According to Stiglitz, the top 1 percent of Americans now takes in roughly one-fourth of America’s total income every year. In terms of wealth rather than income, says Stiglitz, the top 1 percent now controls 40 percent of the total. This is new. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent, he noted. Meanwhile, people in the top 1 percent have seen their incomes rise 18 percent over the past decade, while the incomes of those in the middle have actually fallen. For men with only high school degrees, the decline has been especially pronounced: 12 percent in the last twenty-five years alone, said Stiglitz.
The more divided a society becomes in economic terms, the more likely it is that the wealthy will opt out of paying for public goods and common needs. “You did not need that much collective action in America two hundred years ago,” said Stiglitz. “Our defense needs were small. We had no natural enemies. We needed a post office and basic government infrastructure.” Today, though, he added, “we need collective action to deliver education, research, modern infrastructure, and all the other public goods that are at the core of a successful society. And that is where inequality fits in, because it impedes our ability to act collectively … I would trace it back to Reagan and the unraveling of the social contract.”
Today the rich don’t need the benefits of collective action, said Stiglitz, because they can create their own “subsociety” with its own collective goods. “They have their country clubs, which are their own parks. They have their own private schools. They don’t have to go to public schools and they would not want to have their kids educated there. They have their own transportation system with private jets and chauffeured cars, so they don’t really care about the deterioration in public transport. They don’t care if there are long lines at the airport, because they are not in them.”
Chasing the Losers
If during the Cold War we had let the key features of our formula for greatness—which are the major determinants of economic growth and therefore of power and influence in the world we are living in—deteriorate the way we did during the Terrible Twos, it would have been considered the equivalent of unilateral disarmament. Politicians would have accused one another of creating or tolerating an “education gap” or an “infrastructure gap,” like the “missile gap” of the 1950s. The charges and countercharges would have dominated national elections. In the Terrible Twos, something far worse happened.
We didn’t notice. Declining numbers in the important categories of national life became normal.
Then we made things even worse. Having underestimated the challenge posed to America by 11/9—November 9, 1989, the day the Berlin Wall fell—we compounded the error by overestimating the challenge of 9/11. We spent the rest of the decade focusing our national attention and resources on the losers from globalization—al-Qaeda, Iraq, Pakistan, and Afghanistan—when our major long-term challenge comes from the winners, most of them in Asia. We devoted ourselves to nation-building in Mesopotamia and the Hindu Kush when we should have been concentrating on nation-building at home.
Since the authors of this book both supported the war in Iraq, to date the more controversial and expensive of the two projects, we need to say what we got wrong and what we still believe. Both of us believed then and believe now that finding a way to bring democracy into the heart of the Arab world was a strategic and moral imperative. We knew it would be difficult and costly, and said so at the time, but even so, we underestimated just how difficult and how costly. We have nothing but regret for the excessive price that America and Iraq have had to pay in lives and treasure.
The losers from globalization—specifically al-Qaeda and Saddam Hussein—did pose significant security problems. We had to strike back against the al-Qaeda perpetrators of 9/11, not simply to deter another attack but also to disrupt what they might have been planning next. But Saddam Hussein was not part of 9/11. The Bush administration asserted that his regime had to be toppled because it had weapons of mass destruction. Neither of us shared that view. Michael believed that the weapons of mass destruction that Saddam Hussein was thought to possess—chemical weapons—did not pose a severe enough threat to justify an attack. What did justify removing him from power was the prospect that at some point in the future he would acquire the far more dangerous nuclear weapons.
Tom’s view was that the long-term threat to the United States from the Middle East came less from weapons of mass destruction than from people of mass destruction, produced in a region where autocratic regimes were stifling and enraging the people they governed. That was his view in 2001, not just in 2011, when uprisings around the Arab world occurred, triggered by deep frustration and anger at the long-ruling dictatorships and motivated as well, in many cases, by democratic yearnings. His hope was that America could collaborate with a free Iraq to create a decent, democratic model of development in a region that had none.
It was neither foolish nor irresponsible for President George W. Bush to want to use Iraq as a lever to pry open the closed and autocratic world of Arab politics. It was, however, both foolish and irresponsible to try to do so without a well-thought-out plan, without enough troops, and without an adequate understanding of the scale and complexity of what was required. Execution matters.
America’s initial policy in Iraq offers, alas, a metaphor for much of American public policy in the Terrible Twos: Our reach exceeded our grasp and ability to execute. We simply, casually, and wrongly assumed that things would work out. We willed the ends but not the means.
