Robert Kuttner > Quotes

“Some have argued that capitalism promotes democracy, because of common norms of transparency, rule of law, and free competition—for markets, for ideas, for votes. In some idealized world, capitalism may enhance democracy, but in the history of the West, democracy has expanded by limiting the power of capitalists. When that project fails, dark forces are often unleashed. In the twentieth century, capitalism coexisted nicely with dictatorships, which conveniently create friendly business climates and repress independent worker organizations. Western capitalists have enriched and propped up third-world despots who crush local democracy. Hitler had a nice understanding with German corporations and bankers, who thrived until the unfortunate miscalculation of World War II. Communist China works hand in glove with its capitalist business partners to destroy free trade unions and to preserve the political monopoly of the Party. Vladimir Putin presides over a rigged brand of capitalism and governs in harmony with kleptocrats. When push comes to shove, the story that capitalism and democracy are natural complements is a myth. Corporations are happy to make a separate peace with dictators—and short of that, to narrow the domain of civic deliberation even in democracies. After Trump’s election, we saw corporations standing up for immigrants and saluting the happy rainbow of identity politics, but lining up to back Trump’s program of gutting taxes and regulation. Some individual executives belatedly broke with Trump over his racist comments, but not a single large company has resisted the broad right-wing assault on democracy that began long before Trump, and all have been happy with the dismantling of regulation. If democracy is revived, the movement will come from empowered citizens, not from corporations.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“Consider almost any public issue. Today’s Democratic Party and its legislators, with a few notable individual exceptions, is well to the right of counterparts from the New Deal and Great Society eras. In the time of Lyndon Johnson, the average Democrat in Congress was for single-payer national health insurance. In 1971, Congress overwhelmingly passed the Comprehensive Child Development Act, for universal, public, tax-supported, high-quality day care and prekindergarten. Nixon vetoed the bill in 1972, but even Nixon was for a guaranteed annual income, and his version of health reform, “play or pay,” in which employers would have to provide good health insurance or pay a tax to purchase it, was well to the left of either Bill or Hillary Clinton’s version, or Barack Obama’s. The Medicare and Medicaid laws of 1965 were not byzantine mash-ups of public and private like Obamacare. They were public. Infrastructure investments were also public. There was no bipartisan drive for either privatization or deregulation. The late 1960s and early 1970s (with Nixon in the White House!) were the heyday of landmark health, safety, environmental, and financial regulation. To name just three out of several dozen, Nixon signed the 1970 Clean Air Act, the 1970 Occupational Safety and Health Act, and the 1973 Consumer Product Safety Act. Why did Democrats move toward the center and Republicans to the far right? Several things occurred. Money became more important in politics. The Democratic Leadership Council, formed by business-friendly and Southern Democrats after Walter Mondale’s epic 1984 defeat, believed that in order to be more competitive electorally, Democrats had to be more centrist on both economic and social issues.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“Today, large numbers of citizens throughout the West are angry that the good life is being stolen from them. They are not quite sure whom to be angry at—immigrants, corporations, the government, politically correct liberals, the rich, the poor?”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“You could read Hillary Clinton’s shocking loss to Donald Trump as a perfect storm that included a bungled campaign, serial misjudgments about email servers, Russian hacking, FBI meddling, sexism, and more. Even her ability to call out Donald Trump’s grotesque treatment of women was compromised by memories of Bill Clinton’s womanizing and the sick sexting of Anthony Weiner, husband of the candidate’s closest aide. All of that was true—but a far deeper erosion was at work. The statistics of political disaffection of working people from the party of Roosevelt are astonishing. Working-class white voters, defined as those without college degrees, supported Trump by a margin 67 to 28, a gap of 39 percent. Among working-class white men, the margin was an even larger: 72 to 23, or a chasm of 49 percent. Clinton, counting on the feminist symbolism of a shattered glass ceiling to make up the loss, even lost a majority of white women, by 10 points. As”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“Despite the myth of American mobility, for decades the more socialized economies of northern Europe have done a far better job of allowing people to rise above the station of their parents, while class lines in the US have hardened. The American dream has been alive in social democratic Scandinavia—alive, but not well. As we’ve seen, the pressures of the global market have breached even well-defended social compromises in Sweden and Denmark. The preface of this book introduced a notional argument between Karl Marx and Karl Polanyi. Critics of capitalism writing in the spirit of Marx have long insisted that capitalism is doomed by its own contradictions. Polanyi, with Keynes, believed that given the right democratic mobilization and the right policy interventions, a mixed economy could adapt and thrive. That hope was realized in the three decades after World War II. Conversely, Polanyi argued that if markets were not harnessed in a broad public interest, their excesses would destroy both market society and democracy. This is what happened in the 1920s and 1930s, and it has echoes now.