the earth.

We prefer instead to reaffirm all our confidence in our Savior who has not abandoned the world He has redeemed.” Francis, who doesn’t like sourpusses, seems to feel exactly the same way.

E.J. Dionne is a professor at Georgetown University, senior fellow at Brookings, and Washington Post columnist. He covered the Vatican for The New York Times in the 1980s, and his books include Our Divided Political Heart and Souled Out: Reclaiming Faith and Politics after the Religious Right.

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Poised for

Prosperity?

Drawing the right lessons from the past quarter-century B y A l a n S. B l i n d e r

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H

istory doesn’t repeat itself, but as Mark Twain famously suggested, it occasionally rhymes.

About 15 years ago, I partnered with Janet Yellen—who has since gone on to bigger and better things—to write a short book titled The Fabulous Decade. The decade, of course, was the 1990s, or more specifically, the period beginning in 1992 or 1993 and ending in 2000—by common consent the most successful period in U.S. economic history since the 1960s. The questions for this article are whether, how, and to what extent current preconditions and policy settings resemble those that prevailed around President Bill Clinton’s inauguration day, whether the good times are about to roll again, and what policy adjustments may be needed to usher in a new period of prosperity.

At first, these questions may seem preposterous. Having endured the financial crisis, the Great Recession, and the tortoise-slow recovery since 2009, most Americans have lowered their expectations. Few are feeling ebullient about the economy—never mind envisioning a second coming of the Clinton prosperity.

Once you start thinking about it, however, the macroeconomic conditions of 2014–2015 bear several striking resemblances to those of 1992–1993. Which raises a fascinating question: Might another “fabulous decade” be possible? The economic policies pursued in the 1990s were not perfect, but on balance they surely helped make the decade fabulous. More important, they offer lessons about both what we should do and what we shouldn’t do now.

godruma / istock

The Way Things Were—And Are

Not many Americans were happy about their economy in 1992. According to a Wall Street Journal/NBC News poll in September, fully 86 percent of respondents thought—incorrectly—that the country was still in a recession, which may have been the main reason President George H.W. Bush was not re-elected.

Nonetheless, the seeds of future success had been sown, and several of them have striking parallels with today.

For openers, the recession of 1990–1991 had produced significant industrial restructuring. People called it “downsizing” at the time because firms were trumpeting their ability to get by with less labor, but it might have been described more accurately as “survival of the fittest.” Recessions prune the economic trees,

sometimes ruthlessly. Note that such pruning was far more ruthless in the punishing 2007–2009 recession, leaving much of American industry today leaner and probably also meaner than it was in 1991.

Second, though not widely recognized at the time, the U.S. economy was already growing smartly. Over the last three quarters of 1991 and first three quarters of 1992, real GDP grew at an annual rate of 3.3 percent. Speaking about not being widely recognized at the time, how many Americans realize that growth over the last three quarters of 2014 averaged 4.1 percent? And this comparison makes no allowance for the fact that the economy’s underlying growth trend is almost certainly lower now.

Third, even though few people gave Bush and the Democratic Congress much credit at the time, the Budget Enforcement Act of 1990 had started the federal government down the path to smaller deficits—which would become a hallmark of the Clinton administration.

Recent fiscal-policy decisions have looked (and been) both chaotic and hyper-partisan. But the federal budget deficit has plummeted from about $1.3 trillion in fiscal year 2011 to under $.5 trillion (just 2.6 percent of GDP) estimated for fiscal year 2015.

While fiscal policy was tightening in the 1990s, the Federal Reserve under Chair Alan Greenspan had its foot pressed firmly on the monetary policy accelerator. The Fed reduced the real federal funds rate to zero around mid1992 and held it there until February 1994.

More recently, the Fed under Ben Bernanke pushed the nominal federal funds rate down

to zero by December 2008, and it is still there.

Bernanke then followed with trillions of dollars of “quantitative easing” and other measures designed to push down long-term interest rates.

Chair Janet Yellen has (so far) maintained those hyper-expansionary policies, although the Fed is expected to start “exiting” soon.

In 1992, all of these factors—industrial restructuring, strong growth, fiscal consolidation, and easy money—were portents of things to come. Might history be poised to rhyme?

Perhaps the signal achievement of the 1990s was the Fed’s “soft landing.” A central bank is said to achieve a soft landing when, as in the Goldilocks tale, it tightens just enough—not too little, and not too much—to “land” the economy at full employment without pushing inflation either too high or too low. It’s an elusive goal, rarely achieved, but the Federal Reserve accomplished it in 1994–1995.* By the end of 1995, the unemployment rate was 5.6 percent, inflation was around 3 percent, and real GDP growth was running around 3.25 percent. At the time, that looked pretty close to perfect. Today, Yellen and the Federal Open Market Committee (FOMC) are seeking to engineer another soft landing—this time with unemployment near 5.25 percent and inflation near 2 percent. How well they do over the next few years will be crucial to America’s economic health.

The shift toward smaller budget deficits, which started under the first President Bush and continued and strengthened under Clinton, also bears emphasis. Proposing and eventually enacting the Omnibus Budget Reconciliation Act between February and August of 1993 induced a strong bond market rally that brought the 30-year Treasury bond rate down more than 160 basis points, stimulating the economy in the process. By contrast, President Barack Obama’s American Recovery and Reinvestment Act of 2009 pushed fiscal policy toward stimulus. But sometime in 2010, U.S. fiscal policy debates switched toward restraint even as monetary stimulus intensified. Interest rates have since dropped to historic lows. So in *In fairness, I should point out that Yellen and I were both on the Fed’s Board of Governors at the time.

So, writing in 2000, we were partly giving ourselves high grades. That said, the judgment that the Fed was hugely successful in 1994 –1995 is widely held.

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terms of the fiscal-monetary policy mix, there is a certain resemblance between 1992–1997 and 2010–2015: tight fiscal policy and easy money. One obvious difference, however, is that with long-term rates already so low, there is no prospect of spurring the economy with another bond market rally.

In that 2001 book, Yellen and I also discussed a series of favorable supply shocks from 1995 to 1998 that helped the U.S. economy grow faster without rising inflation. Without going into details, they were: ■ a sharp moderation in health-care inflation in 1994–1995; ■ declining oil prices in 1997–1998; ■ a tech boom, centered on new information and communications technologies, which raised the productivity growth rate starting in 1995; and ■ a rising dollar for most of the period.

Except for productivity growth, which has been miserable of late, the parallels here are striking. Health-care prices have been in remission for years now; they have stopped inflating faster than other prices. The price of oil fell nearly 50 percent between June–July 2014 and February 2015. The value of the dollar has been rising. Each of these developments is disinflationary. Indeed, the Fed’s current concern is whether inflation is falling too low.

Favorable supply shocks permit economies to achieve some combination of slower inflation and faster growth—the precise opposite of stagflation. As growth accelerated and unemployment fell from 1996 to 1999, but inflation did not rise, the Greenspan Fed took most of the gains in the form of higher growth and more jobs rather than in lower inflation. This aspect of history seems likely to be repeated, at least partially, since the Fed today wants inflation to rise, not fall. In principle, the Fed should take more than 100 percent of the gains from recent supply shocks in the form of more jobs. Consistent with that, the FOMC has stated that it will be “patient” about raising rates and would welcome a modest overshoot of normal full employment.

It also helps to have a stock market boom, which Clinton certainly enjoyed, especially in the last two years of his presidency. But remember that while the Clinton prosperity did get extra “legs” from the Internet bubble

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The seemingly inexorable upward climb of income inequality came to a halt during Clinton’s second term, mostly due to tight labor markets. of 1998–2000, the economic boom predated the stock market bubble. Of course, the Clinton boom ended soon after the stock market crashed. Obama has also presided over a huge rise in stock prices, which hit rock bottom early in his presidency. Whether the stock market is now “bubbly” has been under debate for several years. We’ll see. But it is important to remember that, while the stock market crash that started in 2000 destroyed a great deal of wealth, its impact on the national economy was minor. In particular, not a single major financial institution failed, and the mini-recession of 2000–2001 was short and shallow.

In the 1990s, a happy combination of rapidly rising tax revenue (fueled partly by higher tax rates, but mainly by faster growth and huge capital gains) and spending restraint (based on the highly partisan 1993 budget law and subsequent bipartisan agreements) brought the federal budget deficit down from $290 billion in fiscal year 1992 to approximate balance in fiscal year 1997 and then to a stunning $236 billion surplus in 2000—a swing of 6.8 percent of GDP. While that looks like “fiscal drag” of nearly a percentage point of GDP per year, a great deal of it reflected the economy’s strength rather than restrictive fiscal policy. By comparison, the federal budget deficit declined by 5.3 percent of GDP between fiscal years 2011 and 2015 (as currently estimated). That’s a faster pace of deficit reduction than in the 1990s despite far less robust economic growth. Many

observers, including me, think fiscal drag after 2011 was excessive—and is one major reason why the recovery in GDP was so slow.

Since my interest here is in parallels between the 1990s and today, I should add one more item to the list, even though Yellen and I ignored it in our book: The seemingly inexorable upward climb of income inequality came to a halt during Clinton’s second term.

For example, the Gini coefficient for U.S. household income—a summary measure of inequality—rose almost every year from 1980 to 1994, and again from 1998 to 2012, but it was unchanged between 1994 and 1998. Why? Part of the interruption—probably a minor part—can be attributed to some egalitarian policies pursued by the Clinton administration, such as an increase in the progressivity of the income tax and a huge expansion of the Earned Income Tax Credit. For example, using a better measure of poverty than the official one, a team of poverty researchers at Columbia University estimated that, between 1993 and 2000, poverty fell by 5.5 percentage points, of which only 1.3 points were due to more generous tax-transfer programs. Based on that estimate and on past evidence that inequality rises in slumps and falls in booms, most of the pause in inequality was probably due to the extraordinarily tight labor markets of the later Clinton years. I mentioned earlier that 1995 ended with the national unemployment rate at 5.6 percent, which was widely believed to approximate full employment at the time. But

by December 1997, unemployment was down to 4.7 percent, and by December 1999, it was just 4.0 percent. In fact, the unemployment rate hovered in a tight range around 4 percent for the 19 months from August 1999 through February 2001—the only 4 percent unemployment period since the late 1960s.

Tight labor markets have many positive side effects, including higher real-wage increases.

One of them is that they reduce inequality. The reasons are hardly mysterious. As labor becomes scarcer, employers find job vacancies harder to fill. So they start pursuing potential workers more aggressively, even training them as needed.

Because firms get less choosy, employment and wage prospects for people on the lower rungs of the job ladder improve. Consider this one striking indicator: The employment rate of never-

married mothers with a high school education or less leaped from 51 percent in 1992 to 76 percent in 2000 (and fell thereafter).

The tight labor markets of the late 1990s offset powerful centripetal forces that had been widening income disparities since the late 1970s. But those forces regained the ascendancy once slack returned to labor markets, and inequality has been rising ever since. Looking forward, a major question is whether the U.S. labor market will tighten sufficiently to act as a check on rising inequality. That hasn’t happened yet, but it’s possible.

to inflation-only, like the European Central Bank’s. We should emulate them?

Fifth, what is normally called a f iscal contraction—higher taxes and/or lower spending—need not slow the economy. One possibility is that monetary easing offsets the fiscal contraction. Another is that the exchange rate depreciates and exports boom.

A third is that fiscal consolidation might kick off a bond market rally. Unfortunately, none of these scenarios are plausible today. The Fed is looking to tighten monetary policy, the dollar is appreciating, and bond rates are already extremely low.

Lessons from the Fabulous Decade

Yellen and I concluded our book with five lessons for macroeconomic policy-makers.

Many, but not all, of them appear to be relevant today. Listed briefly, they were as follows (with updates to the current situation): First, a mix of tight fiscal policy and easy monetary policy can produce a pro-investment environment based on low real-interest rates.

We have that mix today.

Second, well-designed fiscal rules can constrain government spending, as happened in the 1990s. Federal spending has also been tightly constrained since 2010, though I doubt anyone would call the methods “welldesigned.” If there has been any progress toward a more rational fiscal policy, it’s been well hidden.

Third, it is at least possible to “fine-tune” the macroeconomy—as Greenspan appeared to do successfully. Given (a) the depth of the Great Recession, (b) the spectacle of hyper-partisan fiscal policy, and (c) the fact that the Fed is now more or less out of ammunition, I’m not sure anyone sees fine-tuning as possible now.

But Yellen, the current tuner-in-chief, surely remembers the 1990s.

Fourth, a dual mandate—for low inflation and low unemployment—helps the central bank produce better macroeconomic outcomes.

If any doubts about this survived the 1990s, the contrast between growth in the United States and stagnation in the Eurozone since the Great Recession should have dispelled them. I do not mean to imply that different central-bank mandates is the only reason why the U.S. has outperformed Europe. But I am amazed every time I hear calls to change the Fed’s mandate

Did the Clinton Prosperity Lead to Future Problems?

Before proceeding, I should address the criticism, sometimes heard, that many of our subsequent problems were the legacy of the Clinton boom.

Start with the obvious element of truth in the critique: that the tech-stock bubble of 1998–2000 was wild, unsustainable, and bound to end badly—as it did. That’s true.

But, as noted above, the stock market crash appeared to cause only minor damage.

A second potential worry was that the Fed’s experiment with low unemployment was bound to come to grief. Inflationary consequences are delayed, but they do arrive, critics claimed. (Does that sound familiar?) This belief was soundly refuted by the data. The long period of unemployment rates under 5 percent lasted from May 1997 through August 2001, and there was no acceleration of inflation either during or after.

Other critics have attributed the unsustainable housing-price bubble of 2000–2006 to a hangover from the Clinton boom—money frightened away from the stock market allegedly went into housing. This claim conveniently ignores a few pertinent facts. For example, even after the bust, house prices never returned to their 2000 levels, so it wasn’t all illusory.

And the truly horrendous mortgage-lending practices didn’t start until well into the administration of George W. Bush.

Finally, Clinton is sometimes blamed for the lax regulation that led to the financial crisis.

There is a germ of truth here: Not much distance was visible between the Clinton Treasury

and the famously deregulatory Greenspan Fed. But critics who make this claim often focus on the removal of the Glass–Steagall wall between commercial banking and investment banking in 1999. I debunked this idea in my book After the Music Stopped. In truth, virtually none of the bad practices leading up to the crisis were enabled by mergers between commercial banks and investment banks. Virtually all originated with “pure” banks such as Bank of America (at that time) or “pure” investment banks like Bear Stearns and Lehman Brothers.

Mentioning deregulation does, however, bring up the one big time bomb left by the departing Clinton administration: the outrageous ban on the regulation of derivatives in the Commodity Futures Modernization Act of 2000. This amazingly irresponsible action allowed a veritable cornucopia of wild and woolly derivatives to develop and flourish without adult supervision. The rapid unraveling of many of these contracts in the financial crisis was one reason the Great Recession was so great.

Lessons from the Recent Decade

Experience since 2007 has taught us several bitter lessons that the Fabulous Decade did not. The list of possible lessons from the crisis and its aftermath is long, but I would highlight these six: The first is perhaps so obvious that it doesn’t need stating: It can happen here. When the 1990s ended, few people imagined the United States would ever be in danger of returning to depressionary conditions. And that false sense of security was bolstered when the stock market crash of 2000–2003 caused so little harm.

Now we know better. It was a close call.

Second, we now understand that ReinhartRogoff recessions are worse than Keynesian recessions. The two types are not entirely different; they both feature a drop in aggregate demand. But a Reinhart-Rogoff recession includes a serious banking or financial crisis that not only destroys wealth (hence reducing spending) but also destroys portions of the financial system (thereby damaging the economy’s credit-granting mechanisms) and leaves mountains of debt in its wake (thus requiring massive deleveraging). So such recessions tend to be deeper and longer than Keynesian recessions, and to be followed by more sluggish,

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drawn-out recoveries. We now know that the United States is not immune from ReinhartRogoff recessions.

We also know, or rather some of us know, that Hyman Minsky was largely right. I have often heard it said that, prior to the financial crisis, macroeconomists thought finance didn’t matter for the “real economy.” That is about as wrong as wrong can be. But what is true is almost as bad.

The predominant intellectual view prior to the crisis was that financial markets are efficient and self-correcting—if occasionally a bit wild.

The central concepts of finance were therefore equilibrium, rational expectations, and market efficiency. Decades earlier, Minsky had argued against this view—mostly to deaf ears. The central concepts of finance, in his view, should be recurrent cycles of boom and bust enabled by, among other things, myopic financial-market participants with strong tendencies to forget the past and go to extremes.

The efficient-markets hypothesis supported the aforementioned view that little or no financial regulation was necessary—indeed, that regulation was likely to do more harm (e.g., by stifling innovation) than good (e.g., by enhancing safety and stability). Perhaps the most egregious manifestation of this attitude was the ban on regulating derivatives. By contrast, Minsky believed that financial markets need regulatory restraints to enhance safety and soundness. How tight those restraints should be is a matter of continuing debate.

As one specific example, I think most macro­economists were astounded to learn that financial fraud and near-fraud could rise to macroeconomic proportions. Dishonesty has always existed in markets (and elsewhere). But when it came to the national economy, I think most of us thought fraud and near-fraud lived in the rounding error. The subprime-­mortgage crisis taught us how wrong this could be. Here’s something no one would have believed in 2001: The new Consumer Financial Protection Bureau might save us from a future recession.

Implicit in the lessons of the 1990s was the idea that, when it came to managing the macroeconomy, monetary policy was in charge— and would suffice. In the United States, that meant leaving the job to the Fed. The Great Recession taught us that when things get really bad, conventional monetary policy (manipu-

Here’s something no one would have believed in 2001: The new Consumer Financial Protection Bureau might save us from a future recession. lating the short-term interest rate) might be insufficient and might need supplementation from unconventional monetary policy and even fiscal policy. As mentioned above, the Fed had lowered the federal funds rate virtually to zero

by December 2008, but found that near-zero interest rates were insufficient to pull the economy out of the ditch, even with assistance from the large fiscal stimulus of 2009–2010. Since then, the Fed has deployed various combinations of quantitative easing and “forward guidance” (central-bank talk). It has also practically begged Congress to help out with more fiscal stimulus—or at least not to hurt the economy with ill-timed deficit reduction.

What’s Next?

The only honest answer to a question like that, of course, is that nobody knows. And that is my answer. But let me close by indulging in a fantasy exercise. Let’s suppose that, starting about now, the United States were to be blessed with a combination of good luck and good policy, as happened in the 1990s. What would the “good policy” part look like?

