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If confirmed by the Senate, the defining traits he will bring as the 77th Treasury secretary include a Wall Street pedigree, long relationship with Mr. Trump, and a history of moving fast to seize opportunities that might terrify others

IndyMac was the defining deal of Mr. Mnuchin’s career. He knew that the government needed to sell the failed bank—and he played hardball.

Like other Trump cabinet picks, Mr. Mnuchin has a résumé that is at odds with much of the president-elect’s populist rhetoric on the campaign trail.

Mr. Mnuchin, whose father spent his entire career at Goldman, came of age on Wall Street in the 1980s as the business of slicing loans into securities was booming. As a mortgage banker at Goldman, he saw up close ¾the savings-and-loan crisis and efforts by the government to wind down hundreds of insolvent financial institutions.

The bank, which was renamed OneWest Bank and is now part of CIT Group Inc., is under civil investigation by the Department of Housing and Urban Development for loan-servicing practices.

Mr. Mnuchin is regarded within the Trump transition team’s inner circle as a skilled team player. Mr. Trump’s advisers say Mr. Mnuchin will fuse traditional Republican Party support for lower taxes and less regulation with the president-elect’s populist stances on trade and infrastructure.

Like other partners, he earned tens of millions of dollars when Goldman became a publicly traded company in 1999. He bought a 6,500-square-foot apartment in a famous Park Avenue building. Messrs. Mnuchin and Trump were soon in the same philanthropic and social circles,

Mr. Mnuchin donated to the campaigns of Democrats Barack Obama,John Edwards,John Kerry and Al Gore. The only Republican presidential candidate Mr. Mnuchin gave money to was Mitt Romney in 2012.

It was the second-largest bank failure of the crisis, surpassed only by Washington Mutual Inc. in September 2008.

At the end of 2008, Mr. Mnuchin persuaded the FDIC to sell IndyMac for about $1.5 billion. The deal included IndyMac branches, deposits and assets. The FDIC also agreed to protect the buyers from the most severe losses for years. That loss-sharing arrangement turned out to be a master stroke.

Banks often go out of their way to avoid losses, even when borrowers are in violation of loan terms. The loss-sharing agreement took away some of the disincentives, since future losses would be borne partly by the government.

In July 2014, CIT agreed to buy OneWest for $3.4 billion, a bounty of more than $3 billion, including dividends. Mr. Mnuchin’s take was several hundred million dollars, according to a person familiar with the matter.

Before formally launching his presidential bid, Mr. Trump turned to Mr. Mnuchin for advice over dinner. Mr. Mnuchin helped write a tax-cutting plan and tried to rein in some of Mr. Trump’s populist rhetoric, including his vow to not “let Wall street get away with murder,” people familiar with the matter said.

Mr. Trump’s financial agenda, which Mr. Mnuchin would lead as Treasury secretary, has ignited a broad stock-market rally. CIT shares are up about 13%, increasing the value of Mr. Mnuchin’s stake by about $11 million. It is now worth more than $100 million.

He fares best among white voters. The electorate was 91 percent white, per the entrance polls. He does well with less affluent voters. The caucus electorate was far less affluent than the national primary electorate in 2008. He’s heavily dependent on turnout from young voters, and he had months to build a robust field operation. As the primaries quickly unfold, he won’t have that luxury.

Iowa is not just a white state, but also a relatively liberal one

But these strengths were neatly canceled by Mrs. Clinton’s strengths. She won older voters, more affluent voters, along with “somewhat liberal” and “moderate” Democrats.

He has nearly no chance to do as well among nonwhite voters as Mr. Obama did in 2008

The polls say that her supporters are more likely to be firmly decided than Mr. Sanders’s voters.

Mr. Sanders will have another opportunity to gain momentum after the New Hampshire primary. He might not get as much credit for a victory there as he would have in Iowa, since New Hampshire borders his home state of Vermont. But it could nonetheless give him another opportunity to overcome his weaknesses among nonwhite voters.

As a general rule, though, momentum is overrated in primary politics. In 2008, for instance, momentum never really changed the contours of the race. Mr. Obama’s victory in Iowa allowed him to make huge gains among black voters, but not much more — the sort of exception that would seem to prove the rule. Mr. Obama couldn’t even put Mrs. Clinton away after winning a string of states in early February.

ick Santorum, Pat Buchanan or Mike Huckabee, who failed to turn early-state victories into broader coalitions.

Mrs. Clinton holds more than 50 percent of the vote in national surveys; her share of the vote never declined in 2008.

In the end, Mr. Sanders failed to score a clear win in a state where Mr. Obama easily defeated Mrs. Clinton among white voters.

Why a ‘Virtual Tie’ in Iowa Is Better for Clinton Than Sanders

69 percent of respondents described themselves as “angry because our political system seems to only be working for the insiders with money and power;” 54 percent said that both the economic and political systems were “stacked” against them.

the oil & gas (O&G) and Automotive sectors are increasingly exposed to the same kind of disruptive change that the German utilities have faced over the last decade.

It is the marginal change in the composition of the German power market every year over the last decade rather than the annual system change in the composition of demand that explains why the German utilities E.ON and RWE have lost ~80% of their market capitalization since 2008.

In a mature market with a fast-growing, low-cost new entrant (renewables) the equity market will price in the decline of fossil-fuels far quicker than their market share will actually fall

what matters for equity valuations is which energy sources dominate the growth in demand, not which sources dominate the overall level of demand.

Equities are priced on expected discounted cash-flows, and for energy companies expected future cash-flows depend on market expectations of future volumes sold and prices achieved. In the German power market up until 2008, the largest incumbent power generators, E.ON and RWE, had a diversified mix of conventional power plants consisting mainly of fossil-fuel (i.e. coal and gas) and nuclear capacity, but these incumbents were not investing in renewable energy at all over 2002-2008.

nearly all of the demand growth over 2002-08 has been captured by renewable energy sources. Indeed, and as can be seen in Figure 1, of the total 50TWh increase in demand over these six years, 47TWh was captured by renewables, and only 3TWh by conventional power sources. It also means that since 2008, as renewables have continued to grow relentlessly, the market share of conventional generation, including fossil fuels, has inexorably declined.

even after the last 15 years of spectacular growth in renewables, conventional generation – nuclear and fossil-fuel based capacity combined – still accounts for the lion’s share of generation, with 325TWh of total output in 2018 (60% of the market) versus 219TWh for renewables (40%). This is precisely why the German government is having to accelerate the phase-out of coal to help it achieve its longer-term emissions targets – the current rate of system change is simply not fast enough to meet those targets.

the equity market started to price in the end of conventional power generation in Germany as soon as it peaked 10 years ago, even though at that time it still accounted for over 80% of the market.

it would be of little consolation to shareholders in the oil majors if the share of oil and gas in the global energy mix in 2030 were still above 50% but demand had peaked before that and prices had started falling owing to the continuing rapid growth of low-cost renewables.

it is worth contemplating that in 2017, while fossil fuels still accounted for 85% of total system demand and renewables for only 3.6%, renewables already accounted for 30% of the growth in energy demand

It's likely that Americans would receive the stimulus payments faster this time around because more of them file electronically and provide the IRS with their bank information, Gleckman said. Some 88% of individual returns were filed electronically in 2018, compared to 58% in 2008.But there are other factors that may slow the process. Even absent the coronavirus challenges, the agency is working with a smaller budget and less staff than it had in 2010. Now, because of the coronavirus, the agency has shut down its in-person taxpayer assistance centers located across the country at a time when people are sure to have questions about the emergency checks and other changes. Treasury announced last week that it is pushing back the tax return deadline to July 15. Additionally, Congress created a new tax credit designed to refund businesses that are offering their employees coronavirus-related paid leave.

First, the IRS will have to calculate each person's payment amount. Then, it will need the correct direct deposit information or mailing addresses. To get the money to people who don't usually file tax returns, it might have to request that information from the Social Security Administration or Veterans Affairs. In 2008, those people were required to file a return anyway in order to get their rebate.Meanwhile, the IRS will inevitably be fielding calls from Americans concerned about when their check will arrive and whether they took all the necessary steps to receive the money.

Later in 2008, after the economic stimulus checks were sent out, Olson testified before Congress, telling lawmakers that they should fund a new unit within the agency that would be dedicated to facilitating new and emergency initiatives. She argued that it would free up other employees to focus on improving the existing systems and executing the day-to-day work of the agency -- but that never happened.

They were offering nearly unlimited cheap debt to keep the wheels of finance turning, and when that didn’t help, the Fed began purchasing massive quantities of government debt outright.

Investors dumped whatever they could, including ostensibly “risk-free” U.S. Treasury securities. As a global dash for dollars unfolded, Treasurys were no longer serving as the market’s traditional shock absorbers, amplifying extreme turmoil on Wall Street.

By week’s end, the Dow had plunged more than 10,000 points since mid-February as investors struggled to get their arms around what a halt to global commerce would mean for businesses that would soon have no revenue.

“It was sheer, unadulterated panic, of a magnitude that was far worse than in 2008 and 2009. Far worse,”

The idea of shutting down markets was especially discouraging: “It was a profoundly un-American thing to contemplate, to just shut everything down, and almost fatalistic—that we’re not going to get out of this.”

nearly two years later, most agree that the Fed’s actions helped to save the economy from going into a pandemic-induced tailspin.

