It’s impossible to reform our economic system without altering the allocation of political power that prevents such reform
What we must do
They hypothesized that even though the voices of individual Americans counted for little, most people belonged to a variety of interest groups and membership organizations — clubs, associations, political parties, and trade unions. “Interest-group pluralism,” as they called it, was responsive to the needs and aspirations of most citizens
Small retailers were protected against retail chains through state “fair trade” laws requiring wholesalers to charge all retailers the same price and preventing chains from undercutting prices. At the same time, the retail chains were allowed to combine into national organizations to counter the significant market power of large manufacturers.Small investors gained protection under the Securities and Exchange Acts against the power of big investors and top corporate executives.Small banks were protected against Wall Street by regulations that barred interstate banking and separated commercial from investment banking
Because wages stagnated, most people had to devote more time to work in order to makes ends meet. As sociologist Robert Putnam has documented, Americans stopped being a nation of “joiners.” By the 1980s, the expansive mosaic of local organizations that had given meaning to American pluralism was being replaced by national advocacy organizations headquartered in Washington.“Membership” no longer meant activism at the local and state levels. It meant sending money in response to mass solicitations
Many small retailers went under due to repeals of state “fair trade” laws and court decisions finding that resale price maintenance violated antitrust laws. Large chains that spearheaded such moves argued that consumers would get better deals as a result. But the moves also opened the way to giant big-box retailers, such as Walmart, that siphoned away so much business from the Main Streets of America that many became ghost towns.These changes also led to the closings of millions of locally owned businesses that had provided communities with diverse products and services, some produced locally or regionally, and many jobs
In the 2012 elections, the Koch brothers’ political network alone spent more than double on politics than the 10 largest labor unions put together. Corporations spent $56 on lobbying for every $1 spent by labor unions
The loss of American workers’ collective economic power compounded their loss of political power, which in turn accelerated their loss of economic power
Half of all daily newspapers in the U.S. are now controlled by financial firms
The deregulation of finance — demanded by Wall Street — allowed the Street’s biggest banks to become far bigger, taking over markets that state and local banks had previously served and thereby cutting off financing for many small local and regional enterprises
In the 1990s, Democrats voted against Bill Clinton’s health care plan because their corporate sponsors opposed it
In his first two years in office, Clinton pushed for two items of central importance to big business. He got Congress to enact the North American Free Trade Agreement, followed by the establishment of the World Trade Organization. And he committed to reducing the federal budget deficit.Clinton and his allies in Congress also deregulated Wall Street. In 1993, Democrats supported the Interstate Banking and Branching Efficiency Act, which ended restrictions on interstate banking. In 1999, Clinton pushed for repeal of the 1933 Glass-Steagall Act that had separated commercial from investment banking. In 2000, he supported the Commodity Futures Modernization Act, which prevented the Commodity Futures Trading Commission from regulating most over-the-counter derivative contracts, including credit default swaps
Barack Obama presided over one of the most pro-business administrations in American history. He pumped hundreds of billions of dollars into Wall Street in order to save the Street (and the U.S. economy) from imploding after the crash of 2008
The career paths of Democratic officials in the Clinton and Obama administrations confirmed their close ties to business and Wall Street
The major fault line in American politics has shifted from Democrats versus Republicans to anti-establishment versus establishment.The strongest and most powerful force in American politics is a rejection of the status quo, a repudiation of politics as usual, and a deep and profound distrust of elites — including the current power structure of America
Trump is a fake populist, of course. Many big corporations and wealthy individuals are solidly behind him. After they bankrolled his 2016 election, he rewarded them with a giant tax cut
Trump’s 2024 campaign has nothing to do with conservative orthodoxy emphasizing small government. To the contrary, Trump is proposing to centralize government power under his authority and extend it over a range of issues now outside the scope of federal control
But Biden has not taken direct aim at the growing political power of giant corporations, Wall Street, and the ultra-wealthy. He has not explained how they have abused their wealth and power to alter the economy to their advantage — and the disadvantage of most other Americans... He has not fought to get big money out of politics.Yet polls show strong public support for getting big money out of politics. For cutting the biggest Wall Street banks down to a size where they are no longer too big to fail. For resurrecting the Glass-Steagall Act, which had separated commercial and investment banking until its repeal in 1999
a strong coalition — trade unions, working men and women, local political organizations, small businesses, young people, and others. In other words, a new countervailing power
movement... to unite the poor, working and middle class, people of color and white people — everyone who has barely had a raise in 30 years and who now feels cynical, powerless, and disenfranchised
starting in July 2021, 36 million American families began receiving pandemic payments of up to $3,000 per child ($3,600 for each child under six).The result? Child poverty dropped by at least a third, and the typical family gained some breathing space.This hugely successful experiment ended abruptly in December 2021 when Senator Joe Manchin joined 50 Republican senators in rejecting President Biden’s Build Back Better Act, which would have continued it.They cited concerns over the experiment’s cost — an estimated $100 billion per year, or $1.6 trillion over 10 years. But that’s less than big corporations and the rich will have saved on taxes from the Trump Republican tax cut of 2018. Repeal it, and there would be enough money. The cost is also less than the increase in the wealth of America’s 745 billionaires during the pandemic. Why not a wealth tax?The experiment died because, put simply, the oligarchy didn’t want to pay for it
Capitalism is consistent with democracy when democracy is in the driver’s seat — reducing the inequalities, insecurities, joblessness, and poverty that accompany unbridled profit-seeking
