| [an error occurred while processing this directive] |  |  |
 |  | |
| ||
| |||||||
| |||||||
|
| ||||||
| |||||||
| |||||||
 New Part Three - July 24: James Fallows Kevin Phillips Part Two - July 12: James Fallows Kevin Phillips Part One - July 3: James Fallows Kevin Phillips Kevin Phillips is a contributing columnist to the Los Angeles Times and a regular contributor to National Public Radio. Phillips was the chief political analyst for the 1968 Republican presidential campaign, and in 1969 published his landmark book The Emerging Republican Majority. His bestseller The Politics of Rich and Poor was described as a "founding document" of the 1992 presidential election. James Fallows is The Atlantic's national correspondent and the author of Breaking the News: How the Media Undermine American Democracy (1996) and of Free Flight: From Airline Hell to a New Age of Travel. To learn about his new book and look through an archive of his recent articles, visit jamesfallows.com. Previously in Fallows@large: Signals of Saturation (April 3, 2002) James Fallows exchanges e-mail with Todd Gitlin, the author of Media Unlimited: How the Torrent of Images and Sounds Overwhelms Our Lives. Policies of Power (December 6, 2001) James Fallows exchanges e-mail with Walter Russell Mead, the author of Special Providence: American Foreign Policy and How It Changed the World. Beyond the Tech Bubble (August 29, 2001) An e-mail exchange with Michael Lewis, the author of Next: The Future Just Happened. More by James Fallows More on books More on politics and society Join the conversation in Post & Riposte. |
fallows@large | Dialogues with James Fallows  An exchange with Kevin Phillips, the author of Wealth and Democracy: A Political History of the American Rich ..... From: James Fallows To: Kevin Phillips Subject: The silent crash Dear Kevin:
But as the war in Afghanistan has moved past its dramatic, early stage, when spotters on horseback were calling in precision-bombing strikes, to the slower, murkier process of reconstituting a government—and as the effort to destroy al Qaeda leaders has moved from "bunker-buster" bombs to inconclusive detective work—space has opened up in the news environment to consider the longer-term issues you raise. And you don't even have to be content with long-term issues! The most dramatic headlines of the moment, announcing each new revelation of corporate dishonesty and failure, are in a sense the subject of your book. You don't write directly about WorldCom, Adelphia, or Global Crossing, but the problem these companies have created is exactly the one you address: whether great concentrations of private wealth are, in the long run, inconsistent with democracy. Therefore, I'd like to organize this discussion in the fashion of a breaking-news story. That is, I'll begin by asking you several questions about today's WorldCom-type headlines. After that, in later rounds, we'll come back to consider the larger argument of your book and the historical analogies you apply. So here goes, with three introductory questions: The first is a news judgment: fifty years from now, what will people consider to have been the truly consequential developments of George W. Bush's first years in office? Will it be the devastation of September 11, and all the military, governmental, and social consequences that followed? Or could it be the chain of capitalist failures we used to call the "Enron problem" but which now needs a broader name? Six months ago, it could have seemed silly even to raise that question. We all knew that "everything had changed" because of large-scale terrorism on American soil. Nothing else going on inside the United States or around the world could compare. But everything has changed because of the corporate collapses too. It is remarkable how rapidly a number of public assumptions have shifted. It was not even a year ago that The Industry Standard magazine went under. One year before that, the Standard (which covered the Internet industries, and for which I wrote a column), had sold more ad pages in a single year than any other magazine in history. To people outside the "new economy," the Standard's boom and bust was a symbol of the hubris and delusion of the Internet bubble years. Yes, America as a whole might suffer as the failure of dot-com firms drove the NASDAQ down. But last summer, the prevailing reaction from people in the "normal" economy was: hah hah hah! You phonies have been brought back to earth! Now corporate failure is not San Francisco's problem. It's the country's. The alarming aspect of the recent bankruptcies is not simply that they have driven down stock values and therefore drained collective wealth. The real damage comes from the nature of the companies involved and the reason for their collapse. Enron and WorldCom used aggressive "new economy" techniques to expand, but they were firmly involved with basic "old economy" functions—energy and communications. Enron's handmaiden, Arthur Andersen, was from the most venerable part of the old economy. And based on everything we know so far, they were brought down not just