THE STATE OF THE DIS-UNION

An impeached president who was on trial and is up for re-election will be delivering a state of the union address to the most divided union in living memory. He will be giving his address to both his jurors and prosecutors, and most importantly, to the voters that will decide his fate in November.

It’s not unprecedented for an impeached president to give a state of the union address. Bill Clinton delivered his State of the Union in 1999 while in the middle of his Senate trial. But that’s where the similarities end.

Clinton was not up for re-election when he gave his speech, so he didn’t need to employ any campaign-style rhetoric. Trump is a polarizing, divisive president who is addressing an America that has never been so divided.

But this begs the question: why are we so divided?

We’re not fighting a hugely unpopular war on the scale of Vietnam. We’re not in a deep economic crisis like the Great Depression. Yes, we disagree about guns, abortion, and immigration, but we’ve disagreed about them for decades. So why are we so divided now?

Ferocious partisanship is not new. Newt Gingrich, the Republican Speaker of the House who led the House’s impeachment investigation into Clinton, pioneered the combative partisanship we’re used to today. But today’s divisions are far deeper than they were then.

Part of the answer is Trump himself. The Great Divider knows how to pit native-born Americans against immigrants, the working class against the poor, whites against blacks and Latinos, evangelicals against secularists — keeping everyone stirred up by vilifying, disparaging, denouncing, defaming, and accusing others of the worst. Trump thrives off disruption and division.

But that begs another question: Why have we been so ready to be divided by Trump?

One theory is the underlying tension that an older, whiter, and less educated America, concentrated in rural areas, is losing out to a “new” America that’s younger, more diverse, more educated, and concentrated in urban areas. These trends, while much more prominent these days, have been going on since the start of the 20th century. Why are they causing so much anger now?

Another hypothesis is that we are geographically sorting ourselves into Republican and Democratic regions of the country, surrounding ourselves with like-minded neighbors and friends so we no longer talk to people with opposing views. But why are we doing this?

The rise of social media sensationalizing our differences in order to attract eyeballs and advertisers, plays a crucial role in exacerbating the demographic and geographic trends I just mentioned. But it alone isn’t responsible for our polarized nation.

Together, all of these factors contribute to the political schism we’re experiencing today. But none of them alone point to any large, significant change in the structure of our society that can account for what’s happened.

Let me have a go.

In the fall of 2015, I visited Michigan, Wisconsin, Ohio, Pennsylvania, Kentucky, Missouri, and North Carolina for a research project I was doing on the changing nature of work. I spoke with many of the same people I had met twenty years before when I was secretary of labor, as well as with some of their grown children.

What I heard surprised me. Twenty years ago, many said they’d been working hard and were frustrated they weren’t doing better. Now, that frustration had been replaced by full-blown anger — anger towards their employers, the government, Wall Street.

Many had lost jobs, savings, or homes in the Great Recession following the financial crisis of 2008, or knew others who had. By the time I spoke with them, most were back in jobs but the jobs paid no more than they had two decades before in terms of purchasing power.

I heard the term “rigged system” so often I began asking people what they meant by it. They spoke about flat wages, shrinking benefits, and growing job insecurity. They talked about the bailout of Wall Street, political payoffs, insider deals, soaring CEO pay, and “crony capitalism.”

These complaints came from people who identified as Republicans, Democrats, and Independents. A few had joined the Tea Party, while a few others had been involved in the Occupy movement.

With the 2016 political primaries looming, I asked them which candidates they found most attractive. At the time, Democratic Party insiders favored Hillary Clinton and Republican insiders favored Jeb Bush. Yet no one I spoke with mentioned Clinton or Bush.

They talked instead about Bernie Sanders and Donald Trump. When I asked why, they said Sanders or Trump would “shake things up” or “make the system work again” or “stop the corruption” or “end the rigging.”

In the following year, Sanders – a seventy-four-year old Jew from Vermont who described himself as a democratic socialist and wasn’t a registered Democrat until the 2016 presidential primaries – came within a whisker of beating Clinton in the Iowa caucus, routed her in the New Hampshire primary, and ended up with 46 percent of the pledged delegates from Democratic primaries and caucuses.

Trump – a sixty-nine-year-old ego-maniacal billionaire reality-TV star who had never held elective office or had anything to do with the Republican Party and who lied compulsively about everything – won the Republican primaries and then went on to beat Clinton, one of the most experienced and well-connected politicians in modern America (although he didn’t win the popular vote, and had some help from the Kremlin).