“My thought was—I remember this very clearly—‘O.K. We have a four-or-five-day chance to really get our act together and get ahead of this. We’re gonna try to get ahead of this,’” Mr. Powell recalled later. “And we were going to do that by just announcing a ton of stuff on Monday morning.”

It worked. The Fed’s pledges to backstop an array of lending, announced on Monday, March 23, would unleash a torrent of private borrowing based on the mere promise of central bank action—together with a massive assist by Congress, which authorized hundreds of billions of dollars that would cover any losses.

If the hardest-hit companies like Carnival, with its fleet of 104 ships docked indefinitely, could raise money in capital markets, who couldn’t?

on April 9, where he shed an earlier reluctance to express an opinion about government spending policies, which are set by elected officials and not the Fed. He spoke in unusually moral terms. “All of us are affected,” he said. “But the burdens are falling most heavily on those least able to carry them…. They didn’t cause this. Their business isn’t closed because of anything they did wrong. This is what the great fiscal power of the United States is for—to protect these people as best we can from the hardships they are facing.”

They were extraordinary words from a Fed chair who during earlier, hot-button policy debates said the central bank needed to “stay in its lane” and avoid providing specific advice.

To avoid a widening rift between the market haves (who had been given access to Fed backstops) and the market have-nots (who had been left out because their debt was deemed too risky), Mr. Powell had supported a decision to extend the Fed’s lending to include companies that were being downgraded to “junk” status in the days after it agreed to backstop their bonds.

Most controversially, Mr. Powell recommended that the Fed purchase investment vehicles known as exchange-traded funds, or ETFs, that invest in junk debt. He and his colleagues feared that these “high-yield” bonds might buckle, creating a wave of bankruptcies that would cause long-term scarring in the economy.

Mr. Powell decided that it was better to err on the side of doing too much than not doing enough.

, Paul Singer, who runs the hedge-fund firm Elliott Management, warned that the Fed was sowing the seeds of a bigger crisis by absolving markets of any discipline. “Sadly, when people (including those who should know better) do something stupid and reckless and are not punished,” he wrote, “it is human nature that, far from thinking that they were lucky to have gotten away with something, they are encouraged to keep doing the stupid thing.”

The breathtaking speed with which the Fed moved and with which Wall Street rallied after the Fed’s announcements infuriated Dennis Kelleher, a former corporate lawyer and high-ranking Senate aide who runs Better Markets, an advocacy group lobbying for tighter financial regulations.

This is a ridiculous discussion no matter how heartfelt Powell is about ‘we can’t pick winners and losers’—to which my answer is, ‘So instead you just make them all winners?’”

“Literally, not only has no one in finance lost money, but they’ve all made more money than they could have dreamed,” said Mr. Kelleher. “It just can’t be the case that the only thing the Fed can do is open the fire hydrants wide for everybody

Mr. Powell later defended his decision to purchase ETFs that had invested in junk debt. “We wanted to find a surgical way to get in and support that market because it’s a huge market, and it’s a lot of people’s jobs… What were we supposed to do? Just let them die and lose all those jobs?” he said. “If that’s the biggest mistake we made, stipulating it as a mistake, I’m fine with that. It wasn’t time to be making finely crafted judgments,” Mr. Powell said. He hesitated for a moment before concluding. “Do I regret it? I don’t—not really.”

“We didn’t know there was a vaccine coming. The pandemic is just raging. And we don’t have a plan,” said Mr. Powell. “Nobody in the world has a plan. And in hindsight, the worry was, ‘What if we can’t really fully open the economy for a long time because the pandemic is just out there killing people?’”

Mr. Powell never saw this as a particularly likely outcome, “but it was around the edges of the conversation, and we were very eager to do everything we could to avoid that outcome,”

The Fed’s initial response in 2020 received mostly high marks—a notable contrast with the populist ire that greeted Wall Street bailouts following the 2008 financial crisis. North Carolina Rep. Patrick McHenry, the top Republican on the House Financial Services Committee, gave Mr. Powell an “A-plus for 2020,” he said. “On a one-to-10 scale? It was an 11. He gets the highest, highest marks, and deserves them. The Fed as an institution deserves them.”

The pandemic was the most severe disruption of the U.S. economy since the Great Depression. Economists, financial-market professionals and historians are only beginning to wrestle with the implications of the aggressive response by fiscal and monetary policy makers.

Altogether, Congress approved nearly $5.9 trillion in spending in 2020 and 2021. Adjusted for inflation, that compares with approximately $1.8 trillion in 2008 and 2009.

By late 2021, it was clear that many private-sector forecasters and economists at the Fed had misjudged both the speed of the recovery and the ways in which the crisis had upset the economy’s equilibrium. Washington soon faced a different problem. Disoriented supply chains and strong demand—boosted by government stimulus—had produced inflation running above 7%.

because the pandemic shock was akin to a natural disaster, it allowed Mr. Powell and the Fed to sidestep concerns about moral hazard—that is, the possibility that their policies would encourage people to take greater risks knowing that they were protected against larger losses. If a future crisis is caused instead by greed or carelessness, the Fed would have to take such concerns more seriously.

The high inflation that followed in 2021 might have been worse if the U.S. had seen more widespread bankruptcies or permanent job losses in the early months of the pandemic.

an additional burst of stimulus spending in 2021, as vaccines hastened the reopening of the economy, raised the risk that monetary and fiscal policy together would flood the economy with money and further fuel inflation.

The surge in federal borrowing since 2020 creates other risks. It is manageable for now but could become very expensive if the Fed has to lift interest rates aggressively to cool the economy and reduce high inflation.

The Congressional Budget Office forecast in December 2020 that if rates rose by just 0.1 percentage point more than projected in each year of the decade, debt-service costs in 2030 would rise by $235 billion—more than the Pentagon had requested to spend in 2022 on the Navy.

its low-rate policies have coincided with—and critics say it has contributed to—a longer-running widening of wealth inequality.

In 2008, household wealth fell by $8 trillion. It rose by $13.5 trillion in 2020, and in the process, spotlighted the unequal distribution of wealth-building assets such as houses and stocks.

Without heavy spending from Washington, focused on the needs of the least well-off, these disparities might have attracted more negative scrutiny.

Finally, the Fed is a technocratic body that can move quickly because it operates under few political constraints. Turning to it as the first line of defense in this and future crises could compromise its institutional independence.

Step one, he said, was to get in the fight and try to win. Figuring out how to exit would be a better problem to have, because it would mean they had succeeded.

“We have a recovery that looks completely unlike other recoveries that we’ve had because we’ve put so much support behind the recovery,” Mr. Powell said last month. “Was it too much? I’m going to leave that to the historians.”

The final verdict on the 2020 crisis response may turn on whether Mr. Powell is able to bring inflation under control without a painful recession—either as sharp price increases from 2021 reverse on their own accord, as officials initially anticipated, or because the Fed cools down the economy by raising interest rates.

evidence strongly suggests that party attachments have become increasingly polarized by both racial attitudes and race as a result of Obama’s rise to prominence within the Democratic Party.Specifically, Tesler and Sears found that voters high on a racial-resentment scale moved one notch toward intensification of partisanship within the Republican Party on a seven-point scale

Pasek and his collaborators found a statistically significant increase from 2008 to 2012 in “explicit anti-black attitudes” – a measure based on questions very similar those used by Tesler and Sears for their racial-resentment scale. The percentage of voters with explicit anti-black attitudes rose from 47.6 in 2008 and 47.3 percent in 2010 to 50.9 percent in 2012.

Republicans drove the change: “People who identified themselves as Republicans in 2012 expressed anti-Black attitudes more o

By 2012, the numbers had gone up. “The proportion of people expressing anti-Black attitudes,” they write, “was 32 percent among Democrats, 48 percent among independents, and 79 percent among Republicans.”

the shifts described by Tesler and Pasek are an integral aspect of the intensifying conservatism within the right wing of the Republican Party. Many voters voicing stronger anti-black affect were already Republican. Thus, in 2012, shifts in their attitudes, while they contributed to a 4 percentage point reduction in Obama’s white support, did not result in a Romney victory.

Not only is the right risking marginalization as its views on race have become more extreme, it is veering out of the mainstream on contraception and abortion, positions that fueled an 11 point gender gap in 2012 and a 13 point gap in 2008.

the hurdle that the Republican Party faces is building the party’s white margins by 2 to 3 points. For Romney to have won, he needed 62 percent of the white vote, not the 59 percent he got.

To win the White House again, it must assuage the social conscience of mainstream, moderate white voters among whom an ethos of tolerance has become normal. These voters are concerned with fairness and diversity, even as they stand to the right of center. It is there that the upcoming political battles — on the gamut of issues from race to rights — will be fought.

Less than 1 percent of registered voters turned out for Maine’s caucus. In Nevada, where Republican turnout was down 25 percent from 2008, only 3 percent of total registered voters participated.

In Florida, the largest and most diverse state among the nine, turnout was down 14 percent from 2008. And 84 percent of the state’s total registered voters  did not participate in the Republican contest.

