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Wednesday, October 31, 2012

Obama vs. FDR

Cannon here. Happy Halloween! I know that many of you are still recovering from Mother Nature's big trick. Well, here's a treat.

I prepared this post at a time when I feared that a Sandy-related power loss might prevent blogging. Jim DiEugenio -- the best reviewer of political books on the internet -- has graciously allowed his work to appear here. (This piece was previously seen on Consortium News, which more of you should visit.)

This is a review of the book Winner Take All by Jacob Hacker and Paul Pierson -- but it's also a review of the Obama years, as seen through the eyes of a historian who reveres the legacy of Franklin D. Roosevelt. A word of warning: Jim's reviews run deep. But he always has something important to say, even if you have no intention of acquiring the book under discussion.

As readers know, I think Mitt Romney is sufficiently vile to warrant support for Barack Obama in this election. But the day after that election, we should try to implement the key recommendation of this piece -- an independent movement designed to pressure the Democratic party to become, once again, a true alternative.

There's a difference, of course, between a movement and a third party. In American history, movements create change; third parties do not. The civil rights movement did a lot a good; the Peace and Freedom Party, not so much.

Everything below the asterisks was written by Jim DiEugenio.

*  *  *

In the last year or so, I have been contemplating writing a book about President Barack Obama and how he reacted to the economic blowout of 2007-08, compared to how President Franklin Roosevelt grappled with the Great Depression.

In that comparison, I thought, one could gauge not only the character and politics of the two men, but also how the Democratic Party had lost its way and why. After all, Obama said on 60 Minutes that — prior to taking office but after being elected — he had read several books about FDR and the Depression in preparation for handling a similar collapse.

Winner-Take-All Politics, the book under discussion in this review, strictly speaking, does not fit under the rubric of the Wall Street collapse at the end of George W. Bush’s presidency. But it takes pains to describe why Obama and the Democratic Party could not mount the kind of program necessary to revive the economy.

And consequently, why, in 2012, five years after the first phase of the collapse, many Americans still find themselves in the throes of this recession, an economic disaster which, unlike any since the Great Depression, has impacted almost every aspect of American public life: cutbacks in municipal and state services and employment, teacher layoffs which have raised some student class sizes to well over 40, a collapse in real-estate prices in many states, leading to a foreclosure and bankruptcy rate that has been unprecedented.

For instance, in the state of Florida, the abandonment rate of homes and condominiums is over 15 percent. That is, the rate of occupiers who have simply walked away from their dwellings and left them empty. And Nevada is not very far behind. Further, there is no end in sight to this housing debacle, which many people think is the key to reviving the economy.

How It Happened

The authors of Winner-Take-All Politics, Jacob Hacker and Paul Pierson, have put together a thesis that tries to tell the great untold story of the last 30 odd years. That is, how did the redistribution of wealth in this country become so concentrated in the highest echelons, to the point that, in the wake of the collapse, the middle class — or what is left of it — simply does not have the purchasing power to recharge the economy?

Hacker and Pierson spend the first part of the book proving this is so. And they do that in a very convincing manner, through an array of statistical charts that show that the concentration of wealth today is at a point unsurpassed since the Gilded Age, the Age of the Robber Barons — like Jay Gould, Cornelius Vanderbilt, J. P. Morgan and John Rockefeller Sr. — the days when there was no middle class and when these men essentially owned the government through outright bribery.

That was also a time when there were no strong unions to hold the Robber Barons in check. There also were no real laws regulating banking and the stock market. Because of all this, the Robber Barons were allowed to do as they wished with no regard to anyone else. According to Teddy Roosevelt, they even arranged economic downturns to hurt presidents who were opposed to their total dominion. There really was no democracy, since elections were bought and sold.

As notorious Republican campaign manager Mark Hanna once said, “The single most important thing about winning elections is money. I forgot the second thing.” Therefore in the key election of 1896, Hanna backed William McKinley against the full-throated populist William Jennings Bryan, who crisscrossed the country by train, hitting as many as four cities in a day. McKinley sat on his front porch with his mother and wife, while Hanna brought the media to him. Bryan got more votes than any previous candidate for president, but McKinley still won.

