Over the on the web site fourthturning.com, a number of very smart and engaged people, ages ranging from teens to seventies, have been debating the present and future of American history for more than a decade. Essentially they have been trying to integrate current events into Strauss and Howe's theories--frequently through the prism of their own views. Those of us who had read those books in the 1990s when they first came out have not been surprised by the nation's descent into Crisis. Some of the longest threads on those forums have attempted to locate the beginning of the Crisis. It is becoming clear that we will only be able to answer the question of when it really began retrospectively, in twenty years or so. If we are then living in Barack Obama's vision of America we shall date the beginning from this year--but if we are living in George W. Bush's America--and I am increasingly convinced that that is quite possible--then we shall go back to dating it from 9/11, or possibly from the events of the fall of 2000 and the second theft of a presidential election in American history. The two Bush Administrations consolidated, and accelerated, critical trends in American government that had begun under Reagan (and which the Clinton years had done either little or nothing to reverse). President Obama, I am convinced, wants to reverse those trends--but his attempts to do so are showing what an enormous task that is going to be, and certainly raise real doubts as to whether he can be successful.
To explain my fears, I shall look at three critical issues in American life: health care reform (of course); corporate power and the workings of our new financial system; and whether our foreign policy will be based upon military supremacy or on the respect for, and promotion of, international law and diplomatic solutions to problems. We shall see that it is far from clear if the President has enough raw material to work with to make the changes he seems to want, and to make them stick, because so many Republican positions have become consensus positions over the last thirty years.
The health care reform effort, about which I have written a great deal, is going forward, but with less than no assurance that any meaningful change will occur. The emergence of Senator Max Baucus and his Finance Committee as the key locus of power is an interesting phenomenon--his was only one of several committees to produce a bill, and the others have produced far more important ones, including a public option. His own bill not only rejects that, but will allow insurance companies to charge premiums according to the age of their customers, and thus continue their practice of offering generous insurance to people who don't need it. Baucus has been a huge recipient of health care industry contributions for years, and they have gotten what they wanted. I am intrigued, though, that he became the focus of attention because he put together the Gang of Six and has gone through the motions of trying to put together a bill that would garner Republican support. That was hopeless, for reasons that his Senatorial colleague Jim DeMint let out of the bag months ago. As in 1993-4, the Republicans are determined to kill any bill to bring down a Democratic President--and their most powerful lobbies stand ready to fund an expensive primary campaign against any Senator who dares cast a pro-Obama vote, such as Olympia Snowe of Maine. (My own former Republican Senator Lincoln Chafee had to deal with such a challenge three years ago.) Baucus's ostensible purpose has failed, but he has meanwhile crafted the bill the health care industry wants. Meanwhile, the Republican media barrage has successfully painted the public option as equivalent to a single-payer government takeover of health care, and the media is painting the single-payer advocates in the House, who want to use Medicare to provide a much cheaper alternative to private insurance, as a fringe group. With President Obama determined above all to pass a bill, the chances are quite high, as Paul Krugman effectively acknowledged yesterday, that it won't be one that makes any real changes.
Regarding Wall Street, this week's news is rather interesting. The rest of the G-12--the world's other industrialized countries--have made up their minds about American capitalism's latest gift to the world, megabanks who pay their employees bonuses based upon short-term gains. That practice puts a premium on arranging deals for their own sake (which in turn involves the creation of new financial instruments of dubious economic value), on leveraging investments to increase profits, and on artificially bidding up the values of commodities and securities, leading, inevitably, to disastrous crashes, of which we have had two in the last decade. Their obvious solution is to put tight restrictions on such bonuses--but the Administration, according to today's New York Times, along with the British government, opposes actual caps on pay. Caps would be difficult to administer. The alternative that saw us through the Second World War and the high-growth twenty years that followed it--90% marginal tax rates that would remove any incentive to pay those bonuses--is, of course, never even mentioned, thanks to thirty years of Republican anti-tax propaganda. The Administration's economic team, in any case, is deeply implicated in the current system, which Larry Summers also defended for the managers of the Harvard Endowment, whose tens of millions (yes) of bonuses during the first half of this decade did not prevent them from losing 1/3 of the endowment's value and leaving the University lacking the case it needed to pay its bills during the last year. Like the Clinton Administration, which continued the trend towards deregulation that has left us in this mess, the Obama Administration does not seem committed to a fundamental reform or a return to the more disciplined world of our parents and grandparents.
Lastly there is foreign policy, where the President has shown the most striking break with the past, accelerating the withdrawal from Iraq slightly, demanding that Israel halt settlement construction, and now, scrapping the plan for ICBM defense sites in the Czech Republic and Poland. Taking those in reverse order, the latter is a step backward from the Bush foreign/defense policy of trying to assure American military supremacy and invulnerability, partly by undertaking preventive war to keep nations from acquiring weapons we do not think they should have. It was also a very welcome recognition of the essential fact about missile defense which Republicans have been trying to conceal for the past 25 years--that it does not work. (All this was brilliantly handled about ten years ago by Frances Fitzgerald in her book, Way out There in the Blue.) The Bush Administration's denunciation of the ABM treaty--a Republican legacy--was a terrible step backward for the US and the whole word. Sadly, it will be many years, I am sure, before anything similar is attempted again. And indeed, the Administration found it necessary to announce that it was going to work on a different missile defense system instead--although there is enough lead time to back down on that decision should they or their successors find another way out. However, the President has also branded himself an appeaser among Republicans--and his pressure on Israel will play into that as well. Here too Bush and Cheney did their work well. As I have pointed out here many times, President Bush essentially informed the world early in his first term that Israel could keep any land that it had settled in a peace treaty, and the Israelis and their American allies are now arguing that this binds future Administrations as well. It doesn't, but peace has gotten a lot less likely since then, and I'm not confident the President's well-intentioned step will have a good result.
The story of how a new generation of Republicans (very different from the Nixons, Rockefellers and even Goldwaters) managed to reverse the trend of American politics on economic, social and international issues from the 1980s until 2009 is an extraordinary one that should eventually produce some great history. In so doing they created, and relied upon, an active intellectual elite, a strong and growing presence in the media, and an emotional mass movement that now uses the techniques developed by the civil rights movement in the 1960s. For various reasons--which I shall try to take up at another time--the Democrats cannot at the moment deploy comparable forces. Franklin Roosevelt in 1933 benefited from another historical accident--he came into office after three-plus years of catastrophic depression which had given him much more freedom of action, and much bigger majorities, than President Obama has. How the next four years, and the next twenty years, will turn out, remains a very open question.