Apologies for the clickbait-y headline. As your Friendly Neighborhood Cassandra, even I sometimes resort to the lowest common denominator of the attention economy. In this case, the hyperbole is pulling double duty: I wanted you to open the email, but I also believe the world so many of us have known is gone, for good, forever.
Donald Trump’s attack on the Federal Reserve as an ‘independent’ institution is the latest and loudest, and has potentially the largest impact on everyday citizens, America-writ large, and the world. He’s demonstrated time and again his near-complete comfort with turning over the tables of historical precedent, decency, and the rule of law.
The administration has accelerated its unprecedented actions in past weeks, and far from being one-off moves, Trump’s actions represent at bottom, a complete and total break from our past.
End of An Era
In a meeting probably 10 years ago, a very smart DC-type referenced something hadn’t changed in the ‘Post-War’ era. I piped up and noted World War II had ended 70+ years ago, and wasn’t it likely time for a new take on things?
The rest of the table wasn’t impressed, but I’ve long since gotten over that feeling.
The world that Franklin Roosevelt saved (more on him below,) and Truman and Eisenhower, along with their military and financial contemporaries, is well and truly dead. The Cold War has been over for three decades. The Post War security consensus is down to one leg and no arms (‘tis but a scratch!)
We were good. The Russians were bad. There were client states and a staunch ‘Unaligned’ movement. In a sense, the world made sense. While everything is more complicated under the surface, the veneer of society was simple, understandable, and were were the good guys; saving the world for democracy and capitalism.
End of an Order
In the wake of the Great Depression, Roosevelt constructed the New Deal Order; one that expanded the social safety net, put Americans to work, and showed that democracy could save itself at a time when Communism and Fascism were seen as new, dynamic, and necessary. For 50 years, the world FDR built reigned supreme.
In the 1970s, starting with President Jimmy Carter, the New Deal Order began to break down as regulations were rolled back and Neoliberalism, or Globalization, began to rear its head. Ronald Reagan further planted the seeds, but Neoliberalism came to full-flower under President Bill Clinton. We enjoyed the ‘Pax Americana.’
For 30 years, we traded jobs at home for cheap televisions. Financialization became the order of the day. We finally, at long last, ‘trusted’ markets to make the right, rational decisions, even when they continually didn’t do so. The end of Glass-Steagall and other New Deal-era protections were erased and capital took wing like never before.
Before Post-War, Before the Great War
The Federal Reserve was signed into law by President Woodrow Wilson on December 23, 1913. For over a century it has attempted to serve as an ‘independent’ arbiter of the American economy. I asked an AI bot what the Fed is supposed to do. Here’s what it spat out:
Implementing Monetary Policy (Interest rates and the money supply)
Ensuring Financial Stability (lender of last-resort - think TARP)
Supporting the Government (pays our bills, issues debt)
Providing a Safe and Efficient Payment System (operates and oversees various payment networks)
This all sounds good on paper. It is possible to say the Fed has carried out these four tasks, reliably, if not evenly for the past century. The ‘business cycle’ hasn’t disappeared. Speculation, ‘irrational exuberance’ and hyper-capitalist ideology haven’t gone the way of the Dodo, if anything, their shadows are always with us.
The opaque nature of how the Fed works, and the paradoxic nature of its role as an agent of a democratic republic while unaccountable to its citizens, makes the Fed an easy and inviting target; one that Trump has been happy to take on.
Sowing and Reaping
Galatians 6:7 “Do not be deceived: God is not mocked, for whatever one sows, that he will also reap.”
The seeds of this moment, and of the Donald Trump Era, were planted in the 1980s and 1990s. They bore poisonous fruit in the 2000s. Trust in instutitions has plummeted in past decades. The creation of a permanent underclass (57% of Americans live paycheck-to-paycheck,) decreasing political participation, and the two largest generational cohorts losing faith in the “American Dream” the arrival and success of a demagogue like Donald Trump should not be a surprise.
His arrival, mixed with 40 years of right-wing and conservative work to create loud, ugly, and convincing media outlets, allied and interlocking political organizations, and unitary-power blocks (in 28 of the 50 states,) has ended both the Post-War Era and the Neoliberal Order.
What Do We Do?
I get a lot of ‘Reed you’re always complaining or telling us what’s wrong, but don’t tell us how to fix it.’
Some of this is fair. Being a critic, sitting in the stands and watching the game, is easy. There are many of us, though, like so many of you reading this, who are working and striving everyday to make sense of the world as it is and help build what will come next.
The work is a Sisyphean task. We have a lot of rocks, and a big, big hill. As we trudge uphill, idiots, malcontents, and ne’er-do-wells pelt us as we work. Sometimes it feels like those we call ‘allies’ are working at cross-purposes (at best) or pulling us down (more likely.)
In the coming days and weeks I will use my little platform to lay out short, medium, and long-term plans for how we combat Trump’s daily insanity, create mutual-aid networks from the state to the local to the individual level, and attempt to force the intellectual and philosophical aperature open wide enough to understand that what we have is not guaranteed, and the world ahead hasn’t yet been created.
I hope to enlist some very smart colleagues, old hands, and new friends in the effort. Saying “Let’s just go back to what we had,” before Trump is both fallacious, unrealistic, and uninspiring. We can and should look back for guidance and ideas, but know our path lies out there, ahead of us.
News and Notes:
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The progress of FDR happened because of the excesses of the Gilded Age. Now we are in a very similar position where capital has seized power back. We need to be ready with a vision for people to choose over the wreckage that is coming. It will be key to get veto proof majorities in congress that can write rules of governance that ban all of the crony corruption that have valid enforcement measures. We were caught flat footed by a movement 50 years in the making but it's not over unless we all roll over and do nothing.
In the modern era, after periods of great cruelty/war/genocide/hatred, the world is moved to a better place, not a worse one. Humanity wants to survive and hatred and cruelty lessen the chances of survival. Somewhere in our unconscious minds, I believe we know that. I am not a woo person. I am not a pie-in-the-sky person. But I believe we are almost at the end of this horrible time and that then we will climb out of this hole and become America once again. We will always have things we can do better and we will always keep working on them.