Revisiting the Politics of Social Change

The November 2010 midterm elections have unveiled the fissures in America to reveal a society suffering a loss of self-confidence and a fragmentation of its political system. The resurgence of the Republican Party, which led to its new majority in the House of Representatives and a reduction of the Democratic majority in the Senate, was based largely on the mobilization of popular discontent with the state of the economy and the Tea Party’s populist attacks on the Obama administration. The administration’s critics were emboldened by its inability to offer a serious defense of its ability to prevent the economic collapse that has resulted from the “titans” of Wall Street’s cumulative greed and stupidity. In the face of the Tea Party’s mobilization of anti-Obama sentiment around concrete economic issues, the administration demonstrated that it was unable to fashion a coherent response to the populist onslaught and the Republican Party leadership’s obstructionist attempts to block policy initiatives to ameliorate the consequences of the economic downturn.

Unfortunately for the Obama administration, the departures of Lawrence Summers and Peter Orszag as senior economic policymakers in the administration came too late to overcome the impression that it was committed to saving Wall Street at the expense of the rest of society. Further, the reforms adopted by the administration seemed incapable of reining in the predatory Wall Street behavior that had triggered the most serious economic crisis since the Great Depression. Despite the best efforts of Paul Volcker, the former Chairman of the Federal Reserve Board and currently an adviser to the Obama administration, the administration has been unable to restrict Wall Street’s preference for “boom-and-bust” investment strategies – even as the costs of those developments over the past decade have borne bitter fruits for the entire society.[1]

In effect, the Obama administration had proven itself unable to change either Washington or Wall Street, and the country continues to pay the costs of the Clinton administration’s 1999 repeal of the Glass-Steagall Act, which was enacted in 1933 as a response to the speculative activity of banks that led to the Great Depression. The removal of that legal firewall between commercial and investment banks, which imposed limits on speculative activities after 1933, and the explosion of “derivatives” trading on Wall Street – an exercise that evolved into the recycling of risk-laden assets as “securities” on a global scale – helped to trigger the meltdown in 2007-2008. Since that debacle and its exposure of both reckless and criminal activity in the financial sectors, it is not evident that Wall Street has been able to break its addiction to the pursuit of short-term profits at the expense of the stability of the entire global financial system. The Obama administration has found itself hostage to Wall Street’s predatory practices in the name of “saving American capitalism” – with adverse consequences for the wider society. This perception of relative disadvantage coming out of the economic crisis has been validated by recent reports from the federal government. According to the Washington Post, recent government indicators show that:

*Even as conditions are likely to remain miserable for job seekers for years to come, an extraordinary bounce-back is underway in the nation’s corporate sector, with profits rebounding 28 percent over the past year to an all-time high in the third quarter.

*Businesses’ spending on compensation for employees, by contrast, rose only 7.6 percent.

*Among the reasons for the strong earnings growth were that financial companies are no longer suffering from massive write-downs on bad investments, as they were in 2008, and profits from U.S. firms doing business overseas have shot up. [2]

And, according to The New York Times:

*The nation’s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released November 23, 2010. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms.[3]

Perhaps one of the reasons that the Obama administration was reluctant to emphasize its achievements since coming into office in January 2009 was the recognition that the outcomes of its policies could do little to appeal to popular sentiment. The evidence shows that the wealthiest sectors of American society have come out of the recession in an even more advantageous position, while the pain of “structural adjustment” will continue well into the future for the less fortunate sectors of society. In effect, the dubious competence, fraud and mismanagement of Wall Street has resulted in the federal government’s bankrolling of the financial sector’s return to an obscene level of prosperity in the short-term, creating the impression of a society running amok on corruption. The downside of this “upturn” is long-term damage to the wider society, including a real estate crisis that has yet to manifest its full impact, projections of high levels of unemployment and depressed wages across the wider society and threats to a wide range of services that will further strip the limited social safety net that America provides its beleaguered citizens.

