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Princeton University Press
More Equal Than Others: America from Nixon to the New Century / Edition 1

More Equal Than Others: America from Nixon to the New Century / Edition 1

by Godfrey Hodgson
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Product Details

ISBN-13: 9780691127675
Publisher: Princeton University Press
Publication date: 08/13/2006
Series: Politics and Society in Modern America , #44
Edition description: ANN
Pages: 408
Product dimensions: 6.00(w) x 9.00(h) x (d)

About the Author

Godfrey Hodgson is an Associate Fellow at the Rothermere American Institute at Oxford University. He is the author of six books, including The Gentleman from New York: Daniel Patrick Moynihan: A Biography, People's Century, and America In Our Time (1976, Princeton 2005).

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More Equal Than Others

America from Nixon to the New Century

Chapter One

And so we have gone on, and so we will go on, puzzled and prospering beyond example in the history of man.
-Thomas Jefferson to John Adams, January 21, 1812

IN THE YEAR 1975, the mood of the United States was perplexed, morose, and uncertain. For the first time in the modern era, the nation had lost a war. For the first time, a president had been driven from office in disgrace. It was said that the American Dream would be denied to many, because for the first time a generation of Americans would be worse off than their parents.1

For the first time, Americans, "people of plenty,"2 used to a culture of abundance, confronted the prospect of not being self-sufficient in energy and in some key raw materials.3 A quarter of a century later, the national mood was buoyant. The Soviet Union had disintegrated, and its communist creed was utterly discredited. Americans had not so much come to agree with one another about politics, as to lose interest in the political process. By the end of the twentieth century there was an echo in the air of that epoch in nineteenth-century French politics whose motto was "enrich yourselves."4 Americans were busy enriching themselves, and a significant minority did so to impressive effect.

Most striking of all was the transformation of the nation's public philosophy from liberal to conservative. By the 1990s, few cared to identify themselves as liberal. In 1992, for example, a poll showed that only 20 percent of the voters regarded themselves as liberals, compared with 31 percent who identified themselves as conservatives.5 Whereas in 1973 only 32 percent agreed with the proposition that "the best government is the government that governs the least," by 1998 56 percent agreed.6 In the middle 1970s Americans were just coming to the conclusion-painful for some, liberating for others-that the ideas of the New Deal had served their time.7 People were turning from the warm inclusiveness of the liberal consensus to the energizing astringency of a new conservative philosophy. By the 1980s free-market capitalism was being enthroned, not just as a useful system for wealth creation that needed to be kept under watchful scrutiny, but also as one of the twin keys, with democracy, to the American belief system and the American future.8

In politics and journalism, and in a welter of what can only be called corporate propaganda, the idea was ceaselessly reiterated that giant corporations and the stock exchange were the true democracy, and that anyone who dared to challenge their hegemony was no friend to the working families of America, but an elitist and, as such, a traitor to the nation's best traditions. Thus a college professor or working journalist living on a few thousand dollars a month was condemned as an oppressor, whereas a CEO, who paid himself-with the connivance of an intimidated or collusive remuneration committee-several hundred times as much as his average employee, was held up to sycophantic praise as the working man's friend.9

By the late 1990s Americans had put the hesitations of the 1970s far behind them. They had made it, the majority felt. Whatever private fears or misgivings individuals might have, the public mood was robustly confident. It was never more trenchantly expressed than in the State of the Union Message with which President Bill Clinton celebrated the millennium on January 27, 2000, his last after eight helter-skelter years in the White House.10

His tone was triumphant, not to say triumphalist. It was as if the United States had finally attained a state of economic and social perfection, nirvana now.11 We were, he said to an applauding audience of senators and members of Congress, "fortunate to be alive at this moment in history." Never before, Clinton went on, "has our nation enjoyed, at once, so much prosperity and social progress with so little internal crisis and so few external threats." Never before, he said, "have we had such a blessed opportunity to build the more perfect union of our founders' dreams."

