1

Working and Living in the Shadow of Economic Fragility

Edited by

Marion G. Crain

Michael Sherraden

00_9780199988488_c00.indd iii00_9780199988488_c00.indd iii 16-11-2013 15:35:5216-11-2013 15:35:52

1 Oxford University Press Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide.

Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto

With offi ces in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Th ailand Turkey Ukraine Vietnam

Oxford is a registered trademark of Oxford University Press in the UK and certain other countries.

Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016

© Oxford University Press 2014

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization. Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above.

You must not circulate this work in any other form and you must impose this same condition on any acquirer.

Library of Congress Cataloging-in-Publication DataWorking and living in the shadow of economic fragility / edited by Marion G. Crain, Michael Sherraden. pages cmIncludes index.ISBN 978–0–19–998848–81. United States—Economic conditions—2009– 2. United States—Economic policy—2009– 3. Unemployment—United States. 4. Working poor—United States. 5. Recessions—United States. I. Crain, Marion G. II. Sherraden, Michael W. (Michael Wayne), 1948– HC106.84.W67 2014330.973—dc232013033915

9 8 7 6 5 4 3 2 1 Printed in the United States of America on acid-free paper

00_9780199988488_c00.indd iv00_9780199988488_c00.indd iv 16-11-2013 15:35:5216-11-2013 15:35:52

157

9

Guardianship and the New Gilded Age

Insular Politics and the Perils of Elite Rule

Joe Soss and Lawrence R.   Jacobs

Over the past several decades, inequalities of income and wealth have risen

sharply in the United States (Volscho & Kelly, 2012). Th e richest have pulled away from

the rest, not just economically but also socially and politically (Hayes, 2012, pp.  137–

205). Th eir superior positions have become more secure as rates of social mobility have

declined over time and relative to mobility in other wealthy nations (Organization for

Economic Cooperation and Development, 2010). At the other end of the economic lad-

der, decent jobs—the kinds that off er some stability and provide the wages and benefi ts

needed for families to sustain livable lives—have become scarce (Mishel, Bivens, Gould,

& Schierholz, 2012). Two-earner families today take home less than one-earner families

did in the 1970s and carry far more of the risks associated with sickness, disability, old

age, job loss, and changes in family status (Hacker, 2006).

Th e contemporary era of rising inequality has coincided with a period of declining

confi dence in elite actors and institutions. Recent years have seen a particularly sharp

spike in public outrage and distrust. Across the political spectrum, from the Tea Party to

the Occupy movement, protesters have taken to the streets to decry what they see as an

elite betrayal of the common good and a system rigged to serve the advantaged. Th e two

movements are at odds politically, but they share a profound loss of faith in elites. Th at

loss of faith now extends to most Americans, protesting or not. Recent national polls

reveal that trust in government and elected leaders is at the lowest levels ever recorded

in the United States—lower even than right aft er the Watergate scandals (Gallup, 2011).

Levels of trust in the major institutions of the market—banks, fi nancial institutions, and

corporations—are as low as or lower than trust in the federal government (Kohut, 2012;

09_9780199988488_c09.indd 15709_9780199988488_c09.indd 157 16-11-2013 11:14:4216-11-2013 11:14:42

Working and Living in the Shadow of Economic Fragility158

Pew Research Center for People and the Press, 2011). We argue that governing elites in

the United States deserve the popular outrage directed toward them.

Since the 1970s, governing elites in America have become increasingly insulated from

democratic processes, citizen pressures, and public accountability. Th eir growing insular-

ity, in turn, has contributed to rising economic inequality, social insecurity for all but

the wealthiest Americans, and deep pathologies in the policy process. Democratic insti-

tutions have not disappeared, of course, but they coexist today with a host of political

forms that sequester elite decision makers and shield them from public accountability.

Interactions among our governing elites are marked by rancorous confl ict and polariza-

tion in some arenas and by smooth collaboration and consensus in others. At both poles

and most points in between, however, elites govern America today with their eyes pri-

marily on one another.

Americans outside the upper echelons of business and government are relegated to the

sidelines, their potential for infl uence now reduced to one of the “problems” that elites

endeavor to manage (Jacobs & Shapiro, 2000). Th is demotion of the citizenry to the sta-

tus of bystander (or object of manipulation) has combined with recurrent spectacles of elite

corruption, self-serving action, and partisan deadlock to foster political distrust and deep

skepticism about the eff ectiveness of government. Th us, the very political developments

that have served the rich at the expense of the rest now infl ame and reinforce opposition to

government and its capacity for public actions that would redistribute income and wealth.

Th is opposition extends even to those who would benefi t most from the policies. So too,

as economic and political inequalities rise together, large segments of the public become

accustomed to their marginal role in governance and, though political distrust is widespread,

popular deference to ruling authorities becomes more routine and normative (Solt, 2012).

In this chapter, we make two contributions to the study of the politics of inequality

in the United States. First, our analysis upends a classic argument from elite democratic

theory—namely, that ordinary people are prone to irrational passions and the patholo-

gies of faction; they are too willing to trample rights and will enthusiastically embrace

irresponsible policies. Enlightened elites, we are told, safeguard democracy from these

tendencies and serve as guardians of the public good. Recent history, we argue, supports

the opposite conclusion. It is democracy that enlightens elites, makes their confl icts pro-

ductive rather than debilitating, and safeguards against enthusiastic, self-congratulatory

pursuits of irresponsible policies.

When elites are insulated from democratic dialogue with the public, they gravitate

toward excessive and oft en disastrous forms of confl ict or consensus. On one side is the

polarized confl ict that has crippled the US Congress in recent years, producing an ugly

mix of inaction and irresponsible action. On the other side are the ruinous dynamics of

groupthink among fi nanciers, regulators, and Federal Reserve offi cials—dynamics that

led to the social and economic crises of the Great Recession. It is, in fact, hard to say

which of the two has been more damaging for democracy—or for Americans in the lower

half of the income distribution.

09_9780199988488_c09.indd 15809_9780199988488_c09.indd 158 16-11-2013 11:14:4216-11-2013 11:14:42

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 159

Second, our analysis engages a growing body of scholarship that seeks to explain

the rise of economic inequality in America on a scale far greater than in other wealthy

democracies. In recent years, scholars have begun to assert that this development can-

not be adequately explained by analyses that focus only on such systemic developments

as demographic shift s, technological changes, institutional rules of the workplace, and

globalization. Rather, rising inequality in America should be understood, in large part, as

an outcome of politics and public policy (Bartels, 2008; Gilens, 2012; Hacker & Pierson,

2011; Jacobs & Skocpol, 2005; Kelly, 2009).

Most scholars who advance this argument emphasize what might be called the hori-

zontal dimension of political life—a left -right dimension of politics that captures the

balance of power among competing coalitions of organized interests. From this perspec-

tive, the politics of inequality is conceptualized as a form of “organized combat” (Hacker

& Pierson 2011, p. 287). On one side are the Democratic Party, labor unions, and aligned

interests and organizations; on the other side are the Republican Party, organized busi-

ness interests, and related organizations (Bartels, 2008; Hacker & Pierson, 2011; Volscho

& Kelly, 2012). Th e perspective suggests that the rise of inequality in the United States

has refl ected the growing power of business interests and the declining fortunes of labor

unions; it has advanced most sharply when government institutions have been controlled

by Republicans (Bartels, 2008). Th e rising importance of money in American politics

exacerbates these developments; it tightens the bond between affl uence and infl uence,

providing the Republican Party with signifi cant structural advantages in electoral and

legislative competition (Bartels, 2008; Gilens, 2012; Hacker & Pierson, 2011; Winters &

Page, 2009). From this perspective, the threat to democracy posed by rising economic

inequality is also conceptualized along the left -right dimension: because of power imbal-

ances in organized political combat, the median voter loses sway and policies fall “to

the right of ” (i.e., more market-conforming and inequality-producing than) the actual

outcomes preferred by most Americans (Hacker & Pierson, 2011, p. 211).