It would start with the Federal Reserve executing its exit strategy well enough to get us close to the “perfect soft landing” discussed earlier. This is probably the most important item on my list and, although many things could go wrong, there is a reasonable chance we might get it. If we do, 2016 or 2017 might resemble, say, 1995 or 1996—and Janet Yel-

len will be lionized as Alan Greenspan was.

Next, and closely related, we must achieve and then maintain (at least for a while) labor markets that are tight enough both to yield realwage gains for ordinary workers and to halt the trend toward ever-increasing inequality—all without causing much inflation. Wishful thinking? Perhaps. But we accomplished exactly that in the late 1990s, and today’s slower growth trend makes it easier to “eat up slack.” But, like then, the Fed must not flinch.

Third, because labor’s bargaining power is probably even weaker now than it was in the 1990s, tighter labor markets, while helpful, may not be enough to do the job. If so, we will need some new policy initiatives to combat inequality. The current political environment precludes that, but there’s another election next year.

Fourth, we need to stand guard lest financial regulations (principally, Dodd–Frank) be rolled back. Recent developments on this front are not encouraging—nor is past history. (Remember Minsky.) But we must try.

Frequent use of the presidential veto pen may be necessary.

Finally, and this one really does sound like wishful thinking, Congress needs to get rational, stop slashing the current budget, and start paying more attention to long-run budget issues. Two stand out: too little revenue and too much spending on entitlements. Regarding the former, a carbon tax would be a great choice.

Regarding the latter, returning Social Security to actuarial balance is the easy part; policymakers need to save only about 1 percent of GDP. The giant headache is health-care spending— unless the recent cost moderation persists. Here is one place where we could use some good luck to accompany and support good policy.

All this may seem like an impossible dream.

Perhaps it is. But in 1992, the fabulous decade seemed impossible, too.

Alan S. Blinder is a professor at Princeton University and former vice chair of the Federal Reserve and member of the Council of Economic Advisers. His books include After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead and The Fabulous Decade: Macroeconomic Lessons from the 1990s, which he co-authored with Janet Yellen.

Spring 2015 The American Prospect 99

The High Road Wins

How and Why Minnesota Is Outpacing Wisconsin

By Ann Markusen

M

innesota and Wisconsin offer something close to a laboratory experiment in competing economic policies. Since the 2010 elections of Democratic Governor Mark Dayton in Minnesota and Republican Governor Scott Walker in Wisconsin, these neighboring states with similar populations and economies have pursued radically different strategies. Dayton embraces good government, progressive taxation, and high-wage policies, while Walker has chosen shrunken government, fiscal austerity, and a war on labor.

More than four years later, the two states’ achievements in population growth, jobs, pay, and quality of life offer a clear contrast. Minnesota’s economy has outpaced Wisconsin’s. These results suggest that Walker, in his expected run for president, may have difficulty promoting a “Wisconsin Miracle” as a model for national policy. This story also offers a cautionary tale to newly elected conservative governors like Bruce Rauner in nearby Illinois: An attack on government and workers’ wages is not a prescription either for prosperity or for political success.

While the “experiment” is not perfect—there are minor differences in urban and industrial

100 WWW.Prospect.org Spring 2015

structure between the two states—it is clear that imposing fiscal austerity and undermining residents’ standards of living are not successful prescriptions for economic prosperity. As the presidential election ramps up, the hard economics of these two states offer us evidence on the choice between markedly different futures.

The fall 2010 elections reversed partisan leadership in both states. Minnesotans, after 20 years of independents (Jesse Ventura) and Republicans (Arne Carlson, Tim Pawlenty), elected the Democrat Dayton. Wisconsinites elected Walker, the first Republican governor since 2002. Since taking office in early 2011, both have had to work with bipartisan legislative leadership for some part of their terms.

Minnesota’s Senate and House were Republican-dominated until 2013, when the Democrats won majorities in each. Wisconsin’s legislature has been Republican-led except for the single year of 2012, when its Senate went Democratic by one vote following midyear recall elections.

Both governors have actively used budgetary and administrative policies to achieve their goals. Both were re-elected last November.

Walker’s initial slogan, “Wisconsin Is Open for Business,” conveys his broad view that gov-

ernment should be smaller, deficits are categorically bad, the private sector is the only wealth and job creator, lowering taxes will automatically create jobs, and public-sector employees (and by association, many other workers) are too highly paid, which in turn hurts the state’s economic competitiveness. Walker promised to reduce Wisconsin’s deficit, create 250,000 new jobs in his first term, and get government out of the way of private-sector growth. His policies include reducing regulation generally and fasttracking permitting for new environmentally problematic mining in the state. Walker also proposes to increase tuition at the state university by 13 percent and to change its mission from broadly educating the citizenry to serving the labor-market needs of business.

By contrast, Dayton’s gubernatorial agenda has been solidly liberal. As he did while serving as U.S. senator from 2001 to 2007, Dayton embraces an activist government role, believing that well-run programs supporting education, infrastructure, fair and healthy workplaces, health care, progressive taxation, and a social safety net not only benefit Minnesota businesses and families but nurture economic prosperity.

While Dayton supported a popular and

The Politics of Offense and Defense successful campaign for a higher statewide minimum wage, Walker opposed any increase.

Dayton supported the Affordable Care Act and developed a state exchange, while Walker refused an initial $38 million in federal funds to set up a Wisconsin exchange and $11 million to improve Medicaid enrollment, also rejecting federally funded expanded Medicare coverage for the state. (On health care alone, Dayton’s embrace of Obamacare has brought new federal dollars that are spent almost fully within the state, creating good-paying health-sector jobs.)

On another front, Walker successfully fought teachers’ unions, while Dayton led an increase in teachers’ salaries paired with reductions in class size, which proved a stimulus to the Minnesota economy.

In sum, Minnesota’s policies on wages, health care, and unionization have improved the quality of life for large numbers of state residents.

Outpacing Wisconsin, Minnesota’s jobs and pay have expanded, and health care and education have improved. Dayton’s progressive taxation has not scared off business, but has funded better public services, besting Walker’s fiscal strategy of regressive tax cuts and deficit reduction. It’s worth a closer look to see why this was the result.

Ideology versus Smart Economics

To appreciate why the high road delivers better outcomes, consider the fallacies in several conservative assumptions about the way regional economies work.

Good Government and Business Climate.

Walker’s approach presumes that government spending financed by progressive taxes is necessarily a drag on the economy. But if government programs improve business viability by efficiently providing services such as infrastructure (rail, highway, airports) and competent regulatory oversight, they contribute to job creation and prevent out-migration to lower-cost regions. If government support of K-12 and higher education results in bettertrained workers, more jobs will be created and maintained. If corruption is kept to a minimum, which arguably is the case in Minnesota compared to most other states (including Wisconsin, where close associates of Walker are under indictment), the competitive private sector will thrive. Minnesota, for instance, experienced less of the phony real estate boom

b y Sam R o s s - B row n

U

ntil very recently, the political cultures of Minnesota and Wisconsin seemed pretty much in step. In the 1930s, both Minnesota’s Farmer-Labor Party and the Progressive Party of Wisconsin anticipated the New Deal with their own brands of progressive populism. After World War II, both states shifted to the right as Farmer-Labor joined the Democrats and Wisconsin, more drastically, traded Fighting Bob La Follette for Joseph McCarthy in the Senate. Yet by the following decade, senators like Wisconsin’s Gaylord Nelson and Minnesota’s Hubert Humphrey led the charge in Washington, D.C., for environmental protection, civil rights, and an expanded social safety net.

Since then, both states have become reliably blue strongholds in federal races and each has had about the same number of Republicans and Democrats in the governor’s office. The two states’ progressive streak in Congress has been kept very much alive by the careers of Senators Paul Wellstone and Russ Feingold, and more recently, Al Franken and Tammy Baldwin.

But in the past few years, the states’ political pathways have started to diverge—sharply. While Minnesota has once again become a progressive laboratory under Governor Mark Dayton, passing landmark legislation on marriage equality, minimum wage, and progressive taxes, Wisconsin has veered in the opposite direction. Republican Governor Scott Walker has enacted voter ID, rejected Obamacare funds, and seriously undermined workers’ rights statewide. What gives?

“Scott Walker was a great organizer for progressives back in 2011,” says Matthew Rothschild, then-editor of The Progressive, a venerable Madison-based magazine.

After Walker introduced his Budget Repair Bill that February—the one that stripped most public employees of their collectivebargaining rights—protests began growing exponentially. “Four days after the bill was introduced, there were five or ten thousand people there, and by Saturday there were 50,000,” says Rothschild. “By the next Saturday there were 100,000.”

The capitol occupation, numbering more

than 150,000 within just a few weeks, was the largest mass mobilization in Wisconsin’s history. Organizers began thinking bigger.

At a February meeting, Wisconsin’s South Central Federation of Labor, representing more than 30,000 clerical and blue-collar workers in and around Madison, voted to consider organizing a general strike. “I’d never heard the words general strike uttered in public before,” says Rothschild.

The general strike never happened. By March, leaders in the state Democratic Party and the AFL-CIO began pushing the movement toward recalling Walker as well as some of the legislators who had voted for the Budget Repair Bill. By April, the mass protests had dwindled. At one point during a rally in March, Democratic state Senator Jon Erpenbach reportedly told a crowd of 200,000 to go home and “work on the recall.”

At first, the recall campaign made an impressive showing. Within a few months, organizers had collected more than one million signatures statewide—nearly eclipsing the 1.1 million votes earned by Walker in the 2010 election. “It was a huge, organic movement of people who were out there collecting recall petitions, collecting signatures, downloading the forms online,” says Jennifer Epps-Addison, an organizer with Citizen Action of Wisconsin.

But the decision to push for a recall also exposed critical divisions between activists on the ground and Democratic Party leaders.

“You have to understand that this occupation was really led and started by young people, students, and rank-and-file activists,” says Epps-Addison. “But once the nation’s attention was focused in, that’s when more traditional organizations began to get involved and in some ways began to dictate strategy.”

Among those more traditional organizations was the state Democratic Party, which pushed for a primary and for a candidate, Tom Barrett, who seemed to please no one.

As mayor of Milwaukee, Barrett had butted heads with the state’s National Education Association affiliate over a proposal to put the city’s school system under his control. A month before the recall petition drive ended, the NEA affiliate, along with the Wisconsin

Spring 2015 The American Prospect 101

State Employees Union, formally asked Barrett not to run. When he refused, both unions backed Dane County Executive Kathleen Falk in the primary, but Barrett went on to defeat her by a resounding 24 points. The primary put Democrats in exactly the same position they’d been in some 18 months before, when Walker faced Barrett in 2010.

Barrett, says Epps-Addison, had little to say about the concerns of the activists who had forced the recall in the first place.

“When it came to actually running that election, we weren’t able to actually tap into that energy,” she adds. “We ran away from the economy, which at the time should have been the biggest issue.”

Yet it’s not clear whether a more left-wing candidate would have appealed to voters who weren’t part of the state’s progressive movements. Polling among independents showed growing support for Walker in the months leading up to the recall.

And progressives weren’t just up against Walker. They were up against a political system that tipped in Walker’s favor from the moment he was first elected. While activists were collecting signatures for the recall, GOP legislators were busy giving their state districts an unprecedented makeover. According to research by the Journal Sentinel’s Craig Gilbert, the new map completely eliminated competitive districts in the region surrounding Milwaukee while creating dozens of new districts that tilted more Republican than Wisconsin as a whole. In the 2012 presidential race, 56 of Wisconsin’s 99 Assembly districts voted for Mitt Romney, while Barack Obama carried the state by a full seven points. The new map means Republicans don’t have to worry about going too far to the right on hot-button issues, like say, right to work, which the legislature passed in March. Even if Barrett had won in 2012, he would have faced an entrenched GOP majority with the state capitol in its pocket.

To be sure, Wisconsin voters have not suddenly become the most conservative in the country. Over three separate elections, Scott Walker has never won the state with more than 53 percent of the vote, while Obama has carried the state twice and Badger voters elected Democrat (and lesbian) Tammy Baldwin to the Senate in 2012. But in nonpresidential elections, Democrats and progressives have lacked the organizational power and stra-

102 WWW.Prospect.org Spring 2015

tegic vision to overcome a Republican machine and a political system tilted in its favor.

“Typically when we think of coalitions,

we think of a big table with a bunch of organizations who all care about the same thing and are interested in doing the same thing,” says Dan McGrath, executive director of TakeAction Minnesota. “Well look,” he adds pointedly. “That form of organization is designed to play defense.”

About a decade ago, progressive organizers in Minnesota had a different idea.

Recognizing the need for a broad-based, but also deeply organized, progressive alliance, leaders of Progressive Minnesota and the Wellstone-era Alliance for Progressive Action began holding regular meetings.

What they aimed for was a coalition based less on immediate goals and more on deeply shared values—an organization that could develop a long-term political infrastructure and then fight for change on its own terms.

It was a particularly dark time for the Minnesota left. Wellstone’s 2002 death had left an indelible scar on the state’s progressive movement, while his successor in the Senate, Republican Norm Coleman, positioned himself as a staunch Bush ally. At the same time, Republican Governor Tim Pawlenty—no Scott Walker, but bad enough—pushed through a conceal-and-carry law and cut funding for education and social programs. Michele Bachmann was ascendant. Republicans began to talk of Minnesota as a swing state.

In order to counter the Republican takeover, says McGrath, organizers realized they had to look beyond Coleman and Pawlenty and toward larger issues of economic and racial justice in the state. They started to ask themselves what they wanted their state to look like and how they could get there in the long term. “The way this type of coalition is constructed is very different,” he says. “It’s really about aligning around shared values— a shared vision. And really respecting the unique strengths of different organizations around the table.”

Within a few years, that table included groups like CTUL, a workers’ center; ISAIAH, a faith-based community coalition; and Neighborhoods Organizing for Change (NOC), a former ACORN chapter dedicated to racial justice. The coalition’s increasingly broad

than most other states in the mid-2000s, and recovered more quickly and sustainably during the Great Recession.

The Value of a Living-Wage Economy.

Walker’s strategy assumes that decent wages must raise costs to entrepreneurs and discourage businesses and job creation. Yet a 2013 study by John Schmitt of the Center for Economic and Policy Research that summarizes economists’ research on bordering states where one raises the minimum wage and the other does not found no reliable evidence of net job loss in the former. Why? Because workers at the low end of the pay scale spend almost all of their income, fast and locally.

Employers adjust in other ways—by using employees more efficiently, by modestly lowering their profit take, or by small increases in product and service prices. Opposing trade unions runs the same risk. Lower paychecks mean less consumer spending in a state, so that wage cuts and stagnation trickle down to hundreds of thousands of retail and service businesses. And contrary to theory, lower wages do not necessarily induce employers to hire more workers. If low-wage workers are a paramount goal for a business that is mobile, it can move south, or to Asia. Most service businesses—hospitals, retailers, restaurants, day-care providers—need to be close to their customers, and their competitors all face the same small wage-bill hike.

Accepting or Disdaining Federal Money.

New federal funding for health care can be a boon to local economies. A refusal to take federal money for expanded Medicaid and health-care coverage under Obamacare has the opposite effect. Health providers in the low-road state will not be able to expand services and create the jobs that their neighbors can generate. Forgone jobs means lower consumer spending.

Quality of Life. One of government’s jobs is to make the state a nice place to live and work. Companies make decisions on startups, growth, expansions, and decampments on much more than a small change in taxes or minimum-wage levels. And the same is true for households making decisions about where to live, pursue an education, and work. Government programs that improve the quality of life in a state will yield enduring dividends.

Under Governor Mark Dayton, Minnesota’s public investment and fairness-oriented fiscal path has not hurt the state’s ability to produce superior job, population, and income growth.

m a r k d ay t o n / c r e at i v e c o m m o n s

Migration and Workforce Growth as an Economic Tonic

State economies grow for three reasons: Companies start up, prosper, and expand jobs; people move to (and stay in) a state and bring or acquire good educations; and governments efficiently provide public services that improve business profitability and households’ standards of living.

From 2010 through 2014, Minnesota’s population growth rate of 2.9 percent outpaced Wisconsin’s of 1.2 percent. The two states are very close in population size: At last count, 5.8 million people live in Wisconsin and 5.5 million in Minnesota. From 2013 to 2014 alone, Minnesota gained 7,300 residents from net migration (those who arrived minus those who left), while Wisconsin lost a net 3,300 residents. Minnesota gained twice as many net international arrivals, a mix of professionals and political and economic refugees. Natural increase—population growth through births minus deaths—was 50 percent higher in Minnesota than in Wisconsin. While new births in both states were comparable (69,000 in Minnesota and 67,000 in Wisconsin), Wisconsin’s death totals were considerably higher. Compared with Wisconsin, the high-road Minne-

sota was the preferred destination for workers and their families in this era.

Population growth through net migration generates new jobs, as people bring their savings and skills to their new homes—some staffing high-tech companies and higher education, some starting small specialty grocery stores in their ethnic neighborhoods, others doing the dirtiest work at low wages. A large share of new migrants to Minnesota are young people pursuing college educations or seeking postcollege work. The state benefits from a large, diversified Twin Cities economy that offers many work opportunities and draws graduates from the surrounding states’ (including Wisconsin’s) excellent public land-grant universities. A recent study by Jason R. Jurjevich and Greg Schrock found that over a two-year period, Minneapolis-St. Paul gained a net 2,413 post-B.A. graduates aged 25 to 39, compared to Milwaukee’s net gain of 197.

A Closer Look at Jobs in the Two States.

Upon taking office in 2011, Walker pledged to create 250,000 additional jobs in his first term, a period of national economic recovery. He failed,

creating only about 100,000. With an employment growth of 4.8 percent, the modestly smaller Minnesota economy added 130,000 jobs, besting Wisconsin’s growth rate of 4.4 percent.

Both states have comparable numbers of employed workers: 2.87 million in Minnesota and 2.95 million in Wisconsin. But it’s not just employment that matters. High labor force participation—the share of working-age residents who have jobs or are actively looking for work—signals a strong economy. It means fewer discouraged workers and fewer working-age people living in poverty or dependent on welfare and social services. Minnesota has higher rates of labor force participation than Wisconsin. Both states’ rates (Minnesota at 70 percent; Wisconsin at 69 percent) are high compared to the nation’s, at 62.7 percent. Minnesota’s rate has been among the highest in the nation for some years, exceeded recently only by North Dakota with its now slowing oil-fracking boom.

