Thursday, September 22, 2011

A second Gilded Age?

For those unfamiliar with the Gilded Age, it was an era of government dysfunction that lasted from about 1877 to 1900. The gap between rich and poor was enormous. Partisan gridlock in Congress was the norm. Powerful political organizations got out the vote for their candidate and were rewarded with generous favors once the candidate was elected. Large monopolies or near-monopolies wielded enormous power over the government and were said to have bought certain senators. And corruption and crony capitalism were rampant and bipartisan. In fact, as Pittsburgh Tribune-Review columnist Salena Zito argues, it was very much like the political situation today.

In this 1890's political cartoon, a number of bloated figures--representing the "Iron Trust," "Standard Oil Trust," "Copper Trust," "Steel Trust," and various other monopolies--have taken over the Senate. Today the cartoon is just as true; all that needs to change are the names on the figures' bellies. Instead of the Oil Trust and the Steel Trust, we have Giant Banks, Fannie Mae/Freddie Mac, the Military-Industrial Complex, Public Employee Unions, Giant Hedge Funds, Trial Lawyers, et cetera.

In response to the corrupt excesses of the Gilded Age, a populist movement--the Progressive movement--formed in the 1900's. This movement was the driving force behind several important changes: antitrust legislation, direct election of senators, state-level referendums, and (somewhat unfortunately) the income tax. The people largely blamed local and state-based political machines for the corruption, and thus enacted reforms that strengthened the federal government and made all levels of government more responsive to the people.

Similarly, the Tea Party is a populist response to the partisan bitterness and special-interest power that characterize today's politics. In contrast to the Progressives of the 1900's, the Tea Party blames most political problems on the federal government, and thus their goal is to weaken the federal government and give more power to the states and the people. Even outside of the Tea Party, independents in general are fed up with government (as shown by the record-low approval rating for Congress). In 2006 and 2008, independents angrily threw Republicans out of office. Since 2010, the voters have turned their anger towards the Democrats. One has to wonder how long this political ping-pong will continue before someone finally enacts meaningful reform.

1 comment:

  1. Hedge funds are getting killed