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“The ideological gap between the parties has indeed widened, and party discipline has increased. But the source of the widening gap is that Democrats have moved moderately to the center, while Republicans have moved to the far right. And the main source of deadlock is that Republicans have decided to refuse to compromise with Democrats, the better to destroy both Democrats and effective government.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“This chapter begins an inquest. The basic finding: the postwar bargain was built more on a convergence of circumstances than on durable, permanent changes. The bargain proved surprisingly fragile, once capitalists regained their normal, temporarily suppressed powers in a still-capitalist economy. This shift occurred both in national politics and in the new globalization.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“The threat to democracy is increasingly within the West.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“It’s also possible to revise the rules of globalization to reduce the amount of damage done by speculative private finance and to expand the role of transparent social investment. We could provide a lot more debt relief, as well as imposing a Tobin tax (see Chapter 3) on short-term financial transactions. Though the West has less economic influence than it once did, the markets of Europe and North America are still the world’s largest, which gives the West immense power to influence the rules for the global economy as a whole. Those rules were once used to promote balanced domestic social contracts. Lately, they have been used to enrich the already rich, often in concert with the repression of labor in the third world, and at the expense of decent labor standards in the West as well. The point is not that Japan, South Korea, China, and other emergent economies are doing something fundamentally wrong or inefficient by having industrial policies, subsidies, and managed trade strategies to promote their own economic growth. This is precisely what the West did at earlier stages of its own development. The point, rather, is that the system needs more realistic rules and norms, so that there is a fairer balance of benefits. That means balance between developing and developed countries, balance between capital and labor, and balance between market norms and social standards. Today, both the global trading system and US trade policy are promoting imbalance.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“I like Sanders a lot...but I think his time may have passed.”
― Robert Kuttner

“At the level of economic theory, the great fallacy in the logic of David Ricardo, the father of free-trade theory, was to view the gains and losses of trade in a static fashion, as a snapshot at a single point in time. In Ricardo’s theory, whose variants are espoused by free-market economists to this day, if nineteenth-century Britain offered better and cheaper manufactured goods, the US should buy them and export something where it could compete—say, raw cotton and lumber—even if that meant the US never developed an industrial economy. By the same token, if twentieth-century America made the best cars, machine tools, and steel, Japan and Korea should import those, and continue to export cheap toys and rice. And if other nations subsidized US industries, Americans, rather than being fearful of displacement, should accept the “gift.” What Ricardo missed—and what leaders from Alexander Hamilton and Abraham Lincoln to Teddy Roosevelt grasped (likewise statesmen in nations from Japan to Brazil), as well as dissenting economists like the German Friedrich List and the Americans Paul Krugman and Dani Rodrik—was that the dynamic gains of economic development over time far surpass the static gains at a single point in time. Economic advantage is not something bestowed by nature. Advantage can be deliberately created—an insight for which Krugman won a Nobel Prize. Policies of economic development often required an active role for the state, in violation of laissez-faire.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“The combination of these two trends - declining real wages and inflated asset prices - led the American middle class to use debt as a substitute of income. People lacked adequate earnings but felt wealthier. A generation of Americans grew accustomed to borrowing against their homes to finance consumption, and banks were more than happy to be their enablers. In my generation, second mortgages were considered highly risky for homeowners. The financial industry re-branded them as home equity loans, and they became ubiquitous. Third mortgages, even riskier, were marketed as 'home equity lines of credit.”