What Hacker and Pierson are arguing here is that, for all intents and purposes, the USA is now back in the Gilded Age. Even though we have a president who is a Democrat, and even though Democrats control the Senate, it does not matter. The intent of the book is to show why the top 1 percent really does not care about party affiliation.

Flooding the Rich with Money

The authors say the real story behind the bail-out begun by George W. Bush and completed by Barack Obama was not the amount delegated to TARP (with its original $700 billion price tag though later scaled back considerably). That was just the amount handed over in daylight. The amount handed over secretly, through the Federal Reserve (an amount estimated in the trillions of dollars), dwarfed TARP.

The excuse of these combined bailouts was “to save the system,” but the appearance was that the money was going into the wallets of Wall Street swindlers who had created the crisis in the first place. Rather than suffering for their greed and recklessness, they simply were allowed to get to their feet and dust off their top hats – or rather have the taxpayer dust off their top hats.

But the authors explain this galling reality as part of a longer-term favoritism toward the wealthy. They ask, “Why have politicians slashed taxes on the rich even as the riches of the rich have exploded?” (p. 5)

This is one of the main tenets of the book. As the Wall Street denizens had their taxes lowered, they also successfully lobbied to be deregulated, a process that, in turn, caused the collapse. But then, because of their lobbying connections, they were bailed out of the consequences of their own actions, mostly with tax money from the dwindling middle class which has had to shoulder a larger share of the tax burden or watch the costs get passed on to future generations.

To compound the injury inflicted by the rapaciousness of the rich, the middle class also has suffered disproportionately from the severe recession: the widespread layoffs, the stagnating wages, the loss of home values and the decline in public services. A key point of the book for Hacker and Pierson is to figure out how democracy got so undemocratic.

Not Always This Way

Hacker and Pierson compare the contemporary economic scene to America after World War II. From about 1945 to about 1975 the American economic system was much more evenly balanced, both in taxes and in wealth. (p. 11) In those years, overall, the benefits of the economy were distributed more to the middle class and working class than to the upper classes. (p. 15) This changed dramatically from 1979 to 2006, when the top 1 percent received 36 percent of all the income growth generated in the American economy. (p. 290)

The authors then bring out an economic study which shows just how this curve was reshaped in the last 30 or so years. For example, in 1974, the top 1 percent earned 8 percent of the income. In 2007, that more than doubled to 18 percent. If one includes capital gains and dividends, that rate goes up to 23.5 percent. So 1 per cent of the population was getting almost one-quarter of the wealth. Since these records began in 1918, in only one year has distribution been more extreme: In 1928, the year before the great Wall Street Crash of 1929, it was 24 percent.

The authors then dissected what was happening inside the 1 percent by examining the top one-tenth of the 1 percent. This group now averages $7.1 million per year in income, yet in 1974, they averaged $1 million per year, or to put it as a percentage, in 1974, the top 0.1 percent earned 2.7 percent of the nation’s income, while in 2007, they earned 12.3 percent, a huge statistical increase.

Then, the authors go one better. They break down what the top one-hundredth of the top one per cent earns. In 1974, it was $4 million per year. In 2007, it was $35 million per year, which is the highest rate in recorded history. (All these figures are adjusted for inflation, p. 16)

Putting these gains on a graph, the concentration of wealth in the hands of the top 1 percent has more than doubled from the Kennedy/Johnson years to the last years of George W. Bush. (p. 18) Or as the authors put it, America has gone from a nation in which most of our growth went to the bottom 90 percent, to one in which more than half that growth goes to the richest 1 percent. And this acceleration has been sustained over three decades, not significantly altered by the business cycle or who occupies the White House.

The One Percent Paradigm

The theoretical underpinning of this enrich-the-rich paradigm was first postulated back in the 1920s by Treasury Secretary Andrew Mellon, himself one of the key Robber Barons of the Gilded Age. In the 1970s, Arthur Laffer recast it as “supply-side economics” for Ronald Reagan, who – as president – proceeded to slash the top marginal tax rates on the rich by more than half.

In comparing incomes adjusted for inflation (and for benefits from employment), the authors conclude that the magic elixir of Mellon and Laffer has not worked as advertised, that is, it did not create an economy that broadly boosts living standards by having the wealth trickle down. To the degree that this paradigm has worked at all, it’s worked for the upper classes, not the middle classes, and certainly not for the poor and working class. (p. 20) The standard of living for the latter two groups has gone down.