In the Palmetto State, 98 percent of primary voters were white, 72 percent were age 45 or older and nearly two-thirds were evangelical Christian, according to exit polls. From this picture, you may think South Carolina is an all-white, aging state, full of fervent churchgoers. But the Census says the state is only 66 percent white, with a median age of 36. Exit polls from 2008 put the evangelical vote at 40 percent of total.

Whites are 63.7 percent of the total population of the United States; in 1900, they were 88 percent — still more diverse than Republican primary voters today.

When George Bush left office in 2008, some worried that Stewart would run out of material. This proved as shortsighted as the hope that Obama would be America’s grand salvation. Stewart, who describes himself as “a leftist”, has always hammered the Democrats with the vigour of a disappointed supporter, and subjected Obama to one of his most damaging interviews during his first term: the president admitted that his 2008 slogan probably should have been “Yes We Can, But...” At the time, Stewart laughed, but today he admits with a shrug, “It was heartbreaking. It’s generally heartbreaking – that’s what the gig is.”

His seemingly effortless interview with Tony Blair in 2008 cut through Blair’s crusader mentality in a mere six minutes, as Stewart calmly rejected Blair’s theory that any kind of military action can keep the west safe. As Blair stammered, huffed and shifted in his seat, Stewart concluded that: “19 people flew into the towers. It seems hard for me to imagine that we could go to war enough, to make the world safe enough, that 19 people wouldn’t want to do harm to us. So it seems like we have to rethink a strategy that is less military-based.”

it’s also fair to say that some of the interviews, generally those with actors and authors, seem like mere puffery, a point with which Stewart agrees (he embraces criticism as eagerly as he deflects compliments).

How often does he really connect with his interviewees? “Have you seen the show? Mostly, I’m not even listening. But I can bullshit anyone for six minutes.”

It is a delicious irony that in the world of American TV news, one populated by raging egotists and self-aggrandisers, the person who is generally cited as the most influential is Stewart – a man so disinterested in his own celebrity, he often didn’t bother to collect his 18 Emmys, preferring to stay at home with his family.

“Honestly, it was a combination of the limitations of my brain and a format that is geared towards following an increasingly redundant process, which is our political process. I was just thinking, ‘Are there other ways to skin this cat?’ And, beyond that, it would be nice to be home when my little elves get home from school, occasionally.”

Stewart likes to credit “the team”, but given that he has always been deeply involved in the script (unusually for a host), writing and rewriting drafts right up to the last minute, the show will be a pretty different beast without him

He can be brutal about the leftwing media, too (CNN has been a frequent target, for being mediocre and too attached to pointless computer graphics). MSNBC, the liberal 24-hour news network, is, Stewart says, “better” than Fox News, “because it’s not steeped in distortion and ignorance as a virtue. But they’re both relentless and built for 9/11. So, in the absence of such a catastrophic event, they take the nothing and amplify it and make it craziness.”

Watching these channels all day is incredibly depressing,” says Stewart. “I live in a constant state of depression. I think of us as turd miners. I put on my helmet, I go and mine turds, hopefully I don’t get turd lung disease.”

Now that he is leaving The Daily Show, is there any circumstance in which he would watch Fox News again? He takes a few seconds to ponder the question. “Umm… All right, let’s say that it’s a nuclear winter, and I have been wandering, and there appears to be a flickering light through what appears to be a radioactive cloud and I think that light might be a food source that could help my family. I might glance at it for a moment until I realise, that’s Fox News, and then I shut it off. That’s the circumstance.”

Isn’t he being a bit faux modest, I ask, especially when he insists that what he does is comedy and not news? That comes with a certain profile. He thinks about this for a few seconds. “It’s not that I… I mean, it’s satire, so it’s an expression of real feelings. So I don’t mean that in the sense of, ‘I don’t mean this.’ What I mean is, the tools of satire should not be confused with the tools of news. We use hyperbole, but the underlying sentiment has to feel ethically, intentionally correct, otherwise we wouldn’t do it.”

Bush also destroyed centrist Democrats intellectually, by making it impossible for them to credibly critique liberalism from the right.

. In the late ’80s and the ’90s, centrist Democrats had also argued that Reagan’s decision to boost defense spending and aid the Afghan mujahideen had helped topple the Soviet empire. But in 2003, when Bush invaded Iraq, he sparked the greatest foreign-policy catastrophe since Vietnam.

If the lesson of the Reagan era had been that Democrats should give a Republican president his due, the lesson of the Bush era was that doing so brought disaster.

In the Senate, Bush’s 2001 tax cut passed with 12 Democratic votes; the Iraq War was authorized with 29. As the calamitous consequences of these votes became clear, the revolt against them destroyed the Democratic Party’s centrist wing

With the Dean campaign came an intellectual revolution inside the Democratic Party. His insurgency helped propel Daily Kos, a group blog dedicated to stiffening the liberal spine. It energized the progressive activist group MoveOn. It also coincided with Paul Krugman’s emergence as America’s most influential liberal columnist and Jon Stewart’s emergence as America’s most influential liberal television personality.

All of this has shaped the Clinton campaign’s response to Sanders. At the first Democratic debate, she noted that, unlike him, she favors “rein[ing] in the excesses of capitalism” rather than abandoning it altogether. But the only specific policy difference she highlighted was gun control, on which she attacked him from the left.

Whereas the party’s most respected thinkers had once urged Democrats to critique liberal orthodoxy, they now criticized Democrats for not defending that orthodoxy fiercely enough. The presidency of George W. Bush had made Democrats unapologetically liberal, and the presidency of Barack Obama was the most tangible result.

that’s only half the story. Because if George W. Bush’s failures pushed the Democratic Party to the left, Barack Obama’s have pushed it even further. If Bush was responsible for the liberal infrastructure that helped elect Obama, Obama has now inadvertently contributed to the creation of two movements—Occupy and Black Lives Matter—dedicated to the proposition that even the liberalism he espouses is not left-wing enough.

Todd Gitlin quotes Jeremy Varon, a close observer of Occupy who teaches at the New School for Social Research, as saying, “This is the Obama generation declaring their independence from his administration. We thought his voice was ours. Now we know we have to speak for ourselves.

Occupy. The movement may have burned out, but it injected economic inequality into the American political debate

The same anger that sparked Occupy—directed not merely at Wall Street but at the Democratic Party elites who coddled it—fueled Bill de Blasio’s election and Elizabeth Warren’s rise to national prominence. And without Occupy, it’s impossible to understand why a curmudgeonly Democratic Socialist from Vermont is seriously challenging Hillary Clinton

the Democracy Alliance, the party’s most influential donor club, which includes mega-funders such as George Soros and Tom Steyer, has itself shifted leftward during the Obama years. In 2014, it gave Warren a rapturous welcome when she spoke at the group’s annual winter meeting. Last spring it announced that it was making economic inequality its top priority.

By the time Barack Obama defeated Hillary Clinton for the Democratic presidential nomination in 2008, in part because of her support for the Iraq War, the mood inside the party had fundamentally changed.

Moreover, the Occupy-Warren-Sanders axis has influenced Clinton’s own economic agenda, which is significantly further left than the one she ran on in 2008. She has called for tougher regulation of the financial industry, mused about raising Social Security taxes on the wealthy (something she opposed in 2008), and criticized the Trans-Pacific Partnership (a trade agreement she once gushed about).

“Black Lives Matter developed in the wake of the failure of the Obama administration,” argues the Cornell sociologist Travis Gosa, a co-editor of The Hip Hop & Obama Reader. “Black Lives Matter is the voice of a Millennial generation that’s been sold a ba

Had Black Lives Matter existed when Bill Clinton was seeking the presidency, he probably would have run against the group

Today, by contrast, the Democratic Establishment has responded to Black Lives Matter much as it responded to Occupy: with applause

what’s most remarkable isn’t Hillary Clinton’s move to the left, or the Democratic Party’s. It’s the American public’s willingness to go along.

Much of this shift is being driven by a changing mood among whites. Between January and April alone, according to a YouGov poll, the percentage of whites who called deaths like those of Michael Brown and Freddie Gray “isolated incident[s]” dropped 20 points. There’s even been movement within the GOP. From 2014 to 2015, the percentage of Republicans saying America needs to make changes to give blacks an equal chance rose 15 points—more than the percentage increase among Democrats or Independents.

Most interesting—because he is the Republican candidate with the keenest sense of how to appeal to the general electorate—has been the approach of Senator Marco Rubio. In August, a Fox News anchor asked him about Black Lives Matter. Instead of condemning the movement, Rubio told the story of an African American friend of his whom police had stopped eight or nine times over the previous 18 months even though he had never broken the law. “This is a problem our nation has to confront,” Rubio declared. Then he talked about young African Americans who get arrested for nonviolent offenses and pushed into plea deals by overworked public defenders. The government, he said, must “look for ways to divert people” from going to jail “so that you don’t get people stigmatized early in life.”

Conservative Republicans didn’t talk this way in the ’90s. They didn’t talk this way even in the early Obama years. The fact that Rubio does so now is more evidence that today, unlike in the mid-’60s, the debate about race and justice isn’t moving to the right. It’s moving further left

What’s different this time? One difference is that in the 1960s and ’70s, crime exploded, fueling a politics of fear and vengeance. Over the past two decades, by contrast, crime has plummeted. And despite some hyperbolic headlines, there’s no clear evidence that it’s rising significantly again.

