Towards the Gilded Age

I had intended, of course, to say something about the outcome in Massachusetts, which, though in the end rather close, has already turned out to be a decisive event in our current political struggles by unquestionably putting the momentum onto the Republican side. Twelve months too late, the President is now trying to pull populist anger to his side, but since he will now be unable to get any meaningful corporate reform through Congress, he is very unlikely to be successful. (Yesterday Paul Krugman, whom as you know I regard as one of my few allies, called upon the House of Representatives to pass the Senate health bill. Good luck, Paul--I don't think it's going to happen.) I had already predicted that younger voters would determine the outcome in Massachusetts (as they had in the last presidential election) and I was right: they gave the Republicans the election by staying home. Only about 20% of them voted (and those went heavily for Coakley), as opposed to more than half of older voters. Yet the point of this particular blog is above all to go beyond the day's events by putting them in historical perspective, and in that sense, the Supreme Court's decision on campaign financing dwarfs the significance of that particular special election. Other decisions on subjects like abortion and gay rights have also swept away long-standing precedents (mostly in state laws), but in one sense, as others have noted, Citizens United vs. Federal Election Commmission can only be compared to Dred Scott. That earlier decision overruled various laws--the Compromise of 1850, the Missouri Compromise of 1820, and even the pre-Constitutional Northwest Ordinance, going back over seventy years. This one goes back even further, undoing a critical principle of the Progressive Era--and therein lies the heart of the matter.

The Progressive era, which lasted in effect roughly from 1901 until 1917 or so, was a non-partisan experiment in reform designed to mitigate the effects of the industrial and commercial revolutions and broaden liberties. Leading Progressives included both Republicans and Democrats, including Presidents Theodore Roosevelt and Woodrow Wilson. Their achievements included the implementation of the Sherman Antitrust Act under TR, the Federal Reserve Board under Wilson, and constitutional amendments establishing the vote for women and the income tax. (In one of the great untold stories of American history--one very deserving of a long book--they also included an amendment to ban child labor that passed the Congress but was never ratified by the states.) They also included numerous reforms to improve (as Progressives saw it) the democratic process, including direct primaries (for both state offices and, in some states, for the nomination of Presidential candidates), recall elections, and referendums. Last, but hardly least, under Theodore Roosevelt the Congress passed a law forbidding corporations from contributing directly to political campaigns. All of this came to a crashing halt in the wake of the First World War, but various ideas developed during that era became, after the economic collapse of 1929-32, a big part of the basis for the New Deal--as I learned in my youth from various GI historians like the great Richard Hofstadter and Arthur Schlesinger, Jr.

Large elements of the Republican Party were never reconciled to the New Deal. Those elements, interestingly enough, did not manage even to nominate a Presidential candidate from 1933 through 1963--neither Landon nor Willkie nor Dewey nor Eisenhower or Nixon were diehard free-marketeers. When Goldwater was elected his crushing defeat proved that the United States had come to accept the New Deal consensus. That consensus, however, took a double hit from the civil rights acts of 1964-5 (which alienated the white south) and the Vietnam War (which split the Democratic Party), from which it has never recovered. Meanwhile, conservatism steadily gained ground within the Republican Party, culminating in the nomination and election of Ronald Reagan in 1980. Conservatives took a further step forward when George H. W. Bush was punished for his apostasy on taxes in the 1992 election. That, however, is politics: today I want to focus policy.

Conservative Republicans, with plenty of help from Democrats, have been hard at work since 1980 undoing not only the New Deal itself, but the social and economic structure that gave birth to it. The primary electoral muscle of the Democratic coalition came from unions, and union power was largely broken by the long recession under Reagan and the beginning of the de-industrialization of America, as well as by the movement of numerous industries into the un-unionized South. (Those same industries have now moved further south, out of the United States altogether.) Reagan also put a huge dent into the progressive taxation system that had funded the federal government since the Depression, cutting high bracket income taxes while raising the lower-bracket payroll taxes (and putting the proceeds into general revenues, as I pointed out here back in 2005.) Deregulation of S & Ls was followed under Bill Clinton (who restored some fiscal responsibility but did nothing else to fight the ongoing trend) by the repeal of Glass-Steagall and the resultant creation of huge investment banks fueled by depositors' money and credit cards.