Th e balance-of-power story is, in our view, correct and essential. But taken alone, it

is incomplete. To fi ll it out, we must connect it to changes along what might be called

the vertical dimension of politics—the dimension that connects elites to mass publics

and indicates the depth of their mutual engagement in governance. At one pole of this

dimension, elites govern from a highly insulated position and possess expansive freedoms

of action. Citizens may be rallied as supporters or appealed to as sources of legitimacy

for elite action, but they are seen primarily as objects of governance, as risks to be man-

aged, and as political resources to be deployed (Wolin, 2008). At the other pole, elites

are fi rmly embedded in ongoing relationships of democratic representation and, thus,

limited by a variety of constraints and countervailing powers. Citizens are organized into

politics and exercise civic agency as coparticipants in governance (Boyte, 2005; Fung &

Wright, 2003).

Elites have always stood at the center of American governance, but the extent of their

insulation has varied greatly across eras, depending on the broad organization of the

09_9780199988488_c09.indd 15909_9780199988488_c09.indd 159 16-11-2013 11:14:4216-11-2013 11:14:42

Working and Living in the Shadow of Economic Fragility160

political economy. During the mid-twentieth century, elites operated within a variety of

constraints that placed them in dialogue with the public and subjected them to pressures

from nonelites. Since the 1970s, a rising tide of elite autonomy has swallowed one policy

domain aft er another. Advanced by institutional changes that shield decision making

from public infl uence, it has been justifi ed by arguments for public deference to experts

and enlightened offi cials. Th ese developments have proceeded under both major political

parties, and they have empowered governing elites at the expense of ordinary Americans.

From this perspective, the problems that have advanced economic inequality are only

partially captured by accounts that focus on the horizontal dimension, which empha-

sizes power imbalances between political combatants and deviations from the policy

outcomes preferred by the median voter. Economic inequality has risen in tandem with

and through the advancement of a broader erosion of democracy. Th at erosion is char-

acterized by insulated elite rule, diminished civic organization, and the marginalization

of popular political agency. It has occurred not just on the right but on the left as well,

not just in the state but also in the powerful institutions of the market and civil society.

To understand the politics of inequality in the United States today, one must clarify

how shift s in the right-left balance of power have intersected with the growing insula-

tion of governing elites. Neither dimension can be entirely reduced to the other. 1 Indeed,

an appreciation for both dimensions helps to clarify the present political moment: Th e

administration of Barack Obama has diminished the power of the Right, slowing or

reversing its policy agenda in important respects (balance-of-power approaches would

emphasize such developments). In certain areas, however, the administration has adopted

a technocratic managerial style that has further sequestered the power of elites.

In what follows, we begin by clarifying what we mean by “governing elites” and explain-

ing why the relative insulation of elite rule should be seen as a key feature of the political

economy, a feature that varies over time. We then outline the major forces that democra-

tized elite-centered governance during the mid-twentieth century and helped produce an

era of broadly shared prosperity. Finally, we turn to the period since the 1970s, explaining

how the insulation of governing elites has grown over time and why it has contributed to

rising economic inequality. In our conclusion, we briefl y suggest some important priori-

ties for renewing American democracy.

Elite Rule and the American Political Economy

Th e term “governing elites” may lead some to think of government offi cials. To others,

it may suggest a clandestine group conspiring to advance secret agendas. It sounds a bit

like the “power elite,” which an earlier era of scholars saw as a coherent, tightly connected

group that monopolized power by occupying commanding positions in business, gov-

ernment, media, and other key institutions (Mills, 1956, p. 3; see also Domhoff , 1967).

Elements of these earlier approaches remain helpful in mapping power across sectors and

09_9780199988488_c09.indd 16009_9780199988488_c09.indd 160 16-11-2013 11:14:4216-11-2013 11:14:42

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 161

focusing on those at the upper echelons of American institutions. Yet we use the term in

a somewhat diff erent way, and it is worth taking a moment to avoid confusion.

By governing elites, we refer to people who participate in the process of governance—

an activity that extends beyond government. In contemporary governance, networks of

actors in the state, market, and civil society make decisions, separately or together, that

“guide and restrain the collective activities” of society (Keohane & Nye, 2000, p. 12; see

also Bevir, 2010; Treib, Bähr , & Falkner , 2007). We intend for our analysis to encompass

a variety of sites—in government but also in businesses, nonprofi t organizations, policy

institutes, philanthropic foundations, and other institutions. By governing elites , we refer

to actors at such sites “who regularly have the capacity to wield a great amount of power

and authority in the form of decisions and non-decisions which signifi cantly infl uence

the values of society” (Bachrach, 1967, p. 77). 2

Governing elites do not share a single demographic profi le, nor are they necessarily

members of a group that takes intentional action together. Th ey are people who, by virtue

of the positions they occupy, possess outsized infl uence in power relations. Th ey also pos-

sess extraordinary capacities to exercise authority and coordinate the activities of others.

Governing elites rise to their positions in a variety of ways. Some are elected or appointed

to government offi ce; others gain admission by virtue of professional credentials and

technical expertise; others ascend through the ranks of corporate or nonprofi t manage-

ment; still others leverage their vast personal fortunes for a seat at the table.

People who hold elite positions in one arena of governance may hold little infl uence in

another. Within a given policy area, contending elites may hold opposing values, goals,

and interests. Diversity among elites is hardly guaranteed, however. In many sites of gov-

ernance, one fi nds clusters of governing elites who share remarkably similar experiences,

assumptions, interests, and worldviews. For instance, a new fi nancial rule may spark fi erce

debates among elites who share experiences in the fi nancial sector and consider it com-

mon sense to defer to international fi nance and shield private fi rms from state regulations

(Brown & Jacobs, 2008).

In large, complex societies, governing elites of some kind are a political necessity.

Busy citizens cannot follow every public issue or participate directly in every decision.

In political life as elsewhere, society needs divisions of labor, delegations of authority,

and systems of political representation that shape as well as respond to public opinion. It

needs professionals who possess technical expertise, inform public debate, devise policy

proposals, and evaluate the eff ects of collective choices (Fischer, 2009; Warren, 1996). In

a well-functioning representative democracy, governing elites and relevant publics con-

stitute and respond to one another in an ongoing dialogue (Disch, 2011). Th e problem is

that this back and forth has broken down in the United States today.

Or perhaps we should say that it has broken down again. Th e history of democracy in

the United States is, in many respects, a tale of ebbs and fl ows in the insulation of govern-

ing elites. Th e nation’s constitutional founding was itself an eff ort to insulate governance

from the “unruly” public (Dahl, 2003, p. 24). James Madison and the framers of the US

09_9780199988488_c09.indd 16109_9780199988488_c09.indd 161 16-11-2013 11:14:4216-11-2013 11:14:42

Working and Living in the Shadow of Economic Fragility162

Constitution sought to overcome what they saw as an excess of democracy under the

Articles of Confederation. Citing the tendency of the masses toward “violence,” incom-

petence, and “temporary or partial considerations,” Madison hoped for a system in which

elites could impose themselves between the people’s desires and government actions,

serving as gatekeepers who “refi ne and enlarge the public views” to “best discern the true

interest of their country” (Publius, 1787, p. 2). For democracy to work, he stated, “you

must fi rst enable the government to control the governed” (Publius, 1788, p. 2). Toward

this end, the Constitution tempered popular pressures on governing elites by leaving in

place extensive voting restrictions (based on race, gender, and property ownership) and

by insulating political institutions. 3

Over the ensuing decades, elite rule was oft en consolidated, disrupted, and driven

toward democratic forms. Plantation aristocrats and their allies ruled the Old South

through extreme forms of political exclusion, racial subjugation, and economic exploita-

tion. Th rough long periods of the nineteenth century, entrenched elites controlled both

major parties without disruption. During the Gilded Age, business elites oft en decided

Americans’ fates in ways that were virtually unconstrained by government offi cials, who

were oft en deeply in their debt. It was in this era that the powerful politico Mark Hanna

famously quipped, “Th ere are two things that are important in politics. Th e fi rst is money,

and I can’t remember what the second one is” (Miner & Rawson, 2006, p. 526). Indeed,

periods of profound economic inequality have typically coincided with eras of insulated

elite governance, each development abetting the other.