by pie-eyed dreams of Internet retailing but by perhaps criminal acts of irresponsibility and greed. That is: established companies, in "real" industries, have been destroyed, with terrible ripple effects—and specific powerful people seem to be to blame. Each of the big events of the last year was what new-economy people call a "phase shift"—a step away from past assumptions. The terrorist attacks were a shift away from the idea that we'd always be safe at home, and that the world was evolving in our image. The Enron-WorldCom disaster is a shift away from the 1990s' assumption that corporation ambition and innovation would pull the whole society up, and that those generating wealth for themselves were not necessarily stealing it from anyone else. In your view, which shift is more important? To put it another way, which member of the Powell family will historians concentrate on? The father, Colin, who is at the center of diplomatic and military efforts to respond to terrorism? Or the son, Michael, who as head of the Federal Communications Commission has taken a laissez-faire stance as companies like WorldCom collapse around him? Second: a dog that didn't bark question. Your book documents something "everyone knows" but few appreciate in detail: how much more polarized the American distribution of wealth and income became in the last decade. (More specifics on this point in the next round.) As you suggest, there's a reason why this shift caused so little political turmoil at the time. Most Americans did better economically in the 1990s. The Clinton Administration went out of its way to remind people of this, and to come up with small "middle-class benefits" wherever possible. Combined with everything else that was going well—crime rates down, environmental quality up—voters weren't too upset about the very-rapid gains for those at the top. Things are different now. Unemployment is up, retirement accounts are way down, even crime is beginning to return. More important, the Bush Administration's policies make little pretense of offering middle-class rewards. Last year's income-tax reductions, as every newspaper pointed out, went mainly to the richest 10 percent of tax payers. The benefits of the estate-tax rollback are mainly to the richest 3 percent. And yet... it's not an issue! To be more precise, I see very few signs of real political backlash. Certainly nothing of the sort we saw among many white voters when school busing began, nor among California home owners before the "Proposition 13" revolt against property taxes in the 1970s. Yes, there are mitigating factors. While unemployment rates are higher than they were two years ago, they're still quite low. Housing values continue to rise, offsetting the fall in the stock market. Still, I don't get it. Why has no Democratic leader, or Republican challenger for that matter, figured out how to make "the rich get richer" into an important-seeming issue? Is it mainly a talent problem? The Democrats can't rely on Bill Clinton to lead the charge any more. And the people they have to choose from may be too familiar (Gephardt, Gore, Kerry) or too unfamiliar (Edwards) to do the job. Are they too fearful of being blamed for causing "class war"? Is it just a matter of time? If current trends continue, will Democrats run against Enron and WorldCom this fall and in 2004—while the Republicans run against Osama bin Laden? Why are so few people (apart from you!) talking about this issue? Third: a big, complicated question I'll try to raise briefly. You first attracted wide public notice with your prediction of a shift in basic political geography. (Thirty years ago, in The Emerging Republican Majority, you explained why growing Republican strength in the South—really, among Southern whites—would eliminate the Democratic "solid south" and give Republican presidential candidates a strong advantage.) I wonder if you think today's news may be creating another shift in basic geography. For the last thirty years, the Democrats have relied on a "high-low mix" of bedrock support. On the low end, in terms of income, they have had minority-group voters, especially blacks. On the high end, they have relied on Jewish voters for financial contributions and political support. In the emerging politics of the Middle East, the Bush Administration is doing everything it can to outflank the Democrats in support for Israel. Question: is the "high" end of the Democrats' basic support bloc likely to shift in a lasting way? Thanks again for joining in; over to you. Jim Fallows
Next Page: Kevin Phillips - July 3
Part Two - July 12: James Fallows | Kevin Phillips New Part Three - July 24: James Fallows | Kevin Phillips
What do you think? Join the conversation in Post & Riposte. More on books in Atlantic Unbound and The Atlantic Monthly. More on politics and society in Atlantic Unbound and The Atlantic Monthly. Copyright © 2002 by The Atlantic Monthly Group. All rights reserved. | [an error occurred while processing this directive] | |||||
|
Home |
Current Issue |
Back Issues |
Forum |
Site Guide |
Feedback |
Subscribe |
Search
| |||||||