This was, of course, political rhetoric. But it was not mere idle bragging. The United States really did enter the new millennium with impressive achievements to look back on, and exciting prospects for the future. The economy seemed to have overcome all hesitations. Clinton could claim, with some exaggeration, that under his administration the nation had achieved the "fastest economic growth in more than 30 years." In sober truth, the economy really had created some 20 million new jobs in a few years. As a consequence, the number of poor people had fallen to the lowest figure in twenty years and the unemployment rate to the lowest level in thirty years. What was more, unemployment for African Americans and for Hispanics was also lower than ever before. For the first time in forty-two years, there had been budget surpluses in two consecutive years, and-the president accurately predicted-in the very next month America would achieve the longest period of economic growth in its entire history.

That was not all. Economic revolution, Clinton claimed, had been matched by what he called "a revival of the American spirit." That might be hard to measure. But crime, for example, was said to be down by 20 percent, to its lowest level in twenty-five years. The number of children born to teenage mothers had fallen for seven years in a row, and the welfare rolls, those stubborn indicators of hidden misery, had been cut in half. Such statistical measures of societal, let alone spiritual, advancement are always suspect. But at home there certainly was a widespread sense of pride and optimism.

Abroad, the United States in 2000 was dominant in the world as never before. American military power was arguably greater, relative to all possible rivals, than ever. Even in 1945 the Soviet Union had formidable military forces under arms. At the beginning of the millennium the United States stood unchallenged. It had put down such truculent breakers of the peace as Iraq and Serbia with little help from allies and with few casualties. Less than two years later, American military supremacy was challenged once again, this time by terrorism. Once again, at least so far as war in Afghanistan and Iraq was concerned, it was confirmed.

The American economy, at least temporarily, had outdistanced former rivals in Europe and Asia.12 Moreover, never before, unless perhaps in the first few years after World War II, had America been so much admired around the world. American fashions, American music, even American movies, were seen as the last thing in cool. America basked in the prestige earned, from Budapest to Bangalore, by American domination of the new frontiers of computing, information technology, and the Internet. The continued rise of the stock market seemed to confirm that the American economy defied the law of economic gravity.

President Clinton was quick to claim some of the credit for these achievements for his own administration. To renewed applause, he said, "We have built a new economy," and proceeded to set forth his vision of a social utopia as well: "We will make America the safest big country on earth, pay off the national debt, reverse the process of climatic change, and become at last what the Founding Fathers promised: 'one nation, under God, indivisible, with liberty and justice for all.' " With dollars cascading into the U.S. Treasury in a profusion that was unimaginable when his second term began, commented R. W. Apple Jr. in the New York Times, Clinton spoke "with all the expansiveness of a man who had hit the lottery."13

The president's euphoria was no doubt sharpened by relief, and his triumphant tone by an understandable desire to have his revenge on ruthlessly vindictive political opponents. Only weeks previously, after all, he had been acquitted in an impeachment trial before the United States Senate, the first chief executive to face that humiliating ordeal since Andrew Johnson more than 130 years earlier. He would not have been human if he had not taken advantage of the opportunity to confound his enemies and rub the doubters' noses in his success.

Yet Clinton's millennium speech by no means reflected a mere personal or partisan version of how things stood as the twentieth century ended. As early as 1997, Fortune magazine, for example, hardly a mouthpiece for the narrow political contentions of Democrats, claimed that the U.S. economy was "stronger than it's ever been,"14 something it could in truth have said at most points in the past fifty years. Business Week consistently preached the gospel of the new economy. Gurus like Nicholas Negroponte of the Massachusetts Institute of Technology and innumerable brokers drummed away at the idea that, between them, the Internet and the stock market had changed the rules of the game of success.15 From Wall Street the same message came drumming from the million hooves of Merrill Lynch, the thundering herd of people's capitalism. The broker proclaimed in a circular to its happy investors, that this was "Paradise Found: The Best of All Possible Economies"-except, presumably, for the next day's.16 Later Merrill Lynch admitted to the government that its salesmen had been urging clients to "buy" or "accumulate" stocks its analysts privately regarded as "crap," "a dog," and even "a piece of shit."17 Late in 2002 ten banks, including Credit Suisse First Boston, Merrill Lynch, and Salomon Smith Barney, agreed to pay $1.4 billion in a settlement that revealed that published research on stocks was "essentially bought and paid for by the issuer." One supposedly independent analyst at Goldman Sachs, the settlement found, was asked what his three most important goals for 2002 were. The response was "1. Get more investment banking revenue. 2. Get more investment banking revenue. 3. Get more investment banking revenue." Another analyst, at Lehmann Brothers, said that misleading "the little guy who isn't smart about the nuances" was "the nature of my business."18