How is such a feedback loop disrupted? Typically, great groundswells of popular

pressure combine insurgent social movements with shift s in the degree and direction of

electoral participation. Popular movements use ad hoc activities (including protests and

strikes) to directly challenge insulated elite rule, fracture elite consensus, and disrupt the

political coalitions on which elites depend (Goodwyn, 1978; Piven, 2006). Th e critical

elections that accompany these movements embolden and empower reformers to create

new constraints on wealth accumulation and reconnect governance to the masses.

Reformers during the Jacksonian period of the 1820s and 1830s, for example, stymied

the King Caucus that allowed a small clique to monopolize candidate nominations. Th ose

eff orts precipitated an era of mass mobilization and democratic opening (Ostrogorski

[1902], 1970). Abolitionists would later capitalize on these new democratic opportuni-

ties. Using insurgent tactics to disrupt sectional alliances and challenge both political

parties, they helped put an end to chattel slavery and turned the US Constitution into

a far more democratic document. Th e Populist movement of the late-nineteenth cen-

tury, including the presidential campaigns of William Jennings Bryan, set an agenda for

economic redistribution (including the establishment of the federal income tax) and

precipitated an “age of reform” that set the cornerstones upon which future generations

would build the American welfare state (Brinkley, 2000; Hofstadter, 1955; Kazin, 2006).

Th e institutional arrangements created at such times generally last well beyond the

turbulent episodes that mark their birth. Time and again, however, governing elites have

09_9780199988488_c09.indd 16209_9780199988488_c09.indd 162 16-11-2013 11:14:4216-11-2013 11:14:42

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 163

seized on the subsidence of popular pressures to shed the new constraints, protect them-

selves from accountability, and enhance their capacity for autonomous action.

When citizen engagement fades and elites become less worried that citizens will pun-

ish them politically, elite decision makers in government and business oft en drift into

favoritism and corruption. Th e eff ects on the lives of ordinary Americans can be disas-

trous (Glaeser & Goldin, 2006). If liberated from the need to win over broad swaths of

the public, elites tend to lose sight of the center, fi ghting bitterly among themselves and

gathering into uncompromising, polarized camps (McCarty, Poole, & Rosenthal, 2006).

With only like-minded experts observing and checking them, technocrats have recklessly

wagered the health and welfare of Americans on grand designs backed by elegant theo-

ries. In these circumstances of widening latitude, governing elites have persistently failed

to serve as “guardians of the public good” (Publius, 1787, p. 2). Instead, they have proven

exquisitely sensitive to the interests of business and the affl uent; such attention comes at

the expense of the less advantaged.

Democratizing Governance and the Great Compression

From this perspective, it is no accident that the high-water mark of economic equality in

the United States—the era of broadly shared economic prosperity known as the “great

compression” (1940s–70s)—coincided with an era in which governing elites confronted

unusually strong democratizing constraints. It was no golden era of democracy, to be sure,

especially for Americans who were not White, male, heterosexual, and employed. But it

was a period in which elites were forced to accept limits and share power—a period in

which governance was rooted in a meaningful dialogue between elites and nonelites.

Federated civic organizations with cross-class memberships connected business

elites to workers, and public offi cials to constituents, providing forums where citizens

learned about public issues and were recruited into political life (Skocpol, 2003). Labor

unions grew in strength and number, drawing workers into the political process as an

organized and potent force that elites on the Left and Right could not ignore (Dray,

2010; Levi, 2003). Th e major political parties operated as big-tent organizations (Epstein,

1989). Th ey won elections by mobilizing armies of foot soldiers and by appealing to the

numerous split-ticket voters whose moderate and episodic votes could not be counted

on ( Jacobson, 1990; Kimball, 2004). Business elites operated on a constraining fi eld of

government regulations and social norms that, along with tax-and-transfer policies, con-

verted productivity gains into broadly shared prosperity (Kenworthy, 2011; Western &

Rosenfeld, 2011).

Th e politics of inequality in this period operated on an institutional foundation

made far more conducive to democracy by the achievements of the Progressive and New

Deal eras. During the Progressive Era (1890s–1920s), activists and reformers cleaned

out many of the corrupt systems of collaborative elite rule that linked vast inequalities

09_9780199988488_c09.indd 16309_9780199988488_c09.indd 163 16-11-2013 11:14:4316-11-2013 11:14:43

Working and Living in the Shadow of Economic Fragility164

of wealth to insulated, undemocratic processes of governance during the Gilded Age

(1870s–90s). Th ey attacked corrupt party machines that relied on patronage reward

to sustain public cooperation while reserving power for elites. Th ey extended the vote

to women and directly strengthened popular control over governing elites on multiple

fronts—for example, through the direct election of US senators, new referendum and

recall procedures, and primary election systems (Diner, 1998). As ordinary Americans

assumed a more prominent place in governance, mechanisms of economic equality and

social protection also emerged. Among these were a progressively redistributive federal

income tax, workman’s compensation programs, and mother’s pension programs. Th e

New Deal deepened these developments by imposing new constraints on fi nancial and

banking elites (e.g., the Glass-Steagull Act, the Securities Act, and the creation of the

US Securities and Exchange Commission); promoting the political organization of labor

(e.g., the Wagner Act); and strengthening redistributive programs and social protections

(e.g., the Social Security Act). 4 Th e Great Compression was a product of a certain type of

political era in which civic groups and ordinary citizens were organized into the govern-

ing process. Indeed, it is telling that leading scholarly analyses of US politics describe this

era as a raucous clashing of groups, an era when deadlock and delay oft en emerged if poli-

cies could not draw sustained support fr om the electorate (Burns, 1967; see also Dahl, 1956).

Governing elites were constrained by the rules, norms, and relationships in which they

were embedded; by countervailing political forces that came from beyond their ranks;

and by the need to appear familiar, engaged, and responsive to community members and

organizations at election time.

Under these conditions, the needs and aspirations of ordinary people played an impor-

tant role in governance, and governance produced broadly shared material benefi ts.

Problems of inequality in this period—both economic and political problems—centered

on exclusions from the broad social compact that positioned large numbers of Americans

as participants in civic life and as cobenefi ciaries of economic prosperity. Th e shortcom-

ings of American democracy remained legion. Th ese disproportionately aff ected women,

racial minorities, and the very poor. Th ey were especially severe in the South. But placed

in a broad historical perspective, the period can be seen as a relative low point in the insu-

lation of governing elites and as a high point in shared economic prosperity.

Insulated Elite Rule and the New Gilded Age

In the 1970s, the United States began to dismantle the political and economic compact

that produced engaged and contested democracy in the three decades following World

War II. Civic associations, the once common links between business leaders and work-

ers, disappeared (Skocpol, 2003). Business ownership shift ed from wealthy local fami-

lies—people who oft en had deep roots in their communities and held a variety of civic

leadership and stewardship roles—to corporate operatives who owed their allegiance to

09_9780199988488_c09.indd 16409_9780199988488_c09.indd 164 16-11-2013 11:14:4316-11-2013 11:14:43

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 165

the profi tability expected by shareholders (Page, Bartels, & Seawright, 2013). Business

elites moved to expand their freedoms to pursue the kinds of rapid, unilateral actions that

maximize profi ts. Th ey adopted new production models based on managerial fl exibility

and cheap, fungible workforces. Th rough unilateral and state-based strategies, businesses

removed themselves from the limits imposed by collective bargaining relationships with

labor unions (see the chapter by Crain in this volume).