Plus, there are more Americans in the lower-income groups, and the only way the middle class has avoided taking a major hit is, unlike the Sixties, most middle-class families have both parents working.

To put it another way, from 1979 to 2006, the top 1 percent saw a gain of 256 percent in their after-tax income. (p. 23) No other percentile even approached that rise. The second highest gain was the top 20 percent with a 55 percent rise. In other words, trickle-down economics was really trickle-up. Or, as Reagan’s disillusioned budget director David Stockman said, supply-side economics was a gift of a Trojan horse from the wealthy to everyone else.

At this point, the authors stop and zoom in for a very dramatic comparison. They ask: What if they altered the chart by using the rate of wealth distribution that existed in the Sixties? How would the wealthy be doing then, versus everyone else, (sort of an It’s a Wonderful Life alternative reality, speculating on how the various classes would have done if “supply-side” or “trickle-down” economics” had never been born)?

This one graph, more than any page in the book, shows us how the political system has been turned upside down. For if the Sixties’ rate of wealth distribution were applied, today’s top 1 percent would see a decline in their annual income by more than 50 percent! The income of the top 10 percent would drop by about 12 percent, and everyone else would gain significantly. For instance, the middle fifth would see a rise in income of about 16 percent.

Skewed Wealth

But today’s reality is quite different. There is no way around it: America has become a country with one of the most skewed rates of wealth distribution in the Western world. (p. 28) And it has happened in the last three decades, under the doctrine of supply-side economics.

According to the authors, the worst time period for this economic imbalance was the presidency of George W. Bush, under whom the rise in income for the top 1 percent went up on average about 10 per cent a year. As if they really needed the money!

Also, contrary to supply-side propaganda, trickle-down policies have not created a dynamic meritocracy that rewards the enterprise of the hardworking downtrodden who then soar into the upper classes. Instead, social mobility in the United States has stagnated. Today, there is much more opportunity to climb the economic ladder in other Western countries, like Australia, Sweden, Norway, Germany, Spain, France and Canada. In fact, the only two countries that have a worse mobility rate than the U.S. are England and Italy, whose rates are just slightly lower. (p. 29)

Even benefit packages for employees have worsened as a result of trickle-up economics. Employers today give much less to retirement packages than in the Seventies, and Americans pay much more for health insurance than, in say, Canada, while getting less in return. (p. 31) And today, the ratio of people not covered by health insurance is higher than in 1979.

After producing all this impressive data, the authors conclude that America has the worst income inequality in the industrial world. (p. 37) In fact, in the last 30 years, the United States has literally left its cohorts in the dust in this dubious category.

How Did It Happen?

So, how did this remarkable transformation happen? The book offers three main reasons:

(To read the rest, click "Permalink" below)

–The gifts given to the rich in taxes and benefits.

–What the writers call “drift,” the inability of government to adapt to a new economic landscape.

–The freeing up of market regulations while minimum wage laws and the ability of unions to provide a check on corporate power were lessened.

In regards to the gifts to the rich, Winner-Take-All Politics contains a very telling chart about who has benefited the most from the lessening of stock market restrictions. This depicts the occupations of those within the top one-tenth of the 1 per cent.

Over 40 per cent of these people are from the world of corporate managers and CEOs who have benefited as rules limiting compensation, such as stock options, were gutted, especially in comparison to other countries. The next largest group, about 20 percent, is from the financial speculation sector, or Wall Street.

No other group has even 7 percent representation. (p. 46) In other words, while much of American business has been declining, corporate chieftains and investment bankers have become, by far, the most well-off personages in American society.

Gutting Progressive Taxation

One way this transformation has occurred was the gutting of the idea of progressive taxes. Today, the top 1 percent pays a full third less in taxes than in 1970.  The top tenth of that 1 percent pay less than half of what they did then. In other words, the rich do not just get a larger cut of the pie, they pay less for it. (p. 48)

The steep progressivity of the American income tax code, which existed from the post-World War II era through the start of the Reagan era, is gone today. The 90 percent rate applied to the top tranche of a rich person’s income in the 1950s was trimmed to 70 percent in the 1960s, but the biggest change occurred in the last 30 years, resulting from the Reagan tax cuts of the 1980s which lowered the top rate to 28 percent (before they were raised somewhat under George H.W. Bush and Bill Clinton and then dropped again by George W. Bush).

