Wealth and Democracy: A Political History of the American Rich by Kevin Phillips (Broadway Books, 432 pp., $29.95)

Stupid White Men ... and Other Sorry Excuses for the State of the Nation! by Michael Moore (ReganBooks, 304 pp., $24.95) I. As Lord Bryce noted in 1888 in The American Commonwealth, the American way of choosing presidents rarely produces politicians of quality. Subsequent events vindicated his point: in the half-century after his book appeared, Americans elected to the presidency such undistinguished men as William McKinley, William Howard Taft, Warren G. Harding, Calvin Coolidge, and Herbert Hoover. An era that included two wars, the assumption of an empire, a stock market crash, and the beginning of our greatest economic crisis was also marked by as mediocre a political leadership as we have had in our history.

Two features stand out in this roll call of incompetence: the presidents with the lowest reputations over the past hundred or so years were all Republicans, and they were all guided by the conviction that their job was to side with the powerful in any potential conflict with the poor. Our current president is a Republican whose policies favor the rich. His political guru, Karl Rove, is a great admirer of William McKinley and his strategist Mark Hanna. Will this administration, therefore, take its place among the worst presidencies of modern times? In his recent book Public Intellectuals,Richard Posner mocks anyone who makes predictions about such matters. Forgive me, then, for making this one: George W. Bush will be lucky if his presidency ever rises to the level of Taft's or Harding's.A strong case can be made that the Bush administration is the most pro- business presidency that the United States has ever endured. In 1952, Charles Wilson, President Eisenhower's secretary of defense, opined that the good of the country and the good of General Motors could be entwined. Often ridiculed, his statement is, in comparison with the policies of the present administration, a model of statecraft. General Motors, after all, was unionized, so what was good for it was also good for huge numbers of American working-class families. And automobiles, its major product, offered to the upwardly mobile Americans of the period a dramatic opportunity--in that age before the politics of smog--to improve their living conditions.The companies that the Bush administration confuses with the public interest, by contrast, stand out for their rapaciousness in a generally vicious business climate. Enron, to which the president was unusually close, not only destroyed the retirement prospects of its own workers, it also schemed to cause deliberate discomfort to California's energy users--a no-holds-barred approach to doing business that foreshadowed the hideously ugly efforts of this administration to issue frequent and confusing warnings of potential terror attacks when confronted with perfectly appropriate questions about its preparedness for the big attack that took place on its watch. And Halliburton, which now faces an SEC inquiry into its accounting practices during the time that the firm was run by Vice President Dick Cheney, is one of many companies that would presumably benefit from the administration's energy policy, discussions of which it has gone to some length to keep out of the public's hands. The business of the Bush administration is not just business, but sleazy business. America's worst firms picked America's most complaisant politicians (and vice versa) because they knew that they could work with each other.Even when terrorists gave George W. Bush his great moment of leadership, he retreated, when the active fighting in Afghanistan stopped, to a policy of appeasing the already powerful. Although America was vulnerable to attack in part because of the way certain large private companies routinely carried out their business, not once has this president challenged any established industry. The administration committed itself to drilling for oil in Alaska during the campaign, and nothing in the subsequent violence in the Middle East has caused it to rethink alternatives such as energy conservation. It has not used its considerable powers of persuasion--"jawboning," as it was called when presidents knew that business leaders could be sons of bitches--to force airlines into compliance with the security improvements mandated by Congress. On trade policy and farm policy, the administration caved so quickly to the demands of lobbyists that it managed to evoke nostalgia for Bill Clinton (whose free-trade positions cost him votes with labor unions and captains of dying industries). Presidents such as Bush, who jog softly and carry no stick at all, signal to every entrenched interest that nothing will stand in the way of an inclination to have government always on the side of those who already possess influence and power. But when historians make their judgments about Bush, it will not be the similarities between Teapot Dome and Enron that strike them, nor will it be a tax cut so biased in favor of the rich that it makes a mockery of fairness and so huge in size that it will cripple the ability of this administration, or any other administration, to bring security to innocent civilians against whom war has been declared by as evil an enemy as the American people have ever faced, let alone to bring financial security in old age and decent health care coverage. The true shame of the Bush years lies not in debates over levels of taxation or