Across a wide range of policy areas, constraints on elites also have been rolled back

by shift ing governance away from government itself. Since the early 1990s, the big push

has been to “reinvent” government as a collaborator that shares power with organiza-

tions from the business and nonprofi t sectors (Osborne & Gaebler, 1993, p. xxii; see also

Kettl, 2002). As contracts have bestowed public resources and authority on nongovern-

mental organizations, new networks of governing elites have emerged under the guise

of “public-private partnerships” and “cross-sector collaborations.” Interacting in these

networks, elites from various sectors produce outcomes that Americans cannot strictly

blame on any democratically accountable institution or representative.

Th e shift ing of governance away from government complemented more direct eff orts

by business elites to shed the constraints imposed by the citizenry’s political representa-

tives. Th e result was a substantial weakening of what John Kenneth Galbraith (1967, p. ii)

termed the “countervailing” powers of government. Business interests invested heavily

in campaign contributions, new lobbying capacities, think tanks, and other resources for

“organized combat” (Hacker & Pierson, 2011, p. 287). Th ey deployed these capacities to

roll back regulations, cut taxes, and weaken or capture the state agencies charged with

monitoring their actions (Akard, 1992; Ferguson & Rogers, 1986). As they slipped out

of governmental constraints, business elites used their newfound freedoms to opt out of

the social compact that supported a vibrant and growing middle in the mid-twentieth

century. Businesses moved quickly to pare back wages and benefi ts, renege on pension

agreements, shift health care and pension risks onto workers, and diminish the budgetary

costs and labor-market–tightening eff ects of social protections for US workers (Hacker,

2006; Piven & Cloward, 1997).

As business elites freed themselves from unwanted governmental limits, state authori-

ties took parallel steps to enhance their autonomy from mass publics. Reacting to the free-

dom movements of the 1960s, concerned elites began to warn in the 1970s of an “excess of

democracy” that threatened to overload state institutions, erode political legitimacy, and

make society ungovernable (e.g., Crozier, Huntington, & Watanuki, 1975, p. 113; King,

1975). Th ey asserted that political institutions had become too porous, subjecting public

offi cials to a paralyzing onslaught of group demands and citizen voices. Indeed, over the

ensuing decades, elites in government would move in a variety of ways to shore up the

institutional boundaries between themselves and citizens.

Congressional leaders, for example, developed a host of strategies to exercise independent

power and shield themselves from popular pressure. Today, demands from the public are

blunted through escalated uses of the Senate fi libuster or sidestepped via the growing abilities

09_9780199988488_c09.indd 16509_9780199988488_c09.indd 165 16-11-2013 11:14:4316-11-2013 11:14:43

Working and Living in the Shadow of Economic Fragility166

of the Speaker of the House of Representatives and the Senate Majority Leader to set agendas

and control rules in their chambers (Mann & Ornstein, 2008). Members of both legislative

chambers possess a range of sophisticated tactics for minimizing the visibility of their policy

decisions and avoiding exposure to blame (Weaver, 1986). Policies are cleverly designed to

obscure or delay costs and cloud the identities of elite benefi ciaries (Hacker & Pierson, 2005;

Mettler, 2011). Deploying sophisticated strategies of “craft ed talk” developed through public

opinion research (Jacobs & Shapiro, 2000, p. xiii), elected offi cials use stories, arguments,

and symbols to frame actions that service the affl uent. Th ese frames cast policies in terms that

Americans fi nd palatable or, in some cases, rally behind even as they are harmed.

Elites in government also insulate themselves by moving issues to arenas where vis-

ibility and accountability are limited. Elected offi cials distance themselves from

inequality-enhancing decisions by shift ing them to insulated, secretive government agen-

cies, such as the Federal Reserve, and to expert panels run by unelected administrators

and judges. In many cases, they react to rapacious market forces by doing nothing, as in

the case of stagnating minimum-wage and crumbling labor-relations systems. Th e result

is maddening to watch: lawmakers go before the public to denounce outcomes that their

actions ensured. But the process plays a key role in linking insulated elite rule to the pro-

duction of inequality. Politicians dodge public outrage by pointing to a ready supply of

scapegoats. Liberated from blame, they retain popular support while reaping the political

rewards that come from providing favors for more attentive and well-heeled interests.

Not surprisingly, these maneuvers to shield elected offi cials from accountability have

accompanied a resurgence of broader eff orts to demobilize and defang the electorate. In

recent years, numerous actions have been taken to make it more diffi cult for less advan-

taged Americans to make their voices heard. Examples include eff orts to toughen voter

registration procedures, impose new voter identifi cation rules, and sustain felony disen-

franchisement laws (Keyssar, 2012; Manza & Uggen, 2006; Piven, Minnite, & Groarke,

2009). Legislators also have used their redistricting authorities to redraw jurisdictions,

creating a growing number of “safe seats” that insulate elected offi cials from public

accountability (Bullock, 2010, p. 123).

In addition, lawmaking increasingly falls under the growing sway of the executive

branch, which relies on prerogative powers through administrative rule making and

executive orders (Mayer, 2002; Moe, 2003). In recent decades, “the strategy of unilateral

action has grown increasingly more central to the modern presidency” (Moe & Howell

1999, p. 852). Th e administration of George W. Bush is widely seen as a high-water mark

for the “imperial presidency,” and Democrats decried it for unilateral evasions of the

democratic process (Rozell & Whitney, 2009). However, many of these techniques per-

sist under the Obama administration.

For example, President Obama has continued to use signing statements, albeit at a lower

rate, to reinterpret provisions of new statutes and thus to unilaterally alter their eff ects.

He has adopted a technocratic managerial style of “enlightened administration” that

“risks short-circuiting the legislative process and implementing major reforms through

09_9780199988488_c09.indd 16609_9780199988488_c09.indd 166 16-11-2013 11:14:4316-11-2013 11:14:43

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 167

means largely invisible to the public” (Milkis, Rhodes, & Charnock, 2012, p. 67). He has

asserted “vigorous authority to exercise power independently of his Democratic base in

Congress” and, in areas as diverse as climate change, economic policy, health care, hous-

ing, and education, has appointed “policy czars” with broad authority to “cut through—

or leap frog”—traditional processes of policymaking and implementation (Milkis et al.,

p. 66). Embracing Th aler and Sunstein’s (2008, p. 3) argument that elites should design

“choice architecture” in subtle ways to ensure that ordinary people pick correctly, Obama

appointed Sunstein as the head of the Offi ce of Information and Regulatory Aff airs,

granting him broad authority to review and revise government regulations.

Th e continued accretion of presidential power under Obama has had mixed eff ects

on economic inequality. Th e Obama administration used its administrative powers to

establish environmental rules, to create new regulations on labor relations, and to expand

health insurance coverage in ways that mitigate market distributions ( Jacobs, 2012;

Jacobs & Ario, 2012; Jacobs & Skocpol, 2012). Although a fuller treatment of the nuances

of the administration’s actions is not possible here (but compare Jacobs & King, 2012;

Skocpol & Jacobs, 2011), its policies raise an important puzzle: technocracy in the hands

of the Democrat-progressive coalition may help check or perhaps off set market opera-

tions. To fl esh out this puzzle fully would, in our view, require attention to the long-term

eff ects of technocracy, including its role in undermining democratic responsiveness and

its potential to persistently redirect America’s political economy.

Even with the somewhat mixed record of the Obama administration, the broad theme

of the past four decades is disturbing:  governing elites succeeded in separating gover-

nance from the more democratic processes of policymaking that prevailed during the

mid-twentieth century. As a consequence, the wealthiest Americans have siphoned vast

resources out of public and private systems while little has been done to address the grow-

ing insecurities of citizens suff ering from declining wages and supports.

Insulated Elites and the Financial Meltdown

Emerging in 2007 and leading to the Great Recession, the recent fi nancial crisis off ers

a stark illustration of many of the dynamics outlined in this chapter (e.g., Carpenter,

2011; Ferguson & Johnson, 2009a, 2009b; Krippner, 2011; Wessel, 2010). Networks

of elites created and then managed the crisis, with individuals oft en moving back and

forth between positions in state and market institutions that governed through extensive

consultation. Th roughout, elites worked to shield themselves from democratic pressures

and public accountability as they managed events from insulated positions of institu-

tional power. Ignoring mounting evidence of trouble and increasingly shrill warnings

from outside, authorities recklessly clung to ideologically driven policy agendas accepted

as enlightened conventional wisdom among the narrow groups of elites that mattered

to them.