Something very big had happened, and it wasn’t due to Sanders’s magnetism or Trump’s likeability. It was a rebellion against the establishment.

That rebellion is still going on, although much of the establishment still denies it. They have come up with myriad explanations for Trump’s ascendance, some with validity; some without: It was hatred of Obama, it was hatred of Hillary, it was people voting third party, it was racism and xenophobia.

It’s important to note that although racism and xenophobia in America date to before the founding of the Republic, they have never before been so central to a candidate’s appeal and message as they’ve been with Trump. Aided by Fox News and an army of right-wing outlets, Trump used the underlying frustrations of the working class and channeled them into bigotry, but this was hardly the first time in history a demagogue has used this cynical ploy.

Trump convinced many blue-collar workers feeling ignored by the powers that be that he was their champion. Hillary Clinton did not convince them that she was. Her decades of public service ended up being a negative, not a positive: She was indubitably part of the establishment, the epitome of decades of policies that had left these blue-collar workers in the dust. (It’s notable that during the primaries, Bernie Sanders did far better than Clinton with blue-collar voters.)

A direct line connects the four-decade stagnation of wages with the bailout of Wall Street, the rise of the Tea Party (and, briefly, Occupy), and the successes of Sanders and Trump in 2016. By 2016, Americans understood that wealth and power had moved to the top. Big money had rigged our politics. This was the premise of Sanders’s 2016 campaign. It was also central to Trump’s appeal (“I’m so rich I can’t be bought off”), which he quickly reneged on once elected, delivering everything big money could have imagined.

The most powerful force in American politics today continues to be anti-establishment fury at a rigged system. Vicious partisanship, record-breaking economic inequality, and the resurgence of white supremacy are all byproducts of this rigged system. The biggest political battle today isn’t between left, right, or center: it’s between Trump’s authoritarian populism  and democratic (small “d”) populism.

Democrats cannot defeat authoritarian populism without an agenda of radical democratic reform, an anti-establishment movement that tackles runaway inequality and heals the racial wounds Trump has inflicted. Even though he’s a Trojan Horse for big corporations and the rich – giving them all the  tax cuts and regulatory rollbacks they’ve ever wanted – he still has large swaths of the working class convinced  he’s on their side.

Democrats must stand squarely on the side of democracy against oligarchy. We must form a unified coalition of people of all races, genders, sexualities, and classes, and band together to unrig the system. Trump is not the cause of our divided nation; he is the symptom of a rigged system that was already dividing us. It’s not enough to defeat him. We must reform the system that got us here in the first place to ensure that no future politician will ever again imitate Trump’s authoritarian demagoguery.

For now, let’s boycott the State of the Union and show the ratings-obsessed demagogue that the American people refuse to watch an impeached president continue to divide us.

Hillary Clinton won’t be the only winner when Donald Trump and his fellow haters are defeated on Election Day (as looks increasingly likely). Another will be Paul Ryan, who will rule the Republican roost.

Democrats may take back the Senate but they won’t take back the House. Gerrymandering has given House Republicans an impregnable fortress of safe seats.

This means that in order for President Hillary Clinton to get anything done, she’ll have to make deals with Speaker Paul Ryan.

While the Clinton-Ryan years won’t be marked by the same kind of petulant gridlock we’ve witnessed over the last eight, the ascendance of Ryan and Clinton will mark a win for big business and Wall Street over the strongest anti-establishment surge America has witnessed since Great Depression.

Clinton might be able to summon Ryan’s support on a “Buffet rule” for the highest-income taxpayers – an effective minimum tax of 30 percent on top incomes. She might also be able to wangle some additional spending on infrastructure and paid family leave.

But the price Ryan can be expected to exact will be lower corporate tax rates, along with a tax amnesty on corporate profits repatriated to the United States. And to offset the added spending and tax cuts, Ryan will probably want Clinton to trim Social Security (perhaps reviving the terrible idea of a “chained” CPI for determining cost of living increases), and slow the growth of Medicare.

None of this will do much to remedy the central economic challenge of our era – reversing the declining incomes and wealth of most Americans.

Although incomes rose in 2015, the typical household is still worse off today than it was in 2000, adjusted for inflation. The assets of the typical family today are worth 14 percent less than the assets of the typical family in 1984. And the typical job is less secure than at any time since the Great Depression.

These trends are not sustainable – neither economically nor politically. They generated the fury that’s undergirded Trump’s ugly campaign, and fueled the anger that propelled Bernie Sanders’s insurgency.

They’ve fed a growing sense that the political-economic system is rigged in favor of those at the top.