specifics of regulatory policy: there are, and there should be, differences of opinion over those kinds of questions. Nor is the fact that Bush is pursuing a pro-business and conservative agenda the reason to judge him harshly: Americans have never pushed their leaders to equalize incomes, nor have they revolted in anger when, in the name of economic growth, those leaders pursue programs that benefit some at the expense of others. With Bush, questions of method and timing are more significant than questions of policy.Whatever one thinks of Bush's mediocre Republican predecessors, they received a mandate from the voters to pursue their programs of unabashed support for business. They promised pretty much what they delivered: a return to "normalcy," as Harding--like Bush, a linguistically challenged man--so memorably put it. Their policies evoke an era before focus groups and media consultants, when politicians had no problem proclaiming their true allegiances.But Bush never received a mandate for his policies, and not just because he was handed the presidency by the Supreme Court, which was acting with barely concealed partisan fervor against its own well-established legal doctrine. Even had Bush won fair and square, he would have done so by distorting beyond recognition the true beneficiaries of his programs dealing with taxation, government regulation, the environment, and energy. During the 2000 election, Bush's advisers discovered something that no one before had ever quite known: there are simply no limits to how much you can lie in American politics and get away with it. And it is the transposition of that approach to politics into policy that constitutes the disgrace of the Bush method. A tax cut radically biased toward the rich is not nearly so damaging as a tax cut passed while one side to a much-needed debate responds to criticism by simply making up figures.There exists a kind of slack in democratic politics. Most people are too preoccupied with their own affairs and not sufficiently interested in wonkish matters to call politicians to account when they lie. Politicians know about this slack; they pay people to study it closely, and they are frequently tempted to take advantage of it. They may, of course, be deterred from doing so. For one thing, they might conclude--how naive this seems now!--that not every opportunity to win should be exercised, because politics requires long-term cooperation among politicians with different views of the public good. Or they might make a strategic calculation that winning one battle through such methods might cause them to lose subsequent battles, and perhaps more important ones, down the road. Or they might conclude that too much distortion would give their political opponents an advantage to attack them.None of these constraints mattered to the Bush administration. It somehow knew that Democrats would be too craven to challenge them effectively. It had no interest in the long-term effects of its slash-and-burn political methods. It treated the informal rules of the political game as territory for suckers. As a result, it got its tax cut. And the poison that it has introduced into the body politic will remain long after some other administration is forced to deal with the tax cut's rampant irresponsibility.And then there is the disgrace of timing. As Kevin Phillips points out in Wealth and Democracy, not all conservative presidents have been bad ones. Washington, Lincoln, and Theodore Roosevelt stand in a completely different class from Taft, McKinley, and Hoover. Phillips has devoted his career to explaining a fundamental American paradox: we have a pro-business economy and a populist political culture. Since we admire business, we frequently elect politicians whose policies favor the rich; but since we want to ensure that fairness is honored, we reserve our greatest admiration for those who "made their own names fighting elites." It is not that Lincoln and Roosevelt were predisposed to take on the powerful. They governed in times of crisis and, responding to the situations in which they found themselves, they did what they had to do, even if what they had to do put them into confrontation with some of the most powerful forces of their era.Our crisis is certainly not of the magnitude of the Civil War or the Great Depression; but this country, especially after September 11, has serious issues on its hands. Ambivalent in their approach to economics and politics, Americans continue to appreciate capitalism, which is why they are willing to give Bush's proposals a hearing, although without any great enthusiasm. But at the same time they know that fairness matters, and that there is more to membership in the American nation than getting and spending. The Bush administration hears only the first language of business as usual; it is tonedeaf to the second, deeper, and ultimately more important language of purpose. Its response to a people who have suffered one political scandal after another, only to find themselves suddenly defined as the enemy by large numbers of people throughout the world, is to refuse, as if on principle, any calls for greatness or sacrifice, any efforts to mobilize the forces of government on behalf of national objectives, and visions of who we are as a free people, any attempts to broaden and to define the meaning of citizenship.; "Instead of a president who can speak to the best in all of us, we have a president willing to listen only to some of us."Bush does not lead because