The 2010 midterm election has led the Obama administration to a fork in the road – in both ideological and political terms. The president will have to decide whether he will live up to the promise of change that defined his 2008 campaign or whether he will be content with a legacy of being the savior of the primordial predatory capitalism that has eviscerated the middle and working classes of America. In effect, he will have to make a choice between (1) siding with the Republican Party and its championship of a politics of dispossession on behalf of a financial and corporate oligarchy that seeks a return to the “robber-baron capitalism” that defined the late 19th century in American life; or, (2) continuing along the path of reconstructing a social order in which the full humanity of the diverse populations that constitute America is recognized and the political order is based upon a commitment to equality of opportunity and access to citizenship rights, including the rule of law enacted in the interest of human beings – not corporations.[4] Given the growing restiveness among the progressive factions within the Democratic party about the president’s willingness to court the Republican party and its recalcitrant leadership, the president faces increasing pressure to live up to the promises of his 2008 campaign to break with the policies of the Bush administration.

The current context of the Obama administration, two years into the president’s tenure, is reminiscent of the challenges confronting the Kennedy administration in 1962-63. John F. Kennedy, a Roman Catholic, had won the Presidency in the 1960 election by a narrow margin – the first and only Catholic President in American history. His election reflected the coming of age of Catholics in American politics, but he had also raised expectations during his campaign of adopting a more assertive approach to end the Jim Crow order. However, his dependence upon Southern leaders in the Congress made him reluctant to push for reform in the first two years of his presidency in order to get other priorities through Congress. It was a strategy that bred frustration among civil rights activists who decided to engage in direct action protests that would force Kennedy to address their agenda of forcing the pace of desegregation and the introduction of civil rights legislation by the federal government. By June 1963, after the confrontation in Birmingham, Alabama, where the city police used dogs and fire hoses against children engaged in marches and protests, Kennedy shifted ground. The scenes in Birmingham were televised nationally and internationally, and they pushed President Kennedy into announcing a major civil rights initiative on June 11, 1963. Despite his assassination in November 1963, those proposals were enacted in 1964 and 1965 by his successor, Lyndon Johnson, who won an overwhelming mandate in the 1964 Presidential election by crushing Barry Goldwater, the Republican candidate.

The Republican recapture of the majority in the House of Representatives and the lack of a decisive Democratic majority in the Senate after the 2010 midterms have created conditions for the Republican Party to pursue a strategy of paralyzing the Obama administration until the 2012 presidential election. Given the success of the Tea Party movement in changing the political climate of the country by mobilizing opposition to the Democratic party and President Obama’s efforts to expand the social safety net through health care legislation, it will be interesting to see whether progressive factions will embark on a similar effort to change the terms of debate that have been defined by the Tea Party movement. As Martin Luther King Jr. and the Student Non-Violent Coordination Committee demonstrated in the early 1960s, the mobilization of grassroots activism offered an opportunity to the civil rights movement to reshape national political debates and priorities – despite the efforts by Southern conservatives and their allies to derail the civil rights agenda. In effect, the push for change from the civil rights activists made it possible for both Kennedy and Johnson to open the way for Congress to enact civil rights legislation as a response to the politics of popular mobilization in the streets.

However, beyond the changes in health care that emerged from the recent legislation, progressive social forces will have to offer an alternative political vision of America in opposition to the predatory ethos of governance that the Republican Party, sections of the Democratic Party and both parties’ corporate paymasters have embraced since the Reagan era. The three decades of Republican ascendancy in American politics since Ronald Reagan was elected president in 1980 have been defined by widening income disparities between the truly wealthy and the rest of the society; the accelerating export of jobs and industrial capacity to other countries; growth of the underground economy based on the trafficking of drugs, guns and other dangerous substances; the neglect of public education and an expansion of the prison-industrial complex, resulting in the underdevelopment of the intellectual capital available to society; an increasing deference to Wall Street’s speculative excesses and its focus upon the index of short-term business profitability; and neglect of the country’s infrastructure, a dereliction that was highlighted in the wake of Hurricane Katrina in 2005. It is one of the ironies of contemporary American decline that the country has become a victim of the Republican Party’s failure to recognize the wisdom of its most thoughtful leader in the 20th century – Dwight D. Eisenhower – who observed that: “Any failure traceable to arrogance or our lack of comprehension or readiness to sacrifice would inflict upon us a grievous hurt, both at home and abroad.”[5]