And it is. Big money has corrupted our democracy, resulting in laws and rules that systematically favor big corporations, Wall Street, and the very rich over everyone else.

Consider, for example, the growing market power of leading pharmaceutical companies, private health insurers, the biggest Wall Street banks, giant cable providers, four major airlines, and five largest high-tech companies. And the decreasing market power of unions. 

The resulting imbalance is transferring money out of the pockets of average Americans directly into the pockets of major shareholders and top executives.

A similar upward distribution is occurring through bankruptcy laws that allow giant corporations and billionaires to avoid paying what they owe, yet don’t allow average people overburdened with mortgage or student debt to renegotiate those obligations.

Mandatory arbitration clauses in contracts with giant corporations are forcing people to give up rights under a wide variety of consumer and employment laws. Meanwhile, workers classified as “independent contractors” are losing whatever rights they once had under the nation’s labor laws.

In all these respects, the American political economy has become radically imbalanced.

The reforms Hillary Clinton and Paul Ryan are likely to agree to are miniscule compared with the scale of this imbalance.

Hopefully, the leaders of big business and Wall Street – the true winners of the 2016 election – will realize that although they avoided Trump’s authoritarian populism and Sanders’s “political revolution” this time around, they won’t for much longer.

The forces that gave rise to both will grow unless our political economy is rebalanced to work for everyone and not just for those at the top.

There is precedent. In the first decades of the twentieth century, enlightened business leaders joined with progressive reformers to rebalance American capitalism – thereby rescuing it from the savage inequalities and corruption of the Gilded Age.  

If they understand what happened in the 2016 election, enlightened business leaders will do so once again.

The U.S. economy is picking up steam but most Americans aren’t feeling it. By contrast, most European economies are still in bad shape, but most Europeans are doing relatively well.

What’s behind this? Two big facts.

First, American corporations exert far more political influence in the United States than their counterparts exert in their own countries.

In fact, most Americans have no influence at all. That’s the conclusion of Professors Martin Gilens of Princeton and Benjamin Page of Northwestern University, who analyzed 1,799 policy issues – and found that “the preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”

Instead, American lawmakers respond to the demands of wealthy individuals (typically corporate executives and Wall Street moguls) and of big corporations – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

The second fact is most big American corporations have no particular allegiance to America. They don’t want Americans to have better wages. Their only allegiance and responsibility to their shareholders – which often requires lower wages  to fuel larger profits and higher share prices.

When GM went public again in 2010, it boasted of making 43 percent of its cars in place where labor is less than $15 an hour, while in North America it could now pay “lower-tiered” wages and benefits for new employees.

American corporations shift their profits around the world wherever they pay the lowest taxes. Some are even morphing into foreign corporations.

As an Apple executive told The New York Times, “We don’t have an obligation to solve America’s problems.”

I’m not blaming American corporations. They’re in business to make profits and maximize their share prices, not to serve America.

But because of these two basic facts – their dominance on American politics, and their interest in share prices instead of the wellbeing of Americans – it’s folly to count on them to create good American jobs or improve American competitiveness, or represent the interests of the United States in global commerce.

By contrast, big corporations headquartered in other rich nations are more responsible for the wellbeing of the people who live in those nations.

That’s because labor unions there are typically stronger than they are here – able to exert pressure both at the company level and nationally.

VW’s labor unions, for example, have a voice in governing the company, as they do in other big German corporations. Not long ago, VW even welcomed the UAW to its auto plant in Chattanooga, Tennessee. (Tennessee’s own politicians nixed it.) 

Governments in other rich nations often devise laws through tri-partite bargains involving big corporations and organized labor. This process further binds their corporations to their nations.

Meanwhile, American corporations distribute a smaller share of their earnings to their workers than do European or Canadian-based corporations. 

And top U.S. corporate executives make far more money than their counterparts in other wealthy countries.

The typical American worker puts in more hours than Canadians and Europeans, and gets little or no paid vacation or paid family leave. In Europe, the norm is five weeks paid vacation per year and more than three months paid family leave.

And because of the overwhelming clout of American firms on U.S. politics, Americans don’t get nearly as good a deal from their governments as do Canadians and Europeans.

Governments there impose higher taxes on the wealthy and redistribute more of it to middle and lower income households. Most of their citizens receive essentially free health care and more generous unemployment benefits than do Americans.

So it shouldn’t be surprising that even though U.S. economy is doing better, most Americans are not.

The U.S. middle class is no longer the world’s richest. After considering taxes and transfer payments, middle-class incomes in Canada and much of Western Europe are higher than in U.S. The poor in Western Europe earn more than do poor Americans.