All this made money more and more important in politics, far more important than either Republican or Democratic ideology. That is why, since the 1960s, no Democratic President has been able to put through a serious liberal reform. Democrats (at least in bluer states) talk a good game at election time, and sometimes put through legislation that looks like change, but a closer reading always reveals the work of lobbyists at play. When Bill Clinton threatened actually to reverse the decline of the government's role during his first year in office with health care reform, Boomer Republicans (led by Bill Kristol and Newt Gingrich) announced that he could not possibly be allowed to succeed and organized all-out opposition, aided by corporate allies. The same thing has happened during the last year. The increasing role of money has two related consequences: it not only insures corporate influence, but discredits the whole process. It was extremely difficult even for a lifelong Democrat like myself to swallow the compromises necessary to get the health care bill through the Senate. The Medicaid concession to the state of Nebraska was a national disgrace, as was the failure to repeal the anti-trust exemption for the health care industry. (How can anyone believe that exchanges will increase competition when the anti-trust laws do not apply?) I'm not surprised that Massachusetts voters were not impressed.

Now the Republicans have had to cope with one big problem: their policies are bad for America and bad for the American people. They have increased the gap between rich and poor and stripped working people of fundamental protections. Health care is becoming less and less affordable. Millions have fallen to predatory lending. Worst of all, economic de-regulation has brought back the frequent, devastating boom-bust cycles of the late nineteenth century. All this has led to periodic Republican setbacks at the polls, most notably in 2006 and 2008. (We must keep in mind that we are not fighting today over ideological or aesthetic preferences about the distribution of income in America: we are learning again that allowing rich people to keep too much money simply does not work for anyone but them.) They managed to moderate their effects, however, by packing the least democratic part of our system, the courts.

As James MacGregor Burns made clear in Packing the Cout, which I reviewed here some months ago, judicial activism was not an invention of the Warren Court, but has played a huge role in our history since the beginning of the Republic. The Warren Court, which almost for the first time deployed its power on behalf of minority rights, was exceptional only because it favored the Left. During the Progressive Era and New Deal the courts had thrown out literally dozens of regulatory measures, concluding, for instance, that state minimum wage laws were unconstitutional. And on no issue have Republican activists been more single-minded than bending the judiciary to their needs. They have worked at all levels, organizing the Federalist Society, for instance, to recruit young candidates. Until 2000, countervailing factors ensured that even Republican Presidents would veer from ideological orthodoxy in their appointments occasionally, as Ronald Reagan did to appoint the first female justice and George H. W. Bush did to pick the estimable David Souter. But those days are over. During the last twenty years, Republican appointments have been far more ideologically committed and considerably younger and healthier than Democratic ones. Three of the four Boomers on the Court are now Republicans, and Sonia Sotomayor, the Democratic choice, is a diabetic. This strategy first paid a gigantic dividend in the legal coup d'etat of 2000, when a 5-4 Republican majority disclaimed any interest in determining the actual wishes of Florida voters and gave the Presidency to George W. Bush. (Al Gore's ineptitude was also largely to blame, since he never even tried to insist on the full statewide recount which later studies showed would have given him the election.)

The Progressive era, one might argue, had limited impact itself, but put machinery in place to make the New Deal possible. This week the Supreme Court took apart a critical piece of that machinery by using Citizens United to outlaw any restrictions on corporate campaign spending in the name of free speech. Justice Kennedy's emphasis on "free speech" in his majority opinion, in which he professes devotion to that principle that would rival that of my own hero Hugo Black, is quite Orwellian. Here is how he explained the decision of the court not to decide in favor of Citizens United on relatively narrow grounds--as it easily could have done--but instead to eliminate a centuries-old reform.