Much media discourse in the 2000 election campaign took as real the idea that the country as a whole was enjoying unimaginable prosperity. This was an exaggeration. It might be more credible in Washington or Manhattan, Boston or Seattle, or the San Francisco Bay area, than in some less favored parts of the country. It might be truer of lawyers, doctors, and editorial writers than of Nebraska farmers, laid-off Indiana machinists, or Hispanic immigrants to southern California, let alone African American single mothers on the South Side of Chicago. But it was true enough for enough people that it became the key signal of the year, and even of the decade of the 1990s.

It was against this bass line of euphoria and optimism that Clinton moved to his peroration: "After 224 years," he declaimed to his applauding audience-made up in its majority of the Republicans who had opposed his policies every inch and actually prevented him from carrying out many of the policies he had advocated-"the American revolution continues. We remain a young nation. And as long as our dreams outweigh our memories, America will be forever young. That is our destiny. And this is our moment."

* * * * *

LESS THAN TWO SHORT YEARS LATER, that shining moment was tarnished in many ways. Clinton's Democratic heir, Al Gore, had been defeated in the 2000 presidential campaign. The election itself was so close that its result was doubtful through weeks of litigation. On balance it is likely that the victor, George W. Bush, was not elected. One of the most careful and authoritative of the many analyses of the election result concluded that Gore was denied victory by a Supreme Court opinion "doomed to infamy" and that "the wrong man was inaugurated on January 20, 2001, and this is no small thing." No small thing, indeed, for a country that would be the teacher of democracy to the world.19

At the heart of the optimism so fervently expressed by Clinton in his State of the Union Address, but very widely shared in the nation, were two beliefs that had been sharply challenged, if not discredited, within months. One was the upward march of the stock market, rewarding the talent and enterprise of the few but also spreading its beneficence over the many. The Standard & Poor's composite stock price index, corrected for inflation, which trotted along modestly by comparison through the crash of 1929 and the boom of the 1960s and 1970s, soared dizzily from 1995 on to spike in the very month of Clinton's millennium speech.20 The second idea behind the "irrational exuberance" of the market was the confidence that the new technology of the computer and the Internet promised a New Economy. By early 2001, the Dow Jones index of common stocks had fallen from its high by some 40 percent. The Nasdaq index, dedicated to charting the heroics of the new technology stocks, had fallen even more catastrophically. The Nasdaq composite index, to be specific, which passed 5000 in early 2000, had fallen below 2000 by late 2001, or by more than 60 percent in less than two years.21 After the September 11 attacks, the markets rallied to the point where some investment analyses claimed to see the green shoots of a new bull market. Even if that were so, the idea that the new technology had simply abolished the laws of economic gravity had been exploded for good. And by the summer of 2002 the market had fallen to the point where it threatened the health of the economy as a whole.

The other heartening economic statistics Clinton cited had also been swept away. By March 2001 the economy was technically in recession.22 Unemployment was rising, from 3.9 percent in October 2000 to 5.4 percent a year later. In October 2001 alone it rose half a percentage point, the biggest increase in a single month since February 1996.23 And the economic climate was harshest for those very high technology sectors that had led the way in the boom of the later 1990s. "" startups were worst hit. The major winners of the high-technology market-Yahoo!, AOL, Compaq, Sun, even Intel and Microsoft-all announced profit warnings, layoffs, even in some cases actual losses, and their stock fell heavily. Indeed, contradicting a central assumption of the boosters of the New Economy, the stock market would have done better without the new technology companies than with them.

By the summer of 2002 any talk of a New Economy would have appeared fatuous. The Dow Jones indeed had fallen below 8000. Disillusion had spread far beyond the overhyped stocks to most sectors of the market.


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Table of Contents

Foreword ix
Acknowledgments xiii
Disappointment and Denial xvii
1 State of the Union 1
2 New Politics 29
3 New Technology 61
4 New Economics 87
5 New Immigrants 112
6 New Women 139
7 New South, Old Race 172
8 New Society 203
9 New World 249
10 New Century 288
Notes 305
Select Bibliography 349
Index 361

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