This essay is being published in conjunction with the launch of MELTDOWN — a new 8-episode Audible series that launches on 10/28. Find the podcast here.
American democracy is in the midst of a meltdown — the January 6th attack on the U.S. Capitol and Republicans’ intensifying crusade to limit voting rights and deny election results make that abundantly clear. Conflict-averse Democrats in Washington are on the verge of letting this turn into a full-fledged nightmare. Torn between their corporate donors and the electorate, they are studiously avoiding the two key questions: What is really fueling this crisis? And how can it be stopped?
The answer to the first question can be seen in headlines this week about billionaires growing their fortunes by $2 trillion during the pandemic and now creating an overheated market for luxury yachts, all while one in five households just lost their entire life savings. Americans keep voting to change this crushing dystopia and yet they continue being force-fed more of the same — most recently with Democrats threatening to side with their financiers and abandon their whole economic agenda. Such betrayals from both parties have been telling more and more of the country that democracy is a farce.
The way for Democrats to combat that disillusionment is to learn from their party’s history during the Great Depression and the Great Recession. In the former debacle, the Democratic Party halted a potential meltdown of democratic institutions by delivering real help to millions of people. In the latter crisis, the Democratic Party’s refusal to do the same resulted in the political meltdown that fueled the ascent of Donald Trump — and that continues to fuel the MAGA movement today.
If insanity is doing the same thing and expecting different results, then Democrats would be crazy to ignore these lessons at this moment of both opportunity and peril.
“The Hope of Getting Something to Eat”
The first Democratic parable began almost 90 years ago when America’s economy was ravaged by rampant speculation and then a stock market crash, throwing tens of millions of people into abject poverty. As fascism rose in America — through the growth of local Nazi groups, Father Coughlin, and other conservative media voices — Franklin Roosevelt cast his progressive economic initaitives as both a weapon to fight the economic crisis and a shield against right-wing authoritarianism.
“The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach,” he said in a 1932 campaign speech at Oglethorpe University. “We need to correct, by drastic means if necessary, the faults in our economic system from which we now suffer.”
Once elected, Roosevelt championed a then-radical program of government investments and interventions in the economy, directly employing millions of the jobless, investing in public infrastructure, and subjecting powerful financial institutions to tough regulations. Though the New Deal was hardly perfect, the agenda was an unprecedented investment in America’s working class, helping restore some faith in democratic government as a force for good.
The year before a fulminating Nazi rally in a packed Madison Square Garden, FDR warned that the global rise of fascism was the result of democratic governments doing the opposite of the New Deal and protecting an economic status quo enriching a tiny handful at the expense of everyone else.
“Democracy has disappeared in several other great nations, not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion and government weakness through lack of leadership,” he said in a 1938 radio address. “Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat.”
To know Roosevelt’s analysis was correct is to look at how his investments ultimately rescued the economy, beat back fascists, got him reelected in landslide elections, and created a 40-year epoch we now call the New Deal era. His prescience was also confirmed by what concurrently happened in Germany, where leaders imposed spending cuts.
“Austerity measures implemented between 1930 and 1932 immiserized and radicalized the German electorate,” found a recent study from economists and historians looking at Weimar Republic data showing a statistically significant link between local budget cuts and working class voters’ support for the Nazi Party. “Austerity worsened the situation of low-income households and the Nazi Party became very efficient at channeling the austerity-driven German suffering and mass discontent.”
They conclude: “Imposing too much austerity and too many punitive conditions cannot only be self-defeating, but can also unleash a series of unintended political consequences, with truly unpredictable and potentially tragic results.”
“The Siren Calls of Right-Wing Radical Populist Parties”
Fast forward to the modern era, and America experienced the negative versions of these lessons and cautionary tales in the aftermath of the financial crisis.
In 2008, Democrats won the presidency and a huge majority in Congress in a landslide election after they promised transformative change to a nation ravaged by the same forces of corporate greed that had pillaged the country during FDR’s day. But soon after winning, Democrats did the opposite of Roosevelt.
Led by President Barack Obama, Democrats used their new power to enrich their corporate donors with a multitrillion-dollar bailout, while throwing stimulus crumbs at the rest of the country. The Obama administration also refused to prosecute a single banker involved in the financial crisis and allowed bailout money to subsidize Wall Street bonuses, no doubt pleasing the finance industry moguls who funneled a record amount of cash to Obama’s campaign. Then Democratic leaders rescinded the rest of that bailout money before it could be used for its intended purpose: to directly help millions of homeowners being foreclosed on.
Perhaps most tone deaf of all, Democrats mimicked what Weimar leaders did in the early 1930s — they championed an austerity agenda in the name of fiscal responsibility, launching a high-profile initiative to slash Social Security benefits amid an economic emergency.
All of this played right into the hands of Republicans, who opposed every half-decent proposal in Congress but deftly positioned themselves to hit electoral paydirt when Democrats threw in with their big donors. The result: Democrats were shellacked in 2010 midterm elections that saw fight-for-the-little-guy populism appropriated by a Koch-funded Tea Party movement, and amplified by the reactionary rants of CNBC’s Rick Santelli, Fox News’ Glenn Beck and every other Father Coughlin clone in conservative media.
