The Bizarro Sixties

I've come to think of our current era as the Bizarro Sixties.

In the original sixties, the stereotype held that liberals were magical thinkers, while conservatives were common sense pragmatists.  A liberal might be expected to say: "Maybe if we form a circle and hold hands and project our positive energy out into the universe, we can fix the world's problems".  A conservative would be expected to respond: "Well, I'd say that and a dollar will buy you a cup of coffee".

In the 21st century, these roles seem to have flipped. 

Republicans now seem to value philosophy over real world experience. 

In the year 2000, Republicans introduced the idea of the semi-sentient free market.  If we just unshackled the market through deregulation, gave massive tax cuts to the wealthiest Americans and stood back out of the way, the system would sort itself out to produce the strongest economy possible.

We then spent 12 painful years proving this idea to be catastrophically false.

With regulations dismantled and the Bush tax cuts  in place, we limped through 8 years of the weakest economy in modern history, followed by the greatest economic collapse since the Great Depression.  Throughout that time, we amassed conclusive evidence that the Bush tax cuts had done nothing to stimulate the economy, create jobs, or aid in the recovery, they had simply ballooned our debt, while reckless deregulation was a major driver of the economic collapse.

The Republican plan to fix this disaster was unanimous: renew the Bush tax cuts and continue deregulation.

In the 21st century, the bizarro conservatives now say: "Pay no attention the lessons of history!  The purity of our vision must not be muddied by facts!  If we just believe hard enough while  repeating the mistakes of the past, maybe tomorrow an invisible hand will reach down from the sky and make it all work this time."

It has now fallen to liberals to step into the shoes of the common sense pragmatist and respond: "Well, that didn't work.  Let's try something else."

The Republican Faith

In the elections of 2010, Republicans rode a wave of voter dissatisfaction with the economy to sweeping victories by promising to focus our national attention on job creation.  However, once the new class of 2010 picked up the reins of power, they defied expectations.  Instead of focusing on jobs, they focused on woman's health issues.  While efforts to boost the economy ground to a halt, Republicans around the country began introducing unprecedented volumes of legislation aimed at restricting access to abortion and contraception. 

This turn of events was baffling to many of us.  How does promising jobs lead to restricting access to healthcare?  How  did so many Republicans decide to take the same seemingly random turn at the same time?  My hypothesis: this can be explained as an artifact of Republicans restructuring their party as a religion.

The Republican drive to restructure their organization from that of a standard political party to something that more closely resembles a religion started to take shape under Reagan, but solidified under Gingrich's Contract with America.  As with most things, this restructuring came with both good news and bad news.

The good news was that political opponents became blasphemers.  Debates on the merits of policy became battles between good and evil.  This created a base of true believers whose faith could never be shaken by policy failure or broken promises.  In a political party, you can switch if the other side is providing better results.  In a religion, you can't join the devil just because God isn't delivering. 

The bad news was that policy became dogma.  There was no longer any middle ground for policy that has merits but isn't the right solution for the moment.  Policy could only be good or evil.  This meant that Republicans could never add new ideas.  They were limited to the policies already approved, since they had just declared all other ideas to be blasphemous.  So when Republicans want to stir things up, or differentiate themselves in a primary, they either have to turn against an idea that they formerly supported, or take an old idea to a new extreme.  The Contract with America built a house and destroyed all of the extra building material, so the only way Republicans can alter their house is to burn down one of the existing rooms.

This put the Republican class of 2010 in a tight spot.  They had run on economic reform, but the only economic tools left to them were tax cuts for the wealthy and deregulation, and there wasn't much left to do with those tools.  So their choice was to sit in the echoing silence of their inaction, or distract the American people with noise of some other kind.  Once again, strict dogma had given them very few choices.  They could champion gun rights, but there are few rights gun owners don't already have.  They could start in on gay marriage again, but that theme was growing tired.  So that left reproductive rights. 