he does not believe in leadership, a concept that he would no doubt dismiss as a devious effort on the part of liberal elites to deter him from his predetermined course (or as a thinly veiled brief on behalf of John McCain). But it is precisely because Americans are not demanding leadership that we need it so desperately. Instead of a president who can speak to the best in all of us, we have a president willing to listen only to some of us.In its one year in office, the Bush administration has not merely obliterated the memory of Republicans such as Lincoln and Roosevelt. It has also distanced itself from Eisenhower's warning about a military-industrial complex, from Nixon's attempts to steal the left's thunder by adopting programs such as wage and price controls, and even from Reagan's willingness to back off from right-wing nostrums that had little public support. The Bush administration knows that the tradition of Republican stewardship of the nation came to an inglorious end with the watered-down version represented by the current president's father, and it has no plans to resurrect it. Noblesse oblige is dead; ignobility is to be praised, and obligation is to be shunned. We know that Bush is not the hardest-working of modern presidents--and yet he seems to have made all those fund-raising phone calls, and given all those GOP speeches, and appeared at all those county fairs and professional conventions, not out of some deep sense of duty to the nation, but to reward those who so generously rewarded a man so unfit for office as himself. His mediocrity is not a by-product of his mistakes. It is his very intention. He has seen what historical greatness would cost him and his supporters, and he has chosen another path. II. Kevin Phillips's Democracy and Wealth can be read as an explanation of how we arrived at such a state. Since we have a free-market economy and a populist political culture, we do not in America have a politics of class. The poor do not, as socialists of one stripe or another hoped they would, vote for candidates who offer to redistribute income to their benefit. Yet neither do we have a politics of plutocracy: the rich, or at least their children, can often be found expressing solidarity with society's most disadvantaged. Instead we have uneasy swings between periods of excess, such as the Gilded Age and the 1920s, and periods of reform, such as the 1930s and the 1960s. Phillips leaves little doubt where we are now: "The last two decades of the twentieth century ... echoed the zeniths of corruption and excess ... when the rich in the United States slipped their usual political constraints, and this trend continued into the new century."Although Phillips's book begins and ends with the present, its intellectual reach is far greater. Phillips wishes to rewrite such progressive and populist classics as Charles and Mary Beard's Economic Interpretation of the Constitution of the United States (1935), Gustavus Myers's History of the Great American Fortunes (1936), and Ferdinand Lundberg's America's Sixty Families (1937). In tables that spell out who the richest Americans were at various points in our history and how they made their fortunes, Phillips adds little to what those books have already told us; but he is right to try to bring them up to date. What has been seriously missing from our national conversation about money and political influence in recent years is a tone of principled anger.For since 1980, America's already unequal distribution of income and wealth, in Phillips's account, has become outrageously more unequal. The top 1 percent of Americans held 9.3 percent of America's income in 1981, according to one of Phillips's tables, compared with 15.8 percent in 1997. Levels of wealth concentration now approach what they were just before the stock market crash of 1929. And the rich in America do better than the rich anywhere else; the top fifth of Americans make 11 times more than the bottom fifth, compared to ratios of 4.3 in Japan, 7.1 in Canada and France, and 9.6 in the United Kingdom.No doubt some of the advantages enjoyed by the rich are due to their entrepreneurial foresight. But Phillips, a critic of the free market, emphasizes the degree to which public policy contributes, often arbitrarily, to the gap between the rich and everyone else. In his view, the tax cuts of the Reagan years rank among the four most significant transformations in wealth distribution in American history, along with the Hamiltonian financial reforms of 1789-1792, the effects of the Civil War, and the New Deal. The poor, unlike the rich, did not benefit from Reagan's tax cut; any gains achieved by lower rates were eaten up by higher payments for Social Security. Squeezed between declining real income and fewer benefits, the worst-off Americans found themselves working longer hours or borrowing more extensively to keep up. Even though the country's gross domestic product went up, its index of social health declined, as child poverty and youth homicide increased while health care coverage deteriorated.Phillips is not always a reliable guide on these issues. Like all advocates of a cause, he cites data that support his point of view, but when he is presented with contrary indications he simply shifts the grounds of his argument. Unemployment rates were far higher in Europe during the last decades of the twentieth century than they were in America; but instead of congratulating the American economy for putting people to work, Phillips