Wisconsin suffers from persistently higher unemployment rates than Minnesota, and Minnesota’s rate has fallen much faster than Wisconsin’s since the beginning of the two governors’ terms. From 6.8 percent in January of 2011, Minnesota’s unemployment rate fell to 3.7 percent by November of 2014. Wisconsin’s initial rate of 7.7 percent fell to 5.2 percent in the same period. Slower job growth and higher unemployment rates have encouraged net outmigration from Wisconsin: Fewer workers are encouraged to move to or stay in the state.

The divergent job-growth consequences of dueling state economic philosophies is not just a peculiar Midwestern phenomenon. Research

by University of Wisconsin economics professor Menzie Chinn correlated the conservative ALEC-Laffer State Economic Competitiveness Index—an amalgam of 15 business-friendly state policy features (such as tax rates, public employees per capita, minimum wages, antiunion “right to work” laws, estate taxes)—with private nonfarm job growth in California, Wisconsin, Kansas, and Minnesota from 2011 (when all four got new governors) through early 2014. The newly conservative-led states, Kansas ranking 15th and Wisconsin 17th on Laffer’s index, did equally badly relative to U.S. employment growth, while Laffer’s leastfavored states, Minnesota (46th) and California (47th), both posted superior job growth rates.

Spring 2015 The American Prospect 103

scope allowed it to unite community organizing, legislative work, and policy analysis under the same umbrella and to balance short-term campaigns with more long-term struggles for social change. Building this kind of infrastructure means that TakeAction is “designed to go on the offense,” says McGrath.

A good example is the 2012 fight against voter-ID laws, which was easily one of the most unlikely victories in TakeAction’s history. A year after Governor Dayton vetoed a voter-ID bill, state representative Mary Kiffmeyer—who was also serving as the state chair for ALEC at the time—led a GOP push to put the measure to voters. Early polling indicated that 80 percent of Minnesota voters supported it.

But those odds didn’t hold TakeAction or its allies back for a second. Focusing especially on black neighborhoods in Minneapolis and St. Paul, NOC launched a 19-month canvassing campaign ahead of the referendum, knocking on more than 20,000 doors.

Canvassers spoke with residents not only about voter ID, but also about issues like marriage equality in order to build a base of support in the upcoming fight against an anti-gay-marriage amendment. All told, TakeAction (which has a permanent staff of 35) and its allies organized more than 3,000 volunteers statewide, reaching more than 900,000 voters.

In a remarkable turnaround, voters rejected the voter-ID ballot initiative and the marriage amendment, becoming the only state in the country to defeat both. “We like to say how we win is just as important as what we win,” says McGrath. “We’ve got to connect the dots across these issues so we’re actually building the capacity to make larger structural changes as we go.”

An approach like this also offers a remarkable flexibility when it comes to electoral politics. In the run-up to the 2010 gubernatorial race in Minnesota, TakeAction launched reNew.mn, a statewide push to infuse Minnesota’s local caucus and convention process with increased progressive representation. After extensive door-knocking and organizing, TakeAction endorsed state House Speaker Margaret Kelliher, a dedicated environmentalist, and gave a nod to two other “preferred candidates.” Conspicuously absent from the list was Dayton, a one-time

104 WWW.Prospect.org Spring 2015

U.S. senator whom McGrath had denounced as one of the “two millionaires” Kelliher had to defeat to win the Democratic ticket.

Dayton went on to best Kelliher and TakeAction’s other two favorites. But because of the infrastructure it had built up during the primary, TakeAction was able not only to help elect him that November but also steer his administration in a more progressive direction.

“Even though none of our preferred candidates were on the ballot come November,” says Ryan Greenwood, TakeAction’s former political director, “we had a powerful base of people built up that Dayton ultimately respected.”

Since 2010, TakeAction has worked with Dayton on everything from securing marriage equality to statewide single-payer health care (that one’s a work-in-progress).

In one of TakeAction’s more dramatic victories, it launched a “ban-the-box” campaign in 2012 to stop Target from asking job applicants about their criminal histories on job applications. Not only did Target relent and extend the ban to stores nationwide, but Dayton, whose personal fortune derives from his family’s connection to Target, signed a bill banning the practice for all private employers in the state.

TakeAction and its allies have benefited immensely from the organizational groundwork laid by their predecessors, particularly the Wellstone-founded Alliance for Progressive Action. But TakeAction has something its predecessors didn’t: a dual commitment to racial and economic justice, and a strong focus on social policies, rather than individual candidates.

The TakeAction model has even surfaced in Wisconsin. There, groups like Wisconsin Voices and the Wisconsin Democracy Campaign, which Matthew Rothschild now heads, are working to build a broad-based coalition that can begin to work toward “the kind of Wisconsin we want to see in five or ten years,” says Rothschild. At the same time, Jennifer Epps-Addison, now head of Wisconsin Jobs Now, is working to build a Wisconsin chapter of the Working Families Party. The idea, she says, is to connect racial and economic justice through popular education and long-term strategizing toward concrete electoral goals. If all this sounds a little familiar, there’s a reason, says Epps-Addison. “People are figuring out how to win.”

Higher Incomes in Minnesota

It’s not just having a job that matters to residents, but how much the job pays. Divergent labor policies hurt Wisconsin earnings and incomes while boosting them in Minnesota.

In addition to rejecting a higher minimum wage, Walker’s administration vigorously and successfully attacked the teachers’ unions and other unions representing government employees. His Act 10, passed in 2011, gutted the state’s long-standing public-sector union laws. The result, as detailed in a 2014 Center on Wisconsin Strategy (COWS) report, was to dramatically cut public-sector union membership and extract wage and benefit concessions from teachers and other public-sector workers.

The act prohibits bargaining over anything but wages—no health and safety issues, no benefits. It stipulates that no negotiated wage increase may exceed the rate of inflation. It prohibits paycheck union dues, even if workers sign a card authorizing them. It requires that every bargaining unit must annually recertify through a vote of 51 percent of all members of the unit, whether they vote or not.

In contrast, Dayton supported a robust, statewide minimum-wage increase, passed by the Democratic legislature in the spring of 2014. While the national minimum wage of $7.25 an hour still prevails in Wisconsin, Minnesota raised its minimum to $8.00 an hour on August 1, 2014, to rise to $9.50 by August of 2016. For the first time, Minnesota’s minimum will be indexed for inflation. Dayton also embraced a proposal to authorize unionization of home-care and child-care workers subsidized by the state; this measure was passed by the legislature in 2014. (Unionization of homecare workers in California has demonstrated the win-win results for that state: According to economist Candace Howes’s research, workers’ wages rose substantially, prompting a significant decline in turnover and a large shift—as much as 20 percentage points—in the shares of needy home-care clients who elect to remain in their homes, rather than in expensive nursing facilities, saving the state many millions.)

Dayton also authorized the state’s Department of Trade and Industry to pursue a twoyear investigation of the misclassification of Minnesota construction workers as contractors, resulting in agreements with many firms to put

c h a r t d ata s o u r c e : d r . d o u g h a l l , e c o n o m i c p o l i c y i n s t i t u t e / b u r e a u o f l a b o r s tat i s t i c s

related with median wages for all workers.

In a graphic produced for Minnesota’s Select Committee on Living Wage Jobs in 2013, Economic Policy Institute’s Doug Hall showed how strongly the two track together. Though

Unions Drive Wages Up Union Coverage and median wage compared, 2011 19% 17% union coverage

these workers on payrolls and pay them benefits.

As a COWS study demonstrates, the positive income effects of unionization decline dramatically as union membership declines. Union wages, especially in public-sector jobs, often informally establish a prevailing wage level for comparable workers in regional economies.

After four years of diverging labor policy regimes, Minnesota’s wages are both higher and have increased modestly faster. In 2013, Minnesota average annual wages were $47,370, up 4.2 percent from 2010. Wisconsin’s gains were more modest, with the annual average wage of $42,310, up 3.4 percent.

Minnesota’s better wage rates are largely responsible for superior household incomes.

From 2010 through 2013, Minnesota’s median household income jumped from $52,300 to $60,900, a growth rate of 16.4 percent, while Wisconsin’s comparable median moved from $50,400 to $55,300, expanding 9.7 percent.

Higher wages and incomes mean a more prosperous local-serving economy, especially at a time when “buy local” is a growing consumer pattern. The differences are not huge, but are nonetheless significant. They demonstrate that policies that help working families also help the regional economy.

Diverging rates of unionization help explain the two states’ economic performance. Union coverage has been declining nationally, a product of a vigorous business attack on all fronts.

But it is still higher in some states than others, and state policy matters. In 2005, when Wisconsin’s governor was a Democrat, union coverage reached 17.2 percent, exceeding Minnesota’s rate of 16.4 percent under its Republican-led government. In 2010, when the two new governors were elected, the rate was 16.1 percent in Minnesota and 15.1 percent in Wisconsin. Since then, it has diverged more dramatically. Minnesota’s coverage rate was 15 percent in 2014 and is apt to go up with the new unionizing drives in home care and child care.

Wisconsin’s had dropped by 53,000 workers to 12.5 percent by 2014, a four-year attrition rate of 13.9 percent—more than triple that of Minnesota’s 4.2 percent coverage decline.

Unionization contributes to the fact that Minnesota’s hourly median wage is currently 10 percent higher than Wisconsin’s.

State unionization coverage is strongly cor-

Minnesota

15% Iowa Missouri

13% 11% 9%

Nebraska

Kansas North Dakota

7%

South Dakota

5%

$13

$14

$15

$16

$17

$18

median wage

The new budget also included more funding for workforce development initiatives and a $3 million increase—the first since 2005—in the Minnesota Investment Fund, which helps firms add new workers and retain high-quality jobs.

In early 2013, with a newly all-Democratic legislature, Dayton proposed expanding the sales-tax base, other progressive tax reforms, and changes to the state’s property taxes. His sales-tax proposal would have raised $2.08 billion for the state by extending coverage to Internet services, business services, and expensive consumer goods and services (food and clothing being untaxed in Minnesota) in exchange for lowering the overall rate from 6.875 percent to 5.5 percent. It foundered on widespread business and Republican opposition. He proposed reforms to individual income tax that would raise an additional $1.13 billion, chiefly by asking the wealthiest 2 per-

Minnesota’s higher unionization rate and more generous public spending were part of a pattern that contributed to more consumer income and broader prosperity.

Wisconsin was not included in the set, at its current unionization and median wage rates it would fall right in line, close to Missouri. Minnesota’s rate significantly exceeds those of its upper Midwest neighbors, Wisconsin included.

Social Investment versus Stunted Government

Walker ran as an anti-tax, anti-governmentspending candidate, while Dayton vowed to increase tax fairness, to adequately fund critical public investments, and to solve the state’s budget deficit without shifts or accounting gimmicks.

In his first term, Dayton inaugurated his governorship with a strong commitment to creating jobs. Though stymied by a Republican legislature that preferred a Walker-type, businessfriendly agenda, Dayton was able to navigate his $497-million bonding bill into law. The program created thousands of new jobs in shovel-ready projects, many for construction workers who were suffering from high unemployment rates.

cent of Minnesotans to pay their fair share.

(Currently, this group pays 20 percent less in state and local taxes per dollar of income than do middle-income households.) And he proposed lowering the corporate income tax rate but broadening the base by eliminating inefficient tax breaks, especially those that apply to overseas operations of corporations, a reform that would neither raise nor lower the corporate tax take. Dayton successfully proposed broad property tax relief that lowered state property taxes by $49 million, or 0.6 percent, from 2013 to 2014, reducing the state’s most regressive form of taxation. In his second term, he is again pursuing progressive and efficient tax reforms, but with a Republican House, this will be an uphill battle.

After his re-election, Dayton again proposed a biennial bonding bill to make investments in public-sector capacity while creating thousands of private-sector jobs. It passed in May of 2014, with $850 billion for infrastructure projects and an additional $200 million in supplemental

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Under Governor Scott Walker, Wisconsin’s aggressive austerity has not enabled it to fiscally outperform its neighbor Minnesota.

despite its more progressive pattern of taxing and spending, does just as well as Wisconsin.

Why? Because the macroeconomic and longterm growth-stimulating effects of good government policies nurture education, human capital, innovation, and livability, in contrast to wage-lowering strategies and miserly postures toward education and research which hope, fruitlessly, that the private sector will take up the slack.

Similarities, Differences, and Divergent Performance

Of course, the two states are not perfect matches for testing fiscal policy and political philosophy. But they are remarkably similar.

Both have traditionally been relatively liberal since the Progressive era, moving from Lincoln Republicanism in the 19th century to New Deal advocates during the Depression. Both have similar climates and topography, with important swaths of Lake Superior shoreline that attract retirees and visitors.

The two states’ industrial structures, at least at an aggregated level, are similar. Wisconsin is more manufacturing-intensive, 16 percent compared to Minnesota’s 11 percent, while Minnesota’s education and health-service job share

of 18 percent exceeds Wisconsin’s at 15 percent.

Minnesota posts modestly higher job shares (18 percent versus 15 percent) in education and health services and in professional and business services (13 percent versus 10.5 percent).

Underneath these parallel structures, however, sectoral differences partly account for Minnesota’s stronger economy. Wisconsin’s manufacturing is reliant on heavy-equipment sales to developing nations. In addition, small, low-wage, rural manufacturing plants have been dispersing for decades from the greater Chicago area. These small plants may offer jobs and pay that are inferior to Minnesota’s, where manufacturing jobs are more diversified, from food processing to high tech to iron ore. Both states also host mining, logging, and farm jobs that vary by region and quality.

The two states’ metropolitan structures are shapers of population and economic growth paths. The Twin Cities metro of Minneapolis and St. Paul hosts the state’s capitol, the flagship public university, several highly ranked liberal arts colleges, many corporate headquarters, the state’s top arts and cultural institutions, the bulk of the region’s non-storefront financial sector (including the Ninth District Federal Reserve Bank serving Minnesota, northern

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cash appropriations for construction projects.

In contrast, Walker began his 2011 governorship with an austerity budget of spending cuts and tax relief. During his first term, he attempted to close a $3 billion budget gap by cutting revenue-sharing to local governments and schools, and slashing benefits and takehome pay for teachers, state workers, and other public employees. In a highly touted tax-relief package, Walker and the Republican legislature cut business taxes and income and property taxes across the board. But the supposed stimuli of wage restraint and lower taxes did not induce Wisconsin businesses to expand and add jobs at the hoped-for rates. The negative economic consequences, including lagging state tax revenues, left Wisconsin facing an estimated $2 billion budget imbalance going into 2015.

In his recently released post-election budget, Walker accelerates his travel down the low road. He proposes a 13 percent cut of $300 million in state funding for the University of Wisconsin system for 2015 to 2017. This means more jobs lost, and a deterioration in the quality of education and in the ability of the system to produce good research. It also means a speed-up, as more work is piled on teachers. Walker suggests that faculty should teach more classes (one more per semester, as much as a 25 percent increase in workload) and work harder. He seems not to understand that faculty can and will move elsewhere, and student enrollments, already down at some campuses, are likely to decline more rapidly.

Walker has also authorized outsourcing of university custodial services—layoffs are already taking place. Again, this means further cuts in working people’s income, undercutting the state’s economy and budget.

Thus Minnesota’s public investment and fairness-oriented fiscal path since early 2011 has not hurt its ability to produce superior job, population, and income growth, while Wisconsin’s aggressive austerity has not enabled it to outperform its neighbor. Interestingly, both state and local public spending and debt patterns remain basically similar. Minnesota enjoys superior reserves—the Pew Charitable Trusts report on the number of days states can run on reserve funds places Minnesota at the national median, 25th, while Wisconsin ranks 41st. Thus on fiscal grounds, Minnesota,

Michigan, northwestern Wisconsin, and three states to the west), and the state’s major philanthropic foundations. The region may benefit from what economists call agglomeration economies, where the density of labor markets and employers attracts and hold jobs and incomes.

In contrast, Wisconsin’s major private, nonprofit, and public employers are split between Milwaukee and Madison, with the state capitol complex and the state’s top-rated university (arguably superior to Minnesota’s to date) in the latter, and the state’s financial, manufacturing, and philanthropic leadership in Milwaukee.

While these structural and geographic features may differentiate the two states’ economic challenges, it is unlikely that they can explain most of the divergence in growth and pay rates over the past four years. The macro and secular growth effects of markedly distinct fiscal and labor-market policies are clearly playing a major role. It is implausible that a continuation down the low road will bring Wisconsinites the relatively greater prosperity enjoyed by Minnesotans.

High-Road and Low-Road Civic Life

It’s not just economics that shape a state’s culture. In general, a majority of Minnesotans have favored and voted for expansive and inclusive civic policies benefiting people of all income levels. The 2014 Minnesota Legislature passed, and Dayton signed, a Women’s Economic Security Act that expands paid sick leave and unpaid family-care leave (covering men as well), requires gender pay-equity reports of private-sector companies bidding for state contracts, and expands leave and unemployment insurance access for victims of domestic violence. It also forbids companies from demanding pay secrecy of their employees, a widespread practice that makes it more difficult for women, men, and minorities to find out if their wages and salaries are comparable with co-workers’. In the public sector, salaries and wages are published, resulting in much lower pay-equity gaps.

Minnesota voters, by 53 percent to 47 percent, rejected a 2012 constitutional amendment banning gay marriage. In 2013, the legislature passed, and Dayton signed, a same-sex marriage bill, the first state in the Midwest to do so by enactment rather than court order. Wisconsin

banned same-sex marriages in 2006 when 59 percent of Wisconsin voters supported a constitutional amendment, but the U.S. Supreme Court has since ordered gay marriages to be allowed to proceed. Minnesota voters in 2012 rejected a constitutional amendment to require photo identification to vote, but a Walker-supported voter-ID law in Wisconsin is currently on hold, awaiting decision by the Supreme Court.

Minnesota citizens’ positive support for state spending that serves broad populations was dramatically demonstrated in 2008, when voters passed by a 56–39 margin the Clean Water, Land and Legacy Amendment to the state’s constitution. The amendment, first sanctioned by the state’s legislature and supported by a coalition of environmental, arts and culture, and hunting groups, increased the state’s sales tax by three-eighths of a cent, hiking it to 6.88 percent. This revenue is dedicated

ernor, promising to “go all Scott Walker on Minnesota,” claimed that Minnesota’s privatesector job growth from March 2013 to March 2014 was the slowest in the Midwest, and 41st in the nation. These claims were roundly refuted by economist Louis Johnston in Minnesota’s online daily MinnPost. Johnson was defeated at the polls—Dayton received 50.1 percent of votes and Johnson 44.5 percent— even as the state’s House of Representatives swung Republican. Walker was re-elected with 52.3 percent to Democrat Mary Burke’s 46.6 percent. In an off-year election, neither policy position seemed to be a solid winner with the voters, at least with those who showed up to vote. Though Minnesota’s more progressive approach to economic policies clearly out-performs Wisconsin’s conservative one, these are complex issues that are dwarfed by the usual fodder of personality and campaign rhetoric.

