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Look on the Bright Side

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Illustration by Jason Lee  

One obviously has to filter an assessment of prospects through one’s own values. But whatever your partisan loyalties, after two years of dizzying change it may not be so bad to slow down, take stock of what’s been done, and see how it’s working. It could be perfectly good for the republic to take a breather. The fact is, sharing power has proved in the past to be a useful, sometimes even highly effective means of governing, says Columbia University historian Eric Foner: “What actually solidifies change is when the opposition party accepts it.” Foner sees an analogy in 1946, when the Republicans won control of Congress for the first time since before the New Deal—building a victory, then as now, on economic issues. “They passed new legislation, most prominently the Taft-Hartley Act, which severely impeded organized labor. On the other hand, they did not try to dismantle the New Deal. They did not repeal Social Security. They didn’t repeal the Wagner Act. When Eisenhower came in, in 1952, he said pretty explicitly, if we try to turn back the clock, we’ll be pushed out of office pretty fast.” Bill Clinton, Foner notes, similarly consolidated the Reagan revolution.

Sharing the reins can also move both parties toward the middle, producing broadly embraced centrist results. When neither Republicans nor Democrats hold all of the power, they have to take the best ideas from each other. The welfare-reform bill passed during the Clinton administration is a good example. Where cutting the welfare rolls was once considered a Republican idea (and liberal anathema), now virtually everyone agrees it was good policy. Begala sees a similar opportunity today regarding tax policy. “I’d come to the Republicans with a payroll-tax holiday. You guys seem to like tax cuts—well, here’s a tax cut that actually creates jobs!” Others see possibilities in education. With the traditionally Democratic notion that teachers should be protected at all costs softening in the face of stories about incompetent teachers being coddled by unions, the notion of greater accountability has begun to hold sway. Whatever one’s views of those particular ideas, they illustrate realistic opportunities for bi-partisan cooperation.

Over the long term, notes Reich, it doesn’t matter whether one party or the other—or both—are in power at a given time. Progress has always won out over stasis in this country. “Every time we have faced a choice between progressive reform and reactionary politics, we opt for reform,” he says. “It doesn’t happen immediately, but it always happens.” At the beginning of the twentieth century, trusts controlled the economy and urban “machines” controlled much of our politics. “What happened?” says Reich. “Teddy Roosevelt and Woodrow Wilson busted the trusts, and we enacted fundamental democratic reforms. The 1929 crash similarly led to FDR and an era of fundamental progressive reform—minimum wage, Social Security, unemployment insurance, the right to bargain collectively, the 40-hour workweek.” The sixties brought the massive advances in civil rights, the aftermath of Watergate ushered in campaign reforms, and so on.

In fact, it’s when times are good that the country is often in the greatest jeopardy, Reich says. One of the events that set in motion the gears of 2008’s financial crisis, for instance, was the 1999 repeal of the Glass-Steagall Act, which led to the creation of a number of all-purpose megabanks. “At the time,” Reich says, “this was one of the stupidest things I ever heard. I couldn’t believe Larry Summers and Alan Greenspan pushed for it. We let our vigilance down, and conservative forces tend to take over a lot of our politics when nobody’s watching. But when the American public feels that decency and fundamental ideas are threatened, we rise up.”

End-of-days predictions aside, the financial crisis did not turn out to be an existentially catastrophic event. Instead, it was the trigger for a harsher than usual—brutal, in fact—recession that followed, perhaps inevitably, a larger than usual bubble. The fact that we averted the doomsday scenario is itself no small reason to be happy. “We definitely avoided a much deeper fall,” says economics writer David Leonhardt. “In the first month of this recession, industrial production, global trade, and stocks all fell around the world more sharply than they had in 1929. But we had an extremely aggressive response by the government—the stimulus, TARP, and the Federal Reserve’s actions. And the economy rebounded faster than a lot of people thought it would, much faster than it did during the Great Depression.” Unemployment is currently bad enough—9.6 percent. Without the measures undertaken after the crash, that figure, by some estimates, could have been 25 percent.

Today, the economy is by no means growing fast enough to constitute a healthy recovery, but it is growing, and the growth is accelerating, if only slightly (2010’s second-quarter GDP rose by 1.7 percent, third-quarter by 2 percent). Last week, the Labor Department reported that the economy added 151,000 jobs overall in October. It may be cold comfort for the 14.8 million Americans still seeking work, but a September survey of 31 top economists done by CNNMoney.com found that the vast majority put the odds of a double-dip recession no higher than one in four. “You can argue that all the normal restorative powers of the economy are once again taking hold,” says Leonhardt. “The most likely case is a recovery at a pretty decent pace over the next year.”


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