When the Williams Institute at the UCLA School of Law examined polls, it found that between two-thirds and three-quarters of Americans now support barring discrimination against transgender people.

Most Americans, in other words, having decided that discriminating against lesbians and gay men was wrong, have simply extended that view to transgender people via what Flores describes as a “mechanism of attitude generalization.”

In polling, Americans typically say they favor smaller government in general while supporting many specific government programs. When Bill Clinton took office in 1993, Americans said they favored “a smaller government providing fewer services” over “a bigger government providing more services” by 37 percentage points. When Obama took power in 2009, the margin was a mere eight points. And despite the president’s many economic interventions, the most recent time Pew asked that question, in September 2014, the margin was exactly the same.

This intervention has sparked an angry response on the Republican right, but not among Americans as a whole.

On health care, the story is similar: no public backlash. When Obama signed the Affordable Care Act in March 2010, most polls showed Americans opposing it by about eight to 10 points. Today, the margin is almost identical

Little has changed on taxes, either, even though Obama allowed some of the tax cuts passed under George W. Bush to expire. The percentage of Americans who say they pay more than their fair share in taxes is about the same as it was in the spring of 2010 (

in an era when government has grown more intrusive, African American activists have grown more confrontational, and long-standing assumptions about sexual orientation and gender identity have been toppled, most Americans are not yelling “stop,” as they began doing in the mid-1960s. The biggest reason: We’re not dealing with the same group of Americans.

On issue after issue, it is the young who are most pleased with the liberal policy shifts of the Obama era, and most eager for more

It is largely because of them that the percentage of Americans who want government to “promote traditional values” is now lower than at any other time since Gallup began asking the question in 1993, and that the percentage calling themselves “socially liberal” now equals the percentage calling themselves “socially conservative” for the first time since Gallup began asking that question in 1999.

Millennials are also sustaining support for bigger government. The young may not have a high opinion of the institutions that represent them, but they nonetheless want those institutions to do more

They were also 25 points more likely than those 65 and older to approve of Occupy Wall Street and 36 points more favorable toward socialism, which they actually preferred to capitalism, 49 percent to 46 percent. As the Pew report put it, “Millennials, at least so far, hold ‘baked in’ support for a more activist government.

The press often depicts American politics as a battle pitting ever more liberal Democrats against ever more conservative Republicans. Among the young, however, that’s inaccurate. Young Democrats may be more liberal than their elders, but so are young Republicans. According to Pew, a clear majority of young Republicans say immigrants strengthen America, half say corporate profits are too high, and almost half say stricter environmental laws are worth the cost—answers that sharply distinguish them from older members of the GOP.

Asked how they categorize themselves ideologically, more than two-thirds of Republican Millennials call themselves either “liberal” or “mixed,” while fewer than one-third call themselves “conservative.” Among the oldest Republicans, that breakdown is almost exactly reversed.

Millennials are not liberal primarily because they are young. They are liberal because their formative political experiences were the Iraq War and the Great Recession, and because they make up the most secular, most racially diverse, least nationalistic generation in American history. And none of that is likely to change.

America is not governed by public-opinion polls, after all. Congressional redistricting, felon disenfranchisement, and the obliteration of campaign-finance laws all help insulate politicians from the views of ordinary people, and generally empower the right. But despite these structural disadvantages, Obama has enacted a more consequential progressive agenda than either of his two Democratic predecessors did

If Clinton does win, it’s likely that on domestic policy, she will govern to Obama’s left. (On foreign policy, where there is no powerful left-wing activist movement like Occupy or Black Lives Matter, the political dynamics are very different.) Clinton’s campaign proposals already signal a leftward shift. And people close to her campaign suggest that among her top agenda items would be paid family leave, debt-free college tuition, and universal preschool

Clinton will face this reality from her first day in office. And she will face it knowing that because she cannot inspire liberals rhetorically as Obama can, they will be less likely to forgive her heresies on policy. Like Lyndon B. Johnson after John F. Kennedy, she will have to deliver in substance what she cannot deliver in style.

it’s likely that any Republican capable of winning the presidency in 2016 would govern to the left of George W. Bush. In the first place, winning at all would require a different coalition. When Bush won the presidency in 2000, very few Millennials could vote. In 2016, by contrast, they will constitute roughly one-third of those who turn out

In 2000, African Americans, Hispanics, and Asians constituted 20 percent of voters. In 2016, they will constitute more than 30 percent.

even if the 2016 Republican nominee wins 60 percent of the white vote (more than any GOP nominee in the past four decades except Reagan, in 1984, has won), he or she will still need almost 30 percent of the minority vote. Mitt Romney got 17 percent.

This need to win the votes of Millennials and minorities, who lean left not just on cultural issues but on economic ones, will shape how any conceivable Republican president campaigns in the general election, and governs once in office.

If America’s demographics have changed since the Bush presidency, so has the climate among conservative intellectuals. There is now an influential community of “reformocons”—in some ways comparable to the New Democratic thinkers of the 1980s—who believe Republicans have focused too much on cutting taxes for the wealthy and not enough on addressing the economic anxieties of the middle and working classes.

The candidate closest to the reformocons is Rubio, who cites several of them by name in his recent book. He says that partially privatizing Social Security, which Bush ran on in 2000 and 2004, is an idea whose “time has passed.” And unlike Bush, and both subsequent Republican presidential nominees, Rubio is not proposing a major cut in the top income-tax rate. Instead, the centerpiece of his economic plan is an expanded child tax credit, which would be available even to Americans who are so poor that they don’t pay income taxes

it’s likely that were he elected, Rubio wouldn’t push through as large, or as regressive, a tax cut as Bush did in 2001 and 2003. Partly, that’s because a younger and more ethnically diverse electorate is less tolerant of such policies. Partly, it’s because Rubio’s administration would likely contain a reformocon faction more interested in cutting taxes for the middle class than for the rich. And partly, it’s because the legacy of the Bush tax cuts themselves would make them harder to replicate

A key figure in passing the Bush tax cuts was Federal Reserve Chairman Alan Greenspan, who in 2001 warned that unless Washington lowered tax rates, surpluses might grow too large, thus producing a dangerous “accumulation of private assets by the federal government.” Greenspan’s argument gave the Bush administration crucial intellectual cover. But the idea now looks laughable. And it’s hard to imagine the current Federal Reserve chair, Janet Yellen, endorsing large upper-income tax cuts in 2017.

the kind of centrist, Chamber of Commerce–friendly Democrats who helped Bush pass his tax plan in 2001—including Max Baucus, John Breaux, Mary Landrieu, Zell Miller, Max Cleland, Tim Johnson, Blanche Lambert Lincoln—barely exist anymore. The Democrats’ shift left over the past decade and a half means that a President Rubio would encounter more militant opposition than Bush did in 2001

the next Republican president won’t be able to return the nation to the pre-Obama era.

That’s what happened when Dwight Eisenhower followed Franklin D. Roosevelt and Harry Truman. Ike moderated the growth in government expansion that had begun in the 1930s, but he didn’t return American politics to the 1920s, when the GOP opposed any federal welfare state at all. He in essence ratified the New Deal

It’s also what happened when Bill Clinton followed Ronald Reagan and George H. W. Bush. By passing punitive anticrime laws, repealing restrictions on banks, signing NAFTA, cutting government spending to balance the budget, reforming welfare, and declaring that the “era of big government is over,” Clinton acknowledged that even a Democratic president could not revive the full-throated liberalism of the 1960s and ’70s. He ratified Reaganism.

Barack Obama sought the presidency hoping to be the Democrats’ Reagan: a president who changed America’s ideological trajectory. And he has changed it. He has pushed the political agenda as dramatically to the left as Reagan pushed it to the right, and, as under Reagan, the public has acquiesced more than it has rebelled.

To the question “How did he do it?” McKay offers a fairly coherent answer, one grounded in Bale’s canny and sensitive performance. As biography, in other words, the movie works pretty well. As history, though, it’s another story — at once tendentious and undercooked, proposing a reductive, essentially conspiratorial account of recent events.

The motley pageantry of our politics — the endless arguments about race, class, religion, ideology, sex, region and heritage that have defined the republic since the beginning — boils down to a single personality. All you really need to know about the world today is that everything wrong with it is Dick Cheney’s fault.

How did he get away with it, though? The answer McKay supplies is that he was smart and the rest of us were too dumb and too distracted to stop him

Tooze calls it a problem in “Western capitalism” intentionally. It was not just an American problem.

One of the great strengths of Tooze’s book is to demonstrate the deeply intertwined nature of the European and American financial systems.

In 2006, European banks generated a third of America’s riskiest privately issued mortgage-backed securities. By 2007, two-thirds of commercial paper issued was sponsored by a European financial entity.

