Senator Bennett told us that during his unsuccessful 2010 campaign for renomination he encountered people who roundly criticized him for positions that he had never taken. He was accused, for example, of supporting the Obama health-care plan, when he had in fact outspokenly opposed it—and made this clear on his official website, where he posted his own innovative alternative. When he asked his constituents where they had gotten their mistaken beliefs, they usually replied, “The Internet”—meaning the far-right-wing sites that had become their sources of news.
“I lost the campaign on Facebook, YouTube, all of the rest of that,” Bennett told us as his staff cleared out his Senate office in December 2010. “I couldn’t penetrate it. It was saturated with Glenn Beck. Glenn Beck is on television every day. The Glenn Beck groupies pick out pieces that they love, and then it’s all over, as they say. It goes viral. That’s where [the Utah state Republican delegates who voted in the primary] got their information. They didn’t get it from The New York Times.”
Bennett told us that an old friend wrote to him out of the blue to ask why he was pushing a constitutional amendment providing that “every member of Congress, after one term, gets full pay for life [and] every member of Congress has a gold-plated medical plan for which they do not pay.” The friend, said Bennett, had apparently heard some such thing from Glenn Beck and shared it with everyone on his Christmas card list—including Bennett. So the message to voters, said Bennett, was “Throw them all out—they raised their salaries while they are cutting Social Security benefits to pay for it.”
How did Bennett respond? He and his wife sat down at the computer and wrote the following reply: “Dear X: Thanks for sending me this to give me an opportunity to comment. Number one, we have frozen our salaries; number two, the Social Security thing is set by law; number three, I wish that it were so that I got full salary for the rest of my life just for serving one term; we do not have a gold-plated health care plan—we have exactly the same as any other federal employee.” And to that voter’s credit, said Bennett, he got a response. The voter sent the following note out to his Christmas card list: “Senator Bennett has been our friend for a long time, and he set the record straight, and I want everybody to know that these are the facts.”
The correction had little effect. Repeatedly during the campaign voters came up to him at rallies, Bennett said, and grilled him: “‘You voted for ObamaCare.’ ‘No, I didn’t.’ ‘Yes, you did. I read it on the Internet. ’ ‘You voted for ObamaCare.’ ‘You voted for the stimulus.’ ‘You voted for TARP.’ I said, ‘Look, I am the guy who changed the proposed law from $700 billion to two tranches of $350 billion, because I wanted to see if it worked before I voted for the second, and I voted against the second $350 billion because of the way the first $350 billion was headed.’ ‘No, no, you wasted $700 billion. Glenn Beck told me so.’” That is character assassination masquerading as news. Democratic colleagues are getting the same treatment from some left-wing websites, said Bennett. “Nobody pays the least bit of attention to CBS News anymore. If Walter Cronkite were to be resurrected, nobody would hire him, let alone listen to him.”
The political consequences of the new media landscape that Bennett describes, along with hyper-partisanship and the power of special interests, are paralyzing the American political system. The paralysisinduced failure to address adequately the country’s four major challenges is, in turn, pushing America toward a grim future. That future, which we will inherit in the absence of major political change, is already visible on the shores of the Pacific Ocean.
California, Here We Come
Once upon a time, both the United States of America and the state of California were the envy of the world. Each was favored by geography with fertile soil and abundant natural resources. Each developed the institutions and customs that made it a prosperous, creative, exciting place. Each became a fast-growing land of opportunity, both a model for others and a magnet for people from elsewhere, who flocked there by the millions.
So glowing was each one’s reputation that each became associated, in the public mind, with the most precious of all metals. California was the Golden State from the time, in the middle of the nineteenth century, when large deposits of gold were discovered there, triggering the first of many waves of immigration. In that same era, among European Jews, for whom the New World was their hoped-for destination, America was known as die goldene medina—“the golden land.” In the most remote and provincial pockets of Europe, the legend that America’s streets were actually paved with gold was half believed.
The American dream reached its peak in California. The historian Kevin Starr entitled his multivolume history of the Golden State Americans and the California Dream; an early study of the quintessential California institution, the film industry, called it “the Dream Factory”; the slogan of Disneyland, which opened outside Los Angeles in 1955, is “Where Dreams Come True”; and a 1965 hit by the Mamas and the Papas (ranked as number 89 on Rolling Stone magazine’s list of the top 500 songs of all time) was called “California Dreamin’.” It was written while the group was living in New York.
In the twentieth century California became the America of America, as admired and respected (with a touch of resentment and jealousy thrown in) by the other states of the union as the United States itself was by the other countries of the world. The American public-private formula for prosperity—education, infrastructure, immigration, research and development, and a business-friendly economic climate with appropriate regulation—reached its zenith in California, which became the favored location of that characteristically American business, venture capitalism.
