The economic challenges that face affluent democracies are well known: the increase in global competition, the shift from manufacturing to services, the ascent of high-rolling finance as both a powerful shaper of corporate strategies and a dominant sector of the economy in its own right. But the social institution of the mixed economy could have been updated to respond to these changes. The balance between effective public authority and dynamic private markets could have been recalibrated rather than rejected. Instead, the political coalition in favor of such a constructive balance shattered under the pressure of an increasingly conservative Republican Party and an increasingly insular, parochial, and extreme business leadership. The moderate perspective that government and the market needed to complement each other gave way. It was replaced by a destructive insistence that these two centers of power were locked in mortal combat- destructive because so many of those in power rejected adaptation in favor of upending, destructive because this insistence so often magnified rather than mitigated the economic challenges faced, and destructive because so few Americans now trust their democracy to do what democracies do to ensure broad prosperity.The second best book I read was a biography of Tip O'Neill. It fills in some blanks- why was the Democratic Party so broken in 1980, why did they roll over for Reagan in the House, and how despite this did Reagan accomplish so little of his "revolution?"
In a word, Democrats were old fashioned. They were old men representing old urban neighborhoods and old political machines that had run out of gas. They represented an old fashioned horse-trading way of doing politics in a post watergate era that saw horse-trading as corruption. And they represented New Deal social supports that worked so well that the middle class they'd created took them for granted. When Republicans took the Senate and the White House in 1980, Democrats weren't just defeated. They were in total collapse, the expectation was that in 1982 Republicans would sweep the House too.
O'Neill started with this and not only kept Democrats in control of the House, but successfully rallied the country around Social Security and Medicare. He preserved the core of the New Deal and kept it at the center of Democratic self identity. Neither of those things was inevitable.
What these books have in common is a story about how the pursuit of purity turns things to shit.
In American Amnesia, it's the story of the financialization of Corporate America in the 70's and 80's. While executives nominally worked on behalf of shareholders, they enjoyed wide discretion in setting priorities. There was "room" for executives to care about their local communities, or about employees. That changed when maximizing the benefit of shareholders became the be-all end-all. After that, the only thing that mattered was share price, the only thing management needed to care about was share price. Community welfare, employee welfare, gone.
In Congress the New Deal owed its existence to machine politicians who thrived on horse-trading. Their ethos was, "you scratch my back and I'll scratch yours." The whole concept of social insurance could be reduced to that. But after Watergate, trading favors was seen as corruption. An odd abstraction was idolized, a monk-like politician who had no connections or interests, who only decided anything after monk-like meditation in a cave somewhere. Jimmy Carter was the embodiment of this, and he sucked at every level- even the voters who thought they wanted someone like him couldn't wait to get rid of him. Instead of grappling with the nitty gritty of competing interests, voters turned to the fantasy land Reagan offered where there were no conflicts and everyone agreed on everything.
I see the same thing today in people who couldn't tolerate the moral grays of Clinton or Obamacare, instead accepting sewer filth of Trump.