― Robert Kuttner

“In the disconnect between grievance and remedy, there is an astonishing muddle. Angry people vote for a seeming populist, and they get an autocrat whose policies and appointees make the economy even more tilted to the very rich. Trump’s populism turns out to be a blend of spite, entertainment, jingoism—and alliance with corporations when it comes to actual policy. Yet in the absence of government policies to lean against the predations of the market, Trumpism fills the vacuum.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“Republicans, meanwhile, moved from moderate right to far right, beginning with Barry Goldwater and Ronald Reagan. By the time Newt Gingrich became House Speaker in 1994, the Republican strategy was to deny Democrats successes on any issue. Under Obama, Republican legislators vowed to vote against the Affordable Care Act, sight unseen. Democrats, meanwhile, viewed themselves as the party of government, “the grown-ups in the room,” and were more inclined to compromise in order to keep government functioning. This asymmetry enabled Republicans to roll Democrats, time after time. The tactic reached an apotheosis under Obama, a leader with a personal affinity for compromise, of which Republicans took full advantage. So,”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“Domestically, we do not allow child labor, or unsafe labor, or labor that pays less than a minimum wage. Those policy choices reflect a century of domestic political struggle. To allow the fruits of such labor to enter via the back door of trade was a conscious political choice by elites. The orthodox view is that these shifts resulted from changes in the nature of the economy. The market, naturally, rewarded those with more advanced skills and education, while routine workers whose jobs could be done by machines or by cheaper labor offshore lost out. The basic problem with this story is that the postwar blue-collar middle class did not have college degrees, and most semiskilled factory workers had not graduated from high school. Yet the social contract of that era called for paying them decently. For a century, markets have often been wrong, and good social policy has overridden their verdicts. The US, on average, is more than twice as rich as it was in the postwar era. But those riches are being shared very differently today.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“In their authoritative 1995 work, Voice and Equality, political scientists Sidney Verba, Kay Lehman Schlozman, and Henry E. Brady demonstrated that political activity varied by class. Their study found that 86 percent of high-income people reported having voted, but only 52 percent of low-income people said they voted. And 73 percent of high-income people were involved with a political organization, compared to 29 percent of low-income people. A 2012 sequel by the same authors showed a widening of these patterns, as institutions of working-class participation such as trade unions continued to decline, while the influence of the wealthy concentrated. The affluent go to meetings, are active members of groups concerned with public issues, and develop “civic skills” far more than the poor do—and that disparity has been widening. The iconic Norman Rockwell painting of an ordinary working fellow standing up to speak his mind at a town meeting, meant to depict one of FDR’s Four Freedoms, belongs to another era. And yet, in the Trump rebellion, regular working people who had little regard for civic norms abruptly recovered their voices in a fashion characteristic of mass society—disaffected people sharing not always rational rage with an irrational leader. They even formed new, Tocqueville-style associations, the Tea Parties. Voice and Equality concluded that lower-income people participate at lower rates for three reasons: “they can’t” (because they lack the time or money); “they don’t want to” (because they don’t believe that politics will make a positive difference in their lives); and “nobody asked them” (the political system has few avenues of recruitment for lower-income people). In a survey of why so many people avoided politics, one key reason was that politics felt irrelevant. This view, of course, was also correlated by social class. Nobody in large corporations believes that politics is irrelevant. Trust in government—and in all major institutions—has been falling for half a century. When the American National Election Study first asked the question in 1958, 73 percent of Americans said they trusted the federal government to do the right thing “just about always” or “most of the time.” That sense of trust peaked in 1964, at 78 percent, and has been steadily dropping ever since. By 2015, it was down to just 19 percent. The”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“mobilize citizens against elites, inspired democratic leaders, and a good dose of luck. These moments tend not to last. The institutions often turn out to be more fragile than they first appear, and they require continual renewal. In a basically capitalist economy, financial elites, even when constrained, retain an immense amount of residual power. That can be contained only by countervailing democratic power. The Bretton Woods era suggests that a more benign form of globalization is possible. But the postwar brand of globalization, balancing citizenship and market, above all required a politics. Today, a few thinkers could sit in a seminar room and design a thinner globalization and a stronger democratic national polity. Keynes and his generation did just that after World War II. But they had the political winds at their backs. Today’s architects of democratic capitalism face political headwinds. Though ideas do matter, they are no substitute for political movements.