Friday, September 14, 2018

A World (Only Partly) Shaped By Two September Crises

by Michael C. Dorf

On Tuesday, Donald Trump commemorated the 17th anniversary of the 9/11 terrorist attack in true Trumpian fashion -- by pumping his fists self-congratulatorily upon arriving in Shanksville, Pennsylvania for a solemn ceremony and by sending out an enthusiastic but otherwise incoherent tweet. As Trevor Noah observed, bizarre and loathsome as Trump's 2018 behavior was, it was not nearly as bad as what he has done on past 9/11 anniversaries or on the awful day itself.

Meanwhile, tomorrow will mark the 10-year anniversary of the collapse of Lehman Brothers, which set in motion what we came to call the financial crisis and the Great Recession. To be sure, the preceding dramatic fall in the subprime mortgage market and broader housing market, as well as other firm-specific troubles like those that hit Bear Sterns, make the selection of any single date as the start of the financial crisis and Great Recession contestable. Nevertheless, given the cascade of events that followed Lehman's collapse, it is as good a point as any to choose to remember.

In today's essay, I want to use the confluence of these two anniversaries as an occasion to make some observations about how these events have shaped our current landscape--and how they have not.

We live in the shadow of 9/11, but in a way that is punctuated by contingency. Had it not been for a handful of votes in Florida and the partisanship of the Supreme Court, George W. Bush would not have been president on 9/11. If not, there is a decent chance that the attacks would have been thwarted, because a Gore administration would have been less focused on Iraq and would not have ignored repeated urgent warnings from the CIA that al Q'aeda operatives already in the US were planning a large-scale attack. Even if the 9/11 attack occurred in the alternative universe of a Gore presidency, the US reaction might well have been different. The US might not have invaded Afghanistan, thus avoiding the longest war (by far) in our history, and even if we had, the war might have been brought to a successful conclusion long ago, because Gore--unhaunted by the demons of Bush I failure that haunted Bush II and not surrounded by neocon fantasists--would not have diverted blood and treasure to Iraq.

Or perhaps not. There is, as I said, a great deal of contingency in our actual world, and so we cannot say with any kind of certainty how any particular alternative path would have unfolded. What we can say is that much of the current geopolitical landscape was shaped by 9/11 and its aftermath. The deliberate misuse of 9/11 by the Bush II administration probably facilitated congressional acquiescence in authorizing the Iraq War; the destabilization of Iraq greatly increased the power and influence of Iran in Iraq and the broader region, which, in turn, led to Saudi support for Sunni pushback against Iran and its proxies, fueling the sectarian civil war that rages in Yemen, Syria, and intermittently in parts of Iraq. Iraq's destabilization also led to the emergence of ISIS, which, though now greatly weakened, was for a time a potentially existential threat to regimes in the region.

Large and tragic though these events were, both for the US and the Middle East, it is not clear that they directly account for the greatest challenges on the current international stage. The Syrian civil war is a humanitarian disaster, but it is only partly a product of terrible US regional policy in the early 2000s. It is possible to imagine the Arab Spring and a brutal Assad government crackdown leading to roughly the same spot as we are in now, even absent a US invasion of Iraq. What might be different in such a world would be that the US would have been less weary and less wary of further involvement in the Middle East, and so would not have left the Syrian opposition to the tender mercies of Assad and his Iranian and Russian backers.

More broadly still, the most pressing threats on the world stage may be only tangentially related to the disastrous foreign policy of the Bush years. Global warming has only become a more pressing existential threat to our and many other species. Russia's resurgence as a bad actor, continuing nuclear tensions with North Korea, and, most of all, the capture of democracies by nationalists with authoritarian tendencies (or worse) in Austria, Hungary, Italy, Poland, and the US, as well as Brexit, seem difficult to explain as a direct product of 9/11 or its aftermath--except to the extent that some post-9/11 policies played a role in fueling events that gave rise to the refugee crisis that provided opportunities for right-wing demagogues. But that is at most a limited extent.

The Great Recession seems like a potentially more important factor in the threat to liberal democracy. Here the standard narrative would go like this: Hard economic times lead to a search for scapegoats, which provides an opening for demagogues. That's a real phenomenon, but it doesn't exactly fit the facts. The authoritarians have found their greatest opportunity in the last few years, at a point at which the economies of developed countries had largely recovered. It's possible to hypothesize causation with a lag built in, but it's hardly clear that this is what's going on. And at least in the US, this whole narrative of economic-hardship-fueling-Trumpism has been repeatedly debunked.