“Between 2001 and 2006,” Tooze writes, “Greece, Finland, Sweden, Belgium, Denmark, the U.K., France, Ireland and Spain all experienced real estate booms more severe than those that energized the United States.”

while the crisis may have been caused in both America and Europe, it was solved largely by Washington. Partly, this reflected the post-Cold War financial system, in which the dollar had become the hyperdominant global currency and, as a result, the Federal Reserve had truly become the world’s central bank.

therein lies the unique feature of the crash of 2008. Unlike that of 1929, it was not followed by a Great Depression. It was not so much the crisis as the rescue and its economic, political and social consequences that mattered most

The Fed acted aggressively and also in highly ingenious ways, becoming a guarantor of last resort to the battered balance sheets of American but also European banks. About half the liquidity support the Fed provided during the crisis went to European banks

Before the rescue and even in its early stages, the global economy was falling into a bottomless abyss. In the first months after the panic on Wall Street, world trade and industrial production fell at least as fast as they did during the first months of the Great Depression. Global capital flows declined by a staggering 90 percent

The Federal Reserve, with some assistance from other central banks, arrested this decline. The Obama fiscal stimulus also helped to break the fall.

China, with its own gigantic stimulus, created an oasis of growth in an otherwise stagnant global economy.

The rescue worked better than almost anyone imagined

The governing elite did not anticipate the crisis — as few elites have over hundreds of years of capitalism. But once it happened, many of them — particularly in America — acted quickly and intelligently, and as a result another Great Depression was averted. The system worked

But Tooze also convincingly shows that the European Central Bank mismanaged things from the start

On the left, the entire episode discredited the market-friendly policies of Tony Blair, Bill Clinton and Gerhard Schroeder, disheartening the center-left and emboldening those who want more government intervention in the economy

On the right, it became a rallying cry against bailouts and the Fed, buoying an imaginary free-market alternative to government intervention. Unlike in the 1930s, when the libertarian strategy was tried and only deepened the Depression, in the last 10 years it has been possible for the right to argue against the bailouts, secure in the knowledge that their proposed policies will never actually be implemented.

The crash brought together many forces that were around anyway — stagnant wages, widening inequality, anger about immigration and, above all, a deep distrust of elites and government — and supercharged them. The result has been a wave of nationalism, protectionism and populism in the West today.

confirmation of this can be found in the one major Western country that did not have a financial crisis and has little populism in its wake — Canada.

No government handled the crisis better than that of the United States, which acted in a surprisingly bipartisan fashion in late 2008 and almost seamlessly coordinated policy between the outgoing Bush and incoming Obama administrations. And yet, the backlash to the bailouts has produced the most consequential result in the United States.

experts are considering the new vulnerabilities of a global economy

we are confronting a quite different problem — an erratic, unpredictable United States led by a president who seems inclined to redo or even scrap the basic architecture of the system that America has painstakingly built since 1945. How will the world handle this unexpected development? What will be its outcome? This is the current crisis that we will live through and that historians will soon analyze.

Between 2016 and 2017 alone, some 1,500 fewer American undergraduates chose to major in history. The drop-off has continued even among students who entered college long after the economic recovery began.

Where a student studies also has little impact in numbers choosing history (except in one sector of campuses): History majors have fallen across the board and throughout the country—at research universities, small and large colleges, private and state institutions, among white and nonwhite students, as well as among both men and women.

colleges have begun cutting faculty wholesale, hollowing out their history offerings. Due to steep falloff in student interest, last summer the University of Akron announced plans to eliminate advanced degrees and significantly reduce course offerings in history. Like bobby sox and saddles shoes, study of the past at many colleges and universities seems not just to have gone out of style; it is going away.

several among the nation’s elite colleges seem to be in the midst of a renaissance in interest in history. Their undergraduates are flocking to history courses and the history major. An article in the Yale Daily News, the Yale College newspaper, found that the history major is, according to a Yale professor of history there, “thriving.”

Contrary to nationwide trends, the history major, which fell in popularity at Yale after the 2008 crisis, has now zoomed back up to be the third most popular major. About 10 percent of this year’s graduating class—129 students—majored in history.

Nationally only about 1 percent of students choose history as their major.

According to the Yale Daily News reporter, Yale plans to add 11 new history professors in 2019 to meet rising demand.

The same goes at other Ivies. Princeton has also hired new history faculty in response to rising student numbers.

At Brown, the director of undergraduate studies in history said that along with more history majors, non-majors are clamoring to take history classes. Brown has had to expand its history course offerings, as enrollments grew in just a year from 1,082 students to 1,385 students.

Even in today’s relatively good times, few students can feel certain enough about their future to major in the study of the past. Majoring in history, it seems, has become just another luxury item the anxious majority of undergraduates cannot afford.

Few history majors—and even fewer of those who take history courses while in college—become historians, but they do move on to become citizens. Knowledge of the past provides young people with a sense of place and a concept of temporal continuity, lessons to apply to the present and future, an interpretive framework and perspective for navigating the choppy global world.

An epidemic of historical amnesia already plagues this country, which has often paid a terrible price and done grave harm to other foreign people and lands due to its ignorance of the past

“If the world is to cope with climate change, policymakers will need to pull every lever at their disposal,” he writes. “Faced with this threat, to indulge in the idea that central banks, as key agencies of the state, can limit themselves to worrying about financial stability … is its own form of denial.”

In England, by contrast, Carney has convened 33 central banks to investigate how to “green the financial system.” According to Axios, every powerful central bank is working with him—except for Banco do Brasil and the Fed.

Mark Carney, the governor of the Bank of England, in 2015, in a speech which has subsequently received massive coverage—and he is a man, after all, absolutely of the global financial establishment—coined the idea of a climate Minsky moment. [Editor’s note: A Minsky moment is when an asset’s price suddenly collapses after a long period of growth.]

We would need [fossil-fuel assets] to be on the balance sheet of actors who were under huge pressure in a fire-sale situation and who couldn’t deal with a sudden revaluation. We would need an entire network of causation to be there, which is what produced the unique crisis of 2007 to 2008.

So imagine that we stay on our current path, and we’re headed toward 3 or 4 degrees’ [Celsius] temperature change. And then imagine some of the nonlinearities kick in, which the climate scientists tell us about, and we face a Fukushima-style event.

What happens next? You then get nervous democratic politicians—and not necessarily those who are known for their populism, but just nervous democratic politicians—suddenly deciding that we have to stop doing one or another part of our carbon-based economy. It has to stop, and it has to stop immediately. And then you get big shocks. Then you get sudden revaluations.

In other words, the success of the delaying tactics of the carbon lobby create a situation in which we’re then faced with the possibility of a sudden regulatory shock

“One-third of equity and fixed income assets issued in global financial markets can be classified as belonging to the natural resource and extraction sectors, as well as carbon-intensive power utilities, chemicals, construction, and industrial goods firms.”

Whether that will, in fact, ease the formation of majorities in Congress is another question. Because, after all, it does somehow have to get through the Senate, you know.

Germany is far, far more exposed. A huge slice of their economy is basically all about internal combustion engines, and so that number includes all of those stocks, for sure.

If we saw a huge shock to, say, European equity [exchange-traded funds], which were heavily in German automotive, that’s the sort of trigger that we might be looking at.

This is not simply a zero-sum game; this is a structural transformation that has many very attractive properties. There’s loads of excellent jobs that could be created in this kind of transition.There’s no reason why, even by conventional GDP-type metrics, it need even be associated with the kind of feel-bad factor of slow GDP growth. Then [you could] also link it to a revival of social democracy for the United States. From a progressive political point of view, that’s obviously extremely attractive.

there’s also a deeper view: that climate change is the situation within which all other politics will happen for the next several generations, at least.

ever since the 1990s that’s been the logjam on any serious American commitment.

When you look at a third of securities tied up in the carbon economy and the evidence for decoupling GDP growth from carbon emissions maybe not being as strong as we’d like, do you think the change that needs to happen is realistic?

Tooze: Realistic? No. I mean, depends what you mean by realism. The scale of the challenge requires a boldness of action for which there is no precedent. That’s the only good purpose that the war analogies serve

Meyer: In your piece, you write: “Those in the United States who call for a Green New Deal or a Green Marshall Plan are, if anything, understating the scale of what is needed.”

Do you think climate action needs to be larger than, say, the U.S. mobilization for World War II?

Tooze: Well, less large in absolute terms. Because even the U.S. was spending almost 40 percent of GDP on World War II. And if you’re the Soviet Union, you’re spending 55 to 60 percent in 1940. We don’t need to do anything like that. It needs to be much bigger than the New Deal, which in fiscal-policy terms was really quite trivial.

Crucially, what makes it totally unlike the war is that there’s no happy end. There’s no moment where you win and then everything goes back to the way it was before, but just better. That’s a misunderstanding

This isn’t crash dieting; this is a permanent change in lifestyle, and we need to love that and we need to live it and we need to own it and we need to reconcile ourselves to the fact that this is for us and for all subsequent generations of humans.

It isn’t just the oil and gas majors, because they wouldn’t get you to 30 percent. Exxon isn’t big enough to get you to that kind of percentage. It’s Exxon, and [the major automakers] Daimler and BMW, and the entire carbon-exposed complex.

all the really hard choices need to be made by people like China and India and Pakistan and Bangladesh and Indonesia

You don’t have that very much in Germany. There isn’t anyone in Germany saying, “Which bit of mid-20th-century history is this most like?,” mercifully. The one analogy that has popped up in Germany is reunification, which I actually think is quite a good one, because that’s still an ongoing problem

in the American case, it would be civil rights and Reconstruction, which isn’t a particularly optimistic comparison to draw. It’s an ongoing problem, it’s a deep historic problem, it only happened once, we still haven’t fixed it, and we’re not at peace.

