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American Roulette


I don’t know about you, but I find casinos, for all their adrenaline and glitz, pretty depressing places.

Risk-taking is fabulous, central to the American ethos—but not when it’s involuntary. Too many Americans have been too suddenly herded into our new national economic casino, and without debate turned into the suckers whose losses become the elite’s winnings.

That’s the central argument of Yale political scientist Jacob Hacker’s valuable new book, The Great Risk Shift. Beyond our recent reversion to extreme, twenties-style income inequality, he presents data explaining the new sense of economic dread hanging over Americans. We all know that in this globalized, ultracompetitive age, job security has been beggared, but Hacker attaches startling numbers to the national anxiety. In short, people’s incomes are swinging wildly—like winnings in a casino. In 1970, a family in any given year had a one-in-fourteen chance of its income dropping by half; today, the chance is one in six. No wonder mortgage foreclosures and personal bankruptcies have quintupled during the same period. Middle-class Americans live more and more with the kind of gnawing existential uncertainty that used to be mainly a problem of the poor.

The Great Society programs of the mid-sixties—Food Stamps, Head Start, Medicaid, Medicare—were the final flowering of a social-welfare era that began with FDR’s New Deal 30 years earlier. The countervailing rightward pendulum swing—deregulation and tax cuts under Reagan, welfare reform under Clinton, still more tax cuts under Bush—has dominated our political economy for nearly the past 30 years.

In other words, the time seems to be ripening for a transformative surge of new passion and policy and political traction around the idea of economic fairness. Blaming illegal Mexican immigrants and dollar-an-hour Chinese workers for our troubles is an easy way to vent, but Lou Dobbs’s other regular targets are pretty much on the mark: corporate greedheads and their craven enablers in the political class.

For more than a generation, the Republicans have pitched themselves as the good-old-days party, appealing to the nostalgic hunger for the wholesome, coherent society and culture of mid-century, before life went crazy around 1968. What the Democrats can do now is the same thing, only different—that is, appeal to the nostalgic hunger for the sense of basic economic security and fairness that prevailed before life went crazy around 1986.

Just as Republicans depicted Democrats as insanely freewheeling social experimenters determined to lavish money on the undeserving poor, the caricature can be convincingly reversed: Now the GOP is the party of arrogant, reckless risk-takers—invading Iraq, denying climate change, privatizing Social Security—determined to lavish money on the undeserving rich.

Populism has gotten a bad odor, and not just among plutocrats—for most of the political chattering class, it is at least faintly pejorative. But I think that’s about to change: When economic hope shrivels and the rich become cartoons of swinish privilege, why shouldn’t the middle class become populists? What Professor Hacker calls “office-park populism” will be a main engine of any new cyclical progressive renaissance. The question is whether we’ll elect steady, visionary FDR-like national leaders—Bloomberg? Obama?—who can manage to keep populism’s nativist, Luddite tendencies in check.

I think practical-minded political majorities can be brought together to fix the big, important things that have nothing to do with religious faith or sex. In polls, between 60 and 70 percent of people now think “it is the responsibility of the federal government to make sure all Americans have health-care coverage” “even if taxes must be raised.” Universal health coverage, protecting everyone against the mammoth downside economic risk of illness, would empower people to take constructive economic risks, freeing them to move to new jobs or start new businesses. We could enact de facto compensation caps for top executives, either by limiting the tax deductibility of CEO pay or, as in Britain, by making CEO pay subject to a shareholder vote every year. We can raise—and certainly not further reduce—taxes on the extremely well-to-do.

We’ve had a bracing, invigorating run of pedal-to-the-metal hypercapitalism, but now it’s time to ease up and share the wealth some. We can afford to make life a little more fair and a lot less scary for most people. It’s not only a matter of virtue and national self-image. Because the future that frightens me isn’t so much a too-Hispanic U.S. caused by unchecked Mexican immigration, but a Latin Americanized society with a high-living, blithely callous oligarchy gated off from a growing mass of screwed-over peons. I think we need to put up with the Republicans’ complaining about “class war!” now in order to avoid a real one later.



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