instead attacks the quality of the jobs that were produced. And when he points out that for middle-class Americans the costs of health clubs and private schools increased because the rich could pay more for them, he verges on caricature: most middle-class Americans were too busy enjoying their newfound access to such goods to pay too much attention to the price. Phillips should be read as a social critic, not as an economic historian. Righteous anger is his forte, not nuanced analysis.Yet he does concentrate our attention. The rich did get richer in the last two decades of the twentieth century, and to a considerable degree their gains came at the expense of everyone else. In times past, such periods of excess gave rise to opposition in forms ranging from utopian novels to political re- alignments. Yet neither political party during this period felt called upon to respond. At a time when the right was concerned with abortion and homosexuality and the left pushed affirmative action and multiculturalism, the single most important moral issue facing the country--the right of every individual to be treated by government with equal dignity and respect--went all but undiscussed. As a result, a once-vibrant populist tradition degenerated into the vile Pat Buchanan and the narcissistic Ralph Nader.Even more intellectually ambitious than his retelling of American economic history is Phillips's extended comparison between sixteenth-century Spain, the Golden Age of the Netherlands in the seventeenth century, and the British industrial expansion of the nineteenth century. In each case, he points out, new elites arose to accumulate, with the help of government, fantastic wealth. New technologies, from Leewenhoek's microscopes to Watt's steam engine, furthered exploration and advance. (Spain somewhat mysteriously drops out of Phillips's story.) Flushed with their success, the elites overextended themselves, falling victim to what Phillips calls "the hubris, even self- deception, that attends leading world economic power status." Decadence set in, as sober and industrial values were replaced by those of luxury and snobbery. Ultimately war followed peace, and defeat followed victory. The great years of Holland and Britain are now to be found in museums, as the actual economies of those societies fell back to normal.Analogies between different countries in different eras can be offered as suggestive or they can be offered as determinative. Phillips leans toward the latter. It is not the intricacies of Dutch religious wars or British activities in India that interest him so much as the lessons that these historical events might hold for the United States now. Like other empires at other times, America's recent economic growth was fueled by a new technology and received considerable support from government. We, too, overextended ourselves, especially in Vietnam. Money corrupted our culture just as it did theirs. And our future looks grim, he believes, for democracy will be in trouble if we do nothing to curb the influence of wealth. Although Phillips is quite vague in his calls for reform--he speaks at one point of "a more democratic approach to taxation, money, and banking"--he does not offer them with much enthusiasm. He seems to believe in some kind of economic nationalism, but he also notes "its poor prospects for long-term success." With such perfunctory proposals, Phillips leaves us feeling that we too may find ourselves best represented in a museum, so that some future economic power may ponder the mistakes that we made. Over the course of thirty years, Phillips has written two wonderful books. The Emerging Republican Majority (1969), still a favorite among conservatives, outlined the ways in which the Republican Party could overcome the liabilities of its elitist reputation by appealing to Northern working-class ethnics and displaced Southern whites. The Cousins' Wars (1999), one of the most insightful books written about American society in the last fifty years, brilliantly analyzed the common religious and ethnic divisions that underlay the English and American Civil Wars, as well as the American Revolutionary War. Wealth and Democracy is not in their class. It lacks the powerful realism of the former, substituting in its place a free-floating anger that never attaches itself to a program for correcting the abuses it documents. And it does not achieve the startling originality of the latter, for it is badly organized, sloppily written, and loosely argued. One of the best informed and most sober political commentators in America has unfortunately produced something of a rant. And we are all the worse for it, because Wealth and Democracy, its lack of focus and its forced analogies notwithstanding, is exercised by a matter of great importance.; "Instead of analyzing an issue, he personalizes his opponents, even charging Prescott Bush with ties to the Nazis (which he admits that he cannot prove) or asking his grandson the president whether he is an alcoholic and how this may be affecting his job performance." Phillips argues that wealth and democracy are ultimately incompatible. The pursuit of the former requires an oligarchy, while the realization of the latter demands greater equality. Republicans can best handle this situation-- Phillips rarely offers advice to Democrats--when they temper their natural affiliations with the rich and the powerful by adopting populistic language, and even populistic policy. Richard Nixon did that, in part by following