Meyer: There’s a kind of shallow view of climate change: that it is something we need to avert or stop. And that’s somewhat true

furthermore—and much more fundamentally than any of those things—this isn’t really about America. I mean, America can be an obstacle and get in the way, but none of the really hard choices needs to be made by Americ

like Reconstruction or the civil-rights movement, it needs to be something that people take on like a moral commitment, in the same way they take on genocide prevention as a moral commitment

problems that we thought we’d fixed, like the Green Revolution and the feeding of the world population, for instance—totally not obvious that those fixes cope with the next 20 years of what’s ahead of us. The food problem that was such an oppressive issue globally in the 1970s may resurge in an absolutely dramatic way.

Meyer: Given all that, if Jerome Powell decided that he wanted to intervene on the side of climate action, what could he do? What could the Fed do?

Tooze: What I think the Fed should announce is that it enthusiastically supports the idea of a bipartisan infrastructure push focused on the American electrical network, first and foremost, so that we can actually hook up the renewable-generating capacity—which is now eminently, you know, realistic in economic terms. Setting a backstop to a a fiscal-side-led investment push is the obvious thing.

It is indeed a highly appropriate response to an environment of extremely low interest rates, and [former Treasury Secretary] Larry Summers & Co. would argue that it might help, as it were, to suck us out of the state of secular stagnation that we’re in.

another avenue to go down—for the Fed to take a role in helping develop a classification of green bonds, of green financing, with a view also to rolling out comprehensive demands for disclosure on the part of American firms, for climate risks to be fully declared on balance sheets, and for due recognition to be given to firms that are in the business of proactively preparing themselves for decarbonization.

You could, for instance, declare that the Fed views with disfavor the role of several large American banks in continuing to fund coal investment. Some of the carbon-tracking NGOs have done very good work showing and exposing the way in which some of the largest, the most reputable American banks are still in the business of lending to Big Coal. Banking regulation could be tweaked in a way that would produce a tilt against that.

the classic role of the Fed is to support government-issued debt. Insofar as the Green New Deal is a government-issued business, the Fed has just an absolutely historical warrant for supporting fiscal action.

with regards to the broader economy, the entire federal-government apparatus essentially stood behind the spread of home ownership in the United States and the promotion of suburbanization through the credit system. And kind of what we need is a Fannie Mae and Freddie Mac for the energy transition.

if the question is, Is there historical warrant for the financial agencies of government in the United States biasing the property structure in the economy in a certain way?, the answer is emphatically yes—all the way down to the grotesque role of the New Deal financial apparatus in enshrining the racial segregation of the American urban space, with massive effects from the 1930s onward.

The idea of neutrality should not even be allowed in the room in this argument. It’s a question of where we want to be biased. If you look at QE, especially in the U.K. and the EU, it was effectively fossil-biased.

monetary policy is not neutral with regards to the environment. There’s no safe space here. The only question is whether you’re going to lead in the right way

Meyer: Last question. With any of this, is there a role for interested Americans to play if they are not particularly tied to the financial- or monetary-policy elite?

Tooze: Support your congressperson in doing exactly what AOC did in the hearings with Powell a couple of weeks ago

[Editor’s Note: Representative Alexandria Ocasio-Cortez asked Powell whether inflation and unemployment are still closely connected, as the Fed has long argued.]

Applaud, follow with interest, raise questions. That’s exactly what needs to be happening. The politicization of monetary policy is a fact.

If we don’t raise these questions, the de facto politics is, more often than not, conservative and status quo–oriented. So this, like any other area, is one where citizens—whether they’re educated and informed or not—need to wise up, get involved, and follow the arguments and develop positions.

So applaud your congresspeople when they do exactly what AOC was doing in that situation. In many ways, I thought it was one of the most hopeful scenes I’ve seen in that kind of hearing in a long time.

It was The Economists’ Hour, as the title of the New York Times editorial writer Binyamin Appelbaum’s debut book has it.

Lemann and Appelbaum contribute to the second wave of post-2008 commentary. The first postmortems focused narrowly on the global financial crisis, dissecting the distorted incentives, regulatory frailty, and groupthink that caused bankers to blow up the world economy

The new round of analysis broadens the lens, searching out larger political and intellectual wrong turns, an expansion that reflects the morphing of the 2008 crash into a general populist surge.

Berle went further. He laid out in detail how shareholders, being so dispersed and numerous, could not hope to restrain bosses—indeed, how nobody could do so. Enormous powers to shape society belonged to company chieftains who answered to no one. Hence Berle’s prescription: The government should regulate them.

“the Treaty of Detroit,” GM’s bosses granted workers regular cost-of-living pay increases, a measure of job security, health insurance, and a pension—benefits that were almost unheard-of. General Motors had “set itself up as a comprehensive welfare state for its workers,” in Lemann’s succinct formulation.

Berle celebrated the Treaty of Detroit by propounding a pro-corporate liberalism. The corporation had become the “conscience-carrier of twentieth-century American society,” he marveled

Anticipating the “end of history” triumphalism of a later era, the sociologist Daniel Bell feted the corporatist order in a book titled The End of Ideology.

the chief threat to Berle’s vision came not from America’s suspicion of concentrated power. It came from economics

Starting in the 1970s, however, economists began to wield extraordinary influence. They persuaded Richard Nixon to abolish the military draft. They brought economics into the courtroom. They took over many of the top posts at regulatory agencies

The rise of economics, Appelbaum writes, “transformed the business of government, the conduct of business, and, as a result, the patterns of everyday life.

In sum, Jensen’s prescriptions inverted Berle’s. The market could be made to solve the problem of the firm. Government could pull back from regulation

Jensen agreed with Berle’s starting point: Corporate managers were unaccountable because shareholders could not restrain them. But rather than seeing a remedy in checks exerted by regulators and organized labor, Jensen proposed to overhaul the firm so that ownership and control were reunited

After decades in which economists’ influence expanded rapidly, the striking thing about the Trump administration and its foreign analogues is that they have largely dispensed with economic advisers

Shortly after the publication of his research, the invention of junk bonds made hostile takeovers the rage. During the ’80s, more than a quarter of the companies on the Fortune 500 list were targeted. Jensen became the scholar who explained why this unprecedented boardroom bloodbath was good news for America.

to a considerable extent, the news was good. Shielded from market discipline, the old corporate heads had deployed capital carelessly

From 1977 to 1988, Jensen calculated, American corporations had increased in value by $500 billion as a result of the new market for corporate control. Reengineered and reinvigorated, American business staved off what might have been an existential threat from Japanese competition.

Michael C. Jensen, an entertainingly impassioned financial economist who reframed attitudes toward the corporation in the mid-’70s.

Even before the 2008 crash, Jensen disavowed the transactional culture he had helped to legitimize. Holy shit, Jensen remembers saying to himself. Anything can be corrupted.

Contrary to common presumption, the economics establishment in the 1990s and 2000s did not believe that markets were perfectly efficient. Rather, influential economists took the pragmatic view that markets would discipline financiers more effectively than regulators could

He is happy to state at the outset that market-oriented reforms have lifted billions out of poverty, and to recognize that the deregulation that helped undo Berle-ism was not some kind of right-wing plot. In the late ’70s, it was initiated by Democrats such as President Jimmy Carter and Senator Ted Kennedy.

Inequality has grown to unacceptable extremes in highly developed economies. From 1980 to 2010, life expectancy for poor Americans scandalously declined, even as the rich lived longer.

Meanwhile, the primacy of economics has not generated faster economic growth. From 1990 until the eve of the financial crisis, U.S. real GDP per person grew by a little under 2 percent a year, less than the 2.5 percent a year in the oil-shocked 1970s.

economists have repeatedly made excessive claims for their discipline

In the ’60s, Kennedy’s and Johnson’s advisers thought they had the business cycle tamed. They believed they could prevent recessions by “fine-tuning” tax and spending policies

When this expectation was exposed as hubris, Milton Friedman urged central banks to focus exclusively on the supply of money circulating in the economy. This too was soon discredited. From the ’90s onward, economists oversold the benefits of targeting inflation, forgetting that other perils—the human cost of unemployment, the destabilization wrought by financial bubbles—might well be worse than rising prices

Greenspan and Summers ducked the political challenge of buffering new kinds of financial trading with regulatory safeguards

Yet a large cost eluded Jensen’s calculations. The social contract of the Berle era was gone: the unstated assumption of lifetime employment, the promise of retirement benefits, the sense of community and stability and shared purpose that gave millions of lives their meaning. Berle had viewed the corporation as a social and political institution as much as an economic one, and the dismembering of corporations on purely economic grounds was bound to generate fallout that had not been accounted for

today’s fierce international competition and disruptive innovation oblige businesses to cut costs or go under. The dilemma is that, even as they compel efficiency, globalization and technological change exacerbate inequality and uncertainty and therefore the need for a compassionate social contract

LinkedIn is not a solution to worker insecurity writ large, still less to inequality. On the contrary, a world in which people compete to gather connections may be even less equal than our current one. A few high-octane networkers will attract large followings, while a long tail of pedestrians will have only a handful of buddies

Rather than buy in to a single grand vision, societies should prefer a robust contest among interest groups—what Lemann calls pluralism. Borrowing from the forgotten early-20th-century political scientist Arthur Bentley, Lemann defines groups broadly. States and cities are “locality groups,” income categories are “wealth groups,” supporters of a particular politician constitute “personality groups.” People inevitably affiliate themselves with such groups; groups naturally compete to influence the government; and the resulting push and pull, not squabbles among intellectuals about organizing concepts, constitutes the proper stuff of politics

Lemann is aware of the risks in this conclusion. He cites the obvious objection: “The flaw in the pluralist heaven is that the heavenly chorus sings with a strong upper-class accent.” In a contest of competing interest groups, the ones with the most money are likely to win

For those who regard inequality as a challenge, an interest-group free-for-all is a perilous prescription.