The Republican ascendancy since 1980 had fostered an unwarranted arrogance about America’s role in the world and had exposed the lack of comprehension among Republican leaders that many countries had moved beyond the assumption that “what is good for America is good for the world.” The overthrow of the Shah of Iran in 1979 was a harbinger of that shift, as was the Sandinista revolution in Nicaragua. Later, the end of the Cold War in Europe unleashed more profound changes that had enormous repercussions around the world and opened the way for the emergence of a new geopolitical order in which Asian states, including Japan, China and India, were poised to emerge as increasingly important players in the international system. The emergence of a strategic entente between Germany and Russia in post-Cold-War Europe also signaled a shift in the continent’s politics that would have implications for Europe’s engagement with both the United States and the rise of the Asian powers. In this shifting geopolitical context, the George W. Bush administration sought to assert America’s preeminence as the “indispensable power” in the international system – a flawed strategy from the outset that eroded American leadership, since Bush proved himself to be an unpersuasive leader to many foreign audiences. By the time that Wall Street panicked over the staggering losses that the major banks were facing, the American image in the wider world had suffered irrevocable damage as the financial debacle followed upon the unalloyed strategic blunders in Afghanistan and Iraq that arose from the Bush administration’s decision to embark on a “War on Terror.”

The Bush administration left the new administration with the dual challenge of crafting an economic recovery program for the United States and developing a credible foreign policy strategy that would allow America to reset its relationship with the wider world. It is an unenviable task and one which will have to be accomplished from a position of the increasing economic weakness that has resulted from the export and shrinkage of American industrial sectors, the skewed income distribution (which is arguably a source as well as a result of the speculative activity that fueled the Wall Street meltdown) and the neglect of the educational system over the past three decades at a time that the Asian states are reaping the benefits of several decades of investment in the expansion of educational opportunities for their citizens.

A broader vision of American economic recovery is now more necessary than that provided in the first two years of the Obama administration. The recent call by Warren Buffett, Bill Gates and Ted Turner for the government to tax the wealthy at higher rates than those currently applied will undoubtedly help to intensify the debates over tax reform under the Obama administration.[6] It will be important for other sectors of society to become involved in challenging the rhetoric of lower taxes that has been championed by Republicans from Reagan onward. The illusion that the rest of the world will continue to finance America’s deficits for the maintenance of its claim to being a superpower is not sustainable over the medium- and long-term. American political debates will have to acknowledge that reality.[7]

Further, current political leaders may need to take refresher courses in American history to understand that America’s influence was greatest in the world when its tax rates and fiscal policies helped to fuel the era of international economic stability that followed World War II. The Vietnam quagmire that led the Nixon administration to abandon the gold standard was followed by the oil crises of the 1970s, which eroded American competitiveness and triggered the progressive restructuring of the American economy away from the industrial development that had secured the U.S’s role as an international leader during the 20th century. China is now the workshop to the world in the early 21st century, and it is extremely unlikely that America will be able to reverse that development to its own advantage. In that context, American political leaders will have to be educated that the Republican shibboleths of low taxes, limited government and predatory capitalism will contribute to the further erosion of America’s appeal in the wider world. Further, those shibboleths, if enacted as policy, will limit American society’s capacity to avoid the crippling effects of high levels of unemployment and underemployment over the long-term.

On the foreign policy track of American renewal, the Obama administration has been measured as it has moved to confront a world in which American diplomatic credibility was badly damaged by its predecessor. American foreign policy will have to be shaped by an explicit recognition that multilateral diplomacy is the most effective strategy for establishing a serious agenda in dealing with climate change, the restructuring of the international energy industry, the spread of nuclear technology and environmental degradation – which all pose challenges for the future of humanity. It will also be important for the United States to embrace diplomacy as key to the resolution of the Bush military adventures in the Middle East and South Asia. America’s imperial record in the Caribbean and Central America in the early 20th century – namely in Cuba, the Dominican Republic, Haiti and Nicaragua – was not impressive in terms of exporting democracy, and the experiences of Iraq and Afghanistan after the American wars in those countries currently offer little prospect of improvement in the American record of imperial governance.[8]