The supposed goal of Reagan’s tax cuts was to spur the economy by having the rich invest more in the productive sector and thus create more jobs, with the benefits then trickling down to working people. But the tax cutting spree mostly diverted the nation’s wealth into the hands of the upper classes without achieving the promised productive investments inside the United States.

Not only did Reagan’s tax cuts help out rich people who didn’t need the help, but many of the investments that the upper classes did make went to finance overseas factories that exploited cheaper labor and caused more unemployment for working-class Americans. Those lost jobs, in turn, put more pressure on cities and towns — with shuttered factories, decaying neighborhoods and depressed U.S. living standards.

In terms of numbers, the authors described it this way: the total after-tax income of the top tenth of 1 percent was 1.2 percent of the national total in 1970.  In 2000, it was 7.3 percent. Yet if the tax rate had remained the same as it was in 1970, that figure would decline to 4.5 percent. In other words, the gulf in inequality would be much narrower. And the government would have much more revenue to spend reviving the American economy and putting teachers and policemen back to work.

Undemocratic Results

What is so remarkable about this skewing of benefits to the rich is that the majority of Americans don’t agree with the idea of simply letting the rich have more of the nation’s wealth. In 2007, even before the Wall Street crash that required the unpopular TARP bailout, 56 percent of the public believed that the government should redistribute wealth by imposing taxes on the rich. (p. 50) But it’s not happening, not by a long shot.

One reason that the tax code has been all but gutted of progressivity is that the political and social counterweight of union membership has declined so much. Indeed, among private businesses it has all but collapsed. In 1947, in the wake of Franklin Roosevelt’s union-building policies, one in every three Americans was in a union. Today that figure is one in nine. But in the private sector it is even worse, at 7 per cent . (p. 56)

And as we have seen of late, the Koch brothers and other wealthy Americans are investing in politicians and policies with the intent to eliminate the last bastion of union membership, public sector unions.

Yet, historically speaking, unions have been a powerful balance to the power of corporate money in Washington. Unions were one of the few groups interested in things like health care, pensions and adequate pay, in other words the standard of living for average people. As the authors point out, it is no coincidence that as the influence of unions has waned, the upper classes have become a political juggernaut.

Again, Winner-Take-All Politics makes a telling comparison. This steep decline in U.S. union membership is not matched in other Westernized countries. For example, in Canada and the European Union, union membership has slipped very little in recent years.

And, the book points out that American public opinion isn’t onboard with the marginalizing of unions. In a 2005 poll, more than half of the respondents in the non-unionized private sector replied that they wanted to be in a union. In 1984, that number was 30 percent.

Reagan’s Union-busting

The authors note here the great public milestone in union-busting: Reagan’s firing of the air traffic controllers in 1981. But they also note that Reagan began to stack the National Labor Relations Board, which is supposed to assure fair play in union-company relations, with pro-management people. The NLRB then began to accept more company dodges to union organizing and reduced fines for abusive management tactics.

As a consequence, organizing in the private sector has become much more expensive for unions, one reason organizing has now spread more to the public sector, explaining why the Koch brothers are now taking aim there.

Another way that the corporate managers have weakened unions is with “right-to-work” laws passed by state governments, preventing “union shops” where all workers must join the union. By ensuring weaker unions with fewer dues-paying members, “right-to-work” states, especially in the South, have attracted businesses seeking cheaper and more compliant workers.

The bottom line for this three-decade-long “class war” has been the increasing disparity between what the average worker makes versus what the average CEO makes. In 1965, that CEO made 24 times what the worker made. Today, the CEO makes 300 times what the average worker makes.

And again, this huge disparity ratio is not prevalent in other countries, where unions have organized to monitor executive pay and pushed back against huge increases in compensation packages. (p. 65) In the United States, however, top executives have faced much less pressure against lavishly rewarding themselves with the help of friendly corporate board committees.

