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Indexing has gone big, very big. For nine in 10 companies on the S&P 500, their largest single shareholder is one of the Big Three. For many, the big indexers control 20 percent or more of their shares. Index funds now control 20 to 30 percent of the American equities market, if not more.

One primary concern comes from the analysts at Bernstein: “A supposedly capitalist economy where the only investment is passive is worse than either a centrally planned economy or an economy with active, market-led capital management.”

Passively managed investment options do not just outperform actively managed ones in terms of both better returns and lower fees. They eat their lunch.

Let’s imagine that a decade ago you invested $100 in an index fund charging a 0.04 percent fee and $100 in a traditional mutual fund charging a 1.5 percent fee. Let’s also imagine that the index fund tracked the S&P 500, and that the mutual fund ended up returning what the S&P 500 returned. Your passively invested $100 would have turned into $356.66 in 10 years. Your traditionally invested $100 would have turned into $313.37.

Actively managed investment options could make up for their higher fees with higher returns. And some do, some of the time. Yet scores of industry and academic studies stretching over decades show that trying to beat the market tends to result in lower returns than just buying the market. Only a quarter of actively managed mutual funds exceeded the returns of their passively managed cousins in the decade leading up to 2019,

What might be good for retail investors might not be good for the financial markets, public companies, or the American economy writ large, and the passive revolution’s scope has raised all sorts of hand-wringing and red-flagging. Analysts at Bernstein have called passive investing “worse than Marxism.” The investor Michael Burry, of The Big Short fame, has called it a “bubble,” and a co-head of Goldman Sachs’s investment-management division has warned about froth too. Shortly before his death in 2019, Bogle himself warned that index funds’ dominance might not “serve the national interest.”

The problem is that the public markets have been cornered by a group of investment managers small enough to fit at a lunch counter, dedicated to quiescence and inertia.

Active managers direct investment dollars to companies on the basis of those companies’ research-and-development prospects, human capital, regulatory outlook, and so on. They take new information and price it into a company’s stock when buying and selling shares.

Passive investors, by contrast, ignore annual reports and market rumors. They do nothing with trading-floor gossip. They make no attempt to research what to invest in and what to skip. Whether holding international or domestic assets, holding stocks or bonds, or using a mutual-fund structure or an ETF structure, they just mirror the market. Big U.S.-stock index funds buy big U.S. stocks just because they’re big U.S. stocks.

At least in a Soviet-type centrally planned economy, apparatchiks would be making some attempt to allocate resources efficiently.

Passive management is merely a giant phenomenon, not an all-encompassing one. Hundreds of actively managed mutual funds are still out there, as are legions of day traders, hedge funds, and private offices buying and selling and buying and selling. Stock prices still move around, sometimes dramatically, on the basis of new data and new ideas.

Still, passive investing may well be degrading the informational content of the markets, messing up price signals and making business decisions harder as a result.

When one of these commodities ends up on an index, the firms that use that commodity in their business see a 6 percent increase in costs and a 40 percent decrease in operating profits, relative to firms without exposure to the commodity, the academics found

the price fluctuations of a newly indexed stock “magically and quickly” change. A firm’s shares begin to move “more closely with its 499 new neighbors and less closely with the rest of the market. It is as if it has joined a new school of fish.”

More broadly, the Bernstein analysts, among others, worry that index-linked investing is increasing correlation, whereby the prices of stocks, bonds, and other assets move up or down or sideways together.

Their theory is that ETF trading shifts prices in subtle ways, making it harder for businesses to know when to buy their gold and copper. Corporate executives “are being influenced by what happens in the futures market, and what happens in the futures market is being influenced by ETF trading,”

A far bigger concern is that the rise of the indexers might be making American firms less competitive, through “common ownership,” in which the mega-asset managers control large stakes in multiple competitors in the same industry. The passive firms control big chunks of the airlines American, Delta, JetBlue, Southwest, and United, for instance

The rise of common ownership might be perverting corporate behavior in weird ways, academics argue. Think about the incentives like this: Let’s imagine that you are a major shareholder in a public widget company. We’d expect you to desire—insist, even—that the company fight for market share and profits. But now imagine that you are a major shareholder in all the important widget companies. You would no longer really care which one succeeded, particularly not if one company doing better meant another company doing worse. You’d just care about the widget sector’s corporate profits, which would go up if the widget companies quit competing with one another and started raising prices to pad their bottom line.

one major paper showed that common ownership of airline stocks had the effect of raising ticket prices by 3 to 7 percent.

A separate study showed that consumers are paying higher prices for prescription medicines because generic-drug makers have less incentive to compete with the companies making name-brand drugs.

Yet another study showed that common ownership is leading retail banks to charge higher prices.

Across firms, executive compensation seems to be more closely linked to a company’s performance when its shareholders are not invested in the company’s rivals, the study found. In other words, firms stop paying managers for performance when owned by the same people who own their rivals.

The market clout of the indexers raises other questions too. The actual owners of the stocks—not the index-fund managers but the people putting money into index funds—have little say over the companies they own. Vanguard, Fidelity, and State Street, not Mom and Dad, vote in shareholder elections

In fact, the Big Three cast roughly 25 percent of the votes in S&P 500 companies.