For those American progressives troubled by the Obama administration’s ongoing pursuit of a futile war in Afghanistan, it is important to recognize that the American military remains committed to exorcizing the demons of defeat in Vietnam. Given the longstanding romance with military adventurism that has shaped the Republican approach to national security, it would be difficult for Obama to part ways with the military in Afghanistan without incurring even more serious costs for his ability to nudge American politics away from the hysteria generated by the Tea Party movement. Such an exorcism is necessary, however, and one promising approach may be for progressives to emphasize the cost of repeating the strategic blunder of Vietnam – war as a strategy for overcoming the resentments of a society – in Afghanistan, which has a well-defined sense of its own identity and where the American military presence is widely perceived as an alien intrusion. As Martin Luther King Jr. recognized in his speech of April 4, 1967, “Beyond Vietnam – A Time to Break Silence”:

There is at the outset a very obvious and almost facile connection between the war in Vietnam and the struggle I, and others, have been waging in America. A few years ago there was a shining moment in that struggle. It seemed as if there was a real promise of hope for the poor – both black and white – through the poverty program. There were experiments, hopes, new beginnings. Then came the buildup in Vietnam, and I watched this program broken and eviscerated, as if it were some idle political plaything of a society gone mad on war, and I knew that America would never invest the necessary funds or energies in rehabilitation of its poor so long as adventures like Vietnam continued to draw men and skills and money like some demonic destructive suction tube. So, I was increasingly compelled to see the war as an enemy of the poor and to attack it as such.[9]

America’s economic recovery and the government’s ability to address society’s problems are tied to an effective resolution of the war in Afghanistan, as that conflict has the potential – like Vietnam – to contribute to a loss of confidence in the dollar as an international currency. As American political leaders remain trapped by the illusion that military power will secure America’s long-term security, it may be useful for them to reflect upon Hannah Arendt’s pithy observation:

The amount of violence at the disposal of a given country may no longer be a reliable indication of that country’s strength or a reliable guarantee against destruction by a substantially smaller and weaker power. This again bears an ominous similarity to one of the oldest insights of political science, namely that power cannot be measured by wealth, that an abundance of wealth may erode power, that riches are particularly dangerous for the power and well-being of republics.[10]

The civil rights movement of the early 1960s opened the space for transformative social change in America, even as the president and the Congress showed themselves timid and, on occasion, paralyzed. Martin Luther King Jr.’s legacy of grassroots activism as the key to social change remains a powerful lesson for contemporary American progressives interested in moving beyond the predatory capitalism and the culture of war that have impoverished this society.

1 Wall Street to sidestep ‘Volcker rule,’ by Francesco Guerrera and Justin Baer in New York and Tom Braithwaite in Washington, Financial Times, November 10, 2010.

2 Fed lowers economic expectations for 2011, by Neil Irwin, Washington Post, November 24, 2010.

3 Corporate Profits Were the Highest on Record Last Quarter, by Catherine Rampell, New York Times, November 23, 2010.

4 See Justice Steven’s dissent in Citizens United v. Federal Election Commission, 130 S.Ct. 876 (2010) for a spirited critique of this development in American law. In that dissent, Stevens asserted that: “In a democratic society, the longstanding consensus on the need to limit corporate campaign spending should outweigh the wooden application of judge-made rules. The majority’s rejection of this principle elevate(s) corporations to a level of deference which has not been seen at least since the days when substantive due process was regularly used to invalidate regulatory legislation thought to unfairly impinge upon established economic interests.” Bellotti , 435 U. S., at 817, n. 13 (White, J., dissenting). At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self-government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.

5 American Rhetoric: Dwight D. Eisenhower — Farewell Address. Full text and audio and video of Dwight D. Eisenhower’s Farewell Address.

6 ‘This Week’ Transcript: The Giving Pledge – Warren Buffett, Bill and Melinda Gates, Ted Turner and Tom Steyer. Nov 28, 2010 04:00 AM story from ThisWeek ABC News.

7 See CNN’s Political Ticker New York Mayor Michael Bloomberg’s comments about the mismatch between the newly elected members of Congress and the challenges they face.

8 Charles Tilly, “War Making and State Making as Organized Crime,” in “Bringing the State Back In,” edited by Peter Evans, Dietrich Rueschemeyer, and Theda Skocpol (Cambridge: Cambridge University Press, 1985).

9 Beyond Vietnam: A Time to Break Silence, Oct 3, 2010. Complete text and audio of Martin Luther King’s Declaration Against the Vietnam War.

10 Hannah Arendt, A Special Supplement: Reflections on Violence, The New York Review of Books, February 27, 1969.