Appelbaum presents a series of persuasive recommendations, confirming that Lemann is wrong to despair of reasoned, technocratic argument. If policy makers want ordinary Americans to appreciate the benefits of open trade, they must ensure that displaced workers have access to training and health care. Because some interest groups are weaker than others, government should correct the double standard by which the power of labor unions is regarded with antipathy but the power of business monopolies is tolerated

Progressives should look for ways to be pro-competition but anti-inequality

—it isn’t so clear that the economists have departed

throughout Appelbaum’s narrative, many of the knights who slay the dragons of bad economic ideology are economists themselves. The story of the past generation is more about debates among economists than about economists pitted against laypeople. Perhaps, with a bit of humility and retooling, the economists will have their day again. If they do not come up with the next set of good ideas, it is not obvious who will

You can fault George W. Bush in any number of ways, but he did not spend the months before 9/11 repeatedly telling the public that there was absolutely no threat of a terrorist attack on our soil or boasting that he had it all under control, or claiming Osama bin Laden was a liberal hoax to delegitimize his presidency and wreck the economy.

Bret: The inability of so much of the public to remember what Trump was saying just a month ago suggests that, in addition to the coronavirus crisis, we’re also experiencing a national amnesia pandemic.

Although actually Trump’s popularity hasn’t risen all that much considering the intensity of the situation. Certainly nothing compared to what we saw with George W. Bush after 9/11.

Biden’s not like that. He isn’t a personality-personal-history candidate; he’s a former-vice-president-who-knows-how-the-system-works candidate.

ret: If Biden is going to make himself more relevant to the moment, I think he needs to do more than emphasize his command of bureaucracy or his experience of personal tragedy. He’s going to need to reintroduce voters to the “Scranton Joe” side of his biography. One reason I suspect Trump is benefiting politically from the pandemic is that he’s been talking about minimizing the economic fallout and getting the country back to work

That might be irresponsible from a medical and epidemiological point of view. But it resonates with millions of Americans, especially small business owners and their employees faced with complete financial ruin if the shutdowns carry on for months.

the idea of a much longer nationwide shutdown strikes me as no less dangerous, potentially more so. The economic damage would be monumental, beyond anything in the power of the government to fix. It runs the risk of creating a secondary health crisis in terms of depression, isolation, suicide, addiction and so on.

The coronavirus crisis explodes that 20th-century framework and poses the question: How does America’s central bank supply dollar liquidity to a polycentric world economy?

In 2013, the agreement to swap was made permanent. A privileged group of central banks — those of Canada, Britain, Switzerland and Japan, as well as the European Central Bank — were granted what amounted to unlimited drawing rights on dollars, in exchange for which they would give their own currency as collateral.

Finally, there is the question of China. In 2008, China was already the main driver of global growt

Three things have changed since 2008. First, dollars are being used on a new scale by new financial actors. Second, the balance of the world economy has further shifted from the European Union-United States-Japan axis toward emerging markets. And third, the politics of the world economy have become far more antagonistic.

As for the growing power of emerging markets, China leads the way. But the growth of economies like Indonesia, Malaysia, Thailand and Turkey has also been spectacular. Once a relatively marginal part of the world economy, the emerging economies are now key drivers of global growth

But they are also a tool of geopolitics: The dollar network provides a financial safety net for the banks of America’s major allies. It is not by accident that no swap was ever considered for Russia or China.

Today, the country’s economy is larger than ever, as are its holdings of American assets. All told, the foreign debts of China’s businesses come to $1.3 trillion. As the global scramble for dollars begins and the American currency rises in value, those debts become less sustainable. That risks unleashing a chain reaction.

Now the U.S. Treasury market is shaking, and the relationship between the two counties — in an era of viral conspiracy theories and trade wars — has sharply deteriorated. How can the Fed manage relations with China’s central bank in these circumstances?

the tea-party movement has largely fallen in behind President Trump and looked the other way as his administration has overseen a rise in the federal budget deficit to $1 trillion—and that was before the new surge of coronavirus spending.

Now, though, some of that tea-party resistance may be re-emerging. Jenny Beth Martin, co-founder of the Tea Party Patriots organization, says 96% of the group’s supporters “don’t want any more spending. They think $2.2 trillion-plus in spending should be enough.”

Overall, though, the Republican party is moving in a markedly different direction this time. A variety of forces are behind the shift.

This time, the problems that have hit the economy are even bigger and have descended with more alarming speed. More important, unlike in 2008, nobody’s business decisions can be blamed.

Second, this time rescue legislation has been crafted so that it helps average Americans and small businesses at least as much as big businesses. That approach reflects the nature of this crisis, where the damage is as much at the bottom of the economic food chain as at the top, but it also changes the politics.

Third, Republicans—and Democrats for that matter—learned some lessons from the last rescue. For one, don’t call it a “bailout.” Americans of all stripes are more sympathetic to an economic rescue, and even economic stimulus, than they are to bailouts.

In addition, most of those who lived through the political and legislative horror show of the 2008-09 crisis emerged thinking the government response actually should have been bigger, not smaller. That’s in part because the rescue, giant as it seemed at the time, didn’t end up costing the government as much as originally thought. T

Finally, and perhaps above all, this is a different Republican party. It’s the populist party of Donald Trump, not the party of traditional conservative ideology. Mr. Trump isn’t opposed to activist government and, as noted, isn’t the least afraid of debt and deficit spending.

Which is why today’s actions may spur further change in Republican orthodoxy.

THE AMERICAN EXPERIMENT rests on three political ideas—“these truths,” Thomas Jefferson called them—political equality, natural rights, and the sovereignty of the people.

After Benjamin Franklin read Jefferson’s draft, he picked up his quill, scratched out the words “sacred & undeniable,” and suggested that “these truths” were, instead, “self-evident.” This was more than a quibble. Truths that are sacred and undeniable are God-given and divine, the stuff of religion. Truths that are self-evident are laws of nature, empirical and observable, the stuff of science. This divide has nearly rent the Republic apart.

The real dispute is between “these truths” and the course of events: Does American history prove these truths, or does it belie them?

The United States rests on a dedication to equality, which is chiefly a moral idea, rooted in Christianity, but it rests, too, on a dedication to inquiry, fearless and unflinching. Its founders agreed with the Scottish philosopher and historian David Hume, who wrote, in 1748, that “Records of Wars, Intrigues, Factions, and Revolutions are so many Collections of Experiments.”9 They believed that truth is to be found in ideas about morality but also in the study of history.

understanding history as a form of inquiry—not as something easy or comforting but as something demanding and exhausting—was central to the nation’s founding. This, too, was new.

A new kind of historical writing, less memorial and more unsettling, only first emerged in the fourteenth century. “History is a philosophical science,” the North African Muslim scholar Ibn Khaldun wrote in 1377, in the prologue to his history of the world, in which he defined history as the study “of the causes and origins of existing things.”11

Only by fits and starts did history become not merely a form of memory but also a form of investigation, to be disputed, like philosophy, its premises questioned, its evidence examined, its arguments countered.

Declaring independence was itself an argument about the relationship between the present and the past, an argument that required evidence of a very particular kind: historical evidence. That’s why most of the Declaration of Independence is a list of historical claims. “To prove this,” Jefferson wrote, “let facts be submitted to a candid world.”

In an attempt to solve this problem, the earliest historians of the United States decided to begin their accounts with Columbus’s voyage, stitching 1776 to 1492. George Bancroft published his History of the United States from the Discovery of the American Continent to the Present in 1834, when the nation was barely more than a half-century old, a fledgling, just hatched. By beginning with Columbus, Bancroft made the United States nearly three centuries older than it was, a many-feathered old bird.

In 1787, then, when Alexander Hamilton asked “whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force,” that was the kind of question a scientist asks before beginning an experiment. Time alone would tell. But time has passed. The beginning has come to an end. What, then, is the verdict of history?

In deciding what to leave in and what to leave out, I’ve confined myself to what, in my view, a people constituted as a nation in the early twenty-first century need to know about their own past, mainly because this book is meant to double as an old-fashioned civics book, an explanation of the origins and ends of democratic institutions, from the town meeting to the party system, from the nominating convention to the secret ballot, from talk radio to Internet polls. This book is chiefly a political

Aside from being a brief history of the United States and a civics primer, this book aims to be something else, too: it’s an explanation of the nature of the past. History isn’t only a subject; it’s also a method.

The truths on which the nation was founded are not mysteries, articles of faith, never to be questioned, as if the founding were an act of God, but neither are they lies, all facts fictions, as if nothing can be known, in a world without truth.