Beyond economics, Minnesotans have favored inclusive civic policies—engaging voters, expanding rights, and benefitting people at all income levels. to such uses as state parks, wildlife management, clean water, arts and artist support, and library and historical society operations. These groups coalesced because session after session, they felt that their issues were losing out to bigger categories like infrastructure, education, and social services. Revenue from the 2008 initiative has amounted to about $300 million a year, and over its 25-year lifetime will total $7.5 billion. Although difficult to track where it all goes—more seems to be channeled to the nonprofit Pheasants Forever than to any other nonprofit—the benefits are widely distributed and are favorably viewed by most Minnesotans. They help to boost quality of life, from inner cities to small rural communities. Under the current political regime in Wisconsin, such an initiative is a nonstarter.

The High Road and the Low Road as Politics

In Minnesota’s November 2014 election, Jeff Johnson, the Republican candidate for gov-

Economists, trade-union leaders, and other policy experts have much work to do to clarify how state economies really work and where there is room to improve both economies and standards of living. This comparison does show that high-road economics are sound economics: They encourage innovation and entrepreneurship, boost purchasing power, attract federal government dollars, discourage corruption, and improve the quality of life which in turn attracts and retains employers, workers, and residents. As we go into the next presidential election cycle, with Scott Walker touted as a role model and potential first-tier candidate, it’s good to keep the nation’s eyes on the details of his disappointing track record.

Ann Markusen is professor emerita at the University of Minnesota’s Humphrey School of Public Affairs. She is the director of the Project on Regional and Industrial Economics, and principal of Markusen Economic Research.

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The Real Story of the American Family Two new books explain how rising inequality shattered the working-class family of the mid-20th century. By Stephanie Coontz b

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uring the culture wars of the 1970s and 1980s, conservative crusaders worried about threats to “traditional” families stemming from both the top and the bottom of the social ladder. In the name of “family values,” they denounced educated elites for denigrating marriage, endorsing premarital sex and cohabitation, and refusing to get judgmental about divorce and unwed motherhood. The “do-your-own-thing” individualism of such people, they claimed, was bad enough for

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spoiled middle-class children, but threatened disaster when it seeped down to the “underclass.”

That “underclass,” need it be said, was assumed to be black ghetto dwellers. Their unstable sexual and familial lives, the crusaders argued, were a legacy of slavery, which had created generations of absent fathers and single-mother families, resulting in ever-escalating crime, poverty, and welfare dependency. Pundits worried that via rap music, acceptance of such behaviors was creeping up the

social ladder, undermining the efforts of ordinary Americans to imbue their children with a commitment to deferred gratification, hard work, and marriage.

In contrast, the (mostly white) male-breadwinner families of middle-income America epitomized the “moral majority.” The men in this America married soon after graduating from high school, found steady work in factories or shops, and took pride in supporting their wives and children. The women might work as secretaries

e w s or clerks before marriage or after the children were in school, but their greatest fulfillment lay in becoming wives and mothers. Sons followed in their fathers’ occupational footsteps. Daughters reliably produced grandchildren, but only after they found a husband. Indeed, from 1960 through 1980, according to sociologist Philip Cohen, men and women with a high school degree were more likely to marry than individuals with either more or fewer years of education.

Since 1970, marriage rates have fallen and births to unwed mothers have risen among all Americans, though at different rates depending on educational level. In a reversal of the past, people with less than a high school degree now have the lowest rates of marriage, while highly educated people have the highest. But since 1980, the most dramatic drop in family stability, Andrew Cherlin argues in his new book, Labor’s Love Lost: The Rise and Fall of the Working-Class Family in America, has taken place among the high-school-educated.

Sociologists and ethnographers such as William Julius Wilson, Elijah Anderson, Kathryn Edin, and Alford Young have done excellent work dispelling myths and stereotypes about our least-educated and most impoverished citizens, a disproportionate percentage of whom are black. The two books under review here do not ignore race, but their primary focus is the collapse of the family system of the moderately educated, white working class. Richly researched and compellingly argued, these books show how, in just a few decades, falling wages and increasing job insecurity overturned the family patterns of the archetypical representatives of “traditional family values”—people without any “legacy of slavery” or generational history of family instability.

In doing so, the authors demonstrate that current trends in marriage and unwed childbearing are more consequence than cause of

Spring 2015 The American Prospect 109

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America’s increasing economic insecurity and inequality.

The subtitle of Cherlin’s book reminds us that the working-class, male-breadwinner family was neither traditional nor a natural outgrowth of the free enterprise system. Indeed, the expansion of laissez-faire capitalism initially created grinding poverty and insecurity for the industrial working class, forcing most such families to rely on child labor. Only in the economic boom that followed World War II, with the indispensible assistance of a strong union movement and massive government investment in job creation, did significant numbers of bluecollar men earn enough to marry and support a family at an early age.

The average real wages of manufacturing workers doubled between 1950 and 1973. Wages rose faster for lowincome workers than for high-income ones in this era, lessening economic inequality. Young male workers just out of high school started work at lower-than-average salaries but saw their earnings increase steadily as they aged. In 1969, only 10 percent of men were still low earners by the time they were between 30 and 35 years old.

The postwar white working-class male-breadwinner family was a historical aberration, but it was accompanied by such an improvement in living standards that it’s small wonder it has become the subject of nostalgia.

Never before had so many men with a high school education or less been able to get jobs that paid significantly more than their fathers had earned at the same age and that allowed them to comfortably support a family on their earnings alone.

Robert Putnam’s Our Kids combines social science data with personal interviews to show the contrast between several American towns and suburbs in the 1950s and today, arguing that the social and economic trends of the postwar era fostered a sense of community and optimism, at least among white working people, that has since been lost. He begins by contrasting what it was like growing up in the 1950s in his (mostly white) hometown of Port Clinton, Ohio, with what it is like there today.

In the 1950s, Putnam argues, residential and educational segregation by

110 WWW.Prospect.org Spring 2015

Labor’s Love Lost: The Rise and Fall of the Working-Class Family in America

by Andrew J. Cherlin

Russell Sage Foundation

Our Kids: The American Dream in Crisis

by Robert D. Putnam

Simon & Schuster

income (as opposed to race) was low, “and opportunities for kids born in the lower echelon to scale the socioeconomic ladder were abundant.” Even low-income children had access to extracurricular activities that were, unlike today, provided free of charge by schools. Their families could enjoy the undeveloped beaches, camping spots, and inexpensive resorts along Lake Erie.

Although Putnam exaggerates the economic mobility of poor Americans before the War on Poverty, he draws a compelling contrast with the Port Clinton of 2012, when the average worker hadn’t seen a rise in real wages for nearly 50 years. He notes that unlike the postwar era, children from low- to middle-income families now go to entirely different schools than do upper-class children. Their families have even lost access to the lakeshore, which has been bought up by wealthy families and transformed into an unbroken line of gated communities. Putnam also describes a widening class gap in participation in the extracurricular activities that have been shown to improve young people’s chances of success. (And a recent paper released by the Council on Contemporary Families finds that income explains twice as much of this gap as does family structure.)

Cherlin and Putnam point out that the family and work arrangements of the postwar era were not idyllic.

Women had few economic options outside marriage and few legal rights within it. The class divide was not as wide in most communities as it is today, but the racial divide was certainly wider, and black poverty rates remained exceptionally high through the period. During the 1960s, African Americans gained more access to manufacturing jobs, becoming even more dependent than whites on industrial employment for economic security. As a result, deindustrialization in the 1970s was especially devastating to blue-collar African American families.

Back in the 1950s and 1960s, even when their jobs were physically exhausting and money was tight, most working people had reason to be optimistic when they looked at where they had come from and where they seemed to be headed. Optimism is a wonderfully

socializing force. In that era, a young man with a high school education or less could start out in almost any job and see his earnings improve substantially over time, outstripping those of his father and grandfather. Real-life experiences, not abstract preaching, imbued him with the sense that deferring gratification and sticking it out would end up paying off.

But the stability of blue-collar family patterns in the 1950s cannot be explained solely by the expanding economic opportunities for young men.

Blocked opportunities for women also played a major role. Full-time jobs open to women were scarce, job tenures were short, and pay was low. In fact, historian Steven Ruggles shows that the gender pay gap for full-time workers increased over the period, peaking in 1966. The only way most women could participate in the prosperity of the postwar era was by marrying. And once a woman married, the legal and cultural enforcement of female deference made her also more likely to “stick it out,” even in an unhappy marriage.

As women won more legal rights and wider job opportunities in the late 1960s and the 1970s, the hold of this marriage culture on people’s lives weakened. Young people began to delay marriage. Premarital sex and cohabitation lost their stigma. Divorce rates rose among all groups of Americans.

But the most dramatic familial changes occurred among those who were left behind, victims of the falling real wages, increasing job insecurity, and declining investment in community resources that began in the early 1970s. Both authors describe the resultant growth of inequality in vivid detail. By 1996, Cherlin notes, the average 30-year-old high school graduate earned 20 percent less than his counterpart in 1979, and the gap between his standard of living and his prospects for advancement versus that of collegeeducated earners had widened dramatically. By 2004, almost a quarter of men ages 30 to 35 were still low earners, compared to just 10 percent in 1969.

Furthermore, the jobs available for people without a college degree became less likely to offer the socialization experience that encourages people to make long-term plans for

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the future. Cherlin describes the “casualization” of work, as jobs have increasingly become part-time or temporary, without long-term prospects or short-term protections. He offers a withering critique of Charles Murray’s claim that men have lost the work ethic of the traditional laboring class. Rather, he argues, “the defining problem of high-school educated young adults is that they cannot become working-class.”

Taken together, these books suggest that even as marriage has become more beneficial for educated dualearner couples and their children, it has become a riskier proposition than it used to be for men and women without a college education. In an economy where most wage-earners need an employed partner to make ends meet, unemployed women and men are not attractive potential partners, and even someone who is employed might not have a job very long. Two low salaries are certainly better than one, which is why low-income couples move in together much more quickly than do their college-educated counterparts. But now that a woman has at least some earnings potential, it makes less sense to hitch herself to a man who might lose his job, leaving her with one more mouth to feed.

If her husband leaves her or loses his job, such a woman can end up worse off than if she had stayed single and focused on increasing her own earnings power. Tellingly, Cherlin reports, between 1980 and 2012 the median income of dual-earner couples increased by nearly 30 percent, while the median income of one-earner, married-couple families remained flat. In contrast, the median income of single mothers increased by 11 percent—not always enough to pull them out of poverty, but better than nothing. And “nothing” is increasingly possible in today’s job market. Overall, among single adults ages 25 to 34, according to a Pew Research Report released last October, there are only 84 currently employed single men for every 100 single women, and only 51 currently employed single black men for every 100 single black women.

Neither Putnam nor Cherlin denies that cultural factors play a role in the

decline of marriage and especially in the rise in unwed motherhood. Cherlin finds that a class-based marriage gap also opened up in the Gilded Age, another period when income inequality was high and rising. But cohabitation and unwed childbearing remained low in that period, as they did during the Great Depression. The destigmatization of nonmarital sex and childbearing certainly contributes to the rise of unwed motherhood, and the cultural emphasis on “self-fulfillment” has clearly increased people’s willingness to divorce. But Cherlin would agree with Putnam that changing cultural values have such a strong impact on family instability “only in conjunction with adverse economic trends.”

I do wish both authors had devoted more attention to the possibility that some of the most detrimental familial changes stem in part from the incomplete spread of many new cultural values. Men and women with a high school degree or less are twice as likely as college-educated Americans to believe that the man needs to be the primary breadwinner in a marriage. When a man cannot fulfill that role, a woman who values this above other characteristics (as a poor woman understandably might) may become contemptuous or impatient, while a man who holds such values may react violently to a partner who earns more than he does. Other things being equal, low-income men are not more likely to abuse their wives than high-income men. But when a man has low earnings or no earnings and adheres to traditional gender ideologies, he is especially likely to do so.

Similarly, the women most likely to see motherhood as the main route to achieving meaning in their lives are the ones least likely to hold feminist aspirations. And the men most likely to take pride in impregnating a woman or juggling multiple sexual partners are the least likely to have embraced new cultural ideas favoring a nurturing, egalitarian masculinity.

In other words, the problem is not simply the collapse of traditional values. It is, in part, the failure of modern values to spread fast enough. And that too is connected to growing educational and occupational inequality.

People who have little access to new

Some detrimental familial changes may stem in part from the incomplete spread of new cultural values. People who have little access to new sources of achievement tend to fall back on old sources of identity.

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sources of achievement tend to fall back on old sources of identity.

Cherlin and Putnam are less concerned about the decline in marriage per se than about the consequences for children of widening economic inequality and changing family patterns. As Cherlin notes, several other wealthy countries have lower rates of marriage but less poverty and more stable living arrangements for children than the United States does.

Both authors overstate the wellbeing of children raised in the 1950s, when harsh, authoritarian parenting was more widespread than today, child abuse was not seen as a social problem—or even recognized by emergency room physicians who treated injured children—and experts dismissed children’s reports of incestuous abuse as fabrications or signs of female “sex delinquency.” In that era, even loving, married parents actually spent less time interacting with their children than single mothers do today.

But a vicious cycle is certainly at work here. Growing economic inequality and social insecurity, combined with declining investment in public resources, put ever more stress on the finances and personal relationships of low-income parents. Yet they also require parents to spend ever more time and money on enrichment and educational activities for their children. This is a race in which poor parents, even married ones, inevitably fall behind, with single parents especially disadvantaged.

Both Cherlin and Putnam suggest ways to break the cycle without resorting to marriage promotion efforts that have already been proven not to work.

Putnam provides an especially helpful summary of evidence showing that social initiatives and investments to improve child outcomes do work. The question, these books make clear, is whether we can develop a new “moral majority” in America that is willing to challenge the increasing concentration of resources in the hands of the few, and is eager to invest in the future of all our children.

Stephanie Coontz teaches at Evergreen State College and is director of research at the Council on Contemporary Families.

Spring 2015 The American Prospect 111

Illinois Digital Rebellion

Covering Bin Laden

The Birth of the Cyber Left

Global Media and the World’s Most Wanted Man

TODD WOLFSON “The first book to chart the intellectual and technological history of the Indymedia network. . . . Todd Wolfson does an excellent job charting the rise of the Independent Media Center and the theoretical implications of this model for left political organizing.”—Andy Opel, author of Preempting Dissent: The Politics of an Inevitable Future Paperback and E-book The History of Communication

Edited by SUSAN JEFFORDS and FAHED AL-SUMAIT “This book beautifully unpacks the ways in which the global media displayed and narrated Osama Bin Laden.

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The Real Cyber War

Hillary Clinton in the News

The Political Economy of Internet Freedom

Gender and Authenticity in American Politics

SHAWN M. POWERS and MICHAEL JABLONSKI

SHAWN J. PARRY-GILES

“Cuts through the Western rhetoric of ‘Internet freedom’ and draws a sobering picture of how policy-making in this space is ultimately a fight for control over information.”—Urs Gasser, Executive Director, Berkman Center for Internet & Society, Harvard University Paperback and E-book The History of Communication

Tracks the evolving ways the major networks and cable news programs framed Clinton’s image as she assumed roles ranging from surrogate campaigner, legislative advocate, and financial investor to international emissary, scorned wife, and political candidate.

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Patronage, Cronyism, and Criminality

Capital, Politics, and Labor

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Naming names, the authors lead readers through a gallery of rogues and rotten apples to illustrate how generations of chicanery have undermined faith in, and hope for, honest government.

From there, they lay out how to implement institutional reforms that provide accountability and eradicate the favoritism, sweetheart deals, and conflicts of interest corroding our civic life.

Paperback and E-book

Updates many of Lichtenstein’s most provocative essays and reviews.

“A rich treasure trove of ideas and analyses on a number of critical topics.

Lichtenstein casts a net which captures capitalism and his subject and investigates the complex position of working people within its contradictory dynamics.”—Labour/Le Travail Paperback and E-book Publication supported by The Center for the Study of Work, Labor, and Democracy at UCSB The Working Class in American History

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Piety and Politics in America The tension between religiosity and secular government goes back to the nation’s founding. By Susan Jacoby b

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hen I speak on college campuses and tell students that the United States Constitution makes no mention of God, at least half of the audience members invariably shake their heads in disbelief. It usually turns out that the students have confused the Constitution either with the Declaration of Independence, which, of course, does refer to a Creator who has endowed all men with “certain unalienable rights,” or with the Pledge of Allegiance, written in 1892 by a Christian socialist minister without any mention of a deity until Congress added “under God” in 1954 as a Cold War rebuke to the officially atheist Soviet Union.

It is not that students (including those at historically religious colleges) are antagonistic when told that ours was the first government in the world founded on the authority of “We the People” rather than of God or a king ruling by divine right. They are, however, confused. The secular side of the nation’s origins does not fit well with their experience of growing up in a time when every presidential inauguration includes as many representatives of the clergy as it takes to demonstrate that freedom of religion does not mean freedom from religion and presidents end important speeches with “God bless America”—a piety derived from a song written by Irving Berlin in 1918 and having as much to do with the Constitution as Berlin’s later hit “White Christmas.” Civil libertarians, of whatever religious or nonreligious persuasion, and outspoken atheists who dare to question these practices are often described as “militant.”

How, when, and why did it become controversial for politicians to pay even passing homage to the noble truth that the Founders had the temerity, at a time when nearly all Americans were Christian, to establish a national government whose founding legal document is entirely secular?

In One Nation Under God: How

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Corporate America Invented Christian America, Kevin M. Kruse, professor of history at Princeton University, offers the latest of many scholarly attempts to address this question.

The subtitle precisely sums up Kruse’s thesis—that the image of America as a “Christian nation,” as distinct from a country with a Christian majority—is relatively recent. He traces what he sees as a 20th-century cultural shift to wealthy businessmen who, beginning with their hatred of the New Deal and reaching the zenith of their influence during the presidency of Dwight D. Eisenhower (with bells and whistles added by Richard M. Nixon a decade later), used religion as a cover for their desire to take down liberalism.

As a political liberal, an atheist, and the author of a book dealing with the neglected secular side of American history, I find this thesis appealing but not entirely convincing. The great virtue of this book is that its author—whose previous works include White Flight: Atlanta and the Making of Modern Conservatism (2007)—takes public prayer and other displays of religiosity seriously. Eugene V. Rostow could not have been more wrong in 1962 when, as dean of the Yale Law School, he delivered a widely publicized lecture describing such practices as essentially harmless “ceremonial deism.” These are theist, not deist practices. They possess real power to permanently affect the way citizens think about their government, as demonstrated by students who are surprised when told that the Pledge is not one of the nation’s founding documents.