Held:
1. Because the question whether §441b applies to Hillary cannot be resolved on other, narrower grounds without chilling political speech, this Court must consider the continuing effect of the speech suppres-sion upheld in Austin. Pp. 5–20.
(a) Citizen United’s narrower arguments—that Hillary is not an “electioneering communication” covered by §441b because it is not“publicly distributed” under 11 CFR §100.29(a)(2); that §441b maynot be applied to Hillary under Federal Election Comm’n v. Wisconsin Right to Life, Inc., 551 U. S. 449 (WRTL), which found §441b uncon-stitutional as applied to speech that was not “express advocacy or its functional equivalent,” id., at 481 (opinion of ROBERTS, C. J.), determining that a communication “is the functional equivalent of express advocacy only if [it] is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate,” id., at 469–470; that §441b should be invalidated as applied to movies shown through video-on-demand because this delivery system has alower risk of distorting the political process than do television ads;and that there should be an exception to §441b’s ban for nonprofitcorporate political speech funded overwhelming by individuals—arenot sustainable under a fair reading of the statute. Pp. 5–12.
(b)Thus, this case cannot be resolved on a narrower ground without chilling political speech, speech that is central to the First Amendment’s meaning and purpose. Citizens United did not waive this challenge to Austin when it stipulated to dismissing the facial challenge below, since (1) even if such a challenge could be waived, this Court may reconsider Austin and §441b’s facial validity here be-cause the District Court “passed upon” the issue, Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, 379; (2) throughoutthe litigation, Citizens United has asserted a claim that the FEC hasviolated its right to free speech; and (3) the parties cannot enter intoa stipulation that prevents the Court from considering remedies nec-essary to resolve a claim that has been preserved. Because Citizen United’s narrower arguments are not sustainable, this Court must, in an exercise of its judicial responsibility, consider §441b’s facial valid-ity. Any other course would prolong the substantial, nationwide chilling effect caused by §441b’s corporate expenditure ban. This conclusion is further supported by the following: (1) the uncertainty caused by the Government’s litigating position; (2) substantial time would be required to clarify §441b’s application on the points raised by the Government’s position in order to avoid any chilling effect caused by an improper interpretation; and (3) because speech itself is of primary importance to the integrity of the election process, anyspeech arguably within the reach of rules created for regulating political speech is chilled. The regulatory scheme at issue may not be aprior restraint in the strict sense. However, given its complexity and the deference courts show to administrative determinations, a speaker wishing to avoid criminal liability threats and the heavycosts of defending against FEC enforcement must ask a governmental agency for prior permission to speak. The restrictions thus function as the equivalent of a prior restraint, giving the FEC power analogous to the type of government practices that the First Amendment was drawn to prohibit. The ongoing chill on speech makes it necessary to invoke the earlier precedents that a statute that chills speech can and must be invalidated where its facial invalidity has been demonstrated. Pp. 12–20.
2. Austin is overruled, and thus provides no basis for allowing the Government to limit corporate independent expenditures. Hence, §441b’s restrictions on such expenditures are invalid and cannot be applied to Hillary. Given this conclusion, the part of McConnell that upheld BCRA §203’s extension of §441b’s restrictions on independent corporate expenditures is also overruled. Pp. 20–51.

Now one would think, reading this outraged language, that existing law forbade the production or distribution of a scurrilous documentary like Hillary (whom readers will remember that I did not support myself) at all. Of course it doesn't. Political speech was free, or almost free, when the first amendment was passed, in two different ways: not only did the law now protect it, but the production and distribution of written materials (the only ones then available) was extremely cheap. In the early nineteenth century, yours truly might have started and turned out a weekly broadsheet almost as easily as I now turn out this blog. The point is not whether material like Hillary can be produced--of course it can, although it testifies to the decline of American political discourse in the last half century--the point is who will have the money to advertise it and broadcast it on cable television. Just as Anatole France remarked that the law impartially forbade both the rich and the poor from sleeping under bridges, the law now impartially allows David Kaiser, the heads of Citibank and Goldman Sachs, and Glenn Beck to make their views available on television to audiences of millions. The problem is that only three of them will be able to do so. The reformers of the 1900-80 era did not need rocket science to figure out that increasingly expensive modern forms of communication would obviously give incredible advantages to the rich and powerful and thus had to be regulated to give ordinary citizens a chance to be heard. A 5-4 Supreme Court majority has now thrown out a century of tradition and returned us to a form of political Darwinism (see my earlier posts on social Darwinism several years ago, easily located by a search at the top of the page.)

The current crisis in American life, I have been saying here now for five years, will lead either to a kind of New Deal revival or to a return to the Gilded Age. Karl Rove understands this and cited William McKinley as his political hero. The court just brought us immensely closer to a return to McKinley's age.

Those like me who never have and never will abandon the New Deal principles they learned in their youth inevitably mourn the likely eclipse, for the rest of our lifetimes, of those principles. But once again my training as a European historian at least enables me to say that things could be much, much worse. Although the Republicans have frequently bent the law (most notably in 2000 and again this week), they have successfully undid the work of our parents and grandparents mainly through legal means. There is no Fascist movement or dictatorship on the horizon (although one could still emerge.) It was the America of the Gilded age to which my paternal grandfather came around 1900, making my own life possible. The liberal tradition will survive, even if will only be revived years after the Boom generation has passed from the scene. (I do not exclude the possibility that my own side might still prevail even in this crisis, but it does not look at all likely.) If the Founding Fathers managed to design a system that can preserve essential liberties and survive even severe swings to the right and left, they will still deserve our thanks.