Republicans Teddy Roosevelt and Senator La Follette fought bitterly and were contemptuous of each other’s methods and motives. Nonetheless, they finally broke the conservatives’ hold on the Republican Party. Teddy Roosevelt was self-consciously a “practical man” who compromised to get things done. “He pushed for change one small step at a time” and cut deals with the trusts and the conservative leaders of both the U.S. House and Senate. Roosevelt declared, “Nothing of value is to be expected from ceaseless agitation for radical and extreme legislation”—a reference to Senator La Follette’s call for bold action. Roosevelt believed “in “fighting one evil at a time” and trusted people “who take the next step; not those who theorize about the two-hundredth step.”29
But a short decade later, Teddy Roosevelt would embrace the whole package of reforms with the same zeal and boldness as his former adversary.
What kept the pressure on national leaders was the early success of uncompromising progressive leaders who defeated the conservatives in key states. They insisted on regulating business abuse, and even more important, on enacting democratic reforms that allowed them to rally popular support to defeat the conservative backlash. At the local level, Jackson Lears writes, “Progressive mayors were often the best at revitalizing democracy—partly through the innovation of ‘home rule,’ which freed city governments from conservative and often corrupt state legislatures, and partly through the encouragement of citizens’ engagement in policy-making.” Mayors Tom Johnson of Cleveland, Sam Jones of Toledo, and Hazen Pingree of Detroit increased popular participation, offered social services once provided by the party machines, regulated business, and took control of public utilities.30
Their achievements inspired large-scale reforms in the states. In 1905, Governor La Follette of Wisconsin demanded that the state’s legislature pass Wisconsin’s own railway bill, regulate corporate lobbyists, and require railway companies to open their books to state auditors. He threatened to remain governor and not take up his U.S. Senate seat unless the legislature passed his program of reforms.31
Many states would try to emulate the “Wisconsin idea.” They taxed the railroads, outlawed rebates, and required lower shipping rates. They regulated the public utilities and authorized the state to take public ownership, if need be. Wisconsin went further and enacted a state income tax, established housing codes to get rid of slums, raised the compulsory school age to sixteen, and passed a state minimum wage law. The goal was reforms that improved living conditions and wages and allowed a family to live above subsistence. They wanted to make sure the worker and farmer got a fair deal.
To make progress, La Follette understood you had to break the power of local party machines and expose their corrupt ties with business. He introduced the referendum that allowed the public to vote directly on issues and direct primaries for all offices and state delegates to party conventions to circumvent and weaken the established parties. And by 1912, twelve states had followed Wisconsin and introduced direct primaries.32
Progressive reformers in the states also worked to reduce social abuse and violence and to help the new immigrants have more stable families. That put them in the middle of the battle over temperance. Many of the women reformers fought to bar the sale of alcohol to protect women and children from drunken husbands and from wife beating. It also undercut the party local machines that used alcohol and the local saloons to “buy” the votes of immigrant workers.
Reformers were very focused on protecting women and the family, and prohibition had the support of progressives, populists, suffragists, the NAACP, Protestant congregations, and the Industrial Workers of the World. By the time the national Prohibition movement got taken up at the federal level, nearly two-thirds of Americans were already living in “dry” states. That was part of the progressive momentum in civil society.33
Woodrow Wilson, the president of Princeton University, ran for governor of New Jersey in 1910 and swept to a surprising victory. He apparently was paying close attention to the reformers in the cities and states, as he quickly repudiated the party bosses who nominated him. Wilson introduced, Lears writes, “a statewide corrupt-practices law to prevent business-government connivance, a Public Service Commission to set utility rates, a workmen’s compensation law, and the empowerment of municipalities to use initiative, referendum, and recall.”34
The country’s growing disdain for the conservative defenders of the old order and support for the reformers produced the wave off-year election of 1910. Democrats won massively to take control of the Congress, and progressive Republicans held their seats against the wave. La Follette was triumphant: “In the beginning, our program of legislation was viewed with alarm and denounced as visionary, extreme, radical, and a menace to capital and to business interests. Today, the justice, the wisdom, the economic soundness of every Wisconsin law to which the progressive movement gave being, has conquered opposition and compelled approval in every enlightened commonwealth in America.”35
The demand for radical progressive reforms and change became the common sense of the era, nurtured and flourishing as a model in the cities and states, even as conservatives and industrialists blocked change nationally. The stark contrast between progressive reforms in the states and conservative roadblocks nationally became a motivation for Teddy Roosevelt, who was considering running for president again. He delivered his “New Nationalism” speech in Osawatomie, Kansas, and declared, “so now the great special business interests too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics”—putting that task of attacking this essential evil on the same level as the task of confronting slavery.36
