Part One: Setting the Scene for the Rise of Trump’s Populism in 2016. The year 1981 separates two very different post WWII Americas. With WWII and the Cold War creating big government in the United States (see the research of Charles Tilly and James Sparrow), the initial post war period witnessed a government-led expansion of and technological improvement in the economic infrastructure that facilitated the nation’s tremendous economic growth led primarily by the automobile and related industries such as oil/energy. The middle class expanded dramatically largely due to a generous GI Bill, the investment in and development of a public school system that was the envy of the world, and the growth of labor union power in extracting living wages, health benefits, worker safety, vacations, and numerous other benefits. Most families could maintain middle and working class status with only one wage earner. The gap between the rich and poor declined significantly. On the eve of the Great Depression, the nation’s richest one percent received almost 24 percent of all national income, yet by 1981, the richest one percent received only 8 to 9 percent of all national income. America led the world in social mobility. The national debt fell from a historic high of 121 percent of GDP in 1946 to 31 percent in 1981. A progressive tax system symbolized a fundamental belief in the fairness of government policy even though effective tax rates on families increased throughout this period and marginal rates were at historic highs. America led the world in college graduates by the 1970s and most graduated with little or no debt.
There was a hard fought expansion of political rights for minorities (the Civil Rights Act of 1964, the Voting Rights Act of 1965, and the Fair Housing Act 1968) and women (Equal Pay Act of 1963 and the approval by Congress of the Equal Rights Amendment in 1971-72), as America finally began to live up to its lofty democratic principle of equality for all under the law. Other developments for women included access to birth control, especially “the pill,” by all women (Griswold v. Connecticut, 1965), and legalized abortion (Roe v. Wade 1972). Immigration became more open for persons from non-European countries. The Democratic Party, just as the Republican Party, was home to both liberals and conservatives. Centrists dominated each party. Members of each party could make compromises and work toward a common goal. A robust civil society had developed (see the work of Robert Putnam). The country landed a man on the moon, developed the space shuttle, and dreamed of even greater achievements.
Post-1981 America is very different. A resorting of Democratic and Republican supporters, traced initially to the 1948 presidential election, began in earnest with the civil rights movement of the 1950s and 1960s as black Americans moved almost entirely to the Democratic Party. A backlash to the violence that was sometimes associated with the civil rights and anti-Vietnam War movements of the late 1960s and early 1970s took the form of President Nixon’s law and order campaign in 1972 that continues to serve as a staple election strategy for Republican Party and its appeals to the white, working and middle classes, especially in the south. There was a backlash to the women’s movement, including opposition to abortion by evangelical Protestants who also spoke out against what they believed was the secularization of America. Party resorting accelerated by the mid-1990s. In essence, conservatives moved to the Republican Party, especially in the south, and liberals moved to the Democratic Party in the upper Midwest, the Northeast, and the West. Parties became more ideologically homogenous and less able and willing to communicate across the ideological divide. Increased technology made gerrymandering of legislative districts easier and reinforced the great ideological divide between parties. The number of safe districts in the House of Representatives reached almost 90 percent. The ideological and policy gaps between the Democrats and Republicans are as large today as they were in the 1920s. Geographically, the parties came to reflect the huge gulf between urban and rural Americas with the suburbs up for grab during the elections.
Government de-investment has led to a serious and threatening decline in the quality of America’s economic infrastructure. Labor unions are under attack by both the private sector and government. Union membership declined from 20 percent of the workforce in 1983 to 10.3 percent in 2019 (Bureau of Labor Statistics). The middle class is disappearing and its discretionary purchasing power has almost been wiped out which makes it more difficult for the country to recover from recessions. Maintaining middle or working class status is difficult today even for a family with two wage earners. The gap between the rich and poor has risen to a point similar to 1929 on the eve of the Great Depression with the nation’s richest one percent currently receiving almost 24 percent of all national income. Many countries now have greater social mobility than America. It should be noted that inequality and political divisiveness are highly correlated and this helps to explain the divisiveness that characterizes the country today. The nation’s debt grew from a post WWII low of 30.8 percent of GDP in 1981 to 50.2 percent in 1989, to 63.8 percent in 1993, to 54.9 percent in 2001, to 81.1 percent in 2009, to 103.1 percent in 2017, and 104.9 percent in 2019. The tax system has become much less progressive and it has come to symbolize the growing sense of the unfairness in government policy even though both marginal and effective tax rates on families have generally declined since 1981. The country is currently ranked sixth in the world in the number of tertiary (2 and 4 year colleges and vocational school) graduates. Due to the failure of most states to properly fund higher education, many students now graduate with a crippling debt. Blaming public K-12 teachers and schools for all of society’s ills has become common while state governments refuse to properly fund them and allow tax dollars to be siphoned off to private schools. Hard fought political rights for women and minorities are under attack. State voter suppression tactics against persons of color have become quite common in states with a history of voting rights discrimination (those cited in the original Voting Rights Act of 1965) since the gutting of the Voting Rights Act in 2013 in Shelby County v. Holder. Post 1981 America represents a second Gilded Age.
