As conservatives attacked the Obama administration’s regulations as too strict, those on the left increasingly charged that they weren’t tough enough. A vivid example of the costs of deregulation came from outside the financial sector. In April 2010, an explosion on the BP oil rig Deepwater Horizon left eleven people dead and polluted the Gulf of Mexico in the worst oil spill in US history. In 2011, left-wing activists, worried about similar damages from lax regulation on Wall Street, mobilized to protest the economic inequality that increasingly defined the nation. Complaining that Wall Street had been bailed out after its poor behavior with few individual members of firms there facing any kind of punishment for their actions, leftists formed a new organization called Occupy Wall Street. For nearly two months, starting in September 2011, they gathered in Zuccotti Park in New York’s financial district. Inspired by the youth revolution in Egypt that brought down the authoritarian government of President Hosni Mubarak that year, the protesters relied on social media to attract supporters and spread their message. Protesting the institutions and policies that allowed 1 percent of the country to control so much of the nation’s resources, Occupy activists asserted: “We are the 99 percent.” That slogan, which became an effective rallying cry, had been inspired by the work of French economist Thomas Piketty. The Occupy movement attracted support from a number of other prominent public intellectuals, too, such as Princeton philosopher Cornel West, who helped ensure media attention. “Every few days, a luminary would come to Zuccotti Park and give a speech that would circulate around the Internet,” one of the activists recalled. “All of a sudden it was cool to be a lefty again.” 40
While the protests came under criticism for lacking sufficient organization or a clear political agenda, supporters claimed they had moved the problem of economic inequality to the center of the national conversation. Many observers agreed. “They are redefining and rebalancing our political discourse,” former New York governor Eliot Spitzer noted. “To all those who are dissatisfied because the Occupy movement did not grow into the complete political theory or social agenda that some wished, I say: Give credit where credit is due.” And indeed, mainstream politicians started to talk more frequently about the issue, with Democrats shifting away from the centrism of the Clinton era and more readily addressing the need to close the gap between those thriving at the top of the economy and the “ 99 percent” struggling beneath them. Polls showed that the public was increasingly warming to this message. According to a Pew survey released in January 2012, more than two-thirds of Americans agreed that there was a strong conflict between the rich and the poor. Economic inequality, the editors of the New York Times observed, had become “the greatest source of tension in American society.” 41
Increasingly, pundits, reporters, and scholars turned their attention to the topic. When Thomas Piketty’s Capital in the Twenty-First Century (2013) was published in English in 2014, the nearly 700-page economic tome became an unexpected best seller. “With its dire warning about a possible New Gilded Age of extreme inequality, Piketty’s daunting monograph hardly seems like fun summer reading,” one reviewer marveled, “yet the book is currently No. 1 on Amazon.com.” Chronicling the conditions that had inspired the Occupy protests, Piketty’s book offered intellectual heft to their critique with statistics and charts suggesting that the protests had been right on target.42
The Politics of Hostage Taking
Though the Democrats found their footing on policy, Republicans increasingly had the edge on politics. Riding a new wave of Tea Party anger, the GOP did extremely well in the 2010 midterms, retaking control of the House, but not the Senate. Just as important, Republicans’ massive investments in state campaigns paid off. Coming out of the 2010 election, the GOP had strong control of many state legislatures and would therefore be in position to craft redistricting plans that would secure Republican congressional incumbents for years to come. Even Obama told reporters the election had been a “shellacking.” 43
Republican leaders like new Speaker of the House John Boehner capitalized on the fervor among Tea Party Republicans, characterizing Obama as a dangerous leftist to stir conservatives into an electoral frenzy. But the growing discord and division revealed a troubling new development in American political discourse. Increasingly, the two parties were not simply drawing different conclusions from the same facts; instead, they were starting out with wildly different versions of what those facts were in the first place. “It was modern day media, and social media, that kept pushing people further right and further left,” Boehner noted in a frank interview after his retirement. While the process had been long under way, it became sharply more pronounced in Obama’s first term. “People started to figure out,” Boehner noted, that “they could choose where to get their news. And so what do people do? They choose places they agree with, reinforcing the divide.” 44 The fractured media landscape affected more than politics. Many conservatives, for instance, simply rejected the scientific consensus about climate change, believing it to be a liberal hoax.
