Failings And An Ungovernable Nation

I often talk about America’s multi-faceted culture war as a threat to democracy, but over the past several years, it’s morphed into something more than that.

When everything is identified with ideology and politics, it becomes impossible to solve problems. The generalized distrust that goes along with hyper-polarization means that if those with the best solutions happen to be of a different ideological persuasion than yourself, you dismiss them out of hand.

Climate change is the most obvious example. Miniature versions of Hollywood-style apocalypse blockbusters play out virtually every day somewhere, both in the US and abroad, and yet merely suggesting that something other than Mother Nature’s randomized furry might be amiss is enough to get you branded a “radical liberal.”

It shouldn’t be incumbent on the majority of society (Democrats, Republicans and Independents alike) to pretend there’s nothing absurd or alarming about, for example, someone armed with a six-foot spear and donning a horned, fur headdress, attempting a hostile takeover of the US Congress. That isn’t normal behavior. Of course, neither is burning down cities or looting stores. The problem is that when people break the social contract in the name of one party, members of the other party will be forgiven for harboring misgivings if their fellow citizens across the aisle fail to unequivocally condemn the transgression. At the very least, everyone, regardless of political affiliation, should be able to admit that hand-to-hand combat with self-styled shamans on Capitol Hill is a suboptimal outcome. Just as it’s suboptimal for thousands of people to die needlessly from a preventable disease due to misinformation spread by the same “movement” from which said shaman took his name.

All of that said, I’ve been keen to emphasize that there’s more to the fraying of America’s social fabric than one reality TV host-turned politician or one party’s descent into madness. This is a story of myriad governmental failings. Regular readers will recall that on January 6, as the Capitol melee unfolded, I published a piece called “Victims.” In it, I wrote that,

The Trump faithful were branded “criminals” and “insurrectionists” by members of both parties, just as the African Americans who destroyed property over the summer during racial justice protests were deemed “thugs” and “looters.”

The point wasn’t to elicit sympathy for anyone, but rather to draw attention to the fact that people who are happy, healthy, educated and economically secure aren’t motivated to break the social contract. Something’s profoundly wrong. Society was (and still is) breaking down.

In a Sunday evening note, JonesTrading’s Mike O’Rourke wrote that “while bickering about culture wars, the US political leadership has failed to protect its citizens from many things, significant among them, anti-competitive behavior.” He added that,

Think about all of those years Amazon did not need to collect sales tax. Not only did the company go on to crush businesses, but entire industries. Think of all of the EV credits that US government has provided Tesla, helping to make Elon Musk the second richest person in the world. Ironically, those were not enough, and the government wants to provide more EV credits. There was Facebook’s Cambridge Analytica scandal where the company exposed the data of tens of millions of Americans to Russia. There were minimal if any consequences since the social media companies are a key information and misinformation platforms in political elections. We have an ongoing trade war with China through presidential administrations of both political parties. China’s largest US corporate trade partner was largely unscathed by the tariffs, while smaller US businesses bore the brunt.

Those are all good points, and although O’Rourke didn’t say this, I think it’s important to note that America’s culture wars are in part the result of the government’s failure to protect citizens.

Anticompetitive behavior and the ongoing decline of labor (as an economic actor) contributed to the same discontent, apathy and generalized disaffection that made America vulnerable to populism. And the failure to rein in social media or otherwise craft some kind of coherent regulatory framework resulted in the exploitation of the public, not just by foreign state actors, but by America’s own state too!

Meanwhile, monopolies printed money (as they’re wont to do), and monetary policy, along with structural changes to market dynamics, created a perpetual motion machine, which in turn exacerbated inequality on at least two fronts. Founders like Musk, Jeff Bezos and Mark Zuckerberg became akin to gods. But also, the parabolic rise in share prices served to exacerbate the wealth divide due to disproportionate ownership of corporate equites (10% of Americans own around 80% of all shares).

O’Rourke touched on much of that too. “The Fed’s near perpetual printing over the past 13 years and the structural investment shift towards indexing has fostered blind buying, degrad[ing] the market pricing mechanism and [turning] the stock market into a popularity contest,” he wrote, adding that these structural shifts have benefited businesses with monopolistic tendencies, driving valuations into the stratosphere. It’s true that profits are robust (figure below), but in this context (i.e., in the context of the monopoly discussion), that just begs the question.

Just seven companies have a collective market cap of $11 trillion, O’Rourke noted, adding that “when the equity market bottomed in March of 2009, the entire S&P 500 was worth approximately $6.6 trillion.

