This article in Foreign Affairs reviews the work of political scientists who try to describe the political path that has made America the most unequal of the major industrial economies. They acknowledge that market forces contributed to this development, but they argue that it was enabled by political decisions which exacerbated the market forces. We are familiar with most of them which started during the Carter administration, and accelerated under Reagan and Bush. They include the shifting of executive compensation to stock options which gave them the incentive to focus on stock price appreciation; tax policy was altered to tax capital gains and dividends at reduced rates; the top marginal tax rate on earned income was dramatically reduced; deregulation of the financial system enabled the leveraged expansion that expanded the role of Wall Street, and turned Wall Street into an executive compensation engine; the countervailing force of organized labor was muted by anti-labor legislation, and corporations acquired the ownership of the mass media, along with the ability to shape public opinion.
One of the results of these changes was the dilution of democracy. The cost of running political campaigns in America reached unprecedented proportions compared to its history and to the rest of the world. President Obama, for example raised a billion dollars to win the last election and the cost of running congressional campaigns has risen dramatically. Access to funding was always important in running for political office, but it has gotten to the point in America that lobbyists write many of the laws that are enacted by a cooperative Congress.
While both of our major political parties contributed to these changes, the GOP has aligned itself more closely to the forces that produced these changes. It has managed to cater to the interests of the super rich, while simultaneously attracting the votes of ordinary Americans by the use of a politics of division. The GOP represents the "real America" and traditional American values, while their opponents raise taxes and spend tax dollars on less deserving Americans. No American presidential candidate has won a majority of the white vote in America since Lyndon Johnson passed the civil rights laws and the "Great Society" bills which expanded federal social support programs.
The Tea Party is the embodiment of GOP political tactics of divisiveness. It hates Wall Street but it votes for Republicans who protect the interests of Wall Street because they believe that the GOP represents their values and that it opposes the use of tax dollars that are used to benefit undeserving minority groups who are not "Real Americans". The glue that binds the Tea Party together is hate. They are fed a constant diet of hate by the conservative media. They hate liberals; they hate Muslims; they hate educated elites; they hate the "liberal mass media"; they hate Washington, but most of all they reflect the legacy of the "old South" and the values of rural America. The GOP has skillfully used the Tea Party to fight against the programs of the New Deal and the Great Society that reflected the ideology of the America that grew up after World War ll and lasted until the late 1970's.
While this article described the political evolution of America. It does not present a political path to ending the "New Guilded Age". The Occupy Wall Street protests may be a step in that direction. Political change in America has always required a shift in public opinion and a threat to office holders that they might lose their jobs. Thus far, the movement has not come up with a list of the changes that must be made to restore democracy and reduce inequality in America. Overturning the changes described above would be a step in the right direction.
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