Who Stole the American Dream? (57 page)

More broadly, the explosive rise of Super-PACs and their super-donors has overwhelmed the campaign finance reform legislation enacted since 1974 and has thrown America once again into an era of essentially unregulated campaign funding.

Reformers like Senator McCain have warned that unregulated funding corrodes American democracy and corrupts the legitimacy of American elections, and so they have fought to impose limits on donations. Other reformers have advocated large-scale public financing to put political unknowns and challengers on a more equal footing with incumbents and to reduce the lopsided political influence of big corporations and wealthy donors. But decisions by the Supreme Court and the Federal Election Commission have punched large loopholes in those reforms.
Fred Wertheimer of Democracy 21 and others have attacked the fictional independence of some Super-PACs from their favored candidates and now call for new laws to ban Super-PACs with any links to candidates, however indirect.

But politicians and their campaign strategists have been so ingenious and adept at getting around laws and regulations that it will almost surely require a constitutional amendment to ban campaign contributions from corporations, labor unions, and other institutions and specifically to empower Congress to impose limits on campaign donations from individuals. But that is a formidable process, sure to be fiercely opposed by entrenched interests. Only a groundswell of grassroots political activism, fueled by public revulsion at the power of Super-PACs and inflated campaign spending by America’s super-rich,
will be able to overcome resistance from politicians, and especially from congressional incumbents who have thrived on the present system.

The only sure way to alter today’s patently unequal democracy is for average Americans to mobilize politically—to break out of their political inertia and to move forcefully back into the political arena.

Important as it is to open up party primaries, arrange for nonpartisan legislative redistricting, and provide a floor of public financing for elections, the fundamental need of American democracy is the practical exercise of democracy—a rebirth of citizen activism. That requires not only a populist rebellion against the political and economic inequalities of our divided nation, but a hopeful rebirth of American idealism, a revival of the belief that ordinary people can, in fact, make a difference and turn the tide.

At election time, American voters seem flattered and even seduced by the ritualistic declarations of presidential contenders that America’s best years lie ahead and America’s democracy is the greatest in the world. But it is clear from a multitude of opinion polls and reporting that once the inflated rhetoric of campaigns subsides, people don’t really believe that anymore. They doubt their own power.

“
The loss of civic faith is an obstacle,” John Gardner remarked in the late 1990s. “One might imagine that the solution would be for government to make itself worthy of our faith. But the plain truth is that the government … will not become worthy of trust until citizens take positive action to hold them to account. Citizen involvement comes first.”

Politicians are afraid of mobilized voters. They open their doors when home-state residents flood the corridors of Capitol Hill—evidence that continuing political pressure from the middle class can push Washington to generate what nineteenth-century British philosopher Jeremy Bentham called “the greatest good for the greatest number.”

So the time has come for direct political action by millions of ordinary Americans to use their physical involvement as a countervailing power to Washington influence peddlers.

But what’s the point? people say. Government doesn’t work.

Well, take a closer look. Government may not work well for average Americans, but it has been working very well for Wall Street, for multinational corporations, and for the financial superclass. They get the government they want, and they pay handsomely to get it.

During 2009 and 2010, when Congress was writing laws on financial regulation, health care, and taxes, business interests spent $6 billion on lobbying. In “soft money” campaign donations,
business outspent labor 97 to 1 in the 2010 elections, and it got a Congress eager to roll back regulations on banks, health insurers, and other businesses and refusing to close corporate tax loopholes or raise taxes on the rich. Over the years, the multinationals have won new trade deals, tax holidays on overseas earnings, and laws that let them import cheaper foreign labor to displace American workers. Some of America’s richest families bankroll anti-tax conservatives like the Tea Party, which has wielded huge influence in two short years, even though it represents only a small fraction of Middle America.

So government can work. You just have to make it work for you.

People are understandably skeptical. Many say they want smaller government, but that may be because they don’t realize how much they already depend on government, like the South Carolina man who in an anti-government tirade told his congressman to “keep your government
hands off my Medicare”—not realizing that Medicare was a government program.

In a 2008 survey by Cornell University, people were asked if they had ever benefited from federal policies and government programs. In response, 57 percent said, “No, never.” But when they were questioned more closely, it turned out that
94 percent had actually benefited
from at least one government social program and the average person had used four programs.

So government has an impact on our lives, and we in the middle class need to learn from Wall Street, Corporate America, and the Tea Party how to make it work better for us. That may sound impossible. Ever since the late 1970s, the power game has been dominated by money. Of course, people in the middle-income brackets cannot hope to outspend the rich and the big corporations.

The most powerful action that average Americans can take is
to organize at the grass roots
, as the Tea Party did, and then
put ourselves on the line
. Ordinary people need to personally join the battle: Show up at town meetings with members of Congress; get out on Main Street and demonstrate for jobs and homes; head for the state capital; take the bus or train to a march on Washington. Like the civil rights protesters, or the military veteran bonus marchers during the Great Depression—or the Tea Party people today—average Americans can stage rallies and demonstrations and put up tent cities on the Washington Mall that make it impossible for Congress and the White House to ignore the needs and demands of ordinary people.

It would help rekindle public faith in government if political leaders would demonstrate that Washington actually works for average Americans, that the White House and Congress are ready to help out Main Street the same way they bailed out Wall Street.

The test should focus on two touchstone issues—jobs and fairness. Both issues can mobilize the middle class. People have an existential understanding of jobs and fairness, either from their own lives or from the lives of their family, friends, and neighbors.

