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