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“of the USA. When the Group Health Cooperative of Puget Sound, one of the pioneering prepaid group health plans, was organized in the late 1930s, its founders included activists in trade unions and producer co-ops. Because health co-ops were fiercely opposed by organized medicine, their leaders and members necessarily had to become active in progressive politics.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“research by the political scientist Martin Gilens demonstrates the policy payoff to the rich and well-connected. The title of his 2013 book says it all: Affluence and Influence. Gilens documents that the policy preferences of the rich are at odds with those of most people. In the populace, there is broad support for preschool, paid parental leave, universal medical coverage, and affordable higher education. These public benefits never arrive, while the rules sought and created by the rich tend to dictate actual policy. Gilens found that the policy preferences of the rich are fifteen times more likely to become public policy as those of non-elites. The rules, you might say, are rigged.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“It speaks volumes about where the real power in America lies that Democrats found it easier to move to the left on an array of identity issues than to move left on pocketbook issues and challenge the dominance of finance.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“When democracy is weak, lower-income people have no defense against the wealthy rigging the rules and taking too large a share of the pie. Sooner or later, people of modest means, who tend to be cynical about government to begin with, give up on the idea that democratic participation and affirmative government can improve their lives. For more than forty years, voter turnout has been on a steady decline. States governed by Republicans have sought to deliberately depress turnout, especially among people likely to vote for Democrats. Extreme gerrymandering has compounded the sense that voting is futile, since incumbents can usually count on getting reelected. But the best-off 20 percent still vote at historic levels, while the decline has been steepest among the poor. When the bottom half turns away from government, people oscillate between not voting at all and embracing the magical promises of”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“polity with extremes of wealth and poverty is a city not of free persons but of slaves and masters, the ones consumed by envy, the others by contempt. — ARISTOTLE”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“Among people with traditional values about household roles, men felt displaced from the position of honor as breadwinners that they had once enjoyed. Many women felt displaced from their ability to feel like competent homemakers and mothers. A middle-class income now required two full-time wage earners. Men were deprived of the traditional services of wives at the same time that women were deprived of their capacity to focus on children and the household. Juggling jobs and kids and keeping a family together required an everyday struggle and heroism that cultural elites seemed to dishonor. The rich solved the problem with nannies. Society was caught between the traditional, patriarchal family structure and a new egalitarian family structure long sought by feminists that was largely blocked by a lack of social supports. Neither model worked well for most people.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“These policies would come back to haunt Europe in the aftermath of the 2008 collapse. Instead of the vigorous, countercyclical fiscal, monetary, and debt relief policies called for in the wake of a 1929-scale crash, Europe’s institutions promoted austerity reminiscent of the post–World War I era. The debt and deficit limits of Maastricht precluded strong fiscal stimulus, and the government of Angela Merkel resisted emergency waivers. Germany, an export champion, which in effect had an artificially cheap currency in the euro, profited from other nations’ misery. Germany could prosper by running a large export surplus (equal to almost 10 percent of its GDP), but not all nations can have surpluses. The European Central Bank, which reported to nineteen different national masters that used the euro, had neither the tools nor the mandate available to the US Federal Reserve. The ECB did cut interest rates, but it did not engage in the scale of credit creation pursued by the Fed. The Germans successfully resisted any Europeanizing of the sovereign debt of the EU’s weaker nations, pressing them instead to regain the confidence of capital markets by deflating. Sovereign debt financing by the ECB went mainly to repay private and state creditors, not to rekindle growth. Thus did “fortress Europe,” which advocates and detractors circa 1981 both saw as a kind of social democratic alternative to the liberal capitalism of the Anglo-Saxon nations, replicate the worst aspects of a global system captive to the demands of speculative private capital. The Maastricht constitution not only internalized those norms, but enforced them. The dream of managed capitalism on one continent became a laissez-faire nightmare—not laissez-faire in the sense of no rules, but rather rules structured to serve corporations and banks at the expense of workers and citizens. The fortress became a brig. There was plenty to criticize in the US response to the 2008 collapse—too small a stimulus, too much focus on deficit reduction, too little attention to labor policy, too feeble a financial restructuring—but by 2016, US unemployment had come back down to less than 5 percent. In Europe, it remained stuck at more than 10 percent, with all of the social dynamite produced by persistent joblessness.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“The geography of economic collapse had political repercussions. Among the states where new business growth lagged far behind the national rate were Pennsylvania, Ohio, Michigan, Indiana, Iowa, West Virginia, and Wisconsin—the states where Trump exceeded expectations and won the election. This pattern was the opposite of the economy of 1992–96, in which benefits of the recovery were broadly shared. In that recovery, 58 percent of Americans lived in counties where job creation equaled or exceeded the national average. In the 2010–14 recovery, that number fell to 28 percent.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“Chetty and his colleagues, applying a broader lens to intergenerational inequality, found that the percentage of grown children who enjoyed a higher living standard as adults than their parents did, declined from 92 percent for those born in 1940 (today’s retirees) to less than 50 percent for those born in 1984 (earners in their prime working years). The older generation benefited from rising GDP growth and increasing equality. The younger generation suffered more from rising inequality than from slower growth, with the hardening of class lines, and advantage passed along from parents to children. The researchers found that reverting to the income distribution of the 1940s would wipe out most of the recent decline in mobility and that higher growth rates are not sufficient to restore the ability of lower-income people to climb the economic ladder. Contrary to conventional economic wisdom, the rules of the game matter more than raw growth rates.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“The labor movement did not dwindle because more Americans were now middle class and no longer felt they needed unions, as some accounts claimed. That contention became increasingly preposterous as more and more workers fell out of the middle class. Polls regularly show that about half of nonsupervisory workers report that they would like to join a union. Fear prevents that. Union activists in non-union workplaces regularly get fired, with management impunity. Unions lost membership because of relentless attacks by corporations, the outsourcing of jobs heavily concentrated in unionized sectors, deregulation and privatization, and the shift in the federal government’s role from benign neutrality under Roosevelt and Truman to full-scale assault under Reagan and the Bushes.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“On the European side of the bargain, a generation of farsighted postwar leaders whose nations were recent enemies shared a common vision. They concluded from the ruinous events of the previous decade that fascism grew in the soil of human misery; that laissez-faire capitalism generated depression; that Europe must never again suffer a civil war; and that to fuse these several goals, Europe needed to move in the direction of both a managed form of capitalism and a federation. Thus was born an egalitarian system, unique in the history of international commerce. The roots of these events began more than a decade earlier in the United States, under Roosevelt’s New Deal.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“To fully appreciate what we’ve lost, we need to begin with a deeper understanding of the egalitarian capitalism that the West once had—and how it eroded. The system created at the end of World War II was, of course, incomplete. Women were not equal citizens, nor were blacks. Much of the West still had colonies. But compared to any version of capitalism before or since, the three decades after World War II were remarkable. The postwar system squared a circle. It achieved the improbable feat of combining dynamic capitalism with near-full employment, increasing income equality based on rising wages, and expanding social benefits. Such a convergence was unprecedented in the history of capitalism. Core elements of the system were the tight regulation of private finance, the offsetting empowerment of organized labor, and the activist role of government.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?

“the asymmetry between a ferociously strategic, corporate Republican Party and a compromised Democratic Party is telling.”
― Robert Kuttner, Can Democracy Survive Global Capitalism?