We cannot say what would have happened had we done things well in Iraq. We can say, though, that if a decent, democratizing Iraq does finally emerge one day it will be something well worth having, and the lives and treasure expended there will not have been in vain. To the contrary, in that case we will have supported something transformational, of great value to both Iraqis and the world. But even in that case, we will have overpaid for the benefits we get, although by how much will depend on how Iraq evolves. Especially given America’s other needs, the American intervention there has cost far too much in lives, money, and the government’s attention. The same is true for the wars in Afghanistan and Libya, enterprises with far less potential strategic benefit. In sum, America—and we very much include ourselves in this mistake—acted as if the world that was created on 9/11 was a whole new world. The events of 9/11 did reveal a serious security threat. They posed a real problem. But it was not, in retrospect, the equivalent of a life-threatening disease that required dropping everything and changing everything; it was a chronic disease that we had to keep under control but in a way that allowed us to get on with the rest of our lives. September 11 was diabetes; it wasn’t cancer. And the rest of our lives that we had to get on with involves addressing the four major challenges of the post–Cold War era by updating and upgrading our formula for greatness.
We overpaid not only for Iraq but for homeland security as well, because no politician wanted to be accused of negligence by some future investigatory commission. Moreover, we paid for all of this—Iraq, homeland security, Afghanistan, Libya—with borrowed money. We gave ourselves a tax cut rather than a tax hike, added a new entitlement—Medicare prescription drugs—and did it all on the eve of the biggest entitlement payout in American history, which will come with the retirement of the baby boomers.
The contrast with a previous era and a previous Republican presidency is striking. In the 1950s, the Eisenhower era, we used a major conflict—the Cold War—as a lever to upgrade our formula for success to ensure a prosperous future for the nation as a whole. In the Terrible Twos, the George W. Bush era, we used another conflict—the war with al-Qaeda, Saddam Hussein, and radical Islam—to avoid doing the things we had to do to assure a prosperous future. In the first period we sacrificed for and invested in the future. In the second we indulged and splurged in the present at the expense of the future.
Crazy Heart
Looking back on the last decade, we could not help but be struck by some o
f the lyrics to one of the songs in the 2009 movie Crazy Heart. Jeff Bridges won the Oscar for best actor for his portrayal of an alcoholic country singer trying to make a comeback. The song, entitled “Fallin’ & Flyin’,” makes an all too fitting anthem for the Terrible Twos.
I was goin’ where I shouldn’t go
Seein’ who I shouldn’t see
Doin’ what I shouldn’t do
And bein’ who I shouldn’t be
A little voice told me it’s all wrong
Another voice told me it’s all right
I used to think that I was strong
But lately I just lost the fight
Funny how fallin’ feels like flyin’
For a little while
Funny how fallin’ feels like flyin’
For a little while
I got tired of bein’ good
Started missin’ that ol’ feelin’ free
Stop actin’ like I thought I should
And went on back to bein’ me
I never meant to hurt no one
I just had to have my way
If there’s such a thing as too much fun
This must be the price you pay
That was America in the Terrible Twos, and we have only begun to pay the price. How did it all happen? The short answer: Our political system got paralyzed and our values system got eroded.
TWELVE
“Whatever It Is, I’m Against It”
In the spring of 2011, the co-chairs of the presidential deficit reduction commission—Alan Simpson, the former Republican senator from Wyoming, who served from 1979 to 1997, and Erskine Bowles—held a dinner briefing at the Jefferson Hotel in Washington. After the dinner broke up, Simpson, a great raconteur, shared with Tom some thoughts about the state of American politics today, including this story: “A few years ago I went back to the Senate just to check in, and I saw my old and dear friend Dale Bumpers [a Democratic senator from Arkansas]. So I went over across the chamber and gave him this big hug. He’s a great guy. When I came back over to the Republican side, [a Republican senator whom Simpson didn’t want to name] pulled me aside and said, ‘What were you doing over there with Bumpers?’ I said, ‘He’s my friend.’ [The Republican senator] said to me, ‘He’s no good. He’s a Democrat. He’s a rabid liberal. You shouldn’t be hugging him.’”
Simpson was appalled. Things didn’t use to be that way. To be sure, political polarization—even hostility—between the country’s two major political parties is not new. But the American political system today is not only more polarized than when Simpson served. It is paralyzed —by a combination of factors. The two parties, which used to be coalitions of liberals and conservatives, are both now ideologically nearly homogenous, and so stand further apart from each other politically than ever before. Their core agendas were formed in the last century and have not been updated to meet the challenges of this one. The gerrymandering of legislative districts now favors the election of hyper-partisan ideologues rather than moderate problem-solvers. Super-empowered and super-funded interest groups now clog the system’s arteries; the new media highlight the loudest and most partisan voices, and more and more depict politics as sports, where all that matters is who won today’s game. And, finally, unlike in the past, there is now no big external enemy to enforce a sense of purpose, seriousness, and national unity.
To be sure, there has never been a golden age when partisan divisions in America were trivial and the two parties calmly worked out all the differences they had, but the costs of today’s partisanship is far higher than before. When we were more polarized, as in the first half of the nineteenth century, we did not need the federal government to do as much as it must do today; and when we did need it to do as much, as we did for much of the twentieth century, our politics were far less polarized. Today, we have the worst of both worlds: a huge, complicated, and difficult agenda, and a political system incapable of addressing it at the speed and scale we need.