Another way companies have weakened American unions is by getting out of U.S. manufacturing and conducting domestic operations that have very little union influence. For example, in 1980, General Electric derived 90 percent of its profits from manufacturing. In 2007, GE got over 50 percent of its profits from its financial business, which was much more lucrative for managers since there was so little regulation as to what they could do and there was even less of it as time went by.

Making Money with Money

In the financial sector, potential rewards were staggering. For example, in 2002, a hedge fund manager had to make $30 million a year to be in the top 25 in his field. In 2005, just three years later, he had to make $130 million to be on that list. In 2007, just two more years later, the top 25 hedge fund managers averaged over $360 million a year.

That “greed-is-good” philosophy was driving the markets headlong into the crash of late 2007 and 2008 when the losses far exceeded profits of previous years. (p. 67) Just north of the U.S. border, Canada, with much stronger laws on real estate and stock market transactions, Canada did not endure anything like the economic meltdown in America. (p. 68)

Hacker and Pierson also address the corollary to the concentration of wealth in the United States, the concentration of political power that money makes possible.

The health of a nation’s democracy tracks closely to the distribution of wealth, a point that Walter Lippmann made in 1914 in his book Drift and Mastery, a book that was one of the hallmarks of the Progressive Era arguing that without a strong push-back to concentrations of wealth, society as a whole suffers and the quality of life declines.

Hacker and Pierson identify the political reform part of FDR’s New Deal as a model of reaction to a concentration of wealth and power, like what existed prior to the 1929 crash and helped cause it. (p. 88) This political reform program also strengthened the image of the Democratic Party among average people.

Roosevelt did not just look at the Great Depression as an economic collapse, but also as a political collapse, a failure of government to rein in the unmitigated greed of the upper classes. The authors call this understanding the politics of renewal, an approach that began to sprout in the Progressive Era of the early 20th Century and flowered from the New Deal and into the Kennedy-Johnson era of the 1960s.

But this recognition of government’s vital role in assuring a fair shake for the average American began to fade away amid the economic struggles of the 1970s and nearly disappeared under an avalanche of Reagan’s anti-government rhetoric of the 1980s. A resurgence of this reform movement has yet to emerge, even as the upper classes have looted the country.

Lost Opportunity 

The authors argue that Obama had the perfect opportunity to initiate such a renewal upon his election, but they imply that he failed to do it. I would be more forthright. I would say he utterly failed to do it. (p. 90)

Much of the rest of the book explores why there has been no politics of renewal to counteract the runaway upper classes. Though interesting, this part of the book is not as solid as the earlier sections. Hacker and Pierson are fine social scientists, but here they put on more of an historian’s hat and identify the rise of an invisible Third Party, consisting of giant lobbying houses that rose in the late Seventies, exemplified by Jack Abramoff’s influence-buying scandal.

As an historian myself, I found most of this useful but I disagreed with some of the analysis. For instance, the authors say that the imbalance between the upper classes and everyone else did not really begin with what most people consider the historical milestone of 1968, i.e. the assassination of Martin Luther King, then Robert F. Kennedy and the election of Richard Nixon. They chart the beginning as the famous letter by Lewis Powell in 1971 when the future Supreme Court justice told America’s corporate chieftains that the “American economic system is under broad attack” and that this attack demanded a response.

“Business must learn the lesson,” Powell wrote, “that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination –without embarrassment and without the reluctance which has been so characteristic of American business.” (p. 117)

The authors argue that Powell’s call to arms started a powerful march by business interests to establish PR centers in Washington and gave rise to the lobbying giants of today, what is now a $3 billion a year industry known as K Street. Powell wrote his memo apparently as a response to Ralph Nader’s then effective role as a consumer advocate behind Citizen Action.

Giant War Chests

As Corporate America built up its Washington army, the number of registered lobbyists grew from less than 500 in 1970 to over 2,500 in 1982. (p. 118) Huge business organizations also sprang up, like the Business Roundtable. (p. 120)

Labor unions found themselves outgunned in campaigns. An alliance between Big Business and Republican National Chairman Bill Brock (1976-1981) enabled the targeting of key Democratic members of Congress, especially in the South where Republicans exploited white resentment against desegregation and other programs aimed at helping disadvantaged blacks.

