21st century populism: history repeating itself
“There is looming up a dark new power. . . . The enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marking, not for economic conquest only, but for political power.
Bernie Sanders? Elizabeth Warren? Hillary Clinton? None of the above. Wisconsin Supreme Court Chief Justice Edward Ryan in an address to University of Wisconsin students in 1873.
“For the first time in our politics,” Ryan continued, “money is taking the field of organized power. The question will arise, and arise in your day though perhaps not fully in mine: Which shall rule–wealth or man? Which shall lead–money or intellect? Who shall fill public stations–educated and patriotic free men, or the feudal serfs of corporate wealth?”
Listening intently as a student was Robert M. La Follette, who would come to be called “Fighting Bob,” given the passion of his pursuit for social and economic justice.
La Follette was a Republican governor of Wisconsin and then four-term senator beginning in 1906. In 1924 he ran for president on the Progressive Party ticket garnering 17 percent of the vote, carrying Wisconsin, and running second in 11 western states.
In his online essay on La Follette, John Nichols writes about how La Follette pulled no punches during his presidential campaign, pledging to “break the combined power of the private monopoly system over the political and economic life of the American people.”
When the Great Recession began in 2008, triage strategies focused on stabilizing big banks and other institutions that had helped bring it on. Underwater home buyers were thrown under the bus while exorbitant health premiums continued to soar.
Seven years later, the top ten percent of the top one percent now have more wealth than the “bottom” 90 percent, roars Sanders, with 58 percent of new income going to the top one percent. Clinton proclaims the deck stacked against the middle and working classes with Warren agreeing calling the system rigged.
Welcome to 21st century American economic populism.
Populism surfaced as a movement in the late 19th century primarily in the Midwest and western states. Its target were the corporations—railroads, steel, oil—and banks. Populism reached its flowering under Franklin D. Roosevelt, a protégé of La Follette.
The progressive reforms implemented under FDR from empowerment of labor unions to reining in banks with the Glass-Steagall Act fueled economic growth until the rise of Reaganism, which posited corporate profit and stockholder return the paramount criteria of economic policy.
Workers and labor unions were marginalized and anyone receiving government assistance from Social Security and Medicare recipients to food stamp users was demonized.
President Bill Clinton and the Republican Congress untethered the banks from the restraints of Glass-Steagall in 1999, and soon after President George W. Bush cut taxes. Deficits and our national debt soared, working and middle class incomes stagnated, foreclosures skyrocketed, Lehman Brothers went under, and Barack Obama was elected.
A century-plus history and here we go again.
“Those who do not remember the past,” philosopher and essayist George Santayana warned, “are condemned to repeat it.”
Referencing a study done by Emmanuel Saez and Gabriel Zucman of the London School of Economics, Fortune magazine suggests the wealth gap worse than thought. Distinguishing between income and wealth, Saez and Zucman trace the wealth gap since 1913. The data clearly show a correlation between progressive—La Follette/FDR—economics and conservative, laissez-faire, free-market economics also known as Reaganism.
“Wealth inequality, it turns out,” write Saez and Zucman, “has followed a spectacular U-shape evolution over the past 100 years.
“From the Great Depression in the 1930s through the late 1970s there was a substantial democratization of wealth. The trend then inverted, with the share of total household wealth owned by the top 0.1 percent increasing to 22 percent in 2012 from 7 percent in the late 1970s. The top 0.1 percent includes 160,000 families with total net assets of more than $20 million in 2012.”
Not since 1913 has 22 percent of wealth, which spiked to 25 percent as the Stock Market Crash loomed, been held by the top 0.1 percent. A century later we’ve come full circle.
“Free men of every generation must combat renewed efforts of organized force and greed to destroy liberty,” La Follette once said.
Indeed. Apparently it’s a never-ending battle.