We cannot possibly meet our four major challenges, let alone update America’s traditional formula for greatness, without a vibrant federal government able to accomplish big, hard things. But the pathologies of the political system, especially its extreme polarization, block precisely the kind of initiatives we need. The title of Ronald Brownstein’s book on the subject—The Second Civil War—from which we draw here, is a deliberate exaggeration: Republicans and Democrats are not about to take up arms against each other. The book’s subtitle, however—How Extreme Partisanship Has Paralyzed Washington and Polarized America —accurately describes one of the chief obstacles to the public policies America needs to thrive in the decades ahead.
We forget that it was not always so. Most Americans today would probably be shocked to learn that Congress established the cornerstone of its social safety net, Social Security, in 1935, established the interstate highway system in 1954, passed civil rights legislation in 1964, and authorized Medicare in 1965, all with a solid majority of each party in both the House of Representatives and the Senate voting in favor of the measures.
In recent years, by contrast, the pattern of one party supporting a measure and the other emphatically and overwhelmingly opposing it has become the norm. Each of the last three presidents failed to persuade members of the other party to support his most important programs. Not a single Republican voted for Bill Clinton’s initial economic package, which included tax increases, or endorsed his health-care initiative. Only twenty-eight Democrats in the House and twelve in the Senate supported George W. Bush’s tax cuts in the spring of 2001, and none endorsed his proposed reform of Social Security, which included private accounts, in 2005. No Republican voted for Barack Obama’s 2009 economic stimulus package or his 2010 health-care plan. Both parties go to ever greater lengths to block the other’s initiatives, such as through the filibuster—a delaying tactic that one party uses when the other has enough votes to pass a bill. From 1955 to 1961 a vote had to be called to end a filibuster only once. In 2009 and 2010, this happened eighty-four times.
Over the past couple of decades, in fact, Democrats and Republicans have become more like hostile tribes than colleagues with different political views but common goals. Demonization has now become a staple of political rhetoric. In 1994 the Republican Speaker of the House, Newt Gingrich, called the Clinton administration “the enemy of normal Americans.” In the next administration, in 2004, the Democratic Senate majority leader, Harry Reid, called President George W. Bush a “liar” who “betrayed his country.” When control of the White House passed back to a Democratic president, Republicans called into question Barack Obama’s patriotism, his truthfulness, and even the circumstances of his birth—suggesting that he had not been born in the United States and was therefore ineligible for the presidency.
The two parties have become polarized on foreign policy as well as domestic issues. The country was divided over the wars in Korea and Vietnam, but in neither case did the division run mainly along partisan lines. Democrats and Republicans alike both opposed and supported both wars. Aggregated Gallup poll data collected between August 7, 1968, and September 22, 1969, revealed that 51 percent of Democrats and 56 percent of Republicans believed the war to have been a mistake, while 37 percent of Democrats and 34 percent of Republicans believed it had not been a mistake. For the Iraq war that began in 2003, by contrast, the supporters were mainly Republicans and the opponents mainly Democrats—in no small part because a Republican president had chosen to wage the war. A 2005 Gallup poll that asked whether the war had been a mistake found that Democrats said that it had been a mistake by 81 percent to 18 percent, while Republicans said it had not been a mistake by 78 percent to 20 percent. For much of the twentieth century, partisanship stopped at the water’s edge. In the twenty-first century, it sails the high seas and plants its flag from the halls of Montezuma to the shores of Tripoli.
This sharp partisan split has given rise to the frequently cited image of a political map in which the country is divided be
tween Republican “red” states and Democratic “blue” ones, with little in common between the two. In red and blue America, partisan polarization extends to social issues and social life, a feature expressed by a billboard on the West Side of deep-blue Manhattan that reads NYC: WHERE PEOPLE ARE OPENLY GAY & SECRETLY REPUBLICAN. Russ Feingold, a Democrat who represented Wisconsin in the Senate from 1993 to 2011, told us that at the rate polarization is proceeding, partisans will soon demand that consumer products reflect their politics: “We’re going to have Republican and Democrat toothpaste.”
The movies of the Marx Brothers, the funniest comedy team America has ever produced, satirize respectable but stuffy institutions such as grand opera and the medical and legal professions. In Horse Feathers their target is academia, but a song that Groucho Marx sings applies all too well to today’s Republicans and Democrats:
Your proposition may be good,
But let’s have one thing understood,
Whatever it is, I’m against it.
And even when you’ve changed it or condensed it,
I’m against it.
The Great Disjunction
It would be logical to assume that America’s two main political parties, and the public officials who belong to them, have become polarized because the country itself has become polarized. It would be logical to assume that a polarized political system rests on an equally polarized society, in which, as in the Gilbert and Sullivan song,
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