The business-oriented groups also began searching for more conservative Republicans to run against what they perceived as moderates.  Key figures in this phase were Richard Nixon’s Treasury Secretary William Simon and neoconservative war hawk Irving Kristol. Both highly combative, Simon came from the business world and Kristol from intellectual circles. In the same time frame, well-founded conservative think tanks emerged, like the American Enterprise Institute.

The first target of this new alliance was Jimmy Carter’s attempt to get a bill through Congress to make it easier to organize unions. It was defeated by a powerful political drive fronted by Sens. Richard Lugar, R-Indiana, and Orrin Hatch, R-Utah. Later, Carter’s tax bill was changed to reduce the capital gains tax rate from 48 percent to 28 percent. (pgs. 131-34)

Winner-Take-All Politics argues that the Democrats, rather than fighting this new system of organized money, chose to imitate the Republicans by joining in the money chase. That approach left the middle class even more an orphan of the political system. For instance, Rep. Tony Coelho, D-California, became the Democrat’s chief emissary in pursuit of Wall Street donations.

After Reagan’s 1984 landslide win over Walter Mondale, Democrats created the Democratic Leadership Council (DLC), a think tank that sought to reposition the party in the “center” on defense and spending issues. The men who formed this group were largely southern Democrats who would soon dominate the party, including Rep. Dick Gephardt of Missouri, Sen. Al Gore of Tennessee, Gov. Bill Clinton of Arkansas, and Sen. Chuck Robb of Virginia.

What made the DLC’s influence even greater was the continuing decline in the size and influence of unions. Thus, Democrats began to support pro-business issues like “free trade” and NAFTA. In filling key government jobs, President Clinton turned to the same stable of Wall Street investment bankers that the Republicans traditionally relied upon, such as Goldman Sachs chairman Robert Rubin to be Treasury Secretary. The culminating image was probably Hillary Clinton’s service on the board of Wal-Mart. Angry voters at the polls might understandably think, “Who do we shoot?” (p. 286)

Meanwhile, other Democratic groups that sprang up focused on narrower issues, like EMILY’s List seeking to bolster the number of pro-choice women in elected government positions. These organizations contributed to a view of the Democratic Party that was becoming a collection of sub-groups promoting narrower issues, rather than a party predominantly fighting for the working and middle classes.

Pro-Business Democrats

With the Democratic Party redefining itself as more “pro-business,” Sen. Phil Gramm of Texas, a onetime-conservative-Democrat-turned-Republican, could pass one of the longtime heart-throb issues of the GOP, the effective repeal of the Glass-Steagall, a law from the New Deal that separated investment banking from commercial banking. The goal of Glass-Steagall was to ensure that if Wall Street crashed again, it would not take down the banks where small investors entrusted their money.

Amid the “boom” economy of the late 1990s, Gramm convinced majorities in Congress – and key economic advisers to President Clinton – that it was time to “modernize” American banking laws by jettisoning much of Glass-Steagall.

Then, Gramm went further. In 2000, he shepherded through the Commodity Futures Modernization Act, which essentially freed up the creation and trading of derivatives from any kind of real regulation. Indeed, if any single bill caused the crash of 2008, it was this one. After leaving the Senate in 2002, Gramm and his wife then made millions of dollars as financial sector consultants and lobbyists. (p. 198)

This analysis by Hacker and Pierson is a useful one and has some truth to it. But I would disagree with any historical survey which discounts the effects of Richard Nixon on a disintegrating polity. For example, the authors make much of the GOP power base in the South, yet it was Nixon who fostered the Southern Strategy to attract working-class whites to the GOP through thinly veiled appeals to racial animosities. There was also the political polarization caused by the divisive Vietnam War.

I also would question any analysis that does not mention the Democratic drift under Jimmy Carter in the late 1970s. Party stalwarts like Arthur Schlesinger and Tip O’Neill found Carter’s lack of passion for traditional party ideals like full employment and universal health insurance problematic. In fact, that was why Sen. Ted Kennedy ran against Carter in 1980. Kennedy did not think such a colorless leader could galvanize the Democratic base enough to defeat an ideological candidate like Reagan.

