I’m a great
fan of Robert Reich. Reich is an
economist and academic who served as Secretary of Labor in the Clinton
administration. Of late, he’s been using
his considerable talents to advocate for policies that will address and reverse
the high degree of economic inequality that grips our country.
I came
across an article Reich wrote in 2014 that I thought required an answer. In the article, Reich highlights the highly
favorable economic conditions that prevailed in the 1950s and 1960s when he
(and I) grew up. He pointed out that in
those days, it only took one income for a family to live a comfortable middle
class life. CEO salaries were about 20
times average worker pay instead of the 200-300 times they are now. He noted that
marginal tax rates were much higher than they are today, and that those high
marginal rates enabled the government to invest in our country’s infrastructure
and human capital.
“It was a
virtuous cycle,” he wrote. “As the economy grew, we prospered together. And that broad-based prosperity enabled us to
invest in our future, creating more and better jobs and a higher standard of
living.”
But, “then
came the great U-turn, and for the last thirty years we’ve been heading in the
opposite direction. Why?”
According
to Reich, some have suggested that globalization and technology are to
blame. Others, he says, lay the blame
squarely at the feet of Ronald Reagan or a greedy and selfish turn in our
national character.
Reich
concludes that none of these provide adequate explanations for the
“U-turn.” Instead, he says “Perhaps the
real problem is we forgot what we once achieved together. . .The collective
erasure of the memory of that prior system of broad-based prosperity is due
partly to the failure of my generation to retain and pass on the values on
which that system was based. It can also
be understood as the greatest propaganda victory radical conservatism ever
won.”
Reich’s
formulation begs the question. What
caused us to abandon the “values on which that system was based?”
In my mind,
it all boils down to trust.
Here’s a
graph I poached from an article by John Sides on The Monkey Cage. It reports responses to a National Election
Studies question about trust
in government that was asked every year between 1958 and
2008. The graph tracks the percentage of
survey respondents who said that you could “trust the government in Washington
to do what is right,” “just about always” and “most of the time.” Though there are some upward blips associated
with particular moments in history, the unmistakable trend is downward.
Sides
argues that what was driving these responses was the economy. In another graph, he shows a relatively close
relationship between the positive change in real disposable income and the
percentage of people who trusted the government.
The economy
is part of the answer. But I think a larger part of it has to do with the
political shocks that have occurred over the last 50 years.
The kind of
trust we’re talking about here is the transactional kind and not the generalized
kind that informs one’s judgment about whether most people can be trusted. Transactional trust develops when people or
institutions prove to be truthful or provide products and services as promised.
Trust began
to plummet in about 1964 or 1965 after the Kennedy assassination. The governmental system that had presided
over successful resolutions of World War II and the Korean War had staged a
disastrous attempted invasion of Cuba, brought the world to the brink of
nuclear war and couldn’t even protect the life of its young, vibrant and
idealistic president.
The trend
continues downward through Lyndon Johnson’s Great Society that never was and
the war in Vietnam. We learned that the
government had been lying to us about the latter in the Pentagon Papers in
1971, just two years before Richard Nixon would have to resign the Presidency
in disgrace as a result of crimes he and his closest advisors committed during
the Watergate Scandal.
Revolutionaries
in Iran took Americans hostage in 1979, and there was nothing we could do about
it. Our sole attempted rescue mission
failed after American aircraft assigned to the mission crashed and burned in
the Iranian desert.
Is it
really any wonder that in 1980, Ronald
Reagan found a receptive audience willing to believe him when he said that the
national government was to blame for the problems besetting our country? And, if you couldn't count on government, to help you, the sensible thing for you to do is to demand lower taxes and less government. You save your money and take care of yourself.
No, Dr. Reich, we didn’t
forget anything and we didn’t fail to transmit our values. The Reagan era began after two decades of sad
experience with politicians who had either lied to the public or failed to
deliver what they promised.
When people
don’t trust the government to improve life here in the Tragic Commons, the
rational play is to devote one’s resources to one’s own endeavors while leaving
the "bleeding heart suckers" to worry about the general welfare. This logic creates a vicious circle that encourages
people to resist calls for greater contributions to the general welfare, leads people to conserve resources so that they can be devoted to one’s private welfare, makes the government less capable
of solving the problems that plague us all, and ends up reducing trust in
government even more.
The U-turn
is not a mystery. It’s the result of the
inexorable logic of the Tragic Commons.
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