The difficulty with Kruse’s argument that “corporate America invented Christian America” is that he skips over the profound tension between Enlightenment secularism and religiosity that has existed since the founding of the republic. In 1787, the omission of God from the Constitution was the subject of bitter debates at state ratifying conventions—though

One Nation Under God: How Corporate America Invented Christian America

By Kevin M. Kruse

Basic Books

The Religion of Democracy: Seven Liberals and the American Moral Tradition

By Amy Kittelstrom

Penguin Press

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the Enlightenment rationalists won.

Such longstanding ambivalence about the role of religion in government has nothing to do with either the hatred of tycoons for the New Deal or the later Cold War campaign against the “godless” Soviets, pushed by many centrists as well as right-wing business and religious institutions.

In some respects, it is a wise decision for an author to set definite limits to a potentially limitless historical inquiry.

What the Founders actually did when they wrote the Constitution is more important than what any of them thought, in their heart of hearts, about religion. And as Kruse rightly observes, the scholarly consensus—that the founders did intend to separate church and state at the national level—has “done little to shift popular opinion.”

Whether scholarship can or should be expected to shift popular opinion is a separate question, but Kruse’s heavy emphasis on the role of big money in bankrolling the Christianization of American public life is even more unlikely to accomplish that end.

Kruse is too meticulous and honest a historian to withhold facts that undercut his own thesis—and the fact is that however persistently religious conservatives tried to pit God against the New Deal, it proved impossible to convince a majority of Americans that Jesus would have hated Social Security, rural electrification, and unions.

The author presents fascinating, vividly drawn portraits of many players in this drama (some remembered today, others not). A Congregationalist minister, James W. Fifield Jr., took over the First Congregational Church in Los Angeles in 1935 and turned it, by 1942, into one of the nation’s first megachurches. Members included a roster of millionaire businessmen (when a million meant som ething), as well as entertainment celebrities like Cecil B. DeMille. In a stellar example of the law of unintended consequences, DeMille set the stage for the numerous “Ten Commandments” cases of recent years. In collaboration with the Fraternal Order of Eagles, DeMille distributed thousands of Commandments monuments around the country in preparation for the 1956 release of the biblical epic

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starring Charlton Heston. Many of these promotional gimmicks wound up in public spaces, giving rise to civil liberties challenges (with mixed judicial results) decades later.

As the founder of an organization called Spiritual Mobilization, Fifield reached some 70,000 Protestant ministers with a screed in which he compared clerical and business opponents of the New Deal to Christ himself. “If, with Jesus, we believe in the sacredness of individual personalities, then our leadership responsibility is very plain,” he declared. Although religious conservatives might be accused of “selling out,” he added, “so was Jesus.”

While Franklin Delano Roosevelt was a serious believer in the Episcopal faith of his upbringing, he—like his more devout cousin, Theodore—kept a reserved distance between his private beliefs and his role as president.

As governor of New York and later as president, however, FDR made masterful use of biblical language to sell his social policies. Criticizing a Republican proposal to privatize New York public utilities, Roosevelt said, “This is a history and a sermon on the subject of water power, and I preach from the Old Testament. The text is ‘Thou shalt not steal.’” His first inaugural address contained so many scriptural references that the National Bible Press issued a detailed chart linking the text with corresponding biblical quotations.

How could a bunch of right-wing ministers have ever hoped to best the master at this game? There is little in Kruse’s narrative to support the idea that religious conservatives of the 1930s begat the Cold War union of religion and political conservatism during the 1950s—much less the right-wing alliance involving conservatives of different faiths that has existed since cultural issues such as abortion came to the fore in the 1970s.

Many of the same actors, like Fifield, were still around in the 1950s, but the movement to define America as a Christian nation received greater impetus with the rise of Billy Graham, who emerged in his early thirties as the most charismatic evangelist in American history and someone before whom one president after another felt

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Evangelist Billy Graham (second from right) kneels in prayer on the White House lawn on July 14, 1950. After spending a half hour with Graham, Truman told his staff that the evangelist “would never be welcome at the White House again as long as he was president.”

obliged to genuflect (metaphorically, given Graham’s Protestantism), until Parkinson’s disease led to his de facto retirement from public life in 2005.

Harry S. Truman, bless him, was the last president to treat Graham as a religious salesman rather than as someone with special spiritual authority. After a meeting at the White House in 1950—which ended with Graham kneeling on the White House lawn to pose for photographers—Truman described the evangelist as someone who was only interested in “getting his name in the paper” and told his staff that Graham “would never be welcome at the White House again as long as he was president.” A year later, Graham launched vigorous attacks on social spending to aid the poor at home and the Marshall Plan abroad.

Unlike Truman, Eisenhower raised no objections to Graham or to public religious ceremonies. In 1953, he presided over the first National Prayer Breakfast—one of those relatively recent institutions that have now

taken on the mantle of tradition—and a year later, famously approved Congress’s addition of “under God” to the schoolchildren’s pledge. Eisenhower himself was hardly the model of a devout Christian soldier. He did not even belong to a church when he was nominated for the presidency and eventually became the first president to be baptized in office. He chose the Presbyterian Church, he said, because his wife Mamie was a Presbyterian.

Moreover, Eisenhower’s receptivity to expanded religious symbolism in public life did not imply approval of the secular aim of the religious and economic conservatives—repeal of the New Deal. As is well known (and Kruse acknowledges this), Eisenhower expanded benefits under the New Deal’s signature legislation, Social Security. He also boosted federal spending for education and championed the largest public works program ever undertaken in this country—the interstate highway system. Indeed, the enthusiasm of many business

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leaders for Eisenhower’s government spending programs, which meant profits for all, was an important factor impeding attempts to confer a religious imprimatur on right-wing politics at that time.

In a brief epilogue, Kruse refers to the strained alliance between establishment Republican businessmen and the religious right, which elected Ronald Reagan, then George H.W. Bush and, finally, George W. Bush.

While acknowledging that the rightwing religious conservatives of the 1950s did not undo the New Deal, he asserts that they did succeed in convincing “a wide range of Americans that their country had been, and should always be, a Christian nation.”

There is little in Kruse’s analysis about the equally strong historical relationship between liberal religion and liberal politics. That is the subject explored by Amy Kittelstrom in The Religion of Democracy: Seven Liberals and the American Moral Tradition. Kittelstrom, associate professor of history at Sonoma State University, has chosen seven 19th-century figures to develop the argument. A long list of historians and political observers have made this point—either implicitly or explicitly—beginning with Mercy Otis Warren’s neglected 1788 Observations on the New Constitution. In recent years, popular works such as God’s Politics (2005) by the evangelical minister Jim Wallis have argued for the reclamation of the banner of religion from the fundamentalist right. (Wallis’s Jesus loves Social Security and anti-poverty programs.)

For much of American history, it was possible to be a religious conservative and an economic populist (as William Jennings Bryan was), or a liberal in matters of religion but not in economics or politics. Only in recent decades, as Kittelstrom notes, has the word “‘godless’ got hitched to the word ‘liberal.’”

Perhaps the desire to explore new territory on well-trod ground is responsible for Kittelstrom’s truly odd selection of people she deems liberals.

Her list begins with John Adams, who was indeed an Enlightenment rationalist and a liberal in religious matters but who was not a political liberal

It used to be possible to be a religious conservative and an economic populist, or a liberal in religion but not in economics or politics.

President Eisenhower hung a painting in the Oval Office, commissioned by Conrad Hilton (who claimed to have designed the image himself) of Uncle Sam praying on his knees.

in his own time or by most modern definitions. No one who has read the correspondence between Adams and Thomas Jefferson can doubt that they agreed completely on the necessity of separating church and state. One of the greatest disappointments of Adams’s old age was his inability to persuade Massachusetts legislators, in writing a new state constitution in 1820, to remove civil restrictions on all religions, including Judaism.

(Although the federal constitution prohibited any religious test for public office, it took decades for some states to follow suit.) But Adams was the president who, among other acts generally considered illiberal, signed the Alien and Sedition Acts in 1798.

Kittelstrom’s next “liberal” strikes me as an even more peculiar choice than Adams. The first of two women on the list (the other is Jane Addams,

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the founding spirit of the settlement house movement) is Mary Moody Emerson, of whom the world would know nothing had she not been Ralph Waldo Emerson’s aunt. Miss (as she would have been identified then) Emerson, who published occasional essays about religion with the genderconcealing initials M.M., occupied no public role—in keeping with the idea of a woman’s place that constrained women of her generation, even in intellectual families.

All of Kittelstrom’s liberals (with the exception of Thomas Davidson, a Scottish intellectual who immigrated to the United States after the Civil War) are directly descended from or linked to the New England Puritans, who morphed first into Congregationalists, then into Unitarians, and later in the 19th century into deists or unconventional theists whose beliefs could not be pinned down. William James, another of Kittelstrom’s choices and an intellectual of the first generation exposed to both Darwin and Freud, was extremely cagey about revealing his real religious beliefs.

In the far-ranging and still influential lectures that he gave in 1901 and 1902, The Varieties of Religious Experience, James displayed an extraordinary capacity to produce quotations that could be used to support just about any religious position.

With the exception of Jane Addams, Kittelstrom ignores religious liberals who not only fell outside mainstream Protestantism but who were also genuine social activists.

Lucretia Mott, the devout Quaker who was often pilloried as an atheist for daring to raise her woman’s voice in public, was an outspoken suffragist and abolitionist who, unlike M.M. Emerson, did not hide behind initials in an attempt to avoid social censure.

Quakerism was arguably the most liberal, in a social and theological sense, form of American Christianity from the colonial era through the Civil War, and it is difficult to understand why Kittelstrom limits her religious liberals to one type of Protestant.

There are no Catholics or Jews in her book. This is

Spring 2015 The American Prospect 115

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understandable in the case of Catholics, given the conservatism of the 19thcentury American church hierarchy, but why give relatively short shrift to Felix Adler, the Jewish founder of the Ethical Culture movement, in favor of William Mackintire Salter, a member of Ethical Culture and another WASP (married to Mary Gibbens, the sister of William James’s wife, Alice)?

Kittlestrom speaks repeatedly of an “American Reformation.” But there was more than one American reformation—just as there were many Protestant reformations in Europe.

The Second Great Awakening, with its literal interpretation of the Bible and emphasis on “born-again” experiences, was taking place during the same period of the late 18th and early 19th centuries as the transformation of Puritan-descended New England Congregationalism into more liberal, Enlightenment-infused Unitarianism.

These movements presaged a permanent split in American Protestantism, played out repeatedly from the early 19th century to our own time through culture wars, beginning in the 1820s with religious conservatives’ attempt to stop federally mandated Sunday postal service (unsuccessful until the development of the telegraph made Sunday mail economically obsolete) and continuing through battles over slavery, evolution, the status of women, birth control, abortion, and gay rights.

Kruse, as a historian of the 20th century, naturally pays more attention to Catholics and Jews than Kittelstrom does, but he does not adequately deal with the rise of conservative Catholic power in the 1950s as an important force in the drive for public acceptance of religious symbolism in government. The theological split that once defined American Protestantism has now become a split in which religiously conservative Catholics, Protestants, and Jews have come together (an alliance that would have been unthinkable in the 1950s) on the right-wing side of cultural issues. At the same time, theologically liberal Catholics, Jews, and Protestants, along with secularists, have become allies on the other side of the culture wars.

By the Eisenhower era, despite

Southern California schoolchildren pledge their allegiance to one nation under God, 1962.

developments like the addition of God to the Pledge, there were already signs of an emerging secular and religious liberal movement against assaults on the separation of church and state. In 1948, in McCollum v. Board of Education, the Supreme Court struck down an Illinois state law allowing “released time” for religious education in public schools. Justice Hugo Black, speaking for the 8–1 majority, declared, “Separation is a requirement to abstain from fusing functions of Government and of religious sects, not merely to treat them all equally.”

Throughout the 1950s, new challenges were making their way through the lower courts. The 1962 case Engel v. Vitale, in which the high court struck down a New York State school prayer, was followed by Griswold v.

Connecticut in 1965, which ended laws—long supported by the combined power of the Catholic Church and highly conservative Protestants— restricting access of married couples to contraceptives. Both the Engel and Griswold decisions enraged religious conservatives in a fashion that prefigured the stronger, lasting reaction to Roe v. Wade in 1973.

Another way of looking at the 1950s is that the successful attempt to infuse

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government with new religious symbolism was a response to a growing secularization in many areas of American cultural life that was disturbing to the devout, even though not yet widely recognized by the general public.

I was in fourth grade when “under God” was added to the Pledge, and since my classmates and I had learned to recite the old-fashioned, godless profession of fealty, our teacher had to explain the change. She said we should be grateful because children in the Soviet Union could be killed for saying the word “God” in public.

I went home and asked my parents whether this was true. They were far from liberals and, like a majority of their adult generation, had voted for both Roosevelt and Eisenhower.

My father laughed and said, “Well, I don’t think your teacher has been to Russia, so I’m not sure she knows.”

But—to give Kruse’s argument its due—my dad was raised at a time when “one nation, indivisible, with liberty and justice for all” was considered patriotic enough.

Susan Jacoby is the author of Freethinkers: A History of American Secularism and the forthcoming Religious Conversion: A Secular History.

Spring 2015 The American Prospect 117

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It’s All About the Money How America became preoccupied with higher education’s bottom line By David L. Kirp b

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his is a pivotal moment in American higher education—a crisis, you might say, if the term hadn’t been debased by overuse. The criticisms come from every corner and the bill of particulars is lengthy.

The financial cost gets most of the attention. Since 1980, tuition has more than doubled at private universities and tripled at public institutions.

Students have accumulated more than $1.2 trillion in debt, $300 million more than what Americans owe credit card companies. For-profit schools enroll about an eighth of all college students, many of whom end up saddled with mountainous debts and worthless degrees.

Students from poor families have it especially rough. Half of all 25-yearolds from well-off families, but just a tenth of all 25-year-olds from poor families, have a bachelor’s degree. As Robert Putnam recently observed, “dumb rich kids” go to college at about the same rate as “smart poor kids.”

What’s more, students are dropping out in alarming numbers. About two out of five students in four-year institutions, and at least three out of five enrolled in community colleges, don’t graduate. The cost to the economy, in lost productivity, and to these individuals, in stunted futures, is immense.

Undergraduates aren’t studying as much as they used to, and they’re not learning much either. Students are “drifting through college without a clear sense of purpose,” conclude Richard Arum and Josipa Roksa in their much-discussed 2011 book, Academically Adrift, and, while in college, more than 36 percent of them do “not demonstrate any significant improvement in learning.” One reason is that students are poorly taught.

Professors persist in relying mainly on lectures to deliver information, rather than adopting demonstrably more effective teaching strategies that engage students in thinking critically.

In their new book, Aspiring Adults

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Adrift, Arum and Roksa track the same group of students after graduation and find that many students remain at sea. While it’s unsurprising that many who matriculated during the recession couldn’t find decent jobs, it’s worrying that they also were unable to form close relationships or take on civic responsibilities.

Women are having an especially hard time. Many have been sexually assaulted while at college. Too often, administrators, fretful about bad publicity, have given a slap on the wrist to the assailants and a pass to fraternities where sexual assaults disproportionately occur.

Meanwhile, star athletes at universities with aspirations for national rankings have literally been handed a pass, receiving credit for nonexistent courses. “Why should we have to go to class if we came here to play FOOTBALL ,” tweeted Cardale Jones, who quarterbacked Ohio State to the 2015 national championship. “We ain’t come to play SCHOOL , classes are POINTLESS.” Elsewhere, athletes have rebelled at being exploited by universities that make millions from their prowess on the field, leave them with sports-related medical bills, and take away scholarships when they are injured.

For their part, many professors anguish over the direction of higher education. The culture wars that roiled campuses a generation ago seem like the good old days. At least then, the faculty occupied center stage; now they find themselves pushed to the margins, their voices counting for little in crucial institutional decisions. Winner-take-all has become the norm, rendering quaint the idea of a university as a community of scholars. Successful coaches and university presidents earn seven-figure salaries and star professors carry minuscule teaching loads, while illpaid lecturers and adjuncts, with no hope of tenure, do the lion’s share of undergraduate teaching. Humanities

The culture wars that roiled campuses a generation ago seem like the good old days. At least then, the faculty were central, and the issue was what students learned.

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departments are being dismembered, and vocationally oriented programs expanded, in the name of making colleges more “relevant” and “efficient.”

“Disruption is coming for higher education,” announces the guru of disruption, Harvard Business School professor Clayton Christensen, in his 2011 book The Innovative University, co-written with Henry Eyring.

“Do it cheap and simple,” Christensen says, predicting that online providers will deliver much of the course content now prepared by professors.

Understandably, such claims invite fears among academics that they will be reduced to the status of glorified teaching assistants.

A word of caution is in order, for some of these “crises” have been overblown. A recent Brookings Institution study concludes that the burden of student debt is actually no greater than a generation ago; the frenzy over massive open online courses, or MOOCs, has died down; the incidence of sexually assaulted women on campus is likely considerably lower than the commonly cited rate of one in five; and fewer students are enrolling at forprofit schools. Still, there’s no doubting that all is not well in higher education.

A common thread runs through this litany of laments: the norms and forms of the marketplace have come to dominate decision making. A dozen years ago, in Shakespeare, Einstein, and the Bottom Line: The Marketing of Higher Education, I explored how market values were edging out the collegial values of academe. Practices that at the time demarcated the frontier of market-driven behavior, like basing scholarships on merit, not need, have since become commonplace.

Markets and money have always mattered in American higher education, but not nearly as much as they do today. Throughout much of the 20th century, a well-educated citizenry was regarded as the ticket to national prosperity, and that shared belief was the rationale for spending tax dollars to underwrite public universities.

The tacit bargain that states made with their flagship universities was simple—the state would subsidize these institutions to keep tuition low if they

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delivered a world-class education to the best and brightest state residents, and produced research that contributed to the common good. Under the terms of that bargain, enrollment mushroomed and America’s premier universities became the best in the world. In The Race between Education and Technology, Harvard economists Claudia Goldin and Lawrence Katz demonstrate that this bet on higher education explains why, in the decades after the Second World War, the United States became the world’s richest nation.

