Saturday, September 20, 2014

By way of explanation, and a flashback

   As regular readers know, I make every effort to have a new post ready by the end of every week.  I am in the midst of a very hectic period, however, and on Friday, my 45th College Reunion, for which I am hosting two old friends, began.  I will make every effort to write something new tomorrow or Monday, but meanwhile, I will repeat perhaps the most important post I ever did here, on July 4, 2010.

The Regeneracy may not be televised

William Strauss and Neil Howe, the authors of Generations and The Fourth Turning, grew up, as I did, in the shadow of the Depression, the New Deal, and the Second World War. As they explained to a group of their acolytes in the late 1990s, they began early in that decade to write a book about American generations, focusing on what each of them had contributed to our national life. Both had been involved in government for about a decade, and both had lived through the cultural cataclsym of the 1960s and early 1970s. But their critical discovery, Bill explained, occurred when they were studying the first half of the nineteenth century, when control of national politics passed successively from the Republicans (Jefferson, Hamilton, Madison, and Monroe) to the Compromisers (Jackson, Daniel Webster, Henry Clay), and hence to the Transcendentals (Lincoln, Jefferson Davis, Sumner, John Brown, and the rest of the Southern fireasters) who brought about the Civil War. Suddenly they recognized the remarkable similarities between three pairs of generations: the Republicans and the GIs (the Presidents from Kennedy through Bush I), whose lives had been shaped by the previous crises; the Compromisers and the Silent Generation, who remembered those crises from their childhoods and sought to moderate emerging conflicts; and the Transcendentals and their own generation, the Boomers, all focused upon throwing out the old and bringing on the new. A new theory of history was born--and they began predicting a new crisis era, set to begin around 2010.

Crises of this type represent the death of the old order and the birth of a new one. The two most inspiring in American history were the late-eighteenth century crisis that gave us the Revolution and the Constitution, and the Depression and the New Deal, which culminated in the Second World War and the creation of the welfare state. The Civil War, as they recognized, had much less of a legacy, failing even to solve the racial problem that had brought it about. It is now clear that their prediction of a crisis was right on the money in both the economic and political spheres--but it seems increasingly likely, I am sorry to say, that we are not going to experience a rebirth or regeneracy comparable to that of the 1780s-90s or the 1930s-40s. The hopes that so many of us shared for a New Deal are retreating further every day, and while I am not yet entirely giving up, my head tells me that we are indeed headed for a new age of corporate supremacy parallel to the 1890s.

Today's New York Times gives a typical example of the reasons for my despair. Earmarks, we all know, are detested by all and sundry (except those who receive them), and the Congress has passed new regulations against them, specifically forbidding their award to private businesses. No sooner was this rule passed, however, than Congressmen and private companies found away around it. They are busily founding non-profits who will control the money and pass it on to the very same private firms that will do the work involved. Nothing, in short, is going to change. In the same way, the new financial reform bill, now nearing passage, will not substantially reduce trade in derivatives or force the big banks to stop trading on their own account. Even its consumer protection provisions contain loopholes. Reducing the influence of money on our politics seems as futile a task as civil service reform or railroad regulation in the 1870s--and that leads me to my next, even more controversial point.

Back in the 1990s Strauss and Howe made another prediction: a member of our own Boom generation would lead us in a new world, like the Transcendental Lincoln and the Missionary Franklin Roosevelt. When 9/11 occurred--only 72 years after the beginning the last crisis in 1929--we all held our breaths to see if it might indeed be the beginning of the crisis, or, as they called it, "Fourth Turning." When George W. Bush failed to unite the United States most of us concluded that it was not. But now, I am not so sure--because it seems that George Bush did far more to pout the United States on a different path, both at home and abroad, than Barack Obama will be able to do. Let us look, as Al Smith used to say, at the record.

Abroad, George W. Bush abandoned most of the principles that had governed our parents' foreign policies. He denounced a critical arms control treaty, the one that had banned ABMs, and began deploying missiles that still have not been proven to work. The Obama Administration has modified his plans, but it has not abandoned them. He invaded Afghanistan and Iraq on the grounds that we could not allow Al Queda to have safe havens, and we remain in Iraq while escalating our presence in Afghanistan, even though it is not clear that any of this has made us more secure. These wars have enormously raised the prestige of the military in American life for the first time since the early 1960s. In the Middle East Bush told Israel it could keep any territory it settled in a peace agreement, and the Obama Administration backed down from its first attempt to challenge that position. President Obama initially tried to recast our relations with the Muslim world but he has stuck, essentially, to the same policies, provoking individual Muslims (usually ones who had lived in the US and even become US citizens) to carry out terrorist attacks. Should one of those succeed on a fairly large scale we have no idea what the consequences might be.

At home, the reckless pursuit of deregulation by every Administration from Reagan through George W. Bush gave us the financial crisis of 2008--but before Bush left office, Henry Paulsen, it is now clear, had managed to make sure that all the banks' losses on derivatives would largely be made good through the huge bailout of AIG. Most importantly, the Bush tax cuts destroyed the surplus that Bush inherited and recreated the permanent deficit so dear to the heart of Ronald Reagan. That, combined with conservative fiscal orthodoxy which Obama seems reluctant to challenge, has crippled the government's response to the highest sustained unemployment since the 1930s. The Obama stimulus stopped the job loss but was not big enough to reverse it, and now it is coming to an end. The Republicans are fighting even modest moves like another extension of unemployment benefits--so far, at least, successfully. They seem certain to gain seats in both the House and Senate this fall, which will make any radical economic moves impossible.

