Can Democracy Tame Plutocracy?

Photo: Pamela Drew/cc/flickr

Can Democracy Tame Plutocracy?

We are headed into a national reckoning. To paraphrase the unlamented Donald Rumsfeld, there are the known knowns and the known unknowns.

We know that America is reaching new levels of extreme inequality. We know that from the founders on, our wisest leaders cautioned that extreme and entrenched economic inequality would lead to political inequality, as the wealthy use their resources and influence to protect their privileges. "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both," the great attorney and Supreme Court Justice Louis D. Brandeis warned us.

We know that America's elites have very different opinions and priorities than the rest of us. They are more fixated on deficits, and more likely to support cutting Social Security and health care to deal with them. They are less supportive of jobs programs or raising the minimum wage, less willing to guarantee affordable college or good schools for all. Not surprisingly, they are more opposed to government action to redistribute wealth or to regulate banks or corporations.

We know that the rich and big corporations now dominate the political process, to an extreme worthy of an oligarchy. A recent exhaustive study by Martin Gilens and Benjamin I. Page found that elites got their way not often, but virtually all of the time. "When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor policy change, they generally do not get it."

Money is speech, the conservative majority on the Supreme Court has ruled, and it is speaking with a bullhorn.

We know that the only counter to organized money is mobilized people. Our democracy is the only protection from corrupted oligopoly. Conservatives who believe that markets will protect us don't understand markets or political economy.

We know that we live in a populist moment. The Great Recession exposed the ideas and shibboleths of conservatism - whether Reaganomics or Rubinomics - as bankrupt. There was a "flaw," as former Federal Reserve Chair Alan Greenspan fleetingly admitted, in the world view.

The known unknown is whether the democracy can save us again, whether the people can call the entrenched interests and wealth to account. Americans, as Massachusetts Sen. Elizabeth Warren has stated, understand that the rules are rigged, the game is fixed to favor the few. The unknown is whether a movement will grow to clean out Washington and make the government an instrument of the common good, rather than the private interest.

This won't be easy. It won't happen in an election or in a presidency. At the beginning of the 20th century, as the robber barons consolidated the wealth of the emerging industrial age, we reached levels of inequality similar to those today. A populist movement arose from impoverished farmers and swept across the plains. Workers organized and fought pitched battles for survival. Middle-class progressive reformers took on the corrupted city machines and the politics of bribery. Muckrakers exposed the horrors and victims of greed. A bold president, Theodore Roosevelt, rallied the nation against the trusts, demanding a 40-hour week, a minimum wage, progressive taxes and protection of the environment.

Yet by 1929, inequality was back to Gilded Age extremes. It took a Great Depression, a New Deal, a Great President in FDR, a world war mobilization, labor organizing, popular movements, brutal strikes and more to create the conditions that built America's broad middle class.

In "The Fight for the Four Freedoms: What Made FDR and the Greatest Generation Truly Great," Harvey Kaye provides a broad overview of this period. He details how FDR educated and mobilized Americans to take on the "economic royalists." As we headed into World War II, FDR evoked the Four Freedoms - freedom of speech and of worship, and freedom from want and from fear - as the goals for which Americans would fight. As victory approached, he made the agenda clearer in his 1944 State of the Union address calling for an Economic Bill of Rights. Coming out of the war, millions of Americans took up the banner for their fallen leader.

But as Kaye details, what in retrospect looks like a time of remarkable progress was in fact a pitched battle, waged by corporate and conservative elites to limit democracy, not expand it, and to weaken economic rights, not deepen them. He traces the corporate counterattack: the assault on labor, exemplified by the Taft-Hartley Bill that undermined labor organizing, the corporate public relations campaigns to elevate "free enterprise," the fierce lobbying to block universal health care and a commitment to full employment.

Now the conservative hold on our politics has reached perverse levels, even with a growing center-left majority in the country. Inequality has reached record heights, but the president's call merely to repeal the obscene "carried interest" tax deduction for hedge fund billionaires or to limit the offshore tax havens of global corporations is spurned by the Republican Congress. A bipartisan effort, supported by the Chamber of Commerce and the AFL-CIO, to finance rebuilding our increasingly decrepit and dangerous infrastructure is buried. Twenty-five states scorn the federal government's offer to pay for expanding Medicaid for low wage workers (100 percent for three years and 90 percent thereafter).

The banks have been bailed out and emerged bigger and more concentrated than ever, even as the bank lobby works tirelessly to impede and weaken the reforms designed to avoid the next wilding. The fossil fuel interests continue to obstruct the ability of America to grab the lead in the global green industrial revolution that will inevitably sweep the world. Even a modest increase in the minimum wage can't get a vote in the House of Representatives.

Kaye argues that fulfilling FDRs pledge may be hard, but it is not impossible. "Democracy is never given. It must be taken." Or as FDR put it, "Democracy is not a static thing. It is an everlasting march," and echoing Jefferson, "it is time for the country to become fairly radical for a generation."

Now the battle of ideas has just been joined. The new populism needs to be nurtured, developed and spread. Hopefully, we won't need to experience another calamity or world war to rouse Americans to take their democracy back.

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