Between reverence and worship, on the one side, and irreverence and contempt, on the other, lies an uneasy path, away from false pieties and petty triumphs over people who lived and died and committed both their acts of courage and their sins and errors long before we committed ours. “We cannot hallow this ground,” Lincoln said at Gettysburg. We are obliged, instead, to walk this ground, dedicating ourselves to both the living and the dead.

studying history is like that, looking into one face and seeing, behind it, another, face after face after face. “Know whence you came,” Baldwin told his nephew.17 The past is an inheritance, a gift and a burden. It can’t be shirked. You carry it everywhere. There’s nothing for it but to get to know it.

Nature takes one toll, malice another. History is the study of what remains, what’s left behind, which can be almost anything, so long as it survives the ravages of time and war: letters, diaries, DNA, gravestones, coins, television broadcasts, paintings, DVDs, viruses, abandoned Facebook pages, the transcripts of congressional hearings, the ruins of buildings. Some of these things are saved by chance or accident, like the one house that, as if by miracle, still stands after a hurricane razes a town. But most of what historians study survives because it was purposely kept—placed

As nation-states emerged, they needed to explain themselves, which they did by telling stories about their origins, tying together ribbons of myths, as if everyone in the “English nation,” for instance, had the same ancestors, when, of course, they did not. Very often, histories of nation-states are little more than myths that hide the seams that stitch the nation to the state.15

When the United States declared its independence in 1776, plainly, it was a state, but what made it a nation? The fiction that its people shared a common ancestry was absurd on its face; they came from all over, and, having waged a war against England, the very last thing they wanted to celebrate was their Englishness.

Facts, knowledge, experience, proof. These words come from the law. Around the seventeenth century, they moved into what was then called “natural history”: astronomy, physics, chemistry, geology. By the eighteenth century they were applied to history and to politics, too. These truths: this was the language of reason, of enlightenment, of inquiry, and of history.

Against conquest, slaughter, and slavery came the urgent and abiding question, “By what right?”

Yet the origins of the United States date to 1492 for another, more troubling reason: the nation’s founding truths were forged in a crucible of violence, the products of staggering cruelty, conquest and slaughter, the assassination of worlds.

Locke, spurred both by a growing commitment to religious toleration and by a desire to distinguish English settlement from Spanish conquest, stressed the lack of cultivation as a better justification for taking the natives’ land than religious difference, an emphasis with lasting consequences.

Unlike Polo and Mandeville, Columbus did not make a catalogue of the ways and beliefs of the people he met (only later did he hire Pané to do that). Instead, he decided that the people he met had no ways and beliefs. Every difference he saw as an absence.22 Insisting that they had no faith and no civil government and were therefore infidels and savages who could not rightfully own anything, he claimed possession of their land, by the act of writing. They were a people without truth; he would make his truth theirs. He would tell them where the dead go.

It became commonplace, inevitable, even, first among the Spanish, and then, in turn, among the French, the Dutch, and the English, to see their own prosperity and good health and the terrible sicknesses suffered by the natives as signs from God. “Touching these savages, there is a thing that I cannot omit to remark to you,” one French settler wrote: “it appears visibly that God wishes that they yield their place to new peoples.” Death convinced them at once of their right and of the truth of their faith. “The natives, they are all dead of small Poxe,” John Winthrop wrote when he arrived in New England in 1630: “the Lord hathe cleared our title to what we possess.”

In much of New Spain, the mixed-race children of Spanish men and Indian women, known as mestizos, outnumbered Indians; an intricate caste system marked gradations of skin color, mixtures of Europeans, Native Americans, and Africans, as if skin color were like dyes made of plants, the yellow of sassafras, the red of beets, the black of carob. Later, the English would recognize only black and white, a fantasy of stark and impossible difference, of nights without twilight and days without dawns. And yet both regimes of race, a culture of mixing or a culture of pretending not to mix, pressed upon the brows of every person of the least curiosity the question of common humanity: Are all peoples one?

Elizabeth’s best defender argued that if God decided “the female should rule and govern,” it didn’t matter that women were “weake in nature, feable in bodie, softe in courage,” because God would make every right ruler strong. In any case, England’s constitution abided by a “rule mixte,” in which the authority of the monarch was checked by the power of Parliament; also, “it is not she that ruleth but the lawes.” Elizabeth herself called on yet another authority: the favor of the people.48 A mixed constitution, the rule of law, the will of the people: these were English ideas that Americans would one day make their own, crying, “Liberty!”

In the brutal, bloody century between Columbus’s voyage and John White’s, an idea was born, out of fantasy, out of violence, the idea that there exists in the world a people who live in an actual Garden of Eden, a state of nature, before the giving of laws, before the forming of government. This imagined history of America became an English book of genesis, their new truth. “In the beginning,” the Englishman John Locke would write, “all the world was America.” In America, everything became a beginning.

England’s empire would have a different character than that of either Spain or France. Catholics could make converts by the act of baptism, but Protestants were supposed to teach converts to read the Bible; that meant permanent settlements, families, communities, schools, and churches. Also, England’s empire would be maritime—its navy was its greatest strength. It would be commercial. And, of greatest significance for the course of the nation that would grow out of those settlements, its colonists would be free men, not vassals, guaranteed their “English liberties.”

Beginning with the Virginia charter, the idea of English liberties for English subjects was planted on American soil and, with it, the king’s claim to dominion, a claim that rested on the idea that people like Powhatan and his people lived in darkness and without government, no matter that the English called their leaders kings.

Twenty Englishmen were elected to the House of Burgesses. Twenty Africans were condemned to the house of bondage. Another chapter opened in the American book of genesis: liberty and slavery became the American Abel and Cain.

To build his case against the king, Coke dusted off a copy of an ancient and almost entirely forgotten legal document, known as Magna Carta (literally, the “great charter”), in which, in the year 1215, King John had pledged to his barons that he would obey the “law of the land.” Magna Carta wasn’t nearly as important as Coke made it out to be, but by arguing for its importance, he made it important, not only for English history, but for American history, too, tying the political fate of everyone in England’s colonies to the strange doings of a very bad king from the Middle Ages.

Magna Carta explains a great deal about how it is that some English colonists would one day come to believe that their king had no right to rule them and why their descendants would come to believe that the United States needed a written constitution. But Magna Carta played one further pivotal role, the role it played in the history of truth—a history that had taken a different course in England than in any other part of Europe.

The most crucial right established under Magna Carta was the right to a trial by jury.

in 1215, the pope banned trial by ordeal. In Europe, it was replaced by a new system of divine judgment: judicial torture. But in England, where there existed a tradition of convening juries to judge civil disputes—like disagreements over boundaries between neighboring freeholds—trial by ordeal was replaced not by judicial torture but by trial by jury.

This turn marked the beginning of a new era in the history of knowledge: it required a new doctrine of evidence and new method of inquiry and eventually led to the idea that an observed or witnessed act or thing—the substance, the matter, of fact—is the basis of truth. A judge decided the law; a jury decided the facts. Mysteries were matters of faith, a different kind of truth, known only to God.

The age of mystery began to wane, and, soon, the culture of fact spread from law to government.

There would never be very many Africans in New England, but New Englanders would have slave plantations, on the distant shores. Nearly half of colonial New Englanders’ wealth would come from sugar grown by West Indian slaves.

One million Europeans migrated to British America between 1600 and 1800 and two and a half million Africans were carried there by force over that same stretch of centuries, on ships that sailed past one another by day and by night.42 Africans died faster, but as a population of migrants, they outnumbered Europeans two and a half to one.

In the last twenty-five years of the seventeenth century, English ships, piloted by English sea captains, crewed by English sailors, carried more than a quarter of a million men, women, and children across the ocean, shackled in ships’ holds.44 Theirs was not a ship of state crossing a sea of troubles, another Mayflower, their bond a covenant. Theirs was a ship of slavery, their bonds forged in fire. They whispered and wept; they screamed and sat in silence. They grew ill; they grieved; they died; they endured.

By what right did the English hold these people as their slaves?

Under Roman law, all men are born free and can only be made slaves by the law of nations, under certain narrow conditions—for instance, when they’re taken as prisoners of war, or when they sell themselves as payment of debt. Aristotle had disagreed with Roman law, insisting that some men are born slaves. Neither of these traditions from antiquity proved to be of much use to English colonists attempting to codify their right to own slaves, because laws governing slavery, like slavery itself, had disappeared from English common law by the fourteenth century. Said one Englishman in Barbados in 1661, there was “no track to guide us where to walk nor any rule sett us how to govern such Slaves.”46

With no track or rule to guide them, colonial assemblies adopted new practices and devised new laws with which they attempted to establish a divide between “blacks” and “whites.”

Adopting these practices and passing these laws required turning English law upside down, because much in existing English law undermined the claims of owners of people. In 1655, a Virginia woman with an African mother and an English father sued for her freedom by citing English common law, under which children’s status follows that of their father, not their mother. In 1662, Virginia’s House of Burgesses answered doubts about “whether children got by any Englishman upon a Negro woman should be slave or ffree” by reaching back to an archaic Roman rule, partus sequitur ventrem (you are what your mother was). Thereafter, any child born of a woman who was a slave inherited her condition.