09_9780199988488_c09.indd 16709_9780199988488_c09.indd 167 16-11-2013 11:14:4316-11-2013 11:14:43

Working and Living in the Shadow of Economic Fragility168

Rampant corruption fl ourished and was tolerated among elites who claimed they

needed to be buff ered from politics so that they could apply their expertise in virtuous

service to the public interest. As political decisions determined economic winners and

losers on a vast scale, citizens were reminded that they could not hope to understand all

the complexities involved and should trust in the knowledge, skill, and virtue of techno-

cratic elites. On measures designed to service banking interests and the affl uent, govern-

ing elites proved remarkably capable of agreement and action. On decisions to meet the

needs of Americans in the lower half of the income distribution, they descended into a

sorry spectacle of polarization, discord, and deadlock. While millions of Americans suf-

fered from losses of jobs and homes, federal offi cials quickly doled out over $7.7 trillion to

big banks, insurance companies, and other fi nancial institutions—that jaw-dropping fi g-

ure accounts only for transfers through March 2009 and yet amounts to half of the value

of everything produced in the United States during that year (Ivry, Keoun, & Kuntz,

2011). As one of the country’s most prominent business reporters explained, “Th e big

powered, moneyed institutions are in control in Washington. . . . Th ere’s a drastic imbal-

ance between the people who created the problem and the people who had to pay [for] the

problem. . . . [With] the rise of the fi nancial institutions as a percentage of GDP, . . . [they]

can persuade the treasury secretary that, if you don’t bail me out Armageddon is going to

happen and everyday people will lose access to their money and the world will come to

an end” (Morgenson, 2012).

Th e power to threaten, however, is only part of the story. As the Great Recession pro-

ceeded, arguments touting the advantages of governance by experts and governing elites

proved highly resilient, even in the face of clear evidence of elite failure. Shortly aft er

his departure from a post in the Obama administration for a top corporate position at

Citigroup, and despite the persistence of widespread pain from the fi nancial meltdown

and recession, Peter Orszag (2011) argued publicly that, when it comes to democracy,

Americans now have “too much of a good thing.” Citing issues as diverse as climate

change, fi nancial recovery, long-term fi scal planning, monetary policy, health care pol-

icy, tax policy, and infrastructure investment, Orszag (2011) called for an expansion of

technocracy-centered, managerial governance modeled aft er that of the Federal Reserve.

To be sure, the Great Recession aroused public demands for new constraints on

fi nancial elites, and these demands have been hard to ignore. Some signifi cant new

forms of oversight emerged from such interventions as the Sarbanes-Oxley Act and the

Dodd-Frank Act of 2010. 5 Th ey were championed and passed as eff orts to impose tough

new limits on banking and fi nance elites but soon met with organized resistance that

slowed or subverted implementation of important provisions. In many areas, banking

elites waited for the public outcry to subside and then quietly moved to restore and even

strengthen their freedoms to self-regulate with limited political accountability.

Federal regulators, many of whom previously worked at the very fi rms they regulated,

mostly functioned as collaborators in this project. Believing that their fi rst responsibil-

ity was to the “fi nancial health of those banks” (on which all depend) rather than to any

09_9780199988488_c09.indd 16809_9780199988488_c09.indd 168 16-11-2013 11:14:4316-11-2013 11:14:43

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 169

process of public accountability, they embraced the fi rms’ preferred view that govern-

ment regulation should be kept to a minimum (Morgenson & Story, 2011). Against the

backdrop of catastrophic failures of self-regulation, they delegated broad new governing

authorities to “clearinghouses” of fi nancial elites under the pretext that (more publicly

accountable) government offi cials could not understand the complexities of the new

fi nancial commodity markets (Story, 2010). Th e identities of the banking elites who run

these clearinghouses are hidden from the public, yet they have broad leeway to regulate

themselves and “protect the interests of big banks in the vast market for derivatives, one

of the most profi table—and controversial—fi elds in fi nance” (Story, 2010, para. 2).

In the Great Recession, governing elites were ultimately able to evade a democratic day

of reckoning even as they failed to deliver on their promises and betrayed the trust of the

public. In 2010, the fi rst offi cial year of economic recovery, the top 1 percent of income

earners captured 93 percent of the income gains over the preceding year (Saez, 2013). For

the staggering numbers of less fortunate Americans who lost jobs, homes, and their retire-

ment savings, the “recovery” was still a long way off .

Conclusion

Th ere has never been a “golden era” of thoroughgoing democratic rule in the United

States. Th e powerful have long organized US political and policy processes to invite dis-

engagement and to bias decision making in favor of the advantaged (Schattschneider,

1960). Race, gender, religion, and sexuality have served as the basis for exclusion and sub-

ordination of individuals (Smith, 1997). Th e poorest Americans have been chronically

marginalized in the political process, just as business has enjoyed a reliably privileged

position (Lindblom, 1977; Piven & Cloward, 1974).

Despite these limitations and more, the period from the 1940s to the 1970s was one

in which the United States constrained governing elites, who found themselves hemmed

in by countervailing popular forces in a variety of ways. Since the 1970s, however, elites

have expanded and insulated their capacities for a mode of governance that is oft en unen-

cumbered by involvement from citizens and public interest groups. Elites contend with

other elites; they manage nonelites. Th e products of this mode of governance surround

Americans; they can be seen in the spiraling concentrations of wealth in gated communi-

ties and in the desperation of struggling Americans whose dreams of livable lives grow

ever more distant.

Can anything be done? Our answer is an emphatic yes. Citizens continue to have the

power to disrupt and constrain governing elites (Piven, 2006). Well-organized electoral

coalitions and social movements can disrupt—as they have in the past—the prevailing

politics of insulated elite rule. Consider how popular resistance halted the Bush admin-

istration’s aggressive push to privatize Social Security (Béland, 2007). Or consider the

powerful role played by citizen groups, such as Health Care for America Now, in the

09_9780199988488_c09.indd 16909_9780199988488_c09.indd 169 16-11-2013 11:14:4316-11-2013 11:14:43

Working and Living in the Shadow of Economic Fragility170

passage of the Patient Protection and Aff ordable Care Act of 2010 (Pub. L. No. 111-148,

124 Stat. 119; see also Jacobs & Skocpol, 2012). Or consider how a wave of popular out-

rage prompted the Susan G. Komen foundation to quickly reverse its unilateral decision

to defund Planned Parenthood (Belluck, Preston, & Harris, 2012).

Th ese instances of popular infl uence swim against the tide in US politics today. To

make them less exceptional, citizens must demand deep, systemic reforms to undo the

combination of political and economic inequality that defi nes this new Gilded Age.

Fortunately, the needed reforms are not so mysterious, and many have already been

developed. Campaign fi nance reforms should deepen transparency through disclo-

sure rules, make small donations more eff ective through public matching, and restore

the capacity for state regulation of campaign contributions (Ackerman, 2013). Election

laws can be redesigned in a variety of ways to broaden citizen participation. Examples

include Election Day holidays, early voting, easier registration, and felon enfranchise-

ment (Ackerman, 2013; Piven et al., 2009). New institutional designs can be used to pro-

mote a greater citizen role in police oversight and public educational institutions (Fung,

2006). A variety of reforms are available to revitalize civic organizations in America and

to promote informed public engagement in policy design and implementation ( Jacobs,

Cook, & Delli Carpini, 2009). Reforms of the Senate fi libuster and the party nomina-

tion process can play an essential role in redemocratizing major government institutions

(Mann & Ornstein, 2012). Th e United States does not need good blueprints; they are

already available. What is needed is the kind of political will and commitment to action

that allowed citizens and reformers to end the last Gilded Age.

