Aftershock: The Next Economy and America's Future by Robert B. Reich
Authors: Robert B. Reich
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suites, from the influence peddlers and pork peddlers in Washington—from all the privileged and the powerful who have conspired against us.
(Wild applause and cheers.)
They will no longer sell Americans out to global money and pad their nests by taking away our jobs and livelihoods!
(Wild applause, cheers.)
This is our nation, now!
(Wild applause and cheers that continue to build.)
A nation of good jobs and good wages for anyone willing to work hard! Our nation! America for Americans!
(Thunderous applause.)
Her opponents’ concession speeches are bitter. George P. Bush, the Republican candidate, is irate. “I cannot stand before you andcongratulate my opponent, who based her entire campaign on fear and resentment,” he tells his supporters.
Chelsea Clinton, the Democratic candidate, is indignant. “I would very much like to offer Margaret Jones my best wishes for the future. But I have to be honest: She and the Independence Party pose a grave danger to this nation.”
Foreign leaders try to be respectful but cannot hide their anxieties. The British prime minister issues a terse statement “wishing Americans well.” The German chancellor offers “condolences,” but the German ambassador to the United States insists the chancellor’s remark has been mistranslated and is best understood as “commiserations.” The president of China appears before news cameras and says, simply, “The United States has committed a grave error.”
The presidents of the U.S. Chamber of Commerce and the Business Roundtable issue a joint statement warning that Margaret Jones and the Independence Party “will push America into another Great Depression.” The CEOs of the four remaining giant Wall Street firms predict economic collapse.
On November 4, the day after Election Day, the Dow Jones Industrial Average drops 50 percent in an unprecedented volume of trading. The dollar plummets 30 percent against a weighted average of other currencies. Wall Street is in a panic. Banks close. Business leaders predict economic calamity. Mainstream pollsters, pundits, and political consultants fill the airwaves with expressions of shock and horror. Over and over again, they ask: How could this have happened?
2
The Politics of Economics, 2010–2020
How indeed. To get some insight, let’s examine what could very well occur in the decade preceding the election of Margaret Jones.
History teaches us that politics is inextricably bound up with economics. Presidents are not nearly as responsible for the economy as voters assume, but they are held accountable nonetheless. Jimmy Carter lost his bid for reelection in 1980 because the economy had been suffering double-digit inflation, mostly brought on by soaring oil prices. In order to “break the back of inflation,” as it was put, Paul Volcker, then chairman of the Fed—but obviously also no Marriner Eccles—raised interest rates so high that he also broke the back of the economy, pushing unemployment into the stratosphere. That also broke the back of the administration. Voters blamed Carter and elected Ronald Reagan.
Reagan, by contrast, won reelection handily in 1984, largely because the economy was surging by then, and voters credited him. George Bush lost his reelection bid in 1992, this time at the hands of Alan Greenspan. Greenspan raised interest rates to ward off inflation, which also raised unemployment. Voters blamed Bush and in 1992 gave Bill Clinton a plurality of votes because he promised to fix the economy. (In the words of his colorful political advisor, James Carville, “It’s the economy, stupid.”) Clinton was reelected in 1996 mainly because jobs were returning. Barack Obama won in 2008 as the economy teetered precariously on the edge of a precipice. Many blamed the bad economy on GeorgeW. Bush, and that blame spilled over to John McCain, the Republican candidate. (It’s not
just
the economy. George W. Bush defeated Al Gore in 2000 by the narrowest of margins, even though
(Wild applause and cheers.)
They will no longer sell Americans out to global money and pad their nests by taking away our jobs and livelihoods!
(Wild applause, cheers.)
This is our nation, now!
(Wild applause and cheers that continue to build.)
A nation of good jobs and good wages for anyone willing to work hard! Our nation! America for Americans!
(Thunderous applause.)
Her opponents’ concession speeches are bitter. George P. Bush, the Republican candidate, is irate. “I cannot stand before you andcongratulate my opponent, who based her entire campaign on fear and resentment,” he tells his supporters.
Chelsea Clinton, the Democratic candidate, is indignant. “I would very much like to offer Margaret Jones my best wishes for the future. But I have to be honest: She and the Independence Party pose a grave danger to this nation.”
Foreign leaders try to be respectful but cannot hide their anxieties. The British prime minister issues a terse statement “wishing Americans well.” The German chancellor offers “condolences,” but the German ambassador to the United States insists the chancellor’s remark has been mistranslated and is best understood as “commiserations.” The president of China appears before news cameras and says, simply, “The United States has committed a grave error.”
The presidents of the U.S. Chamber of Commerce and the Business Roundtable issue a joint statement warning that Margaret Jones and the Independence Party “will push America into another Great Depression.” The CEOs of the four remaining giant Wall Street firms predict economic collapse.
On November 4, the day after Election Day, the Dow Jones Industrial Average drops 50 percent in an unprecedented volume of trading. The dollar plummets 30 percent against a weighted average of other currencies. Wall Street is in a panic. Banks close. Business leaders predict economic calamity. Mainstream pollsters, pundits, and political consultants fill the airwaves with expressions of shock and horror. Over and over again, they ask: How could this have happened?
2
The Politics of Economics, 2010–2020
How indeed. To get some insight, let’s examine what could very well occur in the decade preceding the election of Margaret Jones.
History teaches us that politics is inextricably bound up with economics. Presidents are not nearly as responsible for the economy as voters assume, but they are held accountable nonetheless. Jimmy Carter lost his bid for reelection in 1980 because the economy had been suffering double-digit inflation, mostly brought on by soaring oil prices. In order to “break the back of inflation,” as it was put, Paul Volcker, then chairman of the Fed—but obviously also no Marriner Eccles—raised interest rates so high that he also broke the back of the economy, pushing unemployment into the stratosphere. That also broke the back of the administration. Voters blamed Carter and elected Ronald Reagan.
Reagan, by contrast, won reelection handily in 1984, largely because the economy was surging by then, and voters credited him. George Bush lost his reelection bid in 1992, this time at the hands of Alan Greenspan. Greenspan raised interest rates to ward off inflation, which also raised unemployment. Voters blamed Bush and in 1992 gave Bill Clinton a plurality of votes because he promised to fix the economy. (In the words of his colorful political advisor, James Carville, “It’s the economy, stupid.”) Clinton was reelected in 1996 mainly because jobs were returning. Barack Obama won in 2008 as the economy teetered precariously on the edge of a precipice. Many blamed the bad economy on GeorgeW. Bush, and that blame spilled over to John McCain, the Republican candidate. (It’s not
just
the economy. George W. Bush defeated Al Gore in 2000 by the narrowest of margins, even though
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