Despite his concerns about the fraying fabric of political life, Speaker Boehner and others in the House leadership made a calculated bet that they could harness the renegades’ energy. They believed they could use them to build a voting bloc that would stifle the administration, yet be able to contain them when the time came. Boehner was aware of the risks, though. His fellow Ohio Republican Jim Jordan, a key member of the Tea Party caucus, had always been a “legislative terrorist,” he later admitted.45 But Boehner believed the time had come to take chances. Senate Minority Leader McConnell was thinking the same thing. “We’re determined to stop the agenda Americans have rejected,” McConnell warned, “and to turn the ship around.” 46
The politics of polarization had helped the Republicans return to power, but it soon became clear that it could also tear them apart. Boehner and McConnell underestimated the difficulty that they would have controlling their own members, particularly when the rank and file practiced a style of cutthroat politics that thrived in the modern political climate. The GOP majority in the House, most notably, proved to be riven by internal fractures. Boehner had been a key player in the conservative counterrevolution led by Newt Gingrich, helping draft the “Contract with America” that propelled the GOP to victory in 1994. But sixteen years later, as his caucus moved sharply to the right, the new Speaker seemed more of a centrist by comparison. The rest of the incoming Republican House leadership—Majority Leader Eric Cantor, Majority Whip Kevin McCarthy, and Budget Committee Chairman Paul Ryan—had presented themselves as rebels who would go to even greater lengths than the Gingrich generation to reduce the size and scope of government. In 2010, the three had even published a book about themselves called Young Guns: A New Generation of Conservative Leaders. Though Boehner served as Speaker, the Republican caucus he ostensibly led was much more aligned with the “Young Guns” beneath him. This was especially true of the freshman class of eighty-seven new Republicans, many of whom had been elected with the backing of Tea Party organizations and conservative funders like the Koch brothers.47
The contrast in style and substance between Boehner’s old guard and the new generation became immediately apparent after the election, as Congress turned its attention to raising the debt ceiling. Historically speaking, this was a routine procedure. Between 1960 and August 2011, Congress raised the debt ceiling seventy-eight times in all—forty-nine times with a Republican in the White House, twenty-nine times with a Democrat. Raising the debt ceiling did not authorize new spending, but rather allowed the government to pay the bills for spending measures that Congress had already approved. Over the years, it became increasingly common for members of the opposition party to use the debt ceiling vote as a chance for some political theater, to lecture the incumbent administration about its wasteful ways and present themselves as fiscally responsible instead. As a US senator, Barack Obama himself took part in this ritual, chiding the Bush administration and then voting against raising the de
bt ceiling, knowing the votes were there to raise it anyway. Despite the theatrics, both parties always knew the debt ceiling would be raised, because failure to do so would mean defaulting on the national debt and likely triggering a massive financial crisis.48
In 2011, the routine housekeeping of the debt ceiling reached a crisis point. Many of the incoming freshmen, at the Young Guns’ encouragement, had spent the 2010 campaign pointing to the debt ceiling as the embodiment of Washington’s problems. “This ‘need’ to raise the debt ceiling is caused by one thing,” a Republican challenger in Alabama claimed: “Out-of-control spending in Washington.” “This Congress has done nothing but spend future generations of this country into a black hole,” insisted another from Wisconsin. Despite the campaign rhetoric, the incoming GOP speaker believed his party, as the majority party, had a duty to govern responsibly. “We’re going to have to deal with it as adults,” Boehner said two weeks after the 2010 midterms. “Whether we like it or not, the federal government has obligations, and we have obligations on our part.” But the Young Guns disagreed. At a January 2011 retreat, Cantor asked his caucus to use the debt limit vote as a way to force the Obama administration to make massive spending cuts. “I’m asking you to look at a potential increase in the debt limit as a leverage moment when the White House and President Obama will have to deal with us,” he told them. “Either we stick together and demonstrate that we’re a team that will fight for and stand by our principles, or we will lose that leverage.” 49
Notably, prominent personalities in conservative media outlets encouraged a defiant stance. “Hells no,” said Sarah Palin, the former Republican vice presidential nominee turned Fox News contributor, “I would not vote to increase that debt ceiling. Otherwise it just shows the American public we’re not serious yet, we’re still going to incur more debt.” Host Sean Hannity mocked the “doomsday rhetoric” of congressional Democrats who argued “the American economy would crumble” with a default. “I say let them default,” Eric Bolling argued on Fox & Friends. “What’s going to happen?” Meanwhile, on the Fox Business Channel, hosts and reporters on financial programs likewise encouraged a showdown. Lou Dobbs dismissed the looming deadline for raising the debt ceiling as a “false date” and the idea the government might default as “pure fiction.” “If I were in the Congress,” host Andrew Napolitano said on Freedom Watch, “I would encourage everybody to vote against raising the debt ceiling.” 50
As a result, the Democratic White House and Republican Congress spent much of 2011 engaged in a long series of negotiations over something that had never really been negotiated before. But the entire process, driven as it was by reflexive partisanship, seemed impossible to solve with bipartisan deals. In July 2011, the Senate seemed close to an agreement, one that would have involved significant spending cuts and some small tax increases. But it fell apart as soon as the president signed on. As an aide to the Republican leadership explained in an email to Politico, “The president killed any chance of its success by 1) Embracing it. 2) Hailing the fact that it increases taxes. 3) Saying it mirrors his own plan.” Negotiations proved no better in the House, where compromise became such a toxic issue that, at one point, Boehner refused to return the president’s phone calls. In the end, Obama agreed to a last-minute deal that gave Republicans most, but not all, of what they had demanded. Congress raised the debt ceiling and, in return, received a new deficit reduction deal that relied entirely on spending cuts with no offsetting tax increases on the other side. The agreement also established a bipartisan super-committee of senators and representatives to make recommendations for further cuts. If they could not reach agreement by a specified date, according to the law, automatic cuts would go into effect through sequestration. This threat of automatic, draconian cuts was thought to be the best incentive for overcoming partisan inaction.51