As the home, as well, to forward-looking industries such as electronics and aerospace, to Hollywood and Silicon Valley, California was where Americans could see the future. For decades what they saw was inspiring.
Now it is chilling.
At the end of the first decade of the twenty-first century, the state was suffering from an unemployment rate of 12.5 percent, considerably higher than the very high (9 percent) national average. Its fiscal condition was dire: the state budget deficit exceeded $25 billion, fully 25 percent of total public expenditure. (At 10 percent, the federal budget deficit of that year was considered catastrophically high; and states are required by law to balance their budgets.)
Moreover, California faced future yearly deficits estimated at $20 billion or more and pension obligations of perhaps $500 billion. San Diego, the state’s second-largest city and the eighth largest in the United States, with almost 1.4 million people, teetered on the brink of bankruptcy. Meredith Whitney, one of the few financial analysts to predict the subprime-mortgage debacle, rated California’s financial condition as the worst among the fifteen largest U.S. states. Whitney’s report (described in Bloomberg News, September 29, 2010) “rates the states by four criteria: economy, fiscal health, housing and taxes … ‘The similarities between the states and the banks are extreme to the extent that states have been spending dramatically and are leveraged dramatically,’ Whitney said. ‘Municipal debt has doubled since 2000. Spending has grown way faster than revenues.’”
Public education—think Berkeley—was once the jewel in California’s crown and the key to its prosperity. By 2011, however, the state’s primary and secondary schools, as measured by the test scores of their students, were among the country’s weakest, and its system of higher education, which once set the standard for the rest of the country, even the world, had to raise tuition sharply, provoking protests from students on several campuses.
On March 23, 2011, the San Francisco Chronicle summarized what was happening to state’s higher education system:
About 10,000 students will be turned away, and an untold number of employees will lose their jobs next fall across California State University’s 23 campuses. That was the grim news Tuesday out of Long Beach, where CSU trustees discussed how the university that serves more than 400,000 students will shrink amid devastating budget news from th
e state. “We’re facing the worst financial situation the CSU has ever had,” said Trustee Bill Hauck, chairman of the university system’s finance committee.
While California’s population has continued to grow, approaching forty million, the growth no longer comes from internal migration from other parts of the United States. In fact, more people now choose to leave California each year than move there from other states, an unthinkable trend during the Golden State’s golden era. If it has not died, the California dream is now on life support.
There is more than one reason for this. The end of the Cold War reduced the size of America’s defense industry, many of whose firms were located in the state. California is home to more immigrants, many of whom enter the United States illegally, than any other state, straining its public facilities. Its crazy-quilt governmental system, in which public referenda can tie the hands of the legislature and override, or complicate, an already complicated state constitution, makes it difficult to govern even in the best of times.
The state’s basic failure, however, has been a political one. Its problems require collective action to solve. That can only come through the political system, but California’s political system has not coped with the challenges the state faces. Californians, of course, know this. An article by Bill Whalen in The Weekly Standard (December 27, 2010) reported that “according to the Public Policy Institute of California, only 13 percent of voters approve of the two branches of state government’s working arrangement. Only 2 percent of Californians trust the state to always do right. Just 3 percent have a great deal of faith in Sacramento’s decision-making process.”
We cite California’s present condition because it is an all-too-plausible harbinger of America’s future. The political failures of the Golden State and of the United States are much too close for comfort. Like the national political system, California’s politics are polarized along partisan lines to such an extent that the state has become virtually ungovernable. Democrats and Republicans have such radically different public philosophies, and have become so hostile to each other, that they have not been able to find mutually acceptable solutions to the state’s most basic problems of education, taxation, health, infrastructure, prisons, and pensions. For example, California’s conservative anti-tax activists have set the gold standard for holding down property taxes ever since a freeze of sorts was voted in by state residents in 1978—along with handcuffs that require a two-thirds vote by both houses of the state legislature to enact any new taxes.
At the same time, though, politics in California, like national politics, operates under the sway of powerful special interests, whose donations to candidates for public office and lobbying of public officials tend to aggravate rather than resolve the state’s problems. California’s public employees’ unions, for example, are particularly adept at winning benefits for their members: a Sacramento fire-truck driver earns a salary of $144,000 per year in a county where the average annual wage is about $52,000. Firefighters should be well paid, but there have to be some limits. When you combine powerful public employee unions with powerful anti-tax activists and little willingness to compromise in one state, it spells “bankruptcy.”
There’s an old Navajo saying that if we don’t turn around now, we just might get where we’re going. If we as a country don’t find a way to overcome hyper-partisanship and super-empowered special interests, we too may get where we’re going—to the place at which California has already arrived. That will be us.