So what happened? Perhaps, as Professor Herman Schwartz (University of Virginia) suggests, the 1946 to 1981 era was unlike any era in global economic history because countries could control global market forces as they never had before (Bretton Woods system, near total US global financial dominance, and control of capital movements). The post 1981 era was a return to the pre-WWI global economy in which market forces drove politics (states unable to control market forces, especially capital movements). Globalization of the economy played a role, in particular, the globalization of finance (the end of embedded liberalism, the guarantee of free trade and full employment, see the research of John Ruggie) and the diffusion of auto technology from the US to Europe and Japan during the 60s and 70s. A more competitive and increasingly global market put pressure on American companies and workers like no other time since WWII. Technological advances in the manufacturing sector increased American competitiveness but reduced the need for expensive “factory-line” workers who had once formed the backbone of the American working class. The dramatic growth of a US led post-industrial high technology and information-based global economy in the 1990s put a premium on highly educated workers or human capital at the very time when the cost of going to college skyrocketed due to state government de-investment. While globalization is a standard interpretation and makes sense one might ask why the wealthy European countries are not witnessing a similar steep rise in inequality like the US? Perhaps it has to do with government policies here at home.
From 1946 to 1981 a pro-full employment, pro-government, and an inclusive set of political values set the parameters of public discourse and policy for both parties. Robert Putnam refers to this as part of the “we” era in America that first arose during the Progressive Era in reaction to the initial Gilded Age of the 1890s. The era of stagflation during the 1970s (combined high inflation and high unemployment) ushered in the post 1981 dominance of an anti-inflation, antigovernment, and an exclusive set of political values which has dominated the parameters of public discourse and policy since then. During the era of stagflation, the "one percent" led by Reagan and the Milton Friedman school of economics began to implement a propaganda assault preaching both the evils of government and the “truths” of private markets. Putnam refers to this as the beginning of the second “I” era or the second Gilded Age in American history.
With the defeat of moderate Republican Gerald Ford in 1976, Ronald Reagan of the newly dominant conservative (economic and social) wing of the Republican Party campaigned in 1976 and 1980 on these ideas. Reagan gave voice to the white backlash to the black civil rights demands for economic equity of the late 60s and 70s, the creation of majority-minority voting districts, minority business set-asides, affirmative action, bussing to achieve integration of public schools, and the expansion of the welfare state that supported what he called “welfare queens.” It was during the Reagan years that white, working and middle class evangelical Christians largely from the south and Midwest, became politically powerful in their opposition to feminism, abortion, the Equal Rights Amendment, and what they believed to be the impending loss of the country’s “Christian culture” not only to the growing secularization among young people but also the increased presence of other religions and nationalities in America.
Reagan saw government as the problem. Since 1981, the individual, especially those who are members of the upper class, and the private sector have taken precedence over the community and the public sector. Warren Buffett, one of the wealthiest persons in the world, put it another way in 2006 when he said, “There’s been class warfare going on…and my class has won.” Since 1981 the top one percent class has won by capturing the political system and promoting policies (such as de-regulation of business, removal of Glass-Steagall, enormous tax benefits overwhelmingly for the wealthy, tax loopholes for CEO performance pay and hedge fund managers, and Supreme Court decisions that give the wealthy greater access to the political system such as Citizens United) that have redistributed wealth upward (see Nobel Prize Winning economist Joseph Stiglitz' book The Price of Inequality).