Clearly there are many severe social conservatives in the Republican party who have been itching to go medieval on America for decades, but the question is: why did the entire party pick this moment to let loose?  I think the answer is that Republicans have so limited themselves in terms of policy that this was the only path left without a self-imposed roadblock.  It was a choice between attacking woman's rights, or doing absolutely nothing.  In the end, risking half the vote was preferable to letting the public see that, for Republicans, taking action on the economy is an impossibility.

 

P.S.

This also helps explain the seemingly self-destructive "Incredible Shrinking Tent" tactic of the modern Republican.  If everyone outside the party is evil, then you can never make new friends, you can only turn former friends into enemies (since old enemies get stale after a while and you need to do something to keep the base energized).  So the Republicans have had to keep turning against new segments of the American population:  liberals, gays, atheists, Muslims, Hispanics, immigrants, people who live on coasts, people who care about the environment, Americans with college degrees, poor people, African Americans, women and now people who like sex.  Inexplicably, polls show that this leaves 50% of the population, although you would think the only demographic left to attack would be ultra-wealthy celibate white men. 

Next thing you know, Republicans will be going after people who like to share cute cat photos online.

No Mystery

For many Americans, it seems that the cause of our recent economic meltdown remains a mystery.  Without this knowledge, many now embrace solutions that are, in fact, the exact same policies that caused the crisis in the first place.  Primarily, these involve the removal of essential regulations. 

We have allowed ourselves to believe the fiction that we once had a perfectly functioning free market that was corrupted by regulation and now must be freed again.  In truth, our nation has been plagued by a long series of boom-to-bust economic disasters, with a brief reprieve in the second half of the 20th century following the economic reforms of the Great Depression.  This suggests that economic chaos is the natural state of an unregulated free market and that certain key regulations are required for economic stability.

America's first boom-to-bust cycle resulted in the Panic of 1819.  This was followed by the Panic of 1837, the Panic of 1857, the Long Depression of 1873 - 1896, the Panic of 1907 and finally the Great Depression of 1929 - 1939.  At this point, the American people were tired of continuous economic chaos and empowered the government to take common sense steps to fix the problem.  It was clear that in the modern world, hard work and prudent investing were no guarantee against dying in poverty, so we began creating the social safety net.  It was also clear that a stable economy requires certain baseline regulations, principally the provisions of the Banking Act of 1933 that have become known as the Glass-Steagall Act.

Glass-Steagall drew a line separating commercial banks, where people keep their money, and investment banks, which gamble on high risk / high reward investments.  It recognized that if banks could gamble with the nation's life savings, they could hold the nation hostage.  If they gambled and lost, they could avoid responsibility by telling the nation: "If I go down, I'm taking you all with me".  The government would then either have to bail them out, or suffer a national catastrophe.  By separating commercial and investment banks, Glass-Steagall required the former to safeguard the life savings of the nation, while allowing the later to ride the free market as hard as they liked, as long as they were willing to pay the consequences.  Think of it as the anti-bailout bill.

Given modern rhetoric, you would expect these regulations to have resulted in the end of the free market, the rise of socialism, the nation's collapse into an era of oppression and decline.  Instead, what followed was the greatest period of wealth and stability in American history.  This was the period in which America became the world's preeminent economic superpower, in which the American Dream became our reality, in which capitalism triumphed over communism to become the world's dominant economic system.

We had finally built a foundation that would give our economy the stability to grow.  The economy would still go up and down, but without the devastating collapses that would set us back to square one.  This golden period lasted until the end of the 20th century, when we allowed ourselves to be lulled into false sense of security, to forget the lessons of the past, and to begin chipping away at the foundation our economy was built upon.  In 1999, the principal provisions of Glass-Steagall were repealed and by the beginning of the 21st century our economy's foundation had been entirely chipped away.

What happened next was exactly what you would expect: the floor dropped out from under us.

Our economy returned to its natural state of boom-to-bust chaos. 

The problem is not that certain people are greedy, or unscrupulous, or engaged in class warfare, or are being unfair.

The problem is that, after a few shining decades of reality-based economics, we started making decisions based on how we would like the world to be, rather than the way the world really is.  Today, the path to recovery is clear.  We need to stop repeating the mistakes of the past and start repeating its successes.