Referneces

Ackerman , B. ( 2013 ). Reviving democratic citizenship? Politics & Society, 41 ( 2 ), 309–17 .

doi:10.1177/0032329213483103.

Akard , P. J. ( 1992 ). Corporate mobilization and political power: Th e transformation of U.S. eco-

nomic policy in the 1970s. American Sociological Review, 57 ( 5 ), 597–615 . doi:10.2307/2095915.

Bachrach , P. ( 1967 ). Th e theory of democratic elitism: A critique . Boston, MA :  Little, Brown .

Bartels , L. M. ( 2008 ). Unequal democracy: Th e political economy of the new Gilded Age . New York,

NY :  Russell Sage .

Béland , D. ( 2007 ). Social Security:  History and politics fr om the New Deal to the privatization

debate . Lawrence :  University Press of Kansas .

Belluck , P. , Preston , J. , & Harris , G. ( 2012 , February 3). Cancer group backs down on cut-

ting off Planned Parenthood. New  York Times . Retrieved from http://www.nytimes.

com/2012/02/04/health/policy/komen-breast-cancer-group -reverses-decision-

that-cut-off -planned-parenthood.html?pagewanted=all&_r=0 .

Bevir , M. ( 2010 ). Democratic governance . Princeton, NJ :  Princeton University Press .

Boyte , H. C. ( 2005 ). Reframing democracy:  Governance, civic agency, and politics. Public

Administration Review, 65 ( 5 ), 536–46 . doi:10.1111/j.1540-6210.2005.00481.x.

09_9780199988488_c09.indd 17009_9780199988488_c09.indd 170 16-11-2013 11:14:4316-11-2013 11:14:43

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 171

Brinkley , A. ( 2000 ). Liberalism and its discontents (2nd printing). Cambridge, MA :  Harvard

University Press .

Brown , L. D. , & Jacobs , L. R. ( 2008 ). Th e private abuse of the public interest: Market myths and

policy muddles . Chicago, IL :  University of Chicago Press .

Bullock , C. S. , III. ( 2010 ). Redistricting:  Th e most political activity in America . Lanham,

MD :  Rowman & Littlefi eld .

Burns , J. M. ( 1967 ). Th e deadlock of democracy:  Four-party politics in America (Revised ed.).

Englewood Cliff s, NJ :  Prentice Hall .

Carpenter , D. ( 2011 ). Th e contest of lobbies and disciplines:  Financial politics and regulatory

reform. In T. Skocpol & L. R. Jacobs (Eds.), Reaching for a new deal: Ambitious governance,

economic meltdown, and polarized politics in Obama’s fi rst two years (pp. 139–88) . New York,

NY :  Russell Sage .

Crozier , M. J. , Huntington , S. P. , & Watanuki , J. ( 1975 ). Th e crisis of democracy: Report on the gov-

ernability of democracies to the Trilateral Commission . New York :  New York University Press .

Dahl , R. A. ( 1956 ). A preface to democratic theory . Chicago, IL :  University of Chicago Press .

Dahl , R. A. ( 2003 ). How democratic is the American constitution? (2nd ed.). New Haven, CT :  Yale

University Press .

Diner , S. J. ( 1998 ). A very diff erent age:  Americans of the Progressive Era . New  York, NY :  Hill

and Wang .

Disch , L. ( 2011 ). Toward a mobilization conception of democratic representation. American

Political Science Review, 105 ( 1 ), 100–114 . doi:10.1017/S0003055410000602.

Domhoff , G. W. ( 1967 ). Who rules America? Englewood Cliff s, NJ :  Prentice Hall .

Dray , P. ( 2010 ). Th ere is power in a union:  Th e epic story of labor in America . New  York,

NY :  Doubleday .

DuBois , W. E. B. ( 1903 ). Th e talented tenth. In Th e Negro problem: A series of articles by represen-

tative American Negroes of today (pp. 31–75) . New York, NY :  James Pott .

Epstein , L. D. ( 1989 ). Political parties in the American mold . Madison :  University of

Wisconsin Press .

Ferguson , T. , & Johnson , R. ( 2009a ). Too big to bail: Th e “Paulson Put,” presidential politics,

and the global fi nancial meltdown. Part I: From shadow fi nancial system to shadow bailout.

International Journal of Political Economy, 38 ( 1 ), 3–34 . doi:10.2753/IJP0891-1916380101.

Ferguson , T. , & Johnson , R. ( 2009b ). Too big to bail: Th e “Paulson Put,” presidential politics,

and the global fi nancial meltdown. Part II: Fatal reversal—single payer and back. International

Journal of Political Economy, 38 ( 2 ), 5–45 . doi:10.2753/IJP0891-1916380201.

Ferguson , T. , & Rogers , J. ( 1986 ). Right turn:  Th e decline of the democrats and the future of

American politics . New York, NY :  Hill and Wang .

Fischer , F. ( 2009 ). Democracy and expertise: Reorienting policy inquiry . New York, NY :  Oxford

University Press .

Fung , A. ( 2006 ). Empowered participation:  Reinventing urban democracy . Princeton,

NJ :  Princeton University Press .

Fung , A. , & Wright , E. O. ( 2003 ). Deepening democracy: Institutional innovations in empowered

participatory governance . London, England :  Verso .

Galbraith , J. K. ( 1967 ). Th e new industrial state . Boston, MA :  Houghton Miffl in .

09_9780199988488_c09.indd 17109_9780199988488_c09.indd 171 16-11-2013 11:14:4316-11-2013 11:14:43

Working and Living in the Shadow of Economic Fragility172

Gallup . ( 2011 ). Trust in government. Poll results, released September 11. Retrieved from http://

www.gallup.com/poll/5392/trust-government.aspx .

Gilens , M. ( 2012 ). Affl uence and infl uence: Economic inequality and political power in America .

Princeton, NJ :  Princeton University Press .

Glaeser , E. L. , & Goldin , C. (Eds.). ( 2006 ). Corruption and reform: Lessons fr om America’s eco-

nomic history . Chicago, IL :  University of Chicago Press .

Goodwyn , L. ( 1978 ). Th e populist moment:  A  short history of the agrarian revolt in America .

New York, NY :  Oxford University Press .

Hacker , J. S. ( 2006 ). Th e great risk shift : Th e assault on American jobs, families, health care, and

retirement and how you can fi ght back . Oxford, England :  Oxford University Press .

Hacker , J. S. , & Pierson , P. ( 2005 ). Off center: Th e Republican revolution and the erosion of American

democracy . New Haven, CT :  Yale University Press .

Hacker , J. S. , & Pierson , P. ( 2011 ). Winner-take-all politics: How Washington made the rich richer—

and turned its back on the middle class . New York, NY :  Simon & Schuster .

Hayes , C. ( 2012 ). Twilight of the elites: America aft er meritocracy . New York, NY :  Crown .

Hofstadter , R. ( 1955 ). Th e age of reform: From Bryan to F.D.R. New York, NY :  Knopf .

Ivry , B. , Keoun , B. , & Kuntz , P. ( 2011 , November 27). Secret Fed loans gave banks $ 13 billion

undisclosed to Congress. Bloomberg News . Retrieved from http://www.bloomberg.com/

news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.

html .

Jacobs , L. R. ( 2012 ). Community health clinics—the hidden revolution. Policy Brief, August.

Cambridge, MA :  Scholars Strategy Network . Retrieved from http://www.scholarsstrategy-

network.org/sites/default/fi les/ssn_basic_facts_jacobs_on_community_health_clinics.pdf .

Jacobs , L. R. , & Ario , J. ( 2012 ). Post election, the Aff ordable Care Act leaves the intensive care

unit for good. Health Aff airs, 31 (December), 2603–8 . doi:10.1377/hlthaff .2012.1279.

Jacobs , L. R. , Cook , F. L. , & Delli Carpini , M. X. ( 2009 ). Talking together: Public deliberation and

political participation in America . Chicago, IL :  University of Chicago Press .

Jacobs , L. R. , & King , D. S. ( 2012 ). Obama at the crossroads: Politics, markets, and the battle for

America’s future . New York, NY :  Oxford University Press .