The authors mention the assassinations of leading progressives but only briefly. However, wouldn’t the likes of King, RFK and Malcolm X have fought the corporate greed as it sought to take over the political system? At the time of his death in 1968, King was preparing the Poor People’s March on Washington. I also question the book’s failure to assess the impact of political smear specialists like Terry Dolan and NCPAC in clearing the way for Ronald Reagan’s 1980 victory.

What Next?

At the end in recommending a way back from the current catastrophe, Winner-Take-All Politics seems to suggest that Obama and the Democratic Party need to curtail the ability of elites to block progressive change (as in reforming the filibuster); to facilitate more participation at the ballot box (by increasing voter turnout); and to encourage development of middle-class groups (to energize the political process).

The last point has already been more or less accomplished through the rise of the liberal blogosphere, but the vehicle would remain the compromised Democratic Party.

I disagree with this limited agenda. One of the great opportunities that the blogosphere had when it arose at the beginning of the millennium was to create a new opening with a new political potency and a new way of raising money. But the choice was: Do we try to reform a Democratic Party that has been corrupted to the point that it is now GOP-Lite? Or do we back an alternative to the Democrats thereby putting pressure on them not to rush to the center?

People like Markos Moulitsas, Arianna Huffington and Jane Hamsher chose the former and so far the results have been meager, as far as I can see. In my view, the choice should have been the latter, an independent-minded movement that puts external pressure on the Democrats not to cave.

That would have been a real politics of renewal. And the platform could be informed by the first section of this book regarding the huge transfer of wealth from the middle to upper classes. In that way, this new movement or party would have preceded Occupy Wall Street, although as a more organized, less guerrilla-style uprising, though just as threatening to the entrenched classes.

Still, Winner-Take-All Politics explains what went wrong with America and it offers a persuasive diagnosis that can inform anyone who believes in the necessity of taking action toward rebuilding a strong middle-class democracy.
Sounds like a book I need to read. The review pretty well states exactly what I've come to believe about what's happened in the country and Obama's manifest failure to address or even acknowledge the corruption and malfeasance in high places. As a Dem, POTUS is a big fail. Is he the lesser of two evils? I think we're going to find out unequivocally during his second term. If Barack Obama hops aboard the 'Grand Bargain' train [or as William Black has said, the Grand Betrayal], there will be no defense, even by the groupies.

Andrew Mellon's advice to Hoover was as follows:

"liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people."

Social Darwinism at its finest--destroy the world and only the strong will survive.

Barack Obama was given a golden opportunity. For the most part, he's blown it. He didn't earn my vote in 2008 or this year. And he didn't get it. I went with Stein. I'd love to be proven wrong but frankly I'm not hopeful. I am, however, impressed with the recent storm response. Maybe there's an actual leader inside POTUS screaming to get out.

Time will tell. As for the Romney/Ryan ticket? They're toast as far as I can tell. Deservedly so. Of course if I'm wrong? We're in for a long winter's night.

Thanks....still reading...interesting to see Consortium News picked up on that WaPo series on our neverending war.
Well, I never asked anyone to vote FOR Obama. But we must vote AGAINST Romney. He'll be even worse, and he'll owe all sorts of debts to the radical/fundamentalist right.
Barack Obama didn't "blow" any "opportunity." He is doing exactly what his masters want him to do. He will be remembered as the president who destroyed a major political party, the Democratic party, because he is actually a right-wing mole. You do not be eager to dismantle public education and the New Deal and work with the "other side" without actually being employed by the very people who support the "other side." The powers that be aren't going to be concerned about Romney, who I don't think is anywhere near as bad as Obama, or about rigging voting machines this year, because they've already infiltrated the Democratic Party to destroy it.

Just wait until this dirtbag decides to continue with his "grand bargain" to destroy the New Deal, and he will do it, and all hell will break loose.

I'd like to see a real second party rather than this charade we have now. If Rocky Anderson is serious about forming an alternative party, that may be the direction we need to go. Forget the flake Jill Stein and the Greens.
A vote going to a Third Party is a vote for Willard. That said a vote for Obama is tacit approval of the way he got into the White House back in 2008 and the way he has governed since. I really have no idea how I'll vote except it won't be R. I'm leaning third party at this time. If Obama loses perhaps (I doubt it tho) the Dems will self correct.
I'll read the book. The review is an excellent and succinct history of US politics since the late 60s, which I have lived through. Despite Obama's failures, and they are many, Mitt Romney is like Reagan on steroids. He wants more tax cuts for the already disgustingly wealthy, more bailouts
for Wall Street banks so the taxpayers can be responsible for their gambling debts, more wars, and more wasted defense spending. Like the villain in an old Bogart movie, Key Largo, Romney simply wants more, more for himself and his friends and less for everyone else.
Mr. Mike, a vote for third party is not a vote for Willard in Maryland.