Phillips's advice in The Emerging Republican Majority. George W. Bush, except for his appeals to conservative religious voters, has not shown much interest in populism (nor, it should be added, in Kevin Phillips, whose views have shifted in the direction of Mother Jones). So what options are open to him?One way to resolve the inherent conflict between wealth and democracy would be to suspend democracy in the interests of wealth. At times Phillips darkly hints at such a prospect. "As the twenty-first century gets under way," he concludes, "the imbalance of wealth and democracy in the United States is unsustainable, at least by traditional yardsticks. Market theology and unelected leadership have displaced politics and elections. Either democracy must be renewed, with politics brought back to life, or wealth is likely to cement a new and less democratic regime-- plutocracy by some other name." This is surely too extreme; the last I looked, elections were still in place. Democracy is strong enough to survive the ascendancy of George W. Bush and Dick Cheney. If we take Phillips's insistence on the tension between wealth and democracy as a starting point rather than a tragic denouement, we can begin to appreciate why contempt has become so defining a feature of the Bush administration, whether it takes the form of the president mocking a journalist for his knowledge of French, or the secretary of defense responding to critics with sarcastic disdain, or the vice president simply refusing legitimate and legal requests for information, or the attorney general treating the Constitution as an impediment. An administration with no mandate pursuing with grim determination policies with no public support--and yet which must nonetheless operate within a system that has a free press, an investigative legislature, and an independent, if compromised, judiciary--has little choice but arrogance. It could decide, of course, that cooperation with other branches of government is actually a good thing for democracy and that the best policies are those pursued through informed public debate, but then it could hardly hope to reward the rich and the powerful. And so it does the opposite, shifting as much of the country's wealth as it can to those who need it least, while launching invective and attributions of bad motives to anyone who opposes its goals. Democracy and wealth do push in opposite directions, and for all its many flaws, Democracy and Wealth helps us understand why. III. Something about the subjects of wealth and power seems to bring out the worst in people. The more populistic he becomes, the more ominous Kevin Phillips sounds; and it is a shame to see him fall into the company of people like Ross Perot, Patrick Cadell, and Ralph Nader. But for Michael Moore there is not much room to fall. Films such as Roger and Me and books such as Downsize This! marked him as egocentric and frivolous from the start. Still, he has tried his best to stoop even lower with Stupid White Men. A more irresponsible book on a more important topic would be impossible to write.Phillips only raises the prospect of an unelected leadership, but for Moore, the coup, as he calls it, has already taken place. Al Gore, he says, is the actual president of the United States, because "he received 539,898 more votes than George W. Bush." (At least John Ashcroft knows what is in the Constitution that he routinely ignores; Moore seems not to know that the document calls for a victory in the electoral college.) But instead of Gore, the coup brought to power the "Bush junta," which is composed mainly of millionaires. One of them is Dick Cheney. "When nominated for the vice presidency," Moore writes, "Cheney hemmed and hawed about divesting himself of his Halliburton stock. I guess he knew that the good times were coming." It is beneath Moore, of course, to point out that Cheney did in fact divest himself of the stock--or that Halliburton, which was selling for roughly $40 per share in the fall of 2000, is now worth less than $20. (If Cheney knew anything, evidently, it was that the bad times were coming.)Moore, to put it mildly, does not write to inform. Attitude is all. But if you are writing a book critical of a president who has a problem with the truth, it does not require all that much intelligence to figure out the importance of being truthful yourself. Moore could care less. He describes how he decided one day to watch The McLaughlin Group, where he found the conservative pundit Fred Barnes complaining that kids no longer knew about the Iliad and the Odyssey. So Moore decided to call Barnes and to ask him whether he knew what they were. "Well, they're ... uh ... you know ... uh ... OK, fine, you got me," he quotes Barnes as responding. "I don't know what they're about. Happy now?"I don't know Barnes, but the story struck me as implausible, and so I e-mailed him about it. "It never happened," he wrote back. "One, I've never talked to Michael Moore. Two, I have read the Iliad and the Odyssey. I didn't read them until I got to college, but I did read them. So I know exactly what they're about. Besides that, I've seen movie versions of them." Choose who you wish to believe, but I am disinclined to believe someone who tells me, as Moore does, that 200,000 Americans may be suffering from mad cow disease, that the United States practices apartheid, that first-year airline pilots for commuter airlines live below the poverty level, and that the Confederacy won the Civil War.Thirty or so years