Now students, not society, are regarded as higher education’s big winners. This sea change in attitude—higher education understood to be a private, not a public, good—largely explains why the states’ share of university budgets has plummeted, with tuition rising to fill the void. In American Higher Education in Crisis?, an insightful and crisply written survey of the current state of affairs, Goldie Blumenstyk, a veteran reporter for The Chronicle of Higher Education, points out how widespread the shift in financing has become. In 2000, tuition generated more revenue for public universities than state funds in just three states. By 2012, this was true in 24 states.

“We used to call ourselves state universities,” one university president told me. “Then we described ourselves as state-located universities. Now we’re state-molested universities.”

Meanwhile, a bachelor’s degree has become an ever-wiser investment as the “college wage premium,” which has doubled since the late 1970s, continues to increase. “Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree,” notes New York Times reporter David Leonhardt. That’s up from 64 percent in the early 1980s. Even curmudgeonly William Bennett, in the bluntly titled Is College Worth It?, acknowledges that going to college pays if a student takes the right subjects and attends the right schools.

While undergraduates don’t know these statistics, they get the message. According to a UCLA Higher Education Research Institute survey, which has been conducted annually since the mid-1960s, the percentage

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More Americans see higher education as a private, not a public, good. That sea change in attitude largely explains why the states’ share of university budgets has plummeted, with tuition rising to fill the void.

of freshmen who say that being “able to get a better job” is a critical reason to attend college reached an all-time high of 87.9 percent in 2012. In the 1960s, “developing a meaningful philosophy of life” was cited as the strongest motivation for going to college, more than double the percentage of students focused on making money.

These days, though, it’s all about money. In 2012, nearly three-quarters of freshmen, another record, cited the ability “to make more money” as very important, while fewer than half were eager to cultivate a philosophy of life.

Colleges can read these tea leaves.

Students used to be treated as acolytes whose preferences were to be formed by the college experience, but now they are viewed as consumers whose preferences are to be satisfied. Colleges are keenly competitive, and in the struggle for status, as measured by the U.S. News & World Report rankings, they lure the best-credentialed applicants by spending money on countryclub amenities and basing financial aid on merit, rather than need.

This tactic makes sense for a university whose ambition is to move up in the rankings. But basing admissions decisions on a market metric—maximizing tuition income and institutional ranking—hurts students from poor families. This is especially true at highly selective schools. As “Left Behind,” a Century Foundation report, points out, “one is twenty-five times as likely to run into a rich student as a poor student at the nation’s top 146 colleges.”

Boosting the number of poor kids who attend top colleges should be a top priority on the policy agenda. “The amount of untapped talent out there is staggering,” says Stanford economist Caroline Hoxby. Among the approximately 35,000 low-income kids with scores and grades in the top 10 percentile, more than 80 percent don’t apply to a single selective institution. Hoxby and a team of researchers have conducted ingenious experiments to show that simple strategies—like delivering information packets about colleges’ admission standards and financial aid policy, at a cost of six dollars a student—can substantially boost the number of these students who go to top colleges.

Federal Pell grants are based on

need, but as those grants have become more generous, some states have responded by raising tuition. What’s more, at many schools, Pell grants cover just a fraction of the cost. The Obama administration hopes to advance the goal of equal opportunity in higher education by adopting a market-driven rating system designed to give students a clearer picture of colleges’ costs and outcomes. Its latest proposal, published last December, rates universities partly according to the percentage of students receiving Pell grants, the schools’ affordability, and their graduation rates. Troublingly, however, the earnings of a college’s alumni will also be factored into the equation, as if that were a decent measure of educational quality. The message is plain—the dollar-and-cents return on investment is what counts.

Students’ desire to get rich, colleges’ efforts to improve their place in the pecking order, and the Obama administration’s focus on graduates’ earnings all point in the same direction. Market values trump everything, including learning how to think, developing character, cultivating creativity, or working out a philosophy of life. Tellingly, the Department of Education ruled out taking into account information about students’ satisfaction with their education or the civic engagement of students and alumni.

Seldom has it been made so plain that, to Washington policymakers, a university is little more than a vocational training ground.

Where might pushback against the dominance of market values come from? Two new books—Larry Gerber’s The Rise and Decline of Faculty Governance and William Bowen and Eugene Tobin’s Locus of Authority— look to reforms in university governance, though they have drastically different ideas about what to do.

Gerber makes the emphasis on efficiency the villain of the piece. “American universities,” he writes, “were the best in the world because they were faculty-directed,” but since the 1960s, power has shifted to administrators.

The mushrooming number of parttime instructors, who have no career stake in the university and little if any

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role in running the institution, further weakens the faculty’s position. Gerber’s answer is a reenergized professoriate that can make the case to the public that retreating from shared governance endangers “the future well-being of American society.” Good luck with that.

In their book Locus of Authority, Bowen and Tobin reject the shared governance model as it’s conventionally understood—with the faculty, administration, and board of trustees each vigilantly protective of its own turf. That division, Bowen and Tobin argue, is a prescription for inertia.

They want faculty to abandon their aversion to discussing costs and confront the hard truth that resources are finite even at wealthy institutions.

While elite private institutions like Princeton, where Bowen was formerly president, have never had it so good, funding for public higher education is unlikely to approach the levels of a generation or two ago, and that means hard decisions about academic priorities are inevitable. The approach Bowen and Tobin urge requires a delicate balance, making universities more nimble while respecting their core academic mission and values.

Lani Guinier’s The Tyranny of the Meritocracy, a deep dive into how colleges select and educate students, delivers a more thoroughgoing attack on market forces in higher education.

Guinier, a Harvard Law School professor, challenges one of higher education’s sacred cows, the necessity of using test scores and grades to determine students’ worth. Borrowing from Michael Young’s futuristic satire, The Rise of the Meritocracy, Guinier assails what she terms “testocratic merit”—the use of metrics to admit students that appear meritocratic but actually advantage the advantaged.

Instead, she urges universities to focus on “democratic merit.”

“Once you’re past the first year or two of higher education,” Guinier contends, “success isn’t about being the best test taker. It’s about being able to work with other people who have different strengths than you and who are also prepared to back you up when you make a mistake or when you feel vulnerable.”

Drawing on a rich variety of cases, Guinier describes how schools such

as Clark University in Worcester, Massachusetts, working closely with local communities, have brought into the fold a diverse group of students, including minority youth, by promoting a culture of creativity and collaboration. She shows how pedagogical pioneers like Harvard physics professor Eric Mazur have made a classroom culture shift, turning mammoth lecture courses, which many universities use to weed out struggling students, into a beehive of peer teaching, in the process closing the gap among minority and female students.

Universities ought to be doing more of the work that Guinier describes, but the incentives are weighted against it.

A third of a century ago, U.S. News & World Report published its first college rankings. The criteria and methodology were suspect, but instead of developing a more respectable metric, universities rushed pell-mell to climb this ladder of success, sometimes fudging their data to gain an advantage.

The draft federal regulations could prompt a national conversation about the value of higher learning. It’s learning, not earnings, that should matter, and while it’s easy enough to criticize the widely used metrics of accomplishment based on “value-added” critical thinking and student engagement, these measures are infinitely better than the criterion of higher earnings that the Obama administration has embraced.

The narratives in The Tyranny of the Meritocracy, with their emphasis on collaboration as the key to learning, are instructive for a larger reason.

These tales of improbable successes, lives turned around, and problems solved in the context of higher learning offer a different vision of what success means in higher education. Such experiences need to be honored and held up as models if there’s any chance of keeping the universities from becoming just another business, where the bottom line is all that matters.

David L. Kirp is the James D. Marver Professor at the Goldman School of Public Policy (UC Berkeley) and author of Improbable Scholars: The Rebirth of a Great American School System and a Strategy for America’s Schools.

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Spring 2015 The American Prospect 121

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122 WWW.Prospect.org Spring 2015

Has Child Care Policy Finally Come of Age?

The Democrats may now be turning to a long-stalled agenda for working parents. By Andrea Louise Campbell b

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he Democratic Party is now turning to a new agenda for parents: not just an expanded earned income tax credit and child tax credit, but also paid family leave, universal preschool, and free community college. President Barack Obama encapsulated the message in his 2015 State of the Union address when he asserted that “affordable, high-quality child care … [is] not a nice-to-have— it’s a must-have.” He even made the children-as-social-good argument that’s been missing from the American discussion of family policy: “It’s time we stop treating child care as a side issue, or as a women’s issue, and treat it like the national economic priority that it is for all of us.” The question now is whether, at long last, the United States will be ready to make progress on child care policy.

For the past four decades, even as the majority of women with small children have gone to work outside the home, the United States has done almost nothing to address the problems that parents face. The country has no universal child care policy, or paid family leave, or paid sick leave, or maternity leave, or any of the other supports for parents that are common in other advanced industrial nations.

American inaction on child care policy is all the more puzzling because of its effects on women and their potential power to make it an issue. Despite changes in work patterns, women remain responsible for the majority of child care responsibilities whether they are single parents or married. Women outnumber men in the voting booth.

They earn more college degrees than men do. Although the American economy depends on women, the nation has not responded to their needs, and they have not used their votes or their voices to insist on a response.

If good, affordable child care is so great a need, why is there no national policy? And why, as Elizabeth Palley

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and Corey S. Shdaimah ask in their book, In Our Hands: The Struggle for U.S. Child Care Policy, has there been no social movement for change?

One major problem, Palley and Shdaimah conclude from interviews with child care advocates and others, is the lack of a compelling way to frame the case for child care provision. Child care in the United States has always been understood as an individual, parental responsibility rather than as a social good. The model of K-12 education as a universal right never seeped down into care for younger children.

From the 1970s through the 1990s, while child care was debated, public opinion was ambivalent. Many Americans thought it best for mothers to stay at home with young children even as economic necessity prevented them from doing so. Yet there was strong support for making work a condition of assistance for mothers on welfare, partly because of lingering suspicions about their suitability as parents. In addition, allowing welfare recipients to stay at home while middle-class mothers went to work had become politically untenable.

As a result, the United States has some government-provided child care for the poor, and has left everyone else to secure private services on their own.

For the poor, the shortage of slots is acute. Despite the work requirement in the 1996 welfare legislation, low funding levels have limited subsidized child care to one-fifth of the nation’s poor children. The shortage of slots forces many low-income women to rely on informal caregiving arrangements that raise serious concerns about the children’s safety and well-being.

Middle-class families have some child care costs covered by employer benefits and tax subsidies, but the employer programs are limited and the value of federal tax subsidies has lagged the rapidly rising cost of child care. Like the poor, some middle-class families also

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put their kids in family day care run out of private homes or other unregulated services. The degree of regulation varies substantially by state; federal daycare standards were quashed by the Reagan administration.

From these fragmented arrangements, Palley and Shdaimah argue, arises the second major barrier to a social movement for public provision of child care: sharp divisions among child care advocates about strategies and goals. While some advocates focus on the needs of the poor, others call for early-education programs for all four-year-olds. They argue that emphasizing education and extending the universal K-12 education model to the preschool set is a more feasible goal that both skirts public ambivalence about paid care for younger children and capitalizes on the states’ traditional responsibility for education. Yet others argue for higher regulatory standards of child care at the state or federal levels.

Each of these approaches has its shortcomings. An emphasis on child care for lower-income families is laudable, as their needs are often most severe. But millions of middle-class families have two earners and need help with child care as well. Earlyeducation programs are attractive, but they typically run three to four hours per day and not during the summer,

failing to match work schedules. The one frame that no advocacy group appears to champion is the broad and simple idea that “many families with working parents need help.”

Palley and Shdaimah’s book is

at its best in revealing the tensions among child care advocates, but their analysis lacks two elements that would help explain the puzzling absence of a social movement. First, we rarely hear the voice of parents. While Palley and Shdaimah cite public opinion data, they might have asked parents what they want and analyzed why they haven’t mobilized to demand child care. This is the strategy that sociologist Sandra R. Levitsky pursues in addressing an analogous puzzle: Why is there no social movement for provision of long-term care in the United States? The only public provision of long-term care is through the meanstested Medicaid program, which forces elders to spend down to poverty to qualify. Faced with a choice between Medicaid and costly private services, many adult children care for their disabled elders themselves, with only scattered help from a few state and local programs and no paid leave for caregivers or tax credits to offset the financial burden. In her book Caring for Our Own: Why There Is No Political Demand for New American Social

In Our Hands: The Struggle for U.S. Child Care Policy

By Elizabeth Palley and Corey S. Shdaimah

New York University Press

A soldier visits her son at a day-care facility at Fort Jackson, South Carolina.

The 1989 Military Child Care Act created a system of child-care centers with features civilian parents can only dream of.

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Welfare Rights (2014), Levitsky finds that the split of policy responsibilities across levels of government stymies political activity: Where would caregivers press their claims—at the local, state, or federal level? She also finds that caregivers don’t even know what programs would help or what to argue for. I suspect that similar dilemmas confront parents who might otherwise fight for better child care policy.

The other missing element in Palley and Shdaimah’s analysis is a comparative perspective on the origins of child care policies. In her 2006 book Working Mothers and the Welfare State, Kimberly J. Morgan argues that differences in child care policies among Western industrialized nations are better explained by the role of organized religion in politics than by such factors as the strength of the political left or the rate of women’s employment.

Morgan finds that in countries such as France and Sweden, where religious authorities have been “subordinated to secular state ones,” the state has played a more active role in family policy. In contrast, where organized religion has played a more significant political role, as in the Netherlands and the United States, religious forces have succeeded in generating more opposition to shifting gender roles and the creation of government family policy. As more mothers took paid jobs in all of these countries during the 1960s and 1970s, the responses of governments were different. France and Sweden adopted national policies such as full-day care and preschool programs that facilitated women’s work. In contrast, the Netherlands maintained policies designed around the male-breadwinner model of the family (with more recent reforms still only encouraging part-time work for mothers), and the United States has encouraged private-sector rather than government solutions.

American child care policy has faced two uphill battles: opposition by economic conservatives to increased public spending and opposition by social conservatives to government policies they see as disadvantaging families with stay-at-home mothers.

The ubiquitous fiscal argument comes as no surprise. The views of the social conservatives are more interesting.

Spring 2015 The American Prospect 123

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Social conservatives prefer policies that help all families, such as higher standard deductions on taxes, while objecting to policies such as child care tax credits for working families, which these conservatives claim discriminate against traditional families.

Republicans have had to tread a thin line, as economic reality means that large proportions of Republican voters are from two-earner households.

After conservatives objected to an increase in the dependent care tax credit under Ronald Reagan in 1981, the next round of tax reform in 1986 nearly doubled the personal exemption, a policy that helps all families whether or not women have paid jobs.

Policies facilitating women’s work almost always come from Democratic lawmakers. As Morgan notes, Democrats have secured some aspects of the feminist agenda such as anti-discrimination laws but have encountered conservative opposition on programs that require more spending by government or business. In 1972, President Richard M. Nixon vetoed the Comprehensive Child Development Act, which would have provided universal, federally funded pre-kindergarten education. The main policy innovations adopted in this arena since the 1970s have been the tax breaks for dependent care and the 1993 Family and Medical Leave Act. Although much heralded at the time, the 1993 law provides only unpaid leave and does not apply at all to nearly half of American workers.

The private model of child care

arising from this confluence of forces has had enormous political consequences. First and foremost, private provision undercuts the constituency for policy change. As Morgan argues, the private welfare model is “politically self-reinforcing.” The tax subsidies, incomplete though they are, have helped the middle class afford child care. The system “works” in the sense that the number of child care centers doubled between 1982 and 1997. Middle-class and upper-income women can often get short-term parental leave from employers as well. These partial measures make it difficult to assemble a broad coalition for change.

Second, the private model is facil-

124 WWW.Prospect.org Spring 2015

Private provision of child care has wider significance for economic inequality. The advantages enjoyed by higher-income women allow them to invest in their own careers and their children.

itated by low pay and lax regulatory policies. The private market works only because of the availability of a low-wage workforce. Child care workers—one of the worst-paid groups in American society—receive few employee benefits and have high turnover rates. As Morgan notes, the poor treatment of child care workers harms minorities, who make up a disproportionate share of child care workers. And as sociologist Cecilia Ridgeway argues in her 2011 book Framed by Gender, the low pay of child care workers devalues both women’s care work in general and the paid work of the women for whom they are pinch-hitting.

The politically self-reinforcing private model has wider significance for economic inequality. Higher-income women are more likely to have maternity leave and other benefits at work and can afford better child care for their offspring. These advantages allow them to invest in their own careers and their children. In contrast, lower-income and minority children are more likely to be exposed to informal, poor-quality care, further stacking the societal deck against them.

The private child care model also undermines women’s full participation in work. The same proportion of women work in the United States as in Europe. American women, however, are more likely to work part time, and in the United States part-time workers typically have lower wages and fewer benefits than full-time workers do. Almost all of the gender gap in pay between men and women is due to working mothers.

The United States has not always been unresponsive to the needs of families when women have gone to work. During World War II, the nation provided child care to the women who flocked to factory jobs while their husbands were away. Of course, when those jobs evaporated after the war, so did the day-care centers. A more contemporary example of public provision of child care also comes from a national-security context. As Palley and Shdaimah detail, the 1989 Military Child Care Act created a system of child care centers with features civilian parents can only dream of. The

centers must meet Defense Department certification standards for quality; workers are trained and receive full benefits and wages on par with other military salaries; and parents pay on a sliding scale. The system isn’t perfect—there are waiting lists, just as on the outside—but the example shows that when women must work, we manage to summon effective child care.

Perhaps the personal experience of lawmakers themselves will illuminate the value of more effective work-family policies. Jennifer Senior, author of All Joy and No Fun: The Paradox of Modern Parenthood, recently wrote to Senate offices to ask how they handle parental leave for staff members. As she reported in The New York Times, all of the fifteen Democrats, two independents, and nine Republicans who responded offered paid leave. In fact, Republican Marco Rubio of Florida offered as much paid maternity and parental leave as independent Bernie Sanders of Vermont. Deb Fischer, Republican of Nebraska, told Senior that with paid leave her staffers “do their job well. They’re not preoccupied, they’re not worrying about everything that’s happening at home when they’re at work.” As a Republican, of course, Fischer rejects requiring businesses to offer paid leave, but her own experience confirms what sociologists Eileen Appelbaum and Ruth Milkman found in a study of California’s paid family and medical leave: Paid leave reduces employee turnover and increases morale. It’s good for the employer too.

Democrats are now making that case: Child care policies that help working parents help business as well. But that is a bonus. The core of the argument for child care policies is that they enable parents to deal with today’s economic realities and contribute to the well-being of children.

After decades of inaction, the United States may finally be ready to give child care the priority it deserves.

Andrea Louise Campbell is a political science professor at MIT, where she teaches public opinion and public policy. Her most recent book is Trapped in America’s Safety Net: One Family’s Struggle.