Where does all of this leave us? Well, that depends on your definition of “us.”

As a body politic, it leaves us generally screwed. The interplay between culture wars and government failure is self-perpetuating. Failure to address centuries of racial injustice and misogyny creates antagonism among African Americans and women, and that antagonism is seen as a threat by many of the very same white men who are quite literally dying of despair (figure on the right, below), as famously documented by Anne Case and Angus Deaton.

Ongoing failures only beget more distrust, which perpetuates “us versus them” politics, itself the source of the Beltway gridlock that prevents Congress from solving problems.

Coming full circle, it’s not just America’s democracy that’s in jeopardy, but the viability of the union under any type of government. Culture wars are more than a threat to democracy. Increasingly, they’re an existential crisis. I sometimes wonder if the country is governable at all.


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12 thoughts on “Failings And An Ungovernable Nation

  1. Our current two party system may prevent us from dissipating into a multi party mess as has been on display in Israel and Brazil for quite a while.

    But might that be better than what we have now?

  2. H-Man, good post for making you think about culture wars like the one we had in the 1860’s. It didn’t end well for the South. The problem now is figuring out who will win between the present competing North and South camps since compromise seems to be off the table. It won’t be pretty for whoever is on the short end of that stick.

    1. In this instance, the camps of the culture war are geographically dispersed; there might be no single short end of the stick. A house divided into 1,000 pieces isn’t even a ruin — it’s a non-entity.

  3. I am generally a pessimist, but there’s a way out: demographics. Millennials and GenZ don’t have the same values as aging, decadent baby boomers, and they are much less white, with much less to lose if real change comes to the US. If we don’t fall apart in the next 10-20 years, there’s a chance that what will emerge will be very different from what you see today. Of course, lots can go wrong–voter suppression and entrenched gerrymandering, a stacked Supreme Court, armed insurrection, or sustained misinformation campaigns could all serve to dampen or even halt the turnover. And even if the demographic turnover does happen, it will be too late to halt a lot of avoidable (especially environmental) damage. But it’s a reason to hope. Remember California prop 209 in 1996? Remember the anti-gay marriage laws? That changed fast, didn’t it? First we have to get past 2022 and 2024. Let’s see what there is to salvage at that point.

  4. You’re such a godsend. The answer is no. (“I sometimes wonder if the country is governable at all.”) Not in the age of individualized agit prop.

  5. I’m not a big fan of the struggle between under-educated white men and black people and women.

    It’s like mice fighting over crumbs when the cat is sitting right outside the door.

    The biggest problem we face is society and as a world is climate change. Because that can literally kill us all.

    The second problem is wealth inequality, where a handful of individuals have the same wealth as tens of millions.

    Wealth inequality, higher than at any point since the 1920s, has the effect of reducing incentive for the majority of people, and thus lowering productivity. The capitalists and corporate monopolies have taken too much of the pie, leaving too little for everyone else.

    Instead of addressing the real problems, we’re fighting these pointless “culture wars”.

    1. The strategy has always been to divide the poorer masses against each other so that they do not unite and take the power their numbers could ensure. Black vs white, both poor! red vs blue…”pro-life” vs “pro-death”, etc.

      1. Lyndon B. Johnson once said, “If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.”

  6. The biggest challenge for humanity is how to govern ourselves and manage huge bureaucracies and complex systems. Do you go single leader autocratic or try ‘of by and for’ the people. Thus far, since Sapiens became civilized, nothing has had much staying power. Any system of government is going to fail if the people managing it are incapable of rational thinking and in possession of broad swatches of knowledge about ‘how things actually work’. American politicians as they are now chosen are not getting the job done to put it mildly. Until we can figure out how to get the best qualified (and not best liked) managing things, no system of government is going to succeed for very long before it lurches one way or another and gets replaced (usually with violence). I believe the ‘state of the union’ reflects the quality of management a country has and ours is not good. That should be enough for the citizens of a country to demand something better, unfortunately no one really knows what better is.

  7. The US Census bureau published some very depressing statistics today. 37.2M Americans were in poverty in 2020, up 3.3M from 2019. There are more terrible statistics in the published article.
    We spent $2T on Afghanistan- for what? We could have divided that up among those in poverty and actually gotten something for our money. And saved some lives in the process.

  8. H – Regret that I left the beaten path and ventured into the realm of bias. Your post described some heady subject matter, which tickled very clear and strong feelings on my part. Obviously, it’s a new day and my perspective is refreshed. And on we go…

    But I respect the filter. It’s smart, and it maintains the health of the conversation, wherein lies the value.

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