ago--Roe v. Wade, decided in 1973, is a good benchmark-- conservatives concluded that they were unrepresented in liberal America. They decided to organize themselves politically to reverse the course of their country. Whether one agrees with them or not, one cannot fault them for lacking determination and seriousness of purpose. They did the research, mobilized the voters, tracked the votes of the politicians, and raised the money necessary to achieve their objective. They never did overturn that Supreme Court decision, although they are responsible for weakening it. But owing to their efforts the whole complexion of America shifted rightward, and now we have a president who pays careful attention to everything they have to say.The contrast with Michael Moore could not be greater. Instead of analyzing an issue, he personalizes his opponents, even charging Prescott Bush with ties to the Nazis (which he admits that he cannot prove) or asking his grandson the president whether he is an alcoholic and how this may be affecting his job performance. Rather than searching for a credible cause, Moore resorts to some of the most outlandish appeals to gender and racial identity politics that I have ever seen, as in this: "Women? They deserve none of the blame. They continued to bring life into this world; we continued to destroy it whenever we could." If this book is what passes for a political manifesto, then Tom Paine is truly dead. Moore peppers his book with factoids, weird memos, open letters, bizarre lists, LOTS OF SENTENCES IN CAPITAL LETTERS, and name-dropping accounts of how he happens to know some members of the Bush family personally. It is meant to be satire, I suppose; but the only person skewered is Moore, who proves himself to be the only stupid white man around. Anyone bent on redistributing income in favor of the rich could not get a luckier break than having a critic like Michael Moore.One would think that a person who believes that George W. Bush stole the presidency from its rightful occupant Al Gore would at least prefer to see Al Gore in the office. But Moore is too "radical" for that, of course; he informs his readers that he did not vote for Gore, and he regularly engages in Nader- like rhetoric about how both parties are indistinguishable when it comes to issues such as arsenic in the drinking water. He even seems to relish the idea of a second term for Bush, for he concludes his book with a message to the Democrats: "So yes, WE denied you the White House. WE tossed you out of Washington. And WE will do it again." (As if to show that he cannot be consistent even on this obnoxious point, however, Moore tells us how he tried to persuade Floridians from voting for Nader so as to help defeat Bush.) Moore is astoundingly out of touch with the reality that he claims to care so much about. He is Chomsky for children. He does real damage to the cause that he thinks he is advancing. As is also true of Ralph Nader, the American right is much in his debt.Theodore Roosevelt followed William McKinley, Woodrow Wilson came after William Howard Taft, and Franklin Delano Roosevelt took over from Herbert Hoover. One thing mediocre presidents seem to do is to prepare the ground for better presidents, and in some cases great ones. When it comes to who will succeed George W. Bush, I make no predictions. But there is reason to think that four or eight years of Republican largesse to big business, accompanied by such extreme efforts to keep its generosity from public scrutiny, will prepare the American public to appreciate why government is necessary and why its policies must, above all else, be fair.The next chapter in the way our politics treats the rich and the poor is unlikely to take the forms that it has taken in the past. If Kevin Phillips's book is any indication, populism has run out of gas. No credible coalition can be built on the basis of nationalistic anger in this age of global capitalism, leaving populists sputtering with impotent rage. And if Michael Moore speaks for what passes for the American left--he must be speaking for someone, as his book is a best-seller--no help can be expected from that quarter either. But this should be taken as a sign of hope rather than a sign of despair. It opens the political territory for a challenge from a Roosevelt-style Republican such as John McCain. It also suggests to Democrats that they will need to address directly, and with considerable passion, the warping of priorities that occurs when government shifts so decisively in favor of the rich. Neither task will be easy. For McCain, it would mean, as it did for Theodore Roosevelt, a break with his own party--not exactly the easiest path to the presidency. For Democrats, it means finding a way to capitalize on the gains that Clinton's centrism bequeathed to the party while breaking with his all-too- frequent subservience to big business, a trick that no potential Democratic candidate for the 2004 nomination has yet pulled off. But there is every reason to believe that there exists a hunger for leadership in America even though not much leadership is in evidence. Finding ways to do what seems difficult if not impossible is a crucial aspect of leadership. Any Republican or Democrat capable of overcoming those odds would, if elected, be in a good position to repair the damage done by the election of 2000 and its aftermath.

Idiot Time

By Alan Wolfe

Historical Error

By John B. Judis

Grover

By Jeffrey Rosen

How is Hoover?

By Herbert Croly

Page 1