If enough average Americans mobilize around jobs and fairness and demand action from Congress and the White House, politicians will get the message and respond. As the Tea Party has demonstrated, a highly vocal activist minority with a clear agenda and
focused demands can change the debate and direction of policy in Washington.

Jobs come first. They are the essential economic lever to lift the middle class back to shared prosperity and to jump-start the consumer engine to drive the American economy. The test of whether business leaders are committed to America’s growth or just to their own company’s profits is whether they invest their $1 trillion or $2 trillion in cash reserves and their overseas profits in
creating jobs in America
and not primarily in stock options, higher dividends, and buying back their own company’s stock.

Practical programs to promote and create jobs are the political litmus test of whether Congress and the White House are committed to a middle-class revival or just to a futile repetition of the failed litany of the lower taxes, less regulation, free market mantra that in the 2000s generated the worst economic performance for most Americans of any decade since World War II.

Fairness is the touchstone for money issues—a test of whether America can return to a more equitable sharing of the nation’s economic gains.

As we have seen, the middle class won’t have enough spending power to regenerate “the virtuous circle” in the economy unless a much larger share of America’s national income goes to average Americans. Fairness requires rebalancing how business profits are divided between shareholders and employees, and it calls for rebalancing government policies more in favor of average Americans.

Some quick symbolic steps such as closing corporate tax loopholes, raising taxes on the rich, and imposing new fees on Wall Street’s stock transactions and executive stock options could help restore government’s credibility with ordinary people.

But a more central long-term yardstick of fairness to the middle class is how the Congress and the White House handle housing, since homes are the heart of the American Dream and the cornerstone
of middle-class wealth. As Harvard economist Kenneth Rogoff noted, “There is widespread agreement among economists that
housing debt is at the heart of the slow recovery, and that finding a way to bring it down faster would accelerate the recovery.”

The biggest debt now overhangs twenty-two million families stuck in homes that are “under water.” Like the big Wall Street banks, which were bailed out not only with $700 billion in taxpayer funds, but with $7.7 trillion in loans from the Federal Reserve, these creditworthy homeowners desperately need help with rewriting and refinancing their mortgages, and smart economists have spelled out steps to speed massive refinancing—steps that would be a shot in the arm to the whole nation.

A dead housing market hurts everyone. It not only depresses home values,
it cuts consumer demand. Even people whose homes are above water cut back their spending when housing prices fall. Economists tell us that the housing collapse from 2006 to 2009 has
cost the U.S. economy an estimated $240 billion a year in lost
consumer spending.

“Consumer spending is not only the key to economic recovery in the short term,” economic historian James Livingston of Rutgers University has written. “It’s also necessary for balanced growth in the long term. If our goal is to repair our damaged economy … that entails a redistribution of income away from profits toward wages, enabled by tax policy and enforced by government spending.”

Getting help for homeowners and jobs for the roughly twenty-five million unemployed and underemployed Americans will require changing the political dynamics in Washington. The reflexive instinct of most Americans is to ask for a new Lincoln to pull the nation together again and restore a national sense of purpose. But great as he was, Lincoln could not have done it without armies of volunteers—without regiments from New York, Illinois, Ohio, and Pennsylvania, without average Americans prepared to put themselves
and their lives on the line to reunite America and reforge a common destiny for our nation.

So, too, today it will take armies of volunteers to get the country back on track. People regularly sign up for causes. They join demonstrations—to oppose the new Keystone XL Pipeline from Canada to Oklahoma, to raise money for the Susan G. Komen Race for the Cure, to fight obesity in America, or to take part in comedian Jon Stewart’s Rally to Restore Sanity and/or Fear at the Lincoln Memorial in October 2010. In 1979, several hundred farmers drove their tractors to Washington and camped on the Mall for a few weeks to protest high interest rates. But these are disparate causes.

What’s needed now is an army of volunteers prepared to battle for the common cause of reclaiming the American Dream. Occupy Wall Street and its spin-offs in more than fifteen cities around the country began that process, focusing more of the national dialogue on the hyperconcentration of wealth and power in America—the costly divide of gross inequality between the top 1 percent and the other 99 percent. But for significant long-term impact, either Occupy will need to mature or some new movement will need to emerge with broader participation, better organization, more clearly articulated goals, and specific policy targets.

If Americans are daunted by that challenge, consider what happened in Arab countries that had been under the boot of dictators for decades. The people who took over Middle East capitals in the winter and spring of 2011 had never known our freedoms or our democracy. Yet, amazingly, long passive Egyptians, Tunisians, Libyans, Yemenis, and Syrians dared to challenge entrenched power with their “Arab Spring.” Change has been swift in some countries, slow in others. But it has happened.

In Israel, less noticed but more relevant to Americas issues, hundreds of thousands of people marched through the summer of 2011, demanding that the Israeli government narrow the gap between rich and poor and ease the hardships caused by a housing shortage and a sharply rising cost of living.
Israelis threw up tent cities in parks
from Haifa to Beersheba and along fashionable avenues in Tel Aviv to protest against the concentrated wealth of the “tycoons,” as Israel’s richest families are known. They called on the Israeli government to take action to “minimize social inequalities.”

Under pressure from the street, Prime Minister Benjamin Netanyahu and the Israeli cabinet set up an economic commission to study the popular demands, and then, when the commission delivered its findings, the government approved its call for increased taxes on companies and on capital gains and a surtax on the wealthy, as well as its proposals for easing financial burdens on the middle class. “
The consumer will feel the government’s decision today in his pocket,” said Netanyahu.