While Republicans hailed the conclusion to the crisis as a political success, the economic costs were evident. The stock market experienced its most volatile week and greatest losses since the 2008 financial meltdown. Soon after, Standard and Poor’s downgraded the credit rating of the United States for the first time in history, noting that “the political brinksmanship of recent months highlights what we see as America’s governance and policy making becoming less stable, less effective, and less predictable than what we previously believed.” Federal Reserve chairman Ben Bernanke agreed, noting that the debt ceiling crisis had “disrupted financial markets and probably the economy as well.” According to the Government Accounting Office, the threat of default had increased government borrowing costs by $1.3 billion that year alone. Despite the economic damage, congressional Republicans believed they had won a major victory. Senate Minority Leader Mitch McConnell, for his part, was perfectly candid about his belief that gamesmanship was now more important than governing. “I think some of our members may have thought the default issue was a hostage you might take a chance at shooting. Most of us didn’t think that,” he told reporters. “What we did learn is this—it’s a hostage that’s worth ransoming.” 52
The Election of 2012
As the next presidential campaign drew near, Massachusetts governor Mitt Romney quickly emerged as the Republican frontrunner. In many ways, Romney seemed out of step with the new trends in his party’s congressional caucus and base. His father, former Michigan governor George Romney, had been a prominent moderate Republican during the Nixon era, and in many ways, his son replicated that role. Indeed, his record as a successful GOP governor in the blue state of Massachusetts offered evidence that he not only knew how to lead but also to reach across the aisle with results. In addition to his public sector record, Romney, like his father before him, could point to a career as a successful businessman in the private sector. With the economy recovering, but at an extremely slow pace, those business credentials appealed to conservatives as well as moderates.
Despite his own moderate inclinations, however, Romney increasingly found himself forced to run to the right during the primary campaign in order to placate the rising influence of the Tea Party movement in the Republican base. Placed in the position of having to defend his own role in passing health care reform in his state, Romney awkwardly tried to separate himself from one of his significant accomplishments. Sidestepping the similarities between the two plans, he argued that the difference in size between his plan and Obama’s plan was the key. “Our plan was a state solution to a state problem,” he insisted in May 2011. “His is a power grab by the federal government.” In particular, Romney argued that imposing the individual mandate—an element he had installed in Massachusetts and then urged Obama to implement nationally—was a sign the government was imposing its will on the people. “The Obama administration fundamentally does not believe in [the] American experiment,” he charged. “They fundamentally distrust free enterprise and the idea that states are where the power of government resides.” 53
As the general election began, Mitt Romney and his running mate Paul Ryan—one of the House Young Guns—continued to target the Affordable Care Act, making the promise to “Repeal and Replace” the law a major part of their pitch. But their assault on the new law as an unconstitutional power grab by the federal government was ultimately undercut by the Supreme Court. On June 28, 2012, the court upheld the Affordable Care Act by a vote of 5–4 in the case National Federation of Independent Business v. Sebelius. Notably, Chief Justice John Roberts, a conservative appointee of George W. Bush, cast the decisive vote with the majority. Though it upheld the law in general, the court did strike down a requirement that states had to expand their Medicaid coverage. Many Republican-led states, which had not yet enacted the expansion, now refused to do so; several also refused to set up their own state-level health care exchanges. As a result, according to the law, the federal government stepped in to set them up for them. Despite the ruling, Romney remained committed to the cause and used it as a rallying cry for conservatives. “Our mission is clear,” he said. “If we want to get rid of
Obamacare, we’re going to have to replace President Obama.” 54
As Romney minimized his real accomplishments in the public sector to discredit the Affordable Care Act, his private sector success came under attack as well. One of his challengers in the GOP primaries, former Speaker of the House Newt Gingrich, mounted a blistering attack on Romney’s business credentials at Bain Capital. While Romney had long bragged about his work at the investment firm, Gingrich asserted that Romney’s actions looted companies and left workers without jobs, as Bain often took money out of industries and sent it overseas instead. An anti-Romney documentary tied to Gingrich’s attacks denounced Romney as a “predatory corporate raider,” highlighting the lives of workers allegedly ruined by Bain’s actions. In the general election, Obama picked up on these attacks, running ads that likewise focused on workers who lost their jobs when Bain closed down their factories and steel mills. “It was like a vampire,” one unemployed steelworker recalled in one spot; “they came in and sucked the life out of us.” “It was like watching an old friend bleed to death,” another said. This line of attack, in the primary and the general election, set up an image of Romney as an uncaring plutocrat who made his considerable wealth off the misfortune of others. That image only deepened when a Democratic campaign operative secretly recorded Romney giving a speech to donors. In it, Romney dismissed “ 47 percent” of Americans who he claimed “pay no income tax” and therefore are “dependent on the government.” They would likely support Democrats, he said, because they thought of themselves as “victims” who were “entitled to food, to housing, to you name it.” The reaction to the tape was devastating. “After months of doggedly trying to seem more likeable,” Maureen Dowd noted, “Romney came across as a mean geek, a Cranbrook kid at the country club smugly swaddled in class disdain.” 55
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