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How the Bankers Destroyed the Dream The mortgage collapse was an entirely avoidable crisis—a brew of elite financial lobbying and bad policy. By Peter Dreier b

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n the early 2000s, the media regularly turned to David Lereah, chief economist for the National Association of Realtors. He provided consistently optimistic predictions about rising housing prices and labeled those who disagreed a “Chicken Little.” In 2006, at the peak of the housing bubble, he published a book entitled Why the Real Estate Boom Will Not Bust— And How You Can Profit from It. Within a year, the housing bubble popped. Between 2006 and 2012, housing prices nationwide fell by a third. Americans lost about $7 trillion in household wealth as a result of the real estate crash. Six million families lost their homes to foreclosure and short sales. As late as mid2014, almost 10 million American households (about one in five of all mortgaged homes) were still “underwater”—their homes worth less than their mortgages. Millions of middleclass families watched their major source of wealth stripped away, their neighborhoods decimated, and their future economic security destroyed.

Foreclosed homes in a neighborhood bring down the value of other houses in the area, magnifying the impact.

The slowness of this recovery has much to do with the housing collapse.

In Other People’s Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business, Jennifer Taub explains how they got away with it and how this house of cards came crashing down. She names names—of greedy bankers, sleazy mortgage lenders, compliant politicians, indifferent government regulators, and occasional heroes who fought for stronger government oversight of banks and tougher consumer protections.

Taub reminds us that the nation’s economic troubles were entirely preventable. She pinpoints the key decisions—primarily by presidents, cabinet secretaries, key members of Congress, and government bank regulators—that

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allowed banks to engage in an orgy of speculation that caused the mortgage meltdown and the subsequent economic crisis. They weren’t following some predetermined script. They were making conscious choices about which interests to serve. They knew what they were doing and what the consequences might be. But, blinded by greed, they simply didn’t care.

Taub traces the 2008 financial crisis to the deregulation that began in the Carter years in the 1970s, accelerated during the Reagan-Bush period in the 1980s, and continued during the Bill Clinton and George W. Bush eras. The 2008 disaster, she writes, was a replay of the savings-and-loan debacle of the 1980s, when hundreds of S&Ls and banks went under and the federal government was left to bail out the depositors whose money the speculators had looted to the tune of about $125 billion. At the end of each catastrophe, the industry consolidated, with fewer banks owning more assets. The nation’s ten largest banks increased their control of the industry’s assets from 21 percent in 1960 to 60 percent by 2005.

The financial and real-estate lobbies used their political muscle to promote deregulation, which opened the floodgates to risky and predatory practices. Banks and private mortgage lenders began pushing subprime mortgages, many with “adjustable” rates that jumped sharply after a few years. These loans comprised 8.6 percent of all mortgages in 2001, soaring to 20.1 percent by 2006. That year, ten lenders accounted for 56 percent of all subprime loans, totaling $362 billion.

Instead of cautiously making loans to people who could repay them, banks and brokers made money by lending to people who were unable to repay. They bent the rules, lowered normal banking standards, and engaged in a variety of fraudulent practices—hidden fees, confusing loan documents, failure to verify borrowers’ income—that increased the odds that consumers

Other People’s Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business

by Jennifer Taub

Yale University Press

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would eventually lose their homes to foreclosure, after which lenders and brokers would make money by “servicing” the loan and reselling the home to the next unsuspecting buyer.

Predatory lenders touted low interest rates in ads targeting the elderly and residents of low-income, workingclass, and minority neighborhoods, without explaining the actual interest rates or that adjustable-rate mortgages would soon have higher rates. Mortgage brokers, the street hustlers of the lending world, made a commission for every borrower they handed to a lender. They used mail solicitations and ads that shouted, “Bad Credit? No Problem!” and “Zero Percent Down Payment!” to find people who were closed out of homeownership, or homeowners who could be talked into refinancing.

Taub, a professor at Vermont Law School (and former associate general counsel at Fidelity Investments), is a great storyteller. She peppers her history of the financial crisis with profiles of people who played key roles and bit parts in the unfolding disaster.

The bit players include Harriet and Leonard Nobelman. In 1984, the couple borrowed $68,250 from a mortgage broker to purchase a modest condo in Dallas. The broker then sold the loan to American Savings and Loan Association in Stockton, California, the nation’s largest S&L. Its executives’ greed and mismanagement led to several reorganizations, but whenever it fell on hard times, the federal government bailed it out. Eventually, it was purchased by Washington Mutual, which later collapsed under a mountain of bad mortgages brought on by its own predatory practices, including the creation of a devious idea called the Option ARM (adjustable rate mortgage), which allowed the borrower to defer a portion of the interest due. These mortgages were a trap almost guaranteed to result in massive foreclosures.

While American Savings’ various incarnations kept feeding at the federal trough, the Nobelmans had no such luck. By 1990, they had lost their jobs and faced health problems.

They filed for bankruptcy to avoid losing their home. They wanted a bankruptcy judge to modify their mortgage,

Spring 2015 The American Prospect 125

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based on their condo’s depressed value ($23,500—a result of Dallas’s worsening real estate market). But the bankruptcy judge rejected their plan. When they appealed the case, the federal court for the Northern District of Texas turned them down, too. They took their case to the Federal Circuit Court of Appeals for the Fifth Circuit, but they had no better luck there. So they appealed to the U.S. Supreme Court.

In 1993, in Nobelman v. American Savings Bank, the U.S. Supreme Court prohibited judges from requiring banks to modify mortgages by reducing principal to help homeowners facing bankruptcy and foreclosure.

With the Nobelman ruling, lenders quickly recognized that consumers who fell behind on mortgage payments couldn’t rely on the same bankruptcy protections routinely used by businesses. This, Taub explains, gave lenders “added incentive to place people in homes they could not afford,” often using deceptive mortgage products. As Taub observes, our government determined that while the Nobelmans were “too small to save,” American Savings, “with $30 billion in assets, was too big to fail.”

One fascinating figure in Taub’s story is Kerry Killinger, who became CEO of Washington Mutual in 1990 at age 40. Throughout its history, WaMu had engaged in what Taub calls “simple, safe banking” that was cautious and consumer-friendly. Killinger changed WaMu’s corporate culture.

Between 1990 and 1998, WaMu grew from $7 billion to $150 billion in assets and from 50 to 2,000 branches, in part by buying other banks. In 2001, American Banker named Killinger its Banker of the Year. As WaMu got bigger, so did Killinger’s appetite. He stopped flying coach and began traveling on corporate jets. As a young CEO, he earned a modest salary. By 2007, he was earning $14.3 million in compensation; the next year, $25.1 million.

WaMu pumped up its profits by pushing riskier loans that were more profitable than fixed-rate mortgages. By 2006, 75 percent of WaMu’s home loans were subprime, adjustable mortgages.

WaMu intentionally failed to verify, and sometimes falsified, the income or credit history of borrowers, and even

forged borrowers’ signatures on loan documents. It hired appraisers who inflated the value of homes to increase loans and put borrowers in precarious over-leveraged positions. It relied on 34,000 independent brokers to bring in business but had only 14 of its own employees to oversee their work. Not surprisingly, fraud was rampant and unchecked. Salespeople who delivered the most borrowers received invitations to WaMu’s annual President Club event, an opulent party held in various vacation spots like Cancun, the Bahamas, Maui, and Kauai. Salespeople who refused to sell the Option ARMs as a matter of conscience were fired.

“If you were alive, they would give you a loan,” said one appraiser who worked closely with WaMu. “Actually, I think if you were dead, they would still give you a loan.”

In September 2008, WaMu’s board fired Killinger. A few weeks later, after WaMu reported that it faced $19 billion in losses from troubled mortgages, the Office of Thrift Supervision seized WaMu’s banking divisions and put the FDIC in place as the receiver.

It was, at the time, the largest bank failure in the nation’s history. The FDIC arranged for JPMorgan Chase to purchase WaMu’s assets. Nevertheless, Killinger received $15.3 million in severance payments.

The conclusion Taub draws from the malpractices of WaMu and kindred lenders, rating agencies, investment banks, and others is stark: “Any hope for a large business to self-regulate at the expense of profit is likely not

Under Washington Mutual CEO Kerry Killinger, mortgage fraud was rampant and unchecked.

Washington Mutual pumped up its profits by pushing riskier loans: By 2006, 75 percent of its home loans were subprime, adjustable mortgages.

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tenable on a playing field with competitors waiting to take one’s place. And especially not when a CEO and other top executives are compensated for driving up short-term profits and thus the stock price, even when losses are certain to follow.” She concludes that Killinger “led this company off the cliff, but he did so because lawmakers and regulators took down the guardrails and eliminated the speed limits.”

Although Taub uses Killinger and WaMu as exemplars, she reminds us that this was a systemic disease that infected the entire financial industry.

Many bankers, brokers, and rating agencies broke the law, but much of what they did was perfectly legal, the consequence of decades of deregulation.

Taub reveals that, with a few exceptions, the heads of the crazy quilt of state and federal bank regulatory agencies viewed the lenders as clients. They did little to ensure banks’ safety and soundness or to protect investors, depositors, borrowers—and the wider economy.

The worst culprit was Fed Chair Alan Greenspan, a disciple of Ayn Rand, whose libertarian views colored his tenure as the nation’s top bank regulator. Greenspan believed that the banks could and should police themselves, with investors and rating agencies serving as back-up cops. He didn’t think that any bank would jeopardize its long-term solvency to make short-term profits. Only after the bubble burst and the economy crashed did Greenspan admit he was wrong, telling Congress in 2008 that he was in a state of “shocked disbelief.”

But Greenspan and other regulators had plenty of information warning them that many huge banks were engaging in fraudulent, reckless, and risky activities that would eventually explode. They choose not to act, blinded by ideology, self-interest (including potential jobs in the banking industry), and timidity. “Had Greenspan acted,” Taub writes, “the entire mortgage crisis could have been averted.”

Taub does not spare the Obama administration for its unwillingness to hold the worst culprits accountable for their misdeeds or to address the suffering of homeowners victimized by reckless lenders. Obama’s key economic advisers, particularly Larry Summers

Spring 2015 The American Prospect 127

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and Tim Geithner, did not believe that directly addressing the foreclosure problem by providing financial relief to distressed homeowners was necessary or politically feasible.

Obama eventually supported the effort that led to the Dodd–Frank legislation. The new law focused primarily on protecting consumers from abusive practices, but it did little to challenge the concentration of ownership or key aspects of the industry’s business practices, including the “originate to distribute” loan model and regulation of derivatives.

Particularly frustrating was Attorney General Eric Holder’s reluctance to prosecute the banks and their top executives. Eventually, the Justice Department put enough pressure on several major banks to agree to negotiate multibillion-dollar settlements.

The funds were targeted to some of the victims of the banks’ fraudulent practices, and to help homeowners. But the top executives admitted no wrongdoing. The settlement fees came out of the banks’ revenues, not the pockets of the bigwigs. And the real culprits avoided spending time behind prison bars, which in the end is the only way to really stop them from misbehaving and crashing the economy again.

In 2011, for example, the FDIC sued Killinger and two other WaMu executives for mismanagement. They reached a settlement agreement for $64.7 million, most of it covered by the bank’s insurance policy. That year, too, the Justice Department investigated WaMu but failed to file any charges.

Indeed, many Wall Street honchos survived the financial crisis not only with their jobs intact but with substantial raises. JPMorgan Chase CEO Jamie Dimon received a hefty bonus after negotiating a settlement with the feds over his bank’s involvement in the mortgage crisis. On January 24, 2014, it was announced that Dimon would receive a 74 percent raise—to $20 million—despite what was reported as the bank’s worst year under Dimon’s reign.

The Institute for Policy Studies, in a March 2014 report, found that the $26.7 billion in bonuses handed to 165,200 executives by Wall Street banks in 2013 was enough to more than double the pay for all 1,085,000 Americans who work

128 WWW.Prospect.org Spring 2015

other Books Mentioned:

Financial Justice: The People’s Campaign to Stop Lender Abuse

by Larry Kirsch and Robert N. Mayer

Praeger

From Foreclosure to Fair Lending: Advocacy, Organizing, Occupy, and the Pursuit of Equitable Credit Edited by Chester Hartman and Gregory D. Squires

New Village Press

full-time at the current federal minimum wage of $7.25 per hour.

No bank CEO has faced prosecution or gone to jail for the widespread mortgage fraud that fueled the bubble and the collapse that followed. “The message to every Wall Street banker is loud and clear,” said Senator Elizabeth Warren at a Senate Banking Committee hearing last year. “If you break the law, you are not going to jail, but you might end up with a bigger paycheck.”

Taub’s tale of malfeasance, corruption, and indifference is occasionally interrupted with stories of dissenters who challenged the bankers and regulators. Her heroes include Warren and Senator Richard Durbin, who pushed for legislation to give bankruptcy court judges the power to modify mortgages through “principal reduction”—to reduce the balance owed on the mortgage to the home’s current market value—which would save “underwater” homeowners from spiraling debt and foreclosure, but who ran into a buzz saw of industry lobbyists who killed the bill in the Senate. Another dissenter was Brooksley Born, chair of the Commodity Futures Trading Commission from 1996 to 1999, who wanted her agency to regulate derivatives and other exotic financial investments (including credit default swaps) that she accurately predicted were too risky and would lead to disaster.

Treasury Secretary Robert Rubin, Summers, and Greenspan stopped her from exercising the kind of regulatory authority that would have prevented the calamity. Edward M. Gramlich, a Federal Reserve Board member, repeatedly warned about subprime mortgages and predatory lending.

He tried to get Greenspan to crack down on irrational subprime lending, but his warnings fell on deaf ears, including those in Congress. Taub also praises Sheila Bair, the FDIC chair who resisted banks’ reckless practices, but was usually outmaneuvered by White House officials and regulators closer to centers of power. Taub credits two economists, Dean Baker and Susan Wachter, who warned that the upsurge of subprime loans and the upward spiraling of housing prices was unsustainable, but who were marginalized by their more mainstream colleagues

and the industry’s hired experts.

Missing from Taub’s account are the many community organizing and advocacy groups, like National People’s Action and ACORN, who, since the 1970s, were on the front lines of the battle against bank redlining and who issued early warnings about predatory lending. She also ignores the role of Americans for Financial Reform, the Washington, D.C.–based liberal coalition that played a key part in pushing for tough reform measures that resulted in the Dodd–Frank legislation. Nor does she discuss Occupy Wall Street, which helped inject outrage about the banking industry’s abuse of power into the national conversation. For the story of those grassroots activists, readers will have to rely on Larry Kirsch and Robert Mayer’s Financial Justice: The People’s Campaign to Stop Lender Abuse and Chester Hartman and Gregory Squires’s From Foreclosure to Fair Lending: Advocacy, Organizing, Occupy, and the Pursuit of Equitable Credit.

Taub’s book is a jeremiad, a warning that we need to understand what led to the 1980s S&L crisis and the more recent financial meltdown, or else it could happen again. She would certainly be upset, but not surprised, by a story that appeared on the front page of The New York Times on January 14, soon after the Republicans took control of both the House and Senate. The article began, “In the span of a month, the nation’s biggest banks and investment firms have twice won passage of measures to weaken regulations [adopted as part of the Dodd-Frank law] intended to help lessen the risk of another financial crisis, setting their sights on narrow, arcane provisions and greasing their efforts with a surge of lobbying and campaign contributions.” She may have to add a chapter to the book before it appears in paperback, recounting the sorry tale of lessons unlearned.

Peter Dreier teaches politics and chairs the Urban & Environmental Policy Department at Occidental College. His books include The 100 Greatest Americans of the 20th Century: A Social Justice Hall of Fame, and Place Matters: Metropolitics for the 21st Century, co-authored with John Mollenkopf and Todd Swanstrom.

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The Evolutionary Roots of Altruism Do altruistic groups always beat selfish groups?

A new book claims they do. By Melvin Konner b

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avid Sloan Wilson opens his new book, Does Altruism Exist?, with an old conundrum that has animated many late-night dormitory debates: If helping someone gives you pleasure, gains you points for an afterlife, and enhances your reputation, is it really altruism? Wilson wisely decides to put acts before motives: “When Ted benefits Martha at a cost to himself, that’s altruistic, regardless of how he thinks or feels about it.” Great. But what does “cost” mean in that sentence? Does it mean “cost” after considering all those benefits, or not?

Wilson believes that to answer this question, we must turn to evolutionary theory, and especially to a theory known as group selection, which holds that better adapted groups produce more offspring, with the result that their traits are passed on. The implications are far-reaching. If group selection is correct, it follows that humans and other group-living creatures are fundamentally not selfish but cooperative and even altruistic—that we human beings owe our existence to distant ancestors who were members of groups that succeeded because they were better able to cooperate than other groups.

Group selection departs from the more familiar model of individual selection that sees the evolutionary prize going to the individual, male or female, who has more surviving offspring, regardless of health and life­ span, much less altruism. Yet another variant of Darwinian theory reduces evolution to what the biologist Richard Dawkins famously called “the selfish gene.” In this view, the true competition to reproduce is at the level of the gene, and an organism is only a gene’s way of making a copy of itself.

Selfish-gene theory allowed, however, for an explanation of altruism that arose in the 1960s and became known as “kin selection.” If a gene affects altruism in such a way that the altruism is more likely to be directed at close relatives, the gene can spread in the

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population despite the cost imposed on the altruist. For example, if an individual is 99 percent likely to die while saving two full siblings with 100 percent certainty, that’s enough for the siblingsaving gene to spread slowly but surely over evolutionary time.

In humans we call this nepotism.

And no, it doesn’t matter that there is no one gene for kin-directed altruism. There can be hundreds of genes, each with a small effect, just as there are for height or depression. Environments during childhood can have a whopping effect on each of these three traits as well, but none of this changes the mathematics or the long-term predictive value of kin selection theory.

Other approaches to the evolutionary puzzle of altruism also appeared in the next half-century: the ability to expect and receive reciprocal altruism, the benefits to an individual’s reputation, cooperation in games where the cumulative payoff beats defection, and other models.

So recent decades produced a lot of ways of explaining the evolution of limits on selfishness, and with one exception they all involve some benefit to the individual, or at least to the genes, from restraining raw selfishness. But Wilson considers these explanations inadequate, and his way out is to turn to his decades-long commitment to that alternative process: group selection. To be exact, he defends multilevel selection: He doesn’t reject selection at the level of the gene or the individual, but he believes that group selection plays a very large role, especially in social behavior.