Jacobs , L. R. , & Shapiro , R. Y. ( 2000 ). Politicians don’t pander: Political manipulation and the loss

of democratic responsiveness . Chicago, IL :  University of Chicago Press .

Jacobs , L. R. , & Skocpol , T. (Eds.). ( 2005 ). Inequality and American democracy: What we know

and what we need to learn . New York, NY :  Russell Sage .

Jacobs , L. R. , & Skocpol , T. (Eds.). ( 2012 ). Health care reform and American politics: What every-

one needs to know (Revised and expanded ed.). New York, NY :  Oxford University Press .

Jacobson , G. C. ( 1990 ). Th e electoral origins of divided government: Competition in U.S. house elec-

tions, 1946–1988 . Boulder, CO :  Westview .

Kazin , M. ( 2006 ). A godly hero: Th e life of William Jennings Bryan . New York, NY :  Anchor .

Kelly N. J. ( 2009 ). Th e politics of income inequality in the United States . New York, NY :  Cambridge

University Press .

Kenworthy , L. ( 2011 ). Progress for the poor . New York, NY :  Oxford University Press .

Keohane , R. O. , & Nye , J. H. Jr. ( 2000 ). Introduction. In J. S. Nye & J. D. Donohue (Eds.) ,

Governance in a globalizing world (pp. 1–43) . Washington, DC :  Brookings Institution .

09_9780199988488_c09.indd 17209_9780199988488_c09.indd 172 16-11-2013 11:14:4316-11-2013 11:14:43

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 173

Kettl , D. F. ( 2002 ). Th e transformation of governance: Public administration for twenty-fi rst century

America . Baltimore, MD :  Johns Hopkins University Press .

Keyssar , A. ( 2012, February 12 ). Th e strange career of voter suppression (post, Campaign Stops

Web log). Retrieved from New  York Times website: http://campaignstops.blogs.nytimes.

com/2012/02/12/the-strange-career-of-voter-suppression/ .

Kimball , D. C. ( 2004 ). A decline in ticket splitting and the increasing salience of party labels. In

H. F. Weisberg & C. Wilcox (Eds.), Models of voting in presidential elections: Th e 2000 election

(pp. 161–79) . Palo Alto, CA :  Stanford University Press .

King , A. ( 1975 ). Overload: Problems of governing in the 1970s. Political Studies, 23 ( 2–3 ), 284–96 .

doi:10.1111/j.1467-9248.1975.tb00068.x.

Kohut , A. ( 2012, January 26 ). Don’t mind the gap (post, Campaign Stops Web log). Retrieved

from New  York Times website: http://campaignstops.blogs.nytimes.com/2012/01/26/

dont-mind-the-gap/ .

Krippner , G. R. ( 2011 ). Capitalizing on crisis: Th e political origins of the rise of fi nance . Cambridge,

MA :  Harvard University Press .

Levi , M. ( 2003 ). Organizing power: Th e prospects for an American labor movement. Perspectives

on Politics, 1 ( 1 ), 45–68 . doi:10.1017.S1537592703000045.

Lindblom , C. E. ( 1977 ). Politics and markets: Th e world’s political-economic systems . New York,

NY :  Basic .

Mann , T. E. , & Ornstein , N. J. ( 2008 ). Th e broken branch: How Congress is failing America and

how to get it back on track . Oxford, England :  Oxford University Press .

Mann , T. E. , & Ornstein , N. J. ( 2012 ). It’s even worse than it looks: How the American constitutional

system collided with the new politics of extremism . New York, NY :  Basic .

Manza , J. , & Uggen , C. ( 2006 ). Locked out: Felon disenfr anchisement and American democracy .

Oxford, England :  Oxford University Press .

Mayer , K. R. ( 2002 ). With the stroke of a pen: Executive orders and presidential power . Princeton,

NJ :  Princeton University Press .

McCarty , N. M. , Poole , K. T. , & Rosenthal , H. ( 2006 ). Polarized America: Th e dance of ideology

and unequal riches . Cambridge, MA :  MIT Press .

Mettler , S. ( 2011 ). Th e submerged state:  How invisible government policies undermine American

democracy . Chicago, IL :  University of Chicago Press .

Milkis , S. M. , Rhodes , J. H. , & Charnock , E. L. ( 2012 ). What happened to post-partisanship?

Barack Obama and the new American party system. Perspectives on Politics, 10 ( 1 ), 57–76 .

doi:10.1017/S1537592711004907.

Mills , C. W. ( 1956 ). Th e power elite . New York, NY :  Oxford University Press .

Miner , M. , & Rawson , H. (Eds.). ( 2006 ). Th e Oxford dictionary of American quotations (2nd ed.).

New York, NY :  Oxford University Press .

Mishel , L. , Bivens , J. , Gould , E. , & Schierholz , H. ( 2012 ). Th e state of working America (12th ed.).

Ithaca, NY :  Cornell University Press .

Moe , T. M. ( 2003 ). Th e presidency and the bureaucracy:  Th e presidential advantage. In

M.   Nelson (Ed.), Th e presidency and the political system (7th ed., pp. 425–57) . Washington,

DC :  Congressional Quarterly Press .

Moe , T. M. , & Howell , W. G. ( 1999 ). Unilateral action and presidential power:  A  theory.

Presidential Studies Quarterly, 29 ( 4 ), 850–73 . doi:10.1111/1741-5705.00070.

09_9780199988488_c09.indd 17309_9780199988488_c09.indd 173 16-11-2013 11:14:4316-11-2013 11:14:43

Working and Living in the Shadow of Economic Fragility174

Morgenson , G. ( 2012, March 20). Gretchen Morgenson on corporate clout in Washington . Interview

with Bill Moyers, Moyers and Company video, 15:58. Retrieved from http://billmoyers.com/

segment/gretchen-morgenson-on-industry-infl uence/ .

Morgenson , G. , & Story , L. ( 2011, April 14 ). In fi nancial crisis, no prosecutions of top fi gures.

New York Times . Retrieved from http://www.nytimes.com/2011/04/14/business/14prosecute.

html?pagewanted=all&_r=0 .

Organization for Economic Cooperation and Development (OECD) . ( 2010 ). Economic policy

reforms: Going for growth 2010 . Paris, France :  OECD Publishing . doi:10.1787/growth-2010-en.

Orszag , P. ( 2011, September 14 ). Too much of a good thing. New Republic . Retrieved from http://

www.tnr.com/article/politics/magazine/94940/peter-orszag-democracy .

Osborne , D. , & Gaebler , T. ( 1993 ). Reinventing government:  How the entrepreneurial spirit is

transforming the public sector . New York, NY :  Plume .

Ostrogorski , M. ([ 1902] 1970 ). Democracy and the organization of political parties ( 2 vols., reprint).

New York, NY :  Haskell House .

Page , B. I. , Bartels , L. M. , & Seawright , J. ( 2013 ). Democracy and the policy preferences of wealthy

Americans. Perspectives on Politics, 11 ( 1 ), 51–73 . doi:10.1017/S153759271200360X.

Pew Research Center for the People and the Press . ( 2011 ). Fewer are angry at government, but

discontent remains high . Report, March 3.  Washington, DC : Author . Retrieved from http://

www.people-press.org/2011/03/03/section-1-attitudes-about-government/ .

Piven F. F. ( 2006 ). Challenging authority:  How ordinary people change America . Lanham,

MD :  Rowman & Littlefi eld .

Piven , F. F. , & Cloward , R. A. ( 1974 ). Th e politics of turmoil: Essays on poverty, race and the urban

crisis . New York, NY :  Pantheon .

Piven , F. F. , & Cloward , R. A. ( 1997 ). Th e breaking of the American social compact . New York,

NY :  New Press .

Piven , F. F. , Minnite , L. C. , & Groarke , M. ( 2009 ). Keeping down the black vote: Race and the

demobilization of American voters . New York, NY :  New Press .