Perhaps we were wrong; perhaps the crisis did begin with 9/11. Certainly George W. Bush took advantage of the shift in the national mood to move forward on a great many fronts, and his work has proven lasting. What is happening now is by no means all his fault. The Democratic Party effectively abandoned New Deal principles years ago--Bill Clinton, in fact, bragged about doing so. Now a Democratic Administration has very little to offer to the millions of new unemployed. They may not become enthusiastic Republicans, but they will not be enthusiastic Democrats, either--even though the younger voters among them are closer to the Democrats on social issues.

The politics of the Gilded Age were dominated by money. They were much more hotly contested than most people realize. U. S. Grant won two terms by huge majorities, but the next five elections--from 1876 through 1892--were all extremely close, all close enough to be decided by shifting a single state. The Democrats should have regained the White House in 1876 and did so in 1884 and 1892. Our politics may be similarly contested for the rest of my lifetime, since no government will be strong enough, it seems, to embark upon the kind of great crusade at home or abroad that will create a new consensus.

All this has enormous consequences for the Millennial generation (born 1982-2002?), whom Strauss and Howe expected to be the new GIs. Such, it seems, is not after all their destiny, since no Boomer leaderhip is going to enroll them either in massive public works programs or in a crusade abroad. Like the GIs in the 1930s, they will be preoccupied for a long time with finding work and setting up families. Their idealism and willingness to tackle problems may still do a lot of good, but mostly, it seems, at a local level and on a relatively small scale. In the same way that the GIs did so much to undo prejudice between religions and even between the races, the Millennials will finally break down prejudice based on sexual orientation, and they will probably begin a move away from strong religious belief. But for a variety of reasons, which I hope to explore in months and years to come, it seems that no one alive today is likely to see any kind of replay of New Deal America.


Anonymous said...

From the course of events one sees similarities to those gilded era days with massive technological change and expansion of rich into massive new geographical areas in both eras and huge population growth and expansion of middle class in those new areas. So as long as growth was happening, interrupted by recessions, everyone was happy and focused on new technological toys invented annually in both eras.

As however the relative uselessness of and exhaustion with technology and its abuses and destructive potentials and as the growth potential and creativity of the two eras petered out so that what the rich skimmed off left nothing over for the population and only speculation on housing, stocks kept people believing at the tail end,1920s, 2000s.

Really there is little difference between now and 80 years ago. If Sadaam were Hitler and Putin also were Hitler USA could save the world as in a Hollywood film from Emmerich. It is not so however. We can't script a "Happy End" to repeat the heroics of our grandparents or parents. It was a simpler world back then. Now Russia and China and Middle Eastern people's have learned how to play by the same tricks as the "West". Industrially, financially, hi-tech, Propaganda, controlled democracy, trade flows, all can bypass the post war alliance. The New World Order tripled the participants in the modern era, enabling a parallel power bloc, BRICS, SCO, alternative reserve currency, parallel IMF, trade over silk Road and oil and gas by Peking bypassing US Navy control of oceans.

So if West is in a tail spin due to financial over extension and lacking increasingly in democratic legitimacy it cannot lash out abroad. Hitlers rise and Japan's colonial war was due to trying to emulate UK, USA in so many ways. Since those two countries were isolated geographically they could be defeated as energy, trade , finances not connected. Now Russia, China, India, Near East connected amd all advantages of West in practically all senses have been balanced out. Western value system and results in terms of modern technological progress have equivalents abroad. Wort of VA
u es and trade, USD, etc. is superfluous. Jealousy and desire of "American Dream" is over.

USA has to regenerate from within. The world has copied West to survive and is now successful. The pupil has surpassed the master who was good and had lessons to give but has grown old and Ill.

Unknown said...

Good Morning:

The text is amazingly prescient. I am not only glad you did so, I hope you re-run this particular post every year. I am serious. Pick a nice time for you. Maybe Christmas. We all need to be reminded of the common sense evaluation of the events of our lifetime.

Silenus said...

I've had similar thoughts. After becoming familiar with Strauss and Howe's theory about five years ago, I started to wonder if things are just too disorganized this time around to rebuild a unified society. They mention it didn't happen in the Civil War era because the crisis came too soon and the conflict was too bitter. So I thought maybe this time is similar, like successful Fourth Turnings skip a generation in the American experience.

I noticed also that during that last failure, in the late nineteenth century, there was immense technological growth. That was the Second Industrial Revolution, which concentrated power in corporations rather than in the state.

This time around, with the electronics revolution of the past few decades, we might be seeing a similar technological push against the state and in favor of (semi-) private enterprise.

In my most Hegelian moments, I wonder if this would be toward the good, as if delayed gratification for the next four generations or so will lead to even bigger prosperity in the twenty-first century. Perhaps that delayed gratification of the late-nineteenth century paid off in the unrivaled prosperity of the late 40s, 50s, and 60s.

I also wonder if a continued focus on private business and technological growth will, in the long term, push us closer to a kind of communist synthesis due to automation replacing the need for most human workers. At that point, there would be three options available to resolve the imbalance in society: keep the poor masses permanently oppressed, eliminate the masses, or institute ethical socialism. Of course people wouldn't want to die, so they'd push for the third option, hence the global revolution. At that point the world economy and culture would be more unified than now due to so many more decades of globalization.

But those are my optimistic moments. Maybe all the same could be accomplished with a national renewal instead of continued empowerment of private capital. Or maybe the continued empowerment of private capital won't replace the workforce with machines and so cause the above-mentioned pressures, but will instead just lead to a new de facto slavery for the masses.

It's a lot to think about, and generally I am not optimistic about the future in my lifetime.

Unknown said...

5% underperformance on $30bn is $2,000,000,000 dollars. Thank you Class of 1969! Way to protect the interests of the institution!