The Politics of Nostalgia

For obvious reasons, nostalgia is one of the two most important emotions fueling conservative politics. A wise man once observed that the past “was long ago and it was far away, and it was so much better than it is today” — and this almost universal human sentiment remains ripe for commercial and political manipulation. Still, the strategic use of nostalgia faces a practical problem whenever a society is much wealthier than it was a generation ago. One way of dealing with this awkward fact is to extol the virtues of a simpler time, in contrast to the decadent excesses of the present. This strategy has its limits however (As Jorge Luis Borges notes somewhere, “while it is true that money cannot buy happiness, the advantages of poverty have been greatly exaggerated.”).

Another approach is to make sure that as much as possible of the society’s increased wealth goes to a tiny fraction of its people. From the perspective of the right-wing ideologue, such a maneuver has two equally delightful aspects. First, it rewards society’s most virtuous citizens, that is, those who are already rich. Second, it encourages an inchoate longing for the past — always so useful for conservative political projects of every stripe –among the great bulk of the citizenry, since they will not be misled by the consideration that their own economic station in life has actually improved. Of course this latter strategy requires a deft touch among the powers that be, lest the ever-greedy masses notice that one particularly compelling reason to prefer the past to the present is that the gap between themselves and their social superiors has increased very much to their disadvantage.

There’s a standard narrative in contemporary American politics that goes something like this: After World War II, Europe and Japan lay in ruins, and the USA’s economy was in a historically unique position. As a consequence, the 1950s and 1960s represented a golden era of economic growth, during which America became an affluent society, far wealthier than any the world had yet seen. In addition, most of this period was a time of relative ideological consensus, as people got rich, bought houses and cars, and filled both with the plentiful children of the baby boom. With money falling from the skies, and with the advent of what are now called identity politics still in the future, government was for the most part seen as a positive force in American life. In particular, the belief that markets and businesses could be regulated efficiently, and that taxes could be used to further the common good, was widespread.

All this, the story goes, began to change in the mid-1960s, with the first major battles of what are now known as the culture wars. Ideological consensus fell apart, as bitter divisions appeared in American society regarding Vietnam, civil rights, feminism, the role of religion in public life, environmental regulation, and a host of similar issues. On the economic front, the cost of the Vietnam war and of the Great Society’s social programs would combine with the shock of skyrocketing energy prices to bring an end to the previous era of prosperity. Since then, America has struggled along, through business cycles whose upswings are not nearly as bountiful as those during the palmy days when tens of millions of baby boomers were born, while our periodic recessions are made more fractious by the increasingly partisan politics of a deeply divided culture. For a large portion of the voting public, government is now seen as the problem, rather than a solution to anything — and the biggest problem with our government(s) is that they give away increasingly scarce resources in a cash-strapped time to undeserving recipients of “welfare,” while hard-working ordinary Americans bear an ever-more onerous tax burden, in order to pay for this reckless spending spree.

Variations of this narrative have been uttered endlessly in the 40+ years since Richard Nixon so brilliantly exploited a particularly cynical version of it, which Ronald Reagan subsequently perfected. Here, for example, is a passage from a popular law school casebook, which attempts to explain why so-called “legal process” theories of statutory and constitutional interpretation developed in the 1950s and 1960s fell somewhat out of favor in subsequent decades (It’s worth noting that two of the case book’s three authors are political liberals. I don’t know the politics of the third author. I should also note that, in spite of the quoted passage, it’s a very good case book, and I’m only using this passage to illustrate the success a particular political narrative has had even among otherwise well-informed liberals):

[The years immediately after World War II represented] a period of relative consensus in America, rather sustained economic growth, and burgeoning optimism about government’s ability to foster economic growth by solving market failures and creating opportunities. After the mid-1960s, America was a different society, as consensus collapsed on fundamental issues of war, family, and citizenship; economic growth faltered and oil price shocks introduced stagflation; and government came to be perceived as problematic, often even as a drain on society’s productivity. These developments raised inevitable questions about [interpretive] methodology . . .

The authors go on to claim — correctly in my view — that interpretive methods which argue for sticking to the original “plain meaning” of legal texts are politically popular because such “textualist” versions of originalism give an appearance of objectivity to legal interpretation, and that this supposed objectivity is an attractive virtue, given the culturally and economically troubled conditions of contemporary American life:

Citizens [proponents of textualism argue] ought to be able to open up the statute books and find out what the law requires of them. Once law is understood by the cognoscenti as purposes, spirits, and collective intents, the citizenry might lose faith in the externality of law [and] the objectivity of legal reasoning . . . The changes in American society since the 1960s make an external vision of the rule of law even more important than before. In a society where so many values are open to contest, language may be the main thing we share in common. In a society where “the pie” is not expanding (the economy is stagnant) dividing the pie by an objective criterion becomes ever more critical.