He then embraced in a powerful rush all the policies that the insurgents and state reformers had advanced: “tariff overhaul, workmen’s compensation, child labor laws, direct Senate elections, voter referendums and recalls, minimum wages, maximum workweeks, workplace safety regulations, physical valuation of all corporations, graduated income and inheritance taxes, environmental conservation, and public disclosure of campaign donations.” He would ultimately run as the candidate of the Progressive Party after the Republicans scorned him.37
Running under the banner “New Freedom,” Woodrow Wilson won an extraordinary victory in a three-way presidential contest and would now work with a Congress where progressives from both parties were the majority. In his inaugural address in front of the U.S. Capitol, the new president declared America’s duty “to cleanse, to reconsider, to restore, to correct the evil” before it.38
After being sworn in by the chief justice, President Wilson made clear he would attack the tariff system that “makes the Government a facile instrument in the hand of private interests,” including a banking and currency system suited to fifty years earlier; an industrial system that “restricts the liberties and limits the opportunities of labor, and exploits without renewing or conserving the natural resources of the country.”39
Over the next four years, the big progressive majority from both parties marginalized their conservative wings, and after two decades of impasse, the progressives proceeded boldly. They moved immediately and slashed tariffs by a third and barred Congress from favoring particular industries. The Federal Reserve Act was created in 1913 to issue currency, create a national banking system, and counter the dominance of the private banks. By 1913, three-quarters of the states had ratified the Sixteenth Amendment, permitting a federal income tax, and an income tax bill was passed. The Clayton Antitrust Law of 1914 outlawed price discrimination and gave the president the ability to block corporate mergers—eliminating one of the original abuses of the industrialists that had motivated the progressive reaction.
In 1914, enough states had ratified the Seventeenth Amendment, and in future elections U.S. senators would be directly elected by the people. The conservative Supreme Court overturned the new laws that barred the use of child labor in manufacturing, though the reformers were able to establ
ish an eight-hour day, overtime pay for railway workers, and workmen’s compensation for federal employees. Before very long, the Nineteenth Amendment gave women the right to vote.40
Congress also enacted the Eighteenth Amendment barring the manufacture, sale, and transportation of alcohol, despite President Wilson’s objection. Keep in mind that progressive reformers such as Eleanor Roosevelt supported Prohibition to protect women and children from abusive men, because alcohol was addictive and degrading to urban life—one of the dark social consequences of America’s Industrial Revolution that progressives set out to mitigate.
The country would repeal the Eighteenth Amendment thirteen years later, but for better or worse, progressives and the country were seeking to address the social as well as the economic consequences of America’s rapid industrialization and Gilded Age. In this case, it overreached. In other places, though, the program underreached and would have to wait for the “New Deal” and a new Supreme Court that would accept reforms that empowered labor and allowed much higher taxes on the richest. Still, these bold progressive reforms fundamentally changed American capitalism and democracy and allowed America’s dominant century.
America today is at a comparable tipping-point moment.
12 MOMENTUM FOR REFORM
America today is at a tipping-point moment comparable to the one before the progressive era. Like the earlier progressives, reformers today are building momentum in society, charities, and churches, creating models of reform in the cities and the states, and building toward major changes that can shift the trajectory on inequality, challenge the tightening bond of business and government, and expand democracy. If the first progressive era is any guide, the big issues will not be settled in one presidential election, though each election will embolden the reformers to build an era of reform.
MOMENTUM FOR REFORM
The momentum for reform in the progressive era became irresistible when leaders and activists in all domains became aligned on the central questions—what was wrong, what problems had to be addressed, what values should guide the work of change, and what kind of country we wanted it to be. In short, the momentum for reform moves to a tipping point when reformers have won the argument at the heart of America’s disruptive revolutions. They get the main stage to tell us what issues are most important, what must be addressed, and with what urgency.
That I have reached this point in the book and not proposed the formation of a bipartisan commission to address the deepest problems is a measure of how much America has changed since Simpson and Bowles’s National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center’s Debt Reduction Task Force. Addressing the deficit and entitlements is not the key to America’s renewal. They are part of an age of austerity that has limited America’s potential. In any event, today’s Republican Party is preoccupied with the battle for America’s values and has repudiated every bipartisan policy idea in its policy agenda.
To achieve the radical reforms to check the excesses of the Gilded Age, the progressives of both parties had to break the power of the old stalwart conservatives in both parties. That is why this is a tipping point for reformers who are pressing on for change. For now, Democrats will only succeed in their role if they expose how destructive is the current Republican Party for the country and expose its corrupt strategy to keep the new American majority from governing. Conservatives are waging a guerrilla war against reform. So Democratic reformers will have to press their advantage for change to become inevitable.
If the modernization of the Democratic Party is any indication, the change that allowed for the nomination and election of Bill Clinton took a long time. The Republican Party has not even begun the process.
