The Vermont senator’s success so far demonstrates the end of the
politico-ideological cycle opened by the victory of Ronald Reagan at the
1980 elections
Bernie Sanders makes clear he wants to restore progressive taxation and a higher minimum wage.
Photograph: Evan Vucci/AP
How can we interpret the incredible success
of the “socialist” candidate Bernie Sanders in the US primaries? The
Vermont senator is now ahead of Hillary Clinton among Democratic-leaning
voters below the age of 50, and it’s only thanks to the older
generation that Clinton has managed to stay ahead in the polls.
Because he is facing the Clinton machine, as well as the conservatism
of mainstream media, Sanders might not win the race. But it has now
been demonstrated that another Sanders – possibly younger and less white
– could one day soon win the US presidential elections and change the
face of the country. In many respects, we are witnessing the end of the
politico-ideological cycle opened by the victory of
Ronald Reagan at the 1980 elections.
Let’s glance back for an instant. From the 1930s until the 1970s, the
US were at the forefront of an ambitious set of policies aiming to
reduce social inequalities. Partly to avoid any resemblance with Old
Europe, seen then as extremely unequal and contrary to the American
democratic spirit, in the inter-war years the country invented a highly
progressive income and estate tax and set up levels of fiscal
progressiveness never used on our side of the Atlantic. From 1930 to
1980 – for half a century – the rate for the highest US income (over $1m
per year) was on average 82%, with peaks of 91% from the 1940s to 1960s
(from Roosevelt to Kennedy), and still as high as 70% during Reagan’s
election in 1980.
This policy in no way affected the strong growth of the post-war
American economy, doubtless because there is not much point in paying
super-managers $10m when $1m will do. The estate tax, which was equally
progressive with rates applicable to the largest fortunes in the range
of 70% to 80% for decades (the rate has almost never exceeded 30% to 40%
in Germany or France), greatly reduced the concentration of American
capital, without the destruction and wars which Europe had to face.
A mythical capitalism
In the 1930s, long before European countries followed through, the US
also set up a federal minimum wage. In the late 1960s it was worth $10
an hour (in 2016 dollars), by far the highest of its time.
All this was carried through almost without unemployment, since both
the level of productivity and the education system allowed it. This is
also the time when the US finally put an end to the undemocratic legal
racial discrimination still in place in the south, and launched new
social policies.
All this change sparked a muscular opposition, particularly among the
financial elites and the reactionary fringe of the white electorate.
Humiliated in Vietnam, 1970s America was further concerned that the
losers of the second world war (Germany and Japan in the lead) were
catching up at top speed. The US also suffered from the oil crisis,
inflation and under-indexation of tax schedules. Surfing the waves of
all these frustrations, Reagan was elected in 1980 on a program aiming
to restore a mythical capitalism said to have existed in the past.
The culmination of this new program was the tax reform of 1986, which
ended half a century of a progressive tax system and lowered the rate
applicable to the highest incomes to 28%.
Democrats never truly challenged this choice in the Clinton
(1992-2000) and Obama (2008-2016) years, which stabilized the taxation
rate at around 40% (two times lower than the average level for the
period 1930 to 1980). This triggered an explosion of inequality coupled
with incredibly high salaries for those who could get them, as well as a
stagnation of revenues for most of America – all of which was
accompanied by low growth (at a level still somewhat higher than Europe,
mind you, as the old world was mired in other problems).
A progressive agenda
Reagan also decided to freeze the federal minimum wage level, which
from 1980 was slowly but surely eroded by inflation (little more than $7
an hour in 2016, against nearly $11 in 1969). Again, this new
political-ideological regime was barely mitigated by the Clinton and
Obama years.
Sanders’ success today shows that much of America is tired of rising
inequality and these so-called political changes, and intends to revive
both a progressive agenda and the American tradition of egalitarianism.
Hillary Clinton,
who fought to the left of Barack Obama in 2008 on topics such as health
insurance, appears today as if she is defending the status quo, just
another heiress of the Reagan-Clinton-Obama political regime.
Sanders makes clear he wants to restore progressive taxation and a
higher minimum wage ($15 an hour). To this he adds free healthcare and
higher education in a country where inequality in access to education
has reached unprecedented heights, highlighting a gulf standing between
the lives of most Americans, and the soothing meritocratic speeches
pronounced by the winners of the system.
Meanwhile, the Republican party sinks into a hyper-nationalist,
anti-immigrant and anti-Islam discourse (even though Islam isn’t a great
religious force in the country), and a limitless glorification of the
fortune amassed by rich white people. The judges appointed under Reagan
and Bush have lifted any legal limitation on the influence of private
money in politics, which greatly complicates the task of candidates like
Sanders.
However, new forms of political mobilization and crowdfunding can
prevail and push America into a new political cycle. We are far from
gloomy prophecies about
the end of history.
This piece was first published in Le Monde on 14 Febrary 2016
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