Publius [ James Madison] . ( 1787 , November 23). Th e Federalist, No. 10. New-York Packet , pp.  2–3 .

Publius [ James Madison] . ( 1788 , February 8). Th e Federalist, No. 51. New-York Packet , p. 2.

Robertson , D. B. ( 2005 ). Madison’s opponents and constitutional design. American Political

Science Review, 99 ( 2 ), 225–43 . doi:10.1017/S0003055405051622.

Rozell , M. J. , & Whitney , G. (Eds.). ( 2009 ). Testing the limits: George W. Bush and the imperial

presidency . Lanham, MD :  Rowman & Littlefi eld .

Saez , E. ( 2013 ). Optimal progressive capital income taxes in the infi nite horizon model. Journal of

Public Economics, 97 , 61–74 . doi:10.1016/j.jpubeco.2012.09.002.

Schattschneider , E. E. ( 1960 ). Th e semisovereign people: A realist’s view of democracy in America .

New York, NY :  Holt, Rhinehart and Winston .

Skocpol , T. ( 2003 ). Diminished democracy: From membership to management in American civic

life . Norman, OK :  University of Oklahoma Press .

Skocpol , T. , & Jacobs , L. R. ( 2011 ). Reaching for a new deal: Ambitious governance, economic melt-

down, and polarized politics in Obama’s fi rst two years . New York, NY :  Russell Sage .

Smith , R. M. ( 1997 ). Civic ideals: Confl icting visions of citizenship in U.S. history . New Haven,

CT :  Yale University Press .

Solt , F. ( 2012 ). Th e social origins of authoritarianism. Political Research Quarterly, 65 ( 4 ), 703–13 .

doi:10.1177/1065912911424287.

09_9780199988488_c09.indd 17409_9780199988488_c09.indd 174 16-11-2013 11:14:4316-11-2013 11:14:43

Guardianship and the New Gilded Age: Insular Politics and the Perils of Elite Rule 175

Story , L. ( 2010, December 11 ). A secretive banking elite rules trading in derivatives. New  York

Times . Retrieved from http://www.nytimes.com/2010/12/12/business/12advantage.

html?pagewanted=all .

Th aler , R. H. , & Sunstein , C. R. ( 2008 ). Nudge: Improving decisions about health, wealth, and

happiness . New Haven, CT :  Yale University Press .

Treib , O. , Bähr , H. , & Falkner , G. ( 2007 ). Modes of governance: Towards a conceptual clarifi ca-

tion. Journal of European Public Policy, 14 ( 1 ), 1–20 . doi:10.1080/135017606061071406.

Volscho , T. W. , & Kelly , N. J. ( 2012 ). Th e rise of the super-rich: Power resources, taxes, fi nancial

markets, and the dynamics of the top 1 percent, 1949 to 2008. American Sociological Review,

77 ( 5 ), 679–99 . doi:10.1177/0003122412458508.

Warren , M. E. ( 1996 ). Deliberative democracy and authority. American Political Science Review,

90 ( 1 ), 46–60 . doi:10.2307/2082797.

Weaver , R. K. ( 1986 ). Th e politics of blame avoidance. Journal of Public Policy, 6 ( 4 ), 371–98 .

doi:10.1017/S0143814X00004219.

Wessel , D. ( 2010, April 8 ). Did “Great Recession” live up to the name? Wall Street Journal .

Retrieved from http://online.wsj.com/article/SB100014240527023035912045751696931663

52882.html .

Western , B. , & Rosenfeld , J. ( 2011 ). Unions, norms, and the rise in US wage inequality. American

Sociological Review, 76 ( 4 ), 513–37 . doi:10.1177/0003122411414817.

Winters , J. A. , & Page , B. I. ( 2009 ). Oligarchy in the United States? Perspectives on Politics, 7 ( 4 ),

731–51 . doi:10.1017/S1537592709991770.

Wolin , S. S. ( 2008 ). Democracy incorporated: Managed democracy and the specter of inverted totali-

tarianism . Princeton, NJ :  Princeton University Press .

09_9780199988488_c09.indd 17509_9780199988488_c09.indd 175 16-11-2013 11:14:4316-11-2013 11:14:43

Notes 239

2011)  (statement of Ray Boshara, Senior Advisor, Federal Reserve Bank of St. Louis). http://

www.gpo.gov/fdsys/pkg/CHRG-112shrg74143/pdf/CHRG-112shrg74143.pdf.

7 . Although the PSID gathers extensive income data during each wave, it fi rst collected com-

parable data on assets during the 1984 wave; it subsequently fi elded a module of asset-holding

questions for the 1989, 1994, 1999, 2001, 2003, 2005, 2007, and 2009 waves. Because this analy-

sis considers the life-course dynamics of asset poverty across 5-year blocks of time, we use data

from the 1984, 1989, 1994, and 1999 waves; we combine data from the 2003 and 2005 waves

to create a comparable 5-year point in time for 2004. We use 5-year intervals for the life-table

analysis of asset poverty because 5-year intervals separate the early PSID individual-panel asset

waves. Th is approach underestimates the true incidence of asset poverty because we sample

annual household asset data for individuals at one point during these age intervals rather than

at fi ve points; thus, estimates are lower than those produced if one uses yearly panel data. See

Haveman and Wolff (2000) for further details on the construction of asset poverty using

the PSID.

8 . Homestead Act of 1862, Pub. L. No. 37-64, 12 Stat. 392 (1863); Servicemen’s Readjustment

Act of 1944, Pub. L. No. 78-346, 58 Stat. 284 (1945); Veterans’ Readjustment Assistance Act of

1952, Pub. L. No. 82-550, 66 Stat. 663 (1953).

Chapter 9

1 . Political elitism has never been an exclusive province of the political right. Consider, for

example, W.E.B. DuBois’s argument that the achievement of racial justice would depend on a

uniquely “talented tenth” (1903, p.  33), or Vladimir Lenin’s belief that only an elite vanguard

could lead the misguided proletariat down a revolutionary path to emancipation.

2 . As Peter Bachrach (1967, p. 79) rightly emphasizes, “It is imperative that the defi nition of

political elite be suffi ciently broad to include both governmental and nongovernmental institu-

tions. . . . [For example], there seems little question that heads of giant corporations are political

elites.”

3 . A short list of constitutional features designed for this task must include the separation of

powers and federalism; the selection of US Senators by state legislators; the appointment (with-

out election) of federal judges for their lifetime; and the Electoral College (Dahl, 2003). In his

original Virginia Plan for the Constitution, Madison went further, proposing to give central-

ized national elites the power to tax and regulate all commerce and to veto all state laws. Stating

that he wanted the US national government to “have powers far beyond those exercised by the

British Parliament,” Madison also wanted it to control the establishment of universities, the devel-

opment of infrastructure, the organization of all militias, and the chartering of all corporations

(Robertson, 2005, p. 228).

4 . Banking Act of 1933 (Glass-Steagull Act), Pub. L.  No. 73-66, 48 Stat. 162 (codifi ed as

amended at 12 U.S.C. § 227 [2011]); Securities Act of 1933, Pub. L. No. 73–22, 48 Stat. 74 (codi-

fi ed as amended at 15 U.S.C. §§ 77a–77aa [2011]); National Labor Relations Act of 1935 (Wagner

Act), Pub. L.  No. 74-198, 49 Stat. 449 (codifi ed as amended at 29 U.S.C. §§ 151–169 [2011]);

Social Security Act of 1935, Pub. L. No. 74-271, 49 Stat. 620 (codifi ed as amended at 42 U.S.C.

§§ 1301–1397mm [2011]).

5 . Sarbanes-Oxley Act of 2002, Pub. L. No. 107–204, 116 Stat. 745; Dodd-Frank Wall Street

Reform and Consumer Protection Act of 2010, Pub. L. No. 111–203, 124 Stat. 1376.

13_9780199988488_c13.indd 23913_9780199988488_c13.indd 239 16-11-2013 11:17:4216-11-2013 11:17:42