(The second indented quote was added to the third edition of the casebook in 2001 and was retained in the 2007 edition.)

Now it so happens that the economic component of the standard narrative is completely wrong. Here are the facts (all the monetary figures have been adjusted for inflation):

From 1950 to 1970 real per capita GDP grew by 57.4%.

From 1970 to 1990 real per capita GDP grew by 54.2%. How many people are aware that the explosion of increased wealth America experienced between 1950 and 1970 was almost precisely replicated (from a far higher baseline) between 1970 and 1990?

Indeed, from 1990 to 2010, real per capita GDP grew by 30.1%. Even the financial calamity of the last few years — the worst since the Great Depression — has put only a moderate dent into the overall growth rate of the American economy.

In other words over the last 45 years, the American economy has continued to grow just as quickly as it had during the baby boom: real GDP actually tripled between 1970 and 2009, while per capita GDP more than doubled. America is now an immensely wealthier country that it was during the “golden age” of the mid-1960s. So where does the idea come from that the economy has, relatively speaking, stagnated over the last four decades? The answer is obvious when one looks at what has happened to median family income.

In the 1950s and 1960s median family income grew almost as quickly as per capita GDP. In 1950, the average American family had an income of $29,858. By 1965 that figure had grown to $47,764. Over the course of those two decades, every dollar of GDP growth produced an 81-cent increase in median family income. In that essentially socialistic sense, the baby boom era really was an economic golden age.

Now consider what has happened since: Real per capita GDP grew by 101.2% between 1970 and 2009, yet median family income in 2010 is estimated to have been a little over $50,000 — around 6% higher than it was four decades earlier. While the nation as a whole is trillions of real, inflation-adjusted dollars wealthier than it was 40 years ago, median family income has remained close to $50,000 for this entire time. (Here are the figures for median family income in five year increments, in 2010 dollars. 1965: $47,764, 1970: $48,332, 1975: $48,667, 1980: $46,839, 1985: $46,813, 1990: $50,050, 1995: $49,363, 2000: $53,817, 2005: $53,034, 2010: $50,500). If the relationship between the growth of real per capita GDP and median family income in the 1950s and 1960s had continued during the subsequent four decades, the average American household would be bringing in $85,000 in annual income — and very few families would have to get by on less than $40,000 per year.

Where then has all this almost unimaginable increase in national wealth gone? Consider that while in 1965 the 95th percentile of family income was approximately $105,000 — i.e., a little more than double the median — by 2010 it was $180,000. But the relative good fortune of the upper middle (or perhaps more realistically lower upper) class pales to nothing in comparison to what has happened in the economic stratosphere. Between 1979 and 2007, average after-tax incomes for the top 1 percent of households rose by 281 percent after adjusting for inflation — an increase of nearly one million dollars per household. Yet even this increase is trivial when placed against the bounty that has rained down on the true Lords of Capital. In 1980, the richest 0.01% of American households — roughly the 10,000 richest families — had an average annual income of $5.4 million (in 2006 dollars). A quarter century later, that figure had grown, in real, inflation-adjusted terms, by a factor of nearly six: to $29.6 million per year.

All of this, it should be unnecessary to point out, is a deliberate product of public policy. That income and wealth inequality should have grown so drastically in America over the past three decades isn’t a product of God’s will, or globalization, or the laws of economic thermodynamics — it’s a product of quite conscious decisions regarding, among other things, tax rates, the legal rights of labor unions, the role of money in politics, and a host of other choices that have led to almost all the nation’s economic growth being shuttled to the top of the social pyramid.

One of the dominant narratives of both the past generation and the contemporary political scene — that we can no longer “afford” the supposedly profligate spending of the baby boom era — ignores the fact that we as a nation are more than twice as wealthy, per person, as we were then. And the fact that the powers that be have determined almost all this vast increase in wealth should go, in exponential progression, to the top 1%, and .1% and .01% of the population, only emphasizes both the moral and economic perversity of claims that cuts in government spending should be borne primarily by our ever-shrinking middle class, and the ever-growing ranks of the poor.