The Midterm Elections Should Confirm the Profound Divide of the Nation

The reason why America is so hard to decipher in the fall of 2010 is because it seems to be replaying several parts of its history, all at the same time: the 1929 crisis and the New Deal, the conservative reaction of the ‘70s and even the great fear of Japan of the ‘80s. The midterm elections should simply confirm the profound divide of the nation on the direction of the current crisis and possible remedies.

During his presidential campaign, Barack Obama had positioned himself in the footsteps of Franklin Roosevelt, the providential Democrat who renewed America’s hope with the New Deal. Are we then back to the America of 1934? After all, the Obama administration, similar to the Roosevelt administration, has revived the economy through public spending, imposed new regulations on banks and has adopted several social laws, such as the renovation of the healthcare system. The problem is that the magnitude of these reforms is far from reaching the levels of the New Deal. With the $787 billion stimulus that was approved to boost the economy in February 2009, we have gained the abstract satisfaction of having avoided the worst, without gaining a renovation of the country’s infrastructure — particularly of transportation and education — which could have supported the potential growth of America in the years to come. After all, even Republican President Eisenhower had done better with the launch of the ambitious interstate highway system in 1956.

Above all, the American social contract was not remolded. The middle class, which has experienced a stagnating income for 30 years despite a sustained growth, finds itself even more weakened by the crisis, with no hope for a long-term rebalancing in its favor. In this sense, perhaps America “missed its crisis” — unless it hasn’t fully entered it quite yet. After all, Roosevelt arrived four years after the crash of 1929, and it took him several years to accomplish all the reforms that made him famous. If, as feared by many, the United States is heading toward a double-dip recession, then we may only be in 1931 —at the eve of more ambitious transformations. This would also explain the main constraint that weighs on Obama: The country’s political culture has not changed under the effect of the crisis. Americans continue to see the government’s intervention as dangerous. Better yet, they reject it more and more. In 2008, 50 percent of Americans thought that the State was doing too much; today, 58 percent think that way. Thirty-eight percent of Americans thought that there were too many regulations to the economy at the beginning of the crisis; in the fall of 2010, 49 percent think so, according to a Gallup survey.

This latter evolution brings a very different historical analogy. America seems to be replaying — in fast forward — the conservative revolution born in the 1970s. The Johnson administration’s activism, through the Great Society programs (the integration of blacks and the war on poverty), had set off a strong rejection among the white “silent majority” against social spending deemed useless and against interference from the federal government. The conservative movement fed on this rejection, which carried a successive wave of Republicans to power: Ronald Reagan in1980, Newt Gingrich in Congress in 1994 and George W. Bush in 2000.

Similarly, the Obama administration’s activism in the last two years has prompted the tea party movement: It refuses to watch the federal government increasingly spend and tax and are hopeful to return to America’s golden age: an individualistic and virtuous America where honest people know better than Washington’s elite what is best for themselves and their country. The tea party movement, before being an electoral weapon — and a double-edged one at that — for Republicans, appears first and foremost as the defensive reflex of an anti-government political culture boosted by 40 years of conservative rhetoric and cut to the quick by Obama’s response to the crisis, which actually could seem modest.

It’s conceivable that private initiative and innovation are sufficient, in the years to come, to get America out of the rut. Yet, the infrastructure’s developmental delays, the recent somber cuts in higher education and the globalization challenges (energy and climate, competition and relocation), all seem to call for a more strategic action from the government to ensure the future. Another thing that makes this necessity obvious is the challenge of China. It is another piece of history that America seems to be replaying this fall: the big “Japan-bashing” phase of the ‘80s — the psychosis of a drop in economic standings because of a country’s accelerated recovery growth. China is omnipresent in everyone’s mind, such as in the electoral speeches and sometimes as a scapegoat. However, while the shock following the USSR’s first Sputnik satellite launch in 1957 had led to an acceleration of the space program and of federal research spending (ARPA/NASA) — as well as a massive educational and scientific program — and while the Japanese challenge has led to a firm reaction against the undervalued yen and to a restructuring of the auto industry, nothing similar seems to be happening regarding China. The administration hesitates, risking in turn an explosion of protectionist populism coming from the right as well as the left.

The America of the midterm elections of 2010 seems stuck between several contradictory currents. And at a time when the economy is showing new signs of weaknesses, its political system is heading without a doubt toward a phase of conflict-filled deadlock within the next two years. It remains to be seen whether 2012 will bear resemblance to 1932 or to 1980.