Democrats only embarked on party reform after their mainstream presidential candidate Walter Mondale lost in a landslide in 1984. A similar moment could come sooner than conservatives expect, and business and the business wing of the Republican Party could insist on much more than the gagging of the Tea Party. It could start with demands on immigration reform, funding for education, and infrastructure investment. Observant Catholics might be listening to Pope Francis about inclusiveness, poverty, and the destructive effects of climate change. Maybe a shattering defeat in both the election and the culture war will allow some of the Evangelicals to follow the path of the mainline Protestants who defend the safety net and immigration, and accept homosexuality, gay marriage, and the need to address climate change. Perhaps some of the less politicized Evangelical churches will grow impatient with the partisan impasse and get to work with others in their community to rescue the working-class family and children.
Until then, the Republican Party is unwavering in its commitment to lower taxes and the smallest possible government, which leaves them with no national project other than waging wars against Islamic extremists and containing Russia and China. Republicans struggle with America’s immigrant and racial diversity and view the badly frayed safety net as overly generous and the cause of dependence and poverty. They think the middle class is doing better than you think and insist the jury is still out as to whether inequality really exists or matters that much.
We do not know whether opportunistic presidential candidates co-opting the language of “poverty” and “inequality” will really change the party’s trajectory. Their answers will still likely be less immigration, fewer food stamps, and more traditional families.
Republicans are still coming to terms with the sexual revolution and thus are uncomfortable with contraception and making accommodations for working women and single working mothers. They remain unconvinced about the value of education and higher education and have tried to reduce America’s funding of education and research. They are very skeptical about science and dismissive of claims about climate change. With deep roots in rural America, they have yet to come to terms with the diversity of our culture, marriages, and lifestyles celebrated in metropolitan areas and among the Millennials and by many major businesses.
Republicans hold their views more deeply, sound more confident, and act more urgently because they are winning elections in the more rural conservative heartland that feels deeply threatened by the ascendant trends in the country. As they lose their grip on the country, as they did in California, they move even farther to the right to mobilize and consolidate their Tea Party and Evangelical bases. Their bases and rural support allow them to govern as real conservatives, particularly in the twenty states where they are largely uncontested by the Democrats, and compete for control of the U.S. Congress for now.
Because they are vociferous, confident, and united in their battle against America’s revolutions does not mean the country is listening to them. Today’s conservative Republicans have lost the argument on the character of the country and what are the urgent problems to be addressed.
As conservatives rally their forces, keep in mind that seven in ten Americans say rising diversity means Americans will be enriched by exposure to different cultures and that a more diverse workforce will lead to more economic growth and make American businesses more innovative. A majority in the country and nearly two-thirds of the growing Millennial generation say immigrants strengthen American society.1
You know conservatives are losing the argument when Alan Greenspan, chairman of the Federal Reserve during the boom years before the financial collapse, makes this confession before the House Committee on Oversight and Government Reform: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity (myself especially) are in a state of shocked disbelief.” What did he say? Greenspan acknowledged he had lost “faith” that “self-interest would deliver financial stability.” Acting as a simultaneous interpreter, Martin West writes: “It is as if the Pope declared he no longer believed in the Resurrection of Jesus Christ.” With that, you realize how much was shattered by the crisis. The “established views” of how the advanced “economies and financial systems work” turn out to be “nonsen
se.” “It confirmed,” West concludes, “that the financial system is a ward of the state, rather than a part of the market economy.” If you are a conservative, that should take you back to the drawing board.2
You know there has been a shift in momentum when you look at the reaction to the U.S. release of Thomas Piketty’s Capital in the Twenty-first Century. It set off intense national debates about inequality. It also exposed how fractured conservatives are on this core problem. Some conservatives minimized the importance of inequality or belittled the frenzy among liberals. Some acknowledged the problem but urged conservatives to be wary of what policies might emerge out of such a debate. Others urged their colleagues to acknowledge the problem and consider innovative conservative ideas to lessen inequality or rethink their opposition to the inheritance tax or other measures. One even suggested that conservatives defer to the liberals and accept that Democrats will likely govern nationally in the medium term and let them mitigate the worst consequences of inequality.3
You know momentum has shifted when economic and social science research at distinguished universities and institutes show an inescapable story since World War II. When Democrats hold the presidency, the economy and median income grow decidedly faster than when there is a Republican president, and income inequality and poverty are mitigated. When conservative economists joined the debate on the state of the middle class and inequality, they confirmed the same post–World War II historic pattern. Critically, they confirmed that low-tax policies never produced a period of economic growth. They are simply naked when it comes to their defining policy on the economy. You can see the shift in momentum when the public puts cutting taxes at the very bottom of the list of policies to help the economy and a large majority wants to raise taxes on the richest.
America Ascendant Page 38