Obama did manage to win a second term two years later, but his reelection bid benefited from random good fortune: He was lucky enough to face Mitt Romney, a caricature of Gordon Gekko so flagrantly aristocratic that a GOP primary opponent once suggested he looks like “the guy who laid you off” — and indeed, he might have. The trend, though, persisted: As Obama and his party continued to deliver high-profile giveaways to Wall Street while the rest of the country suffered, voters by the end of his second term had punished Democrats with the largest losses in the party’s modern history.
Trump’s 2016 campaign was the ultimate exclamation point. It was fueled by a predictable meltdown in people’s faith in government to do anything other than enrich the rich, and empower the powerful. His victory was powered by him dishonestly portraying himself as an anti-Wall Street populist — and the specific way he won rhymed with the bleak trends of the 1930s.
Hammering Democrats for not delivering real help to the working class, Trump was buoyed by a 10-point spike in the GOP vote share in the American counties that saw life expectancy stagnate or decline, according to research from Boston University’s Jacob Bor.
That dynamic echoed the 1930s when there was “a significant association between mortality rates and increasing vote shares for the Nazi Party in 1930s Germany,” according to Bor and his fellow Weimar researchers, who ultimately concluded that “when people are suffering, they may be more open to the siren calls of right-wing radical populist parties.”
The Danger of a Permanent Meltdown
This isn’t to directly liken Trump and his followers to Nazis. But look no further than the Charlottesville uprising, the January 6th insurrection or a typical Trump rally to know that the MAGA movement’s authoritarianism and bigotry echo some of the dark themes of the 1930s. And polls show those events are influencing public opinion — recent survey data suggest more than a quarter of Americans today hold views that are right-wing authoritarian.
As scholars now rightly warn that American democracy is facing an existential crisis, all of this history is begging Democrats to rediscover their roots and channel their most popular and successful president, FDR.
And for a brief moment, party leaders seemed to understand that — at the beginning of Biden’s presidency, there was indeed talk of going big on everything from expanding Medicare to strengthening union rights, from reducing families’ crushing debt to making New Deal-style investments in physical infrastructure and direct employment. After all, much of that is what Biden promised during his election campaign.
However, after an initial burst of investment in a COVID-19 pandemic relief bill, Biden and congressional Democrats have consistently retreated in the face of opposition from their corporate donors and an army of business lobbyists.
Democrats’ equivalent of a new New Deal — a reconciliation spending bill to bolster the social safety net — started out at $6 trillion, moved down to $4 trillion, then to $3.5 trillion, then below $2 trillion. And now party leaders are reportedly bowing to their corporate donors, stripping out wildly popular provisions to reduce medicine prices, expand Medicare benefits, and give workers paid family leave, after they already abandoned a promised $15 minimum wage. This has been happening at the same time coastal-state Democrats are making headlines demanding giant new regressive tax breaks that mostly benefit wealthy homeowners — a move that would provide Republican leaders a new opportunity to depict Democrats as more focused on satiating rich elites than on helping the working class.
Meanwhile, Biden has refused to use his existing executive authority to lower drug prices, cancel student debt and more widely distribute vaccine recipes to combat the pandemic.
If these cuts end up sticking, and if Biden keeps refusing to wield power to help the country, Democrats may have placated the industries that bankroll their campaigns, but they will have made it harder to convince midterm election voters that Americans’ lives have improved under the party’s reign. Democratic candidates will be left begging voters to support them as a last line of defense of democracy against the kind of insurrectionists who attacked the Capitol earlier this year.
But here’s the thing: If Americans keep using democratic institutions to try to fix the country, and those institutions keep ignoring them and prioritizing big donors, many voters may simply stop believing in democracy. At minimum, protecting democracy might not be much of a motivating force compelling people to turn out at the polls.
That loss of faith wouldn’t be sudden — it has been happening in countless ways in a system in which the “preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy,” as a landmark study from Princeton and Northwestern University researchers documented all the way back in 2014.
Specific indignities accelerate the erosion. As just one recent example: If voters keep being promised that electing Democrats will reduce prescription drug prices, and polls show drug pricing measures are the most popular part of Democrats’ spending bill, and Democrats choose to help their pharmaceutical donors strip those provisions out of their own bill, then guess what: Lots of people being fleeced by medicine prices may decide their votes don’t matter, they may feel less invested in protecting democracy, and they may not care much about Republican attempts to make it harder for people to vote.
As billionaires hit a jackpot in the last year, millions of Americans lost their health insurance and millions more are teetering on the brink of eviction and bankruptcy. If the ruling party fails to deliver help amid that kind of emergency, it would be regrettable but hardly surprising for millions of people to choose “to sacrifice liberty in the hope of getting something to eat,” in the words of FDR.
That sacrifice is not inevitable — Democrats don’t have to repeat the Obama years of corporate fealty and compromise that led to the Trump presidency, and that corrupt, impulsively vain regime doesn’t have to be a prelude to something even worse.
Democrats still have time to wake up, realize the existential threat before them, channel Roosevelt and enact policies that immediately help people in order to avert an even bigger meltdown than 2016.
But time is running out.
Daily Poster editor-in-chief David Sirota and Oscar-winning documentarian Alex Gibney are the executive producers of the new podcast series “Meltdown,” which explores the aftermath of the financial crisis.