Interestingly enough the top one percent appears to have also won the war of ideas with unquestionable conservative "truths." There is the “truth” of the efficiency of the private sector compared to the public sector. There is the "truth" of the efficiency and stability of markets. There is the “truth” of burdensome and high taxes. There are the “truths” of government is the enemy and small government is always the best. There is the "truth" of the benefits of business de-regulation. There is the “truth” that the one percent actually deserves its incredibly disproportionate wealth because its members have earned it due to their vastly superior skills and hard work. There is the “truth” that the twin engines of national economic growth are lower taxation for the wealthy and the deregulation of the financial and banking sectors. There is the "truth" that America is the land of equal opportunity. These are but a few of the “truths” of the post 1981 American Gospel.
This war of ideas was perhaps best captured by former Senator Fritz Hollings of South Carolina in his parable that I have slightly altered that he told during the Reagan years. A veteran returning from Korea went to college on the GI Bill; bought his house in South Carolina with a Federal Housing Authority loan, and had his soil tested by the United States Department of Agriculture. When his father became ill, the family was saved from financial ruin by Medicare and his life was saved with a drug developed through the National Institutes for Health and the Center for Disease Control. His kids went to public K-12 schools, participated in the school lunch program sponsored by the Department of Education, learned physics from teachers trained in a National Science Foundation program, went to a public university with government guaranteed student loans to cover the low tuition rates and accumulated little to no debt. He drove to work on an interstate highway and moored his boat in a channel dredged by the Army Corp of Engineers. When floods hit he was able to apply for government backed disaster relief from the Federal Emergency Management Agency. The man’s brother was protected by his labor union when his company illegally fired him. After hearing the post-1981 “truths” repeatedly and watching his standard of living decline during the Second Gilded Age, this proud, hard-working, church-going, Korean War veteran and white man of declining working class means finally wrote his Congressman an angry letter. He said, “Get the government off my back; I am tired of paying for all those government programs created for undeserving, lazy people, you know, like those “welfare queens” that Reagan talked about so much.”
With great irony, the man's letter sealed the victory of the one percent and the victory of the post-1981 Gospel of Truths.
Despite this, an increasingly competitive narrative somewhat similar to that of 1946 to 1981 continues to exist and challenge the dominant post 1981 Gospel. Dramatic demographic changes in America are not only bringing into question and challenging the post 1981 conservative Gospel but also altering the presidential election landscape. This was evident in the election and re-election of Barack Obama. Greater participation by the increasing numbers and diversity of minorities/persons of color, including women, propelled Obama to victory. The expansion of marriage rights and rights of LGBTQ individuals reflects a new counter-offensive led by a younger and larger generation, the millennials, who are more liberal and diverse than the older generations. More recently the counter-offensive is being led by scientists and environmental groups worried about global warming and by the Black Lives Matter struggle against institutional racism. The soon to be majority in America of student-debt ridden millennials and minorities tend to believe in inclusiveness, community, and government rather than exclusiveness, individuals, and markets. This harkens back to the pre-1981 Gospel. At the same time, rabid partisanship in the Congress and the Great Recession that Obama inherited made it all but impossible to bring about substantive reforms away from the policies of the post 1981 Gospel except for the Affordable Care Act.
The Great Recession, which started in late 2007, appeared as a flash of lightening that made visible to all Americans the realities of the dramatic economic and income inequality, less social mobility, and the decline of the middle and working (non-college educated) classes that had been taking place since 1981. The politically powerful white, evangelic Christian, middle and working classes primarily from southern and rust belt states, who continued to decry the loss of what they believed to be the nation’s moral values and Christian heritage, had now become painfully aware of and experienced the growing economic inequality in America. While technology continued to reduce the number of union-based working class or high paying “factory” workers, globalization was also responsible for the export of some of these jobs. Non-college educated, white working class individuals began to fear for their future in America. The elections of 2008 and 2012 also awakened this group to the rapidly changing demographic and cultural shifts that were altering what they believed an America and an American should be. Demographics pointed to white Americans becoming a minority by 2040-50. America, as they saw it, was rapidly slipping away and their future position in society was becoming less secure. This insecure group, consisting of predominantly white, evangelic Christian, middle and working classes, was ripe for political mobilization. Ripe for a Republican populist to appear…
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