In other words, far from holding that natural selection operates mainly on genes blindly replicating themselves or on individuals struggling for life and, more important, reproduction, Wilson is one of a growing number of distinguished scientists who believe that competition among superorganisms— functionally organized groups—is key to understanding evolution. The idea

Does Altruism Exist?

Culture, Genes, and the Welfare of Others

by David Sloan Wilson

Yale University/ Templeton Press

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of group selection favoring cooperation isn’t new; it goes back at least to Peter Kropotkin, a Russian evolutionist of the early 20th century, and to some remarks of Darwin’s. Before kin selection was formally proposed in the 1960s, a British ornithologist, V. C. Wynne-Edwards, tried to explain much about avian social life by reference to adaptive group functioning. For example, he asked how the evolution of submissive behaviors could otherwise be explained if dominance leads to reproductive success. Another British ornithologist, David Lack, replied that the beta animal passes on submissive displays, since the alpha can’t monopolize reproductive success forever—he may age or get hurt—while the bowing and scraping beta can live to reproduce another day. In other words, Lack and others stood by individual selection as sufficient. Due to opposition by leading evolutionists at the time, and despite lifelong proponents like David Sloan Wilson, group selection languished.

But it is being revived. In the journal Nature in 2010, Martin Nowak, Corina Tarnita, and E.O. Wilson tried to show that kin selection is irrelevant to explaining the phenomenon that it seemed for half a century most suited for: extreme cooperation and self-sacrifice in insect colonies.

Explanations of kin selection often start with ants and bees, because colonies consist largely of hyper-siblings so closely related to each other that genes underlying sacrifice can be passed down by near kin who live to reproduce. Nowak et al.’s mathematical models aimed to prove that relatedness doesn’t matter—colonies just compete as groups—and they extended their reasoning to dismiss kin selection generally.

Two letters appeared a few months later, one with 137 authors, the other with nine, vigorously defending kin selection and summarizing evidence for it. Among these signers were many of the most recognizable names in evolutionary biology. That doesn’t make them right, of course.

Nor do the papers published since decide the question. They include more work in favor of group selection (in spider colonies, for instance) as well as new empirical work and

Spring 2015 The American Prospect 129

New from reviews supporting kin selection in vertebrates as well as insects. There have also been theoretical claims that group selection and kin selection are mathematically equivalent, and that there is a narrow theory of kin selection that is wrong but a general one that is right.

This is a lively debate. If you search on “The False Allure of Group Selection,” you will find not only Steven Pinker’s critique of the theory but also many lengthy comments from leaders in evolutionary studies, pro and con.

The controversy is raging, and I am not proposing to tell you who is right.

But in his new book, David Sloan Wilson claims the debate is all over:

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The controversy over group selection is receding into the past and eventually will be forgotten except from a historical perspective, like the controversies over the Copernican view of the solar system, Darwin’s theory of natural selection during the late nineteenth and early twentieth centuries, and the theory of continental drift during the early twentieth century. For this reason I am able to offer a postresolution explanation for the evolution of altruism in a short space …

It’s fine for Wilson to present his own view, but to declare victory is a little disingenuous. And implying that the numerous scientists who have little use for group selection are like anti-Copernicans is just a rhetorical trick—and a rather ungenerous one for a book on altruism.

Everyone in evolutionary science believes in multilevel selection, especially at the levels of the gene and the individual, and few rule out group selection completely; it’s a question of how important group selection is. Wilson defines his main evolutionary principles this way: “Natural selection operating within groups tends to undermine group-level functional organization,” and “Group-level functional organization evolves primarily by natural selection between groups.” A shorter version comes from a paper he wrote with another famous Wilson, Edward O.: “Selfishness beats altruism within

groups. Altruistic groups beat selfish groups. Everything else is commentary.”

But consider for a moment some real human instances. After stealing vast tracts of land from Native Americans, largely slaughtering them in the process, competitive Euro-Americans held land rushes in which the conquerors raced as fast as they could to plant flags and claim hundreds of acres each. This land was stolen from people who lived in far more cooperative groups, believed much less in individual property rights, and often viewed land as a resource held in common. They vied with each other before white culture came, and perhaps more cooperative groups prevailed. But faced with a less cooperative group than any of theirs, the Native Americans lost.

On the other hand, the Nazis who murdered most of the Jews of Europe were very organized indeed, much more so than the communities they destroyed. Some scientists project group replacement back through human evolution. Samuel Bowles and Herbert Gintis, in A Cooperative Species, explain the evolution of cooperation as a result of what they believe was extreme group conflict, with the elimination of less cooperative groups throughout the formation of our species.

According to Wilson, we cannot have gotten to our present level of human cooperation and altruism without competition among groups in which more cooperative ones prevailed. He is not naïve about conflict: “Everyday life and the annals of history are replete with examples of individuals and factions that succeed at the expense of their groups, despite the arsenal of social control mechanisms designed to thwart them.” But altruism is safe in the end, according to Wilson, because only groups that control these disruptive forces can succeed against other groups, which will disintegrate, dwindle, or be destroyed.

Leaving aside how plausible his scenario is, we have known at least since sociologist Lewis Coser published his 1950s classic, The Functions of Social Conflict—backed by long historical experience—that group conflict tends to bring out the best and the worst in people. Sure, groups at war cohere

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quite beautifully. The difficulty is that the group has to be really nasty to outsiders. If you need group conflict to evolve cooperation, why don’t you need group conflict to sustain it? And if you do, the logic of group selection seems no help in getting to the kind of cooperation that includes all humanity—the group that is not at war because there is no outsider left to fight.

Wilson’s view is that because group selection preceded human evolution, it provides the evolutionary key. All of us who study human origins would love to be able to say what the key was. Ever since Darwin, scientists have come up with plausible explanations: bipedal walking, rapid brain expansion, toolmaking, language, religion, hunting, art, monogamy, helpless infants, group child care, menstruation, concealed ovulation (instead of estrus or “heat”), menopause, grandmotherhood, aid in childbirth, and many others. Of these, bipedal walking and (probably) hunting preceded brain expansion by several million years. The rest is speculation. Group cooperation is just one of a long list of suspects.

Wilson follows the great evolutionists Ernst Mayr and Niko Tinbergen in urging us to carefully separate ultimate (evolutionary) causes from proximate causes, such as those involving individual motives. As Wilson well knows, the extant evolutionary explanations of altruism (or cooperation) are manifold. Since altruism has evolved and persisted, it must be adaptive, which means it has increased the frequency of genes that underlie it. This, Wilson concedes, applies as much to group selection as to individual or kin selection. But he also knows that the proposed (and to some extent proven) ultimate adaptive value of altruism has included survival of kin, expected reciprocity, and reputation. All are ultimate causes, none depend on motives, and none require group selection.

Suppose I’m a young man on a date and I drop an overly generous bill in a street musician’s guitar case. Is this irrelevant to my personal reproductive success? If I help a colleague

According to Wilson, we cannot have gotten to our present level of human cooperation and altruism without competition among groups in which more cooperative ones prevailed.

manage a difficult student, is it just for the good of the college, or might I one day get help in return? If I die in a suicide attack and my family is praised, is group selection the only way to account for my behavior?

Remember, none of this is about motives; it is all about ultimate causes.

There is also a kind of non-causal explanation known as mismatch: We evolved for so long in groups of kin that we can no longer function any other way, even among unrelated friends and colleagues. Since, unlike many species, we know kin by association—not by odor or other indelible signals—mismatch is possible. It’s not a very elegant explanation, but it may be right.

Expanding on the implications of his argument, Wilson makes a spirited defense of religion against aggressive atheism, claiming among other things that religions promote in-group altruism. (Full disclosure: I agree and am working on a book that makes that among other points.)

He also gives us a reasoned critique, based on behavioral economics, of the Ayn Randian (really, Leon Walrasian) notion of Homo economicus, the

everyday hero who makes the world run handsomely through unrepentant selfishness. In developing his argument for group selection, Wilson draws on Elinor Ostrom’s work on the “tragedy of the commons.” A leader in game theory and winner of the Nobel Prize for economics, Ostrom showed

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that by instituting certain rules, people can avert what some have seen as an inevitable outcome—selfishness depleting and destroying a shared resource. So, even under rational economic theory, it does not have to be everyone for her- or himself.

In one of the book’s best chapters, we learn about what Wilson and his colleagues have done in Binghamton, New York, studying and promoting prosocial behavior (altruism without regard to motives) among disadvantaged students and improving lives and neighborhoods as a result. But we are told that a particular theory of evolution supported this work, even after a chapter showing that religions have done similar good work while in some cases denying evolution, and another showing that governments and philanthropists have done great good while ignoring evolution.

In the book’s final chapter, “Planetary Altruism,” Wilson takes his argument to what he sees as its logical conclusion. “The need to manage self-organizing processes might seem like a contradiction in terms,” Wilson writes, “but it follows directly from evolutionary theory.” The management in question seems to be motivated by a belief in the importance of group selection. Yet Wilson has also acknowledged, “All sorts of selfish motivations can result in a desire to help others.” So, in efforts to manage the planet, why not rely on selfishly motivated altruistic actions tempered by game theory’s evolutionarily stable strategies? That approach might have the same effect and be consistent with other views of evolution. We can agree that planetary altruism (or at a minimum, cooperation) is vital for human survival, but we don’t need a particular, still highly contentious, evolutionary theory to promote it.

Melvin Konner is the author of The Evolution of Childhood: Relationships, Emotion, Mind; The Tangled Wing: Biological Constraints on the Human Spirit; and Women After All: Sex, Evolution, and the End of Male Supremacy.

He teaches at Emory University.

volume 26, number 2. The American Prospect (ISSN 1049-7285) is published quarterly by The American Prospect, Inc., 1333 H Street NW, Suite 300 East Tower, Washington, DC 20005. Periodicals-class postage paid at Washington, DC, and additional mailing offices. Copyright © 2014 by The American Prospect, Inc. All rights reserved. No part of this periodical may be reproduced without the consent of The American Prospect, Inc. The American Prospect ® is a registered trademark of The American Prospect, Inc. Postmaster: Please send address changes to The American Prospect, P.O. Box 421087, Palm Coast, FL 32142. printed in the u.s.a.

Spring 2015 The American Prospect 131

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The Opportunity Dodge

by Lawrence Mishel

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e think of America as the land of opportunity, but the United States actually has low rates of upward mobility relative to other advanced nations and there has been no improvement in decades.

Creating more opportunity is therefore a worthy goal. However, when the goal of more opportunity is offered instead of addressing income inequality, it’s a dodge and an empty promise—because opportunity does not thrive amidst great inequalities.

It is important to distinguish between opportunity (or mobility) and income inequality. Concerns about mobility relate to strengthening the chances that children who grow up with relatively low incomes will attain middle-class or higher incomes in their adulthood. To address income inequality, on the other hand, is to focus on whether low- and middle-income households improve their share of the economic growth generated in the next two decades. Rising inequality is best illustrated by the fact that while the top 1 percent only received 9 percent of household income in 1979, this group gained either 38 percent (using the CBO’s comprehensive measure) or 60 percent (using tax data on market-based incomes) of the income growth between 1979 and 2007.

That is, the top 1 percent received four to six times its expected share of all the income growth.

The opportunity dodge is popular with centrist and conservative politicians. Conservatives, for the most part, consider income outcomes to be the result

132 WWW.Prospect.org Spring 2015

of meritocracy. “I don’t care about income inequality per se; I care about opportunity inequality,” Arthur Brooks, head of the American Enterprise Institute recently said. “I want everybody to have a chance to be mobile, to rise, for everybody to have a chance to earn success.” Likewise, Jeb Bush’s highly touted speech to the Detroit Economic Club keyed in on “the opportunity gap.” Left unsaid is that groups losing out from income inequality are judged to have not exerted sufficient effort, to have inadequate skills, or to have pursued counterproductive behaviors (such as not getting married).

Centrist Democrats sometimes address opportunity instead of income inequality to avoid confronting the top 1 percent’s capture of the lion’s share of income growth. After all, addressing runaway executive pay and a runaway financial sector—the main causes of the top 1 percent’s income gains—smacks of redistribution; and besides, those folks are their donor base. Talking about opportunity also allows a politician to avoid confronting ongoing wage suppression and the imbalance of bargaining power that has led to stagnant wages for college graduates and non-college graduates alike over the last dozen years.

As Representative Scott Peters of the House New Democrat Coalition recently said, “To the extent that Republicans beat up on workers and Democrats beat up on employers—I’m not sure that offers voters much of a vision.”

Improved early-childhood education or access to college— the opportunity agenda—will

enhance the upward mobility of today’s children (especially if coupled with policies that improve the availability of good jobs), and help them prosper as adults. However, it will do nothing to enable today’s families to share in economic growth. That’s what makes it a “dodge” to pursue opportunity but ignore income inequality: It is at best changing the subject and, in Larry Summers’s characterization, it is evading the tougher issue of who has bargaining power in the economy.

The opportunity dodgers also ignore that income inequality and intergenerational mobility are closely linked. The so-called Great Gatsby Curve comparing opportunity with equality shows that mobility is less in countries with the greatest inequality. So we will not be able to foster more opportunity and mobility without also addressing income inequality. Policies to increase mobility usually focus on more and better education, including starting earlier (quality early-childhood education) and extending education through community college or a four-year degree. Yet one of the most robust and long-standing social science research findings is that family background—the circumstances in which children grow up—greatly shapes educational advancement. So, promoting education solutions to mobility without addressing income inequality is ultimately playing pretend. We can’t substantially change opportunity without changing the actual lived circumstances of disadvantaged and working-class youth.

Success in school is not as easy for someone facing poverty, especially the concentrated poverty that racial segregation produces.

These are children who frequently change schools due to poor housing; have little help with homework; have few role models of success; have more exposure to lead and asbestos; have untreated vision, ear, dental, or other health problems; have parents with the greatest stress; and live in a chaotic and frequently unsafe environment. For them, opportunity is not enough unless the foundations of success are established.

Acknowledging that income inequality and poverty greatly affect schooling success means we need to improve the circumstances of poor children’s lives by providing stable, adequate housing and healthy, safe environments. Decent income for their parents is essential. If we fail to improve these circumstances, promoting mobility and opportunity through more and better education is a false promise and is simply posturing.

Last, it is important to recognize that some people are always going to end up on the bottom and middle rungs since—except in Lake Wobegon—somebody has to be below average. Economic policy must also be concerned that lowand moderate-income families have decent incomes, health care, and retirement. The opportunity dodgers are really saying they do not care how low- and middleincome families actually live.

Lawrence Mishel is president of the Economic Policy Institute.

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The Promise of Career and Technical Education

By Randi Weingarten, President AMERICAN FEDERATION OF TEACHERS

n the surface, the latest jobs report from the Department of Labor is good news—an estimated 320,000 jobs were added in November, which translates into the longest streak of uninterrupted private sector job growth in our nation’s history.

However, a deeper look at those numbers shows that while more Americans may be finding jobs, wages are standing still. As the Economic Policy Institute reports, earnings for the wealthy few have surged upward while paychecks for the vast majority of Americans have been falling behind.

And people are feeling it deeply. According to exit polls after the recent election, 70 percent of voters said their family’s financial situation has stayed the same or gotten worse over the last two years.

What this means is our nation’s ever-widening income gap is growing, and the promise of America—that idea that when you work hard, you get a decent shot—is slipping further out of reach for too many.

In those exit polls, voters also expressed frustration about the future for their families. Nearly half said they expect life for “future generations to be worse than life today,” and 78 percent said they’re worried about the future direction of the economy.

We know that Americans are hungry for good middle-class jobs that will move us toward a shared prosperity. We know that when the labor movement was strong, so was the middle class. And we know that we need to rebuild both—because Americans want to work, but in return they want a decent wage that will allow them to support themselves and their families.

The AFL-CIO and our union recently teamed up to convene a summit on how to help accomplish this through career and technical education. The summit attracted everyone from Vice President Joe Biden and Labor Secretary Thomas Perez to business and union leaders, as well as educators and students from high-quality career and technical education programs.

The aim of the summit was to help current workers, dislocated workers and young people get the skills they need to be prepared for the good jobs of today and tomorrow. The standing-room-only

crowd discussed how to scale up and sustain CTE programs that provide multiple pathways to high school graduation, higher education, advanced training and certification, and careers in everything from healthcare and robotics to aircraft maintenance and clean energy. And everyone concluded that such programs represent the promise of highquality CTE. As Vice President Biden said: “Unions have helped to build the middle class. Now we’ve got the job of rebuilding it. This is not about conflict, this is not about pitting business against labor. This is about getting the best-educated workforce in the world.”

Nicholas Pinchuk, chairman and CEO of Snap-on Tools, agreed, noting: “We are in a global competition for jobs; the single best weapon is CTE. We need to out-skill the competition.”

The overwhelming interest in this summit, just days after the election, shows that CTE is an approach that appeals to both Republicans and Democrats.

However, fulfilling the promise of CTE requires resources, partnerships, funding and real input from teachers. As we heard from 570 CTE educators in a recent AFT survey, teachers are excited about the success of CTE, and this success shows in statistics like these: For those with a CTE concentration, 9 in every 10 graduate on time and 7 in every 10 go on to enroll in postsecondary education. However, these educators also stressed that they need 21stcentury technology and equipment in order to match what’s in today’s business settings.

And business leaders at the summit, such as Lorilyn Owens with the Oracle Academy, stressed the importance of listening to teachers. These business leaders believe in CTE because they are true partners in programs that work to give them the skilled workforce they need. At the same time, the businesses provide vital opportunities through internships, mentoring and a pipeline to employment.

Lily Mohamed, who graduated from Platt Technical High School in Connecticut and now works in avionics for Sikorsky Aircraft Corp., was mentored by a Teamsters union member who helped her learn not just the technical skills she needed, but how to excel in a professional environment. “I had the upper hand because I learned the skills I needed for my job in high school,” she said.

CTE programs around the country are giving students like Lily a viable path to the future. To scale and sustain these successes, Congress must act to reauthorize the Carl D. Perkins Career and Technical Education Act with full funding. The AFT is committed to ensuring that CTE educators and students get the resources they need; the time to connect with employers and the community; class sizes small enough to facilitate learning; and diverse program offerings to meet the needs of students and the labor market.

But we can’t do it alone. As we saw at this summit, policymakers, business, labor and community can come together to make CTE a thriving component of our 21st-century education system—and with it, an engine that helps more young people have access to good jobs and the American dream.

Career and technical education gives students viable pathways to the future.

Photo by Michael Campbell

Weingarten, with Alexis Smith, graduate of Toledo (Ohio) Technology Academy, and Vice President Joe Biden, at the CTE summit in Washington, D.C. Follow AFT President Randi Weingarten: www.twitter.com/RWeingarten

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