Something is rotten in these United States, and Americans know it. As usual, the focal point of their anger is Washington's dysfunctional politics and partisan bickering. But the problem isn't just the decline of civility in the halls of the Capitol. It's much bigger. Today the country is reaping the foul harvest of policy decisions it has enthusiastically endorsed over the last 30 years.
How mad are Americans? Just look at this chart. For the last 30 years, Gallup has polled Americans about whether they are satisfied with the direction in which their country is heading. This chart shows the gap between the percentage that is satisfied and the percentage that is not. When the chart heads north of the zero line, most people are satisfied. When it heads south, most aren't. And it's fallen off a cliff.
In fact, the numbers have been sliding southward for a decade. There have been some brief upticks -- the post-9/11 launch of the war on terror, the 2003 Iraq invasion, Barack Obama's 2009 inauguration -- but the trend is clear. And there's no simple, short-term explanation. Earlier periods of intense dissatisfaction, such as the early 1980s and early 1990s, were closely tied to sharp economic downturns. But the recent decline was already in full swing when Americans seemed to be living large, well before the 2008 Great Recession.
Why? Because over the past few decades, Americans eagerly supported a series of decisions aimed at rolling back government's influence in daily life. They were popular at the time. But now the country is paying a heavy price.
Call it a hangover from America's neoliberal binge of the late 20th century, a massive political project aimed at limiting government's role in everyday life. Americans wanted "a minimum of government authority," Ronald Reagan said while campaigning for the presidential nomination in 1976. "Very simply, they want to be left alone." And that was exactly the program enacted over the next quarter-century: Marginal tax rates were reduced, especially for the wealthy; social programs were restricted; controls on commerce and finance were removed. By the time 2000 rolled around, Reagan was remembered as one of the greatest presidents in modern history.
By then, the project of restricting government and liberating market forces was a bipartisan one. It was a Democrat, President Bill Clinton, who famously conceded in 1996 that the era of big government was over. Clinton signed the North American Free Trade Agreement in 1993 and a trade agreement with China in 2000, saying that this was "the only way we can recover the fortunes of the middle class in this country." He also signed laws that loosened federal control over the financial sector, promising they would actually "enhance the stability of our financial services system." Despite all his personal baggage, the American people heartily approved of this agenda: Clinton ended his presidency with a 65 percent approval rating.
Clinton merely followed what was, by then, the conventional wisdom about the virtue of the neoliberal project. Federal Reserve Chairman Alan Greenspan helped set the tone, promising that free markets would generate wealth and regulate themselves effectively. The United States, Greenspan said in 2005, had a "far more flexible, efficient, and hence resilient financial system than the one that existed just a quarter-century ago." Yes, Greenspan's credibility took a beating after 2008, but before the crisis, he was one of the country's most highly regarded policymakers. A 1998 Gallup poll showed that 57 percent of Americans had a favorable view of the Fed chairman, while only 9 percent had an unfavorable view. "With Greenspan, we find comfort," journalist Bob Woodward wrote in his 2000 book Maestro. "He helps breathe life into the vision of America as strong, the best, invincible."
Unfortunately, the decades-long neoliberal project had a price, which became increasingly obvious in the new millennium. The removal of trade barriers put U.S. jobs at risk, while lowering top tax rates and loosening the social safety net aggravated problems of inequality. Lighter regulation encouraged overexpansion and recklessness in the financial sector. Even before the 2007-2008 crisis, Americans were uneasy about the effects that followed from policies they had once enthusiastically endorsed. In 2004, according to an ABC News poll, a majority of Americans believed that they were no better off than when Reagan was inaugurated. In a 2006 CBS poll, two-thirds of respondents doubted that the next generation would be better off than they were. And in an April 2007 Gallup poll, a similar share said that wealth in the United States was unfairly distributed.
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