That's not to say either that economic anxiety plays no role in the threat to democracy or that the Great Recession didn't have an impact on American politics. It is to say that the path from one to the other is hardly a straight line.

Consider the political chain reaction set off by the financial crisis in the US. Voters turn their initial anger at Bush and oppose the bank bailouts based on the understandable but dangerous view that the banks caused the problem and so should suffer the consequences. (The view was dangerous even though bankers did bear substantial responsibility for the crisis, because allowing the banking system to collapse would have had catastrophic consequences for the world economy.) The same anger leads to Obama's election in 2008 but quickly turns against him and the Democrats when Republicans who are themselves economic semi-literates deliberately mislead the economically completely illiterate general public into thinking that spending a ton of money during a severe economic downturn is somehow irresponsible. This leads to a much-too-small stimulus, which delays recovery, which fuels the Tea Party, which leads to an obstructionist Republican Congress, which further impedes progressive economic policies. Whether such policies, if implemented, would have been enough to ensure the election of a Democratic successor in 2016, even one as unpopular as Hillary Clinton, is not clear.

It's possible that even if Obama had faced less Republican obstruction, we still would have ended up with Trump, but in any event, if the Great Recession caused the Trump presidency, it seems to have done so in a very roundabout way. The Financial Crisis and Great Recession so tarnished the GOP brand as to allow the election of the first African American president, which so unhinged millions of racists, crypto-racists, closet racists, and near-racists that they were able to combine with ordinary GOP voters who disliked Trump but disliked taxes, abortion rights, gun control, and Clinton more to lead to Trump's election. In this account, the financial crisis and the Great Recession would have played a causal role in Trump's election but mostly via a "butterfly effect."

Meanwhile, the big unanswered economic question since the end of the Great Recession is this: Why do wages continue to grow so slowly? The comforting possibility is that the low unemployment rate is misleading because of low labor force participation; given the possibility of attracting more people back into the workforce, the effective unemployment rate is too high to create serious wage pressure. If this is right, then slow wage growth is just a lingering effect of the Great Recession that will eventually go away. The more discouraging possibility (which I think is also more accurate) is that low wage growth is the new normal, as, per Piketty, the benefits of productivity gains now go almost entirely to capital rather than to labor.

Thus, I conclude that the two terrible traumas of the first decade of the 21st century almost certainly made us worse off than we otherwise would have been, but the looming potential catastrophes--environmental apocalypse, the end of liberal democracy in much of the world, and the exacerbation of extremes of wealth and poverty--likely would have confronted us even without those traumas.


Shag from Brookline said...

Trump is said to have said to Japan's Abe "I remember Pearl Harbor." Perhaps Trump's border wall campaign promise came about because he remembered the Alamo. But apparently when he was subject to the military draft during the Vietnam conflict he had no such memories. Trump's bone spurs deferments permitted him to discriminate against Blacks seeking housing in Trump real estate.

Joe said...

Pleasant reading.

One issue here is the state of the Republican Party. Trump had no competition in 2016 that was a realistically good option for that voting pool. We can talk about how one or the other of the also rans were credible, but none were a particularly strong candidate. The leaders amounted to a third Bush, a reptile (Cruz), some boy (Rubio) and someone else (Kasich turned out to be the "sane" one that no one really wanted). Christie was a lost cause for doing a few sane things, looking corrupt and being from NJ, probably in that order.

The opening for some troll, if not as bad as Trump, was there.

Shag from Brookline said...

Joe is being too kind about the "also rans." The "Sweet Sixteen" Republicans that Trump' thwarted were the "cream of the crop." Other than Kasich, how have the rest (i.e., those in elective offices) performed in putting country before party with Trump as President? The Cruz Canadacy was the runner up to Trump when the dust settled. Despite Trump's campaign designations of "Lyin' Ted," and insulting Cruz's spouse, Cruz needs Trump in his reelection bid. But then there's Willie Nelson with Beto O'Rourke in his band.

jax said...

It seems like the blue states have taken up the progressive cause with top down mandates, and with the progressives winning primaries in those states only more will come. Minimum wage in NYC was $11 in 2016 and will be $15 in 2018. The family leave act and a few other policies have also augmented labor's better status in NY. Moreover, a good economy has allowed businesses to try to operate with rapidly rising costs. One wonders how long this can last.

Middle class labor has had few favors from the government. Most notably the government allows businesses to deem workers as contract and freelance. Business can save money by avoiding covering benefits and paying FICA taxes. However, they still demand attendance in the office without any extra wage to offset the loss of benefits.

The gig economy might work for a 25 year old, but most middle age persons with responsibilities to a family want a steady job.