Finally, when at global negotiating tables – such as the secretive process devising the “Trans Pacific Partnership” trade deal – American corporations don’t represent the interests of Americans. They represent the interests of their executives and shareholders, who are not only wealthier than most Americans but also reside all over the world.  

Which is why the pending Partnership protects the intellectual property of American corporations – but not American workers’ health, safety, or wages, and not the environment.

The Obama administration is casting the Partnership as way to contain Chinese influence in the Pacific region. The agents of America’s interests in the area are assumed to be American corporations.

But that assumption is incorrect. American corporations aren’t set up to represent America’s interests in the Pacific region or anywhere else.

What’s the answer to this basic conundrum? Either we lessen the dominance of big American corporations over American politics. Or we increase their allegiance and responsibility to America.

It has to be one or the other. Americans can’t thrive within a political system run largely by big American corporations – organized to boost their share prices but not boost America.

For years Americans have assumed that our hard-charging capitalism  is better than the soft-hearted version found in Canada and Europe. American capitalism might be a bit crueler but it generates faster growth and higher living standards overall. Canada’s and Europe’s “welfare-state socialism” is doomed.  

It was a questionable assumption to begin with, relying to some extent on our collective amnesia about the first three decades after World War II, when tax rates on top incomes in the U.S. never fell below 70 percent, a larger portion of our economy was invested in education than before or since, over a third of our private-sector workers were unionized, we came up with Medicare for the elderly and Medicaid for the poor, and built the biggest infrastructure project in history, known as the interstate highway system.

But then came America’s big U-turn, when we deregulated, de-unionized, lowered taxes on the top, ended welfare, and stopped investing as much of the economy in education and infrastructure.

Meanwhile, Canada and Europe continued on as before. Soviet communism went bust, and many of us assumed European and Canadian “socialism” would as well.

That’s why recent data from the Luxembourg Income Study Database  is so shocking.

The fact is, we’re falling behind. While median per capita income in the United States has stagnated since 2000, it’s up significantly in Canada and Northern Europe. Their typical worker’s income is now higher than ours, and their disposable income – after taxes – higher still.

It’s difficult to make exact comparisons of income across national borders because real purchasing power is hard to measure. But even if we assume Canadians and the citizens of several European nations have simply drawn even with the American middle class, they’re doing better in many other ways.

Most of them get free health care and subsidized child care. And if they lose their jobs, they get far more generous unemployment benefits than we do. (In fact, right now 75 percent of jobless Americans lack any unemployment benefits.)

If you think we make up for it by working less and getting paid more on an hourly basis, think again. There, at least three weeks paid vacation as the norm, along with paid sick leave, and paid parental leave.

We’re working an average of 4.6 percent more hours more than the typical Canadian worker, 21 percent more than the typical French worker, and a whopping 28 percent more than your typical German worker, according to data compiled by New York Times columnist Nicholas Kristof.

But at least Americans are more satisfied, aren’t we? Not really. According to opinion surveys and interviews, Canadians and Northern Europeans are.

They also live longer, their rate of infant mortality is lower, and women in these countries are far less likely to die as result of complications in pregnancy or childbirth.

But at least we’re the land of more equal opportunity, right? Wrong. Their poor kids have a better chance of getting ahead. While 42 percent of American kids born into poor families remain poor through their adult lives, only 30 percent of Britain’s poor kids remain impoverished – and even smaller percentages in other rich countries.

Yes, the American economy continues to grow faster than the economies of Canada and Europe. But faster growth hasn’t translated into higher living standards for most Americans.

Almost all our economic gains have been going to the top – into corporate profits and the stock market (more than a third of whose value is owned by the richest 1 percent). And into executive pay (European CEOs take home far less than their American counterparts).

America’s rich also pay much lower taxes than do the rich in Canada and Europe.

But surely Europe can’t go on like this. You hear it all the time: They can no longer afford their welfare state.

That depends on what’s meant by “welfare state.” If high-quality education is included, we’d do well to emulate them. Americans between the ages of 16 and 24 rank near the bottom among rich countries in literacy and numeracy. That spells trouble for the U.S. economy in the future.

They’re also doing more workforce training, and doing it better, than we are. The result is more skilled workers.  

Universal health care is another part of their “welfare state” that saves them money because healthier workers are more productive.

So let’s put ideology aside. The practical choice isn’t between capitalism and “welfare-state socialism.” It’s between a system that’s working for a few at the top, or one that’s working for just about everyone. Which would you prefer?