THIRTEEN
Devaluation
As we peer into society’s future, we—you and I, and our government—must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage.
—President Dwight D. Eisenhower’s Farewell Address,
January 19, 1961
On November 26, 2010, The New York Times ran an unusual article—the advice of a dying man. It was the life story of Gordon Murray, a former bond salesman for Goldman Sachs who became a managing director at both Lehman Brothers and Credit Suisse First Boston. He had recently decided to cease all treatment for his glioblastoma, a type of brain cancer, but rather than live out his days going through his bucket list, the story noted, “he hunkered down in his tiny home office here and channeled whatever remaining energy he could muster into a slim paperback. It’s called The Investment Answer, and he wrote it with his friend and financial adviser Daniel Goldie to explain investing in a handful of simple steps.” What struck us was the line—a red line, really—that Murray drew between the old Wall Street where he began his career back in the 1970s and the Wall Street that eventually blew up in 2008. The story noted that Murray “got a lot of second chances thanks to an affluent background and basketball prowess. He eventually landed at Goldman Sachs, long before many people looked askance at anyone who worked there. ‘Our word was our bond, and good ethics was good business,’ he said of his Wall Street career. ‘That got replaced by liar loans and ‘I hope I’m gone by the time this thing blows up.’”
It is hard to find a more concise and accurate description of something else that happened with the end of the Cold War and the passing of the baton from the Greatest Generation to the baby boom generation: an erosion of important, traditional American values that long underpinned our public and commercial life.
This decline in values has done as much as political hyper-partisanship to undermine our ability to address our great challenges and revive our formula for prosperity. This decline did not happen overnight. It occurred gradually, little by little, almost imperceptibly beneath the surface of daily events, like the geological process known as continental drift that, over millions of years, divided the Earth’s surface into its separate landmasses. Because it happened in an incremental way, we didn’t notice it—until the subprime crisis in 2008 showed just how far we had drifted from some of the bedrock values that used to be us.
Here again, the passage from one generation to another has made a large and, from the point of view of the country’s future, unfortunate difference. Although the Great Depression ended in 1940, World War II concluded in 1945, and the most dangerous moments of the Cold War had passed by the mid-1960s, those searing historical traumas lived on in the memories and consciousness of the men and women who had lived through them. It forged their collective identity as not only the Greatest Generation but also “the prudent generation.” The press mocked President George H. W. Bush for using the word “prudent” so often, but it was a favorite word of many members of his generation—and for good reason. They had encountered more than one black swan—the one-in-a-million kind of disruption that can capsize the whole world and turn rich into poor, the settled into refugees, the carefree civilian into the battle-scarred soldier, and the eternal optimist into the cautious investor. Taken together, their life experiences made that generation prudent, inclined toward collective action, and comfortable with government and expert authority.
As the Harvard political philosopher Michael J. Sandel put it, our parents’ generation came of age at a time “when we took the importance of government for granted—when world events made obvious the importance of government and collective action on behalf of the public good. The shared premise was that the public realm mattered and that government action was a necessary instrument of the public good. The debate was over how much and to what extent.”
Collective action on behalf of the public good, after all, had been necessary for survival, and it was by fighting the Depression, winning World War II, and containing the Soviet Union—by doing big, hard things together—that the Greatest Generation achieved remarkable success.
As the Cold War ended and that generation started retiring, it was replaced in positions of leadership by the baby boom generation (to which we, the authors, belong): the cohort of seventy-eight million Americans born between 1946 and
1964. We have to admit that the conduct of our own generation, in contrast to that of our parents, has been more than a little selfish, pampered, and, at times, reckless and irresponsible.
Unscathed by great disruptions, unburdened by the necessity of great sacrifice, unpressured by the daily effort of confronting a huge global predator—and, in addition, hurried and besotted by new technologies and electronic markets that have encouraged short-term thinking—the baby boom generation has in too many cases displayed too little fiscal prudence, too much political partisanship, and too short a sense of history to engage in the collective nation-building at home that America badly needs today.
A well-functioning political system must be rooted in something deeper than itself: a culture, which is most vividly expressed through certain values. We believe that as the boomer generation has assumed a dominant place in American society, the country has strayed from three of the core values on which American greatness depended in the past.
The first of these changes involves a shift from long-term investment and delayed gratification, which were characteristic of the Greatest Generation, to short-term gratification and get-it-now-while-you-can thinking, which alas is typical of the baby boom generation.
The second change is the loss of confidence in our institutions and in the authority of their leaders across the society. Related to this is a shift in how this society sees people in authority, whether politicians or scientific experts—a shift from healthy skepticism to cynical suspicion of everything and everyone. This shift makes generating the kind of collective action we need to solve our big problems and update our traditional formula for prosperity that much more difficult.
That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Page 33