Susan, Jill just got arrested again for supporting protesters. I think she had the right tactic to garner media attention (rather like Code Pink) but the timing is off. To break through the corporate media it's time to move on to a new approach.

I should mention--I do not live in a swing state. I live in the Bible Belt where Obama couldn't win the time of day. People down here are convinced of the Fox News/GlennBeck/Limbaugh mantra: he's a socialist/Marxist/Muslim with a gay agenda. Idiotic. If anything he's a Repug-lite who leans to the Milton Friedman school of economics [along with too many Dems and whole lot of Republicans]. And he's turned a blind eye to the gross, systemic corruption in the body politic, while disregarding the Rule of Law.

That is far more dangerous to our security than Iran.

However, If I were living in a swing state, I'd end up having to seriously reconsider my 3rd-party vote. Because frankly, the Republicans have come unglued. At every turn they prove themselves thoroughly demented, set on an ideological self-destruct pattern. They seem to be willing to take the entire country with them, too.

I would not vote for that.

Don't worry, Susan, the drones will take us out long before we can starve.
Thanks for the tip on "Consortium News."
Im glad to see that others see it the same way I see it. Indeed I suspect that there are a very large proportion of the population who understand things in this model and are indignant. Sadly they generally dont have any money. So they generally dont have political influence.

This is why I tend to take the opposite view as Joe on Obama. I think you need to send a warning shot on the left - you need to "take out" a sitting president democratically (To be clear I mean vote against - I was gonna use an analogy and then realised how dangerous that might be).

But I can see the risk that Romney actually completes the destruction of this country. I can understand why reasonable people might not want that to happen.

I just dont see what stops the progression from bad to worse. Other than the young slowly taking over from the older asinine generation.

In American history, movements create change; third parties do not.

Except, of course, for that whole winning the Civil War and abolishing slavery bit. I'm sure the Whigs are glad that they don't need to worry about those upstart Republicans.
I should probably also note that Roosevelt's Progressive Party was remarkably successful in getting much of its platform eventually enacted - although it did so by pushing the Democrats "progressively" to the Left:

Minimum Wage
Social Security
Securities regulation
Graduated Income Tax
8 hour workday
Workman's compensation
Direct election of Senators
Women's suffrage
An inheritance tax
Registration of lobbyists

Pretty much everything that was in their 1912 platform, except (unfortunately) single-payer national health insurance and campaign finance regulation, ended up being enacted in the following 25 years.

The Progressives came in *second* in 1912 (beating the Republicans quite handily) and elected 9 Congressmen.

Nope, third parties never accomplish anything.
I went to a costume party tonite and let me tell you preparing was painful. I got a hammer from my tool box and knocked all but one of my teeth out. Next I kept banging my head until my IQ was in the single digits. You should know what is coming next. I was disguised as a republican voter from the Harrisburg, york, Lancaster triangle of PA.
The Progressives are the primary example of what I am talking about -- they could not survive the death of a charismatic leader. And I say that as an unrepentant admirer of TR.

I reject all arguments along the lines of "They pushed the Democrats from outside." That strategy simply DOES NOT WORK.

Anyone who says otherwise will not be published here.

The Tea Party, ghastly as it is, shows us the way. The teabaggers succeeded, despite having a philosophy -- no social security, no medicare, no safety net -- that is quite unpopular.

They succeeded because they worked within an existing party.

That's the way to go. Anyone who says otherwise is a Republican ratfucker. There has been too much fucking of rats in this comments section.

Do not expect to be published again.
The Tea Party is a good example. They fought from within the Repugs by putting up their own candidates. They forced the Repugs right. Dems should do the same. Force the dnc left.

Should have happened well before this election.

Great article. Well-articulated and researched.

NW Luna
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