In an interview with The Wall Street Journal, the chief executive officer of State Street said he thought it was “almost inevitable, when you see this kind of concentration, that it probably will make sense to do something about it.”

But figuring out what the appropriate restrictions are depends on determining just what the problem with the indexers is—are they distorting price signals, raising the cost of consumer goods, posing financial systemic risk, or do they just have the market cornered? Then, what to do about it? Common ownership is not a problem the government is used to handling.

, thanks to the passive revolution, a broad variety and huge number of firms might have less incentive to compete. The effect on the real economy might look a lot like that of rising corporate concentration. And the two phenomena might be catalyzing one another, as index investing increases the number of mergers and makes them more lucrative.

In recent decades, the whole economy has gone on autopilot. Index-fund investment is hyperconcentrated. So is online retail. So are pharmaceuticals. So is broadband. Name an industry, and it is likely dominated by a handful of giant players. That has led to all sorts of deleterious downstream effects: suppressing workers’ wages, raising consumer prices, stifling innovation, stoking inequality, and suffocating business creation

The problem is not just the indexers. It is the public markets they reflect, where more chaos, more speculation, more risk, more innovation, and more competition are desperately needed.

Nevertheless, what distinguishes centrist religious-based groups from their leftist and nationalist counterparts is a friendly sensibility toward business activities including wealth accumulation and free-market economics. Islamism is a bourgeois movement consisting mostly of middle-class professionals, businessmen, shopkeepers, petty merchants and traders.

If there is a slogan that best describes Islamists’ economic attitude, it would be: "Islam-is-good-for-business". Many Arab Islamists admire and wish to imitate the example of Turkey

some Islamist-specific economic measures and ideas will be introduced to complement free-market capitalism

There is nothing in Islamists’ current statements and ideas that shows them to be socialist-oriented, though most readily accept the Keynesian model of active state intervention in the economy. Among Islamists, the interventionist approach appeals most to Salafists, who forcefully call for the adoption of distributive measures to address rampant poverty. Yet the dominant Islamist approach to the economy, with minor variations, is free-market capitalism

These Islamists also face a huge challenge: to deliver critical economic improvements in the short term, while devising a long-term comprehensive reform agenda that lays the foundation of a productive economy. The dismal socioeconomic conditions in transitioning Arab countries - abject poverty, double-digit unemployment, the absence of a competitive private sector, against a background of rising expectations - mean that the new governments will be hard pressed to focus on distributive policies and urgent short-term needs.

The president, though, was slow to absorb the scale of the risk and to act accordingly, focusing instead on controlling the message, protecting gains in the economy and batting away warnings from senior officials.

Mr. Trump’s response was colored by his suspicion of and disdain for what he viewed as the “Deep State” — the very people in his government whose expertise and long experience might have guided him more quickly toward steps that would slow the virus, and likely save lives.

The slow start of that plan, on top of the well-documented failures to develop the nation’s testing capacity, left administration officials with almost no insight into how rapidly the virus was spreading. “We were flying the plane with no instruments,” one official said.

But dozens of interviews with current and former officials and a review of emails and other records revealed many previously unreported details and a fuller picture of the roots and extent of his halting response as the deadly virus spread:

The National Security Council office responsible for tracking pandemics received intelligence reports in early January predicting the spread of the virus to the United States, and within weeks was raising options like keeping Americans home from work and shutting down cities the size of Chicago. Mr. Trump would avoid such steps until March.

Despite Mr. Trump’s denial weeks later, he was told at the time about a Jan. 29 memo produced by his trade adviser, Peter Navarro, laying out in striking detail the potential risks of a coronavirus pandemic: as many as half a million deaths and trillions of dollars in economic losses.

The health and human services secretary, Alex M. Azar II, directly warned Mr. Trump of the possibility of a pandemic during a call on Jan. 30, the second warning he delivered to the president about the virus in two weeks. The president, who was on Air Force One while traveling for appearances in the Midwest, responded that Mr. Azar was being alarmist

Mr. Azar publicly announced in February that the government was establishing a “surveillance” system

the task force had gathered for a tabletop exercise — a real-time version of a full-scale war gaming of a flu pandemic the administration had run the previous year. That earlier exercise, also conducted by Mr. Kadlec and called “Crimson Contagion,” predicted 110 million infections, 7.7 million hospitalizations and 586,000 deaths following a hypothetical outbreak that started in China.

By the third week in February, the administration’s top public health experts concluded they should recommend to Mr. Trump a new approach that would include warning the American people of the risks and urging steps like social distancing and staying home from work.

But the White House focused instead on messaging and crucial additional weeks went by before their views were reluctantly accepted by the president — time when the virus spread largely unimpeded.

When Mr. Trump finally agreed in mid-March to recommend social distancing across the country, effectively bringing much of the economy to a halt, he seemed shellshocked and deflated to some of his closest associates. One described him as “subdued” and “baffled” by how the crisis had played out. An economy that he had wagered his re-election on was suddenly in shambles.

He only regained his swagger, the associate said, from conducting his daily White House briefings, at which he often seeks to rewrite the history of the past several months. He declared at one point that he “felt it was a pandemic long before it was called a pandemic,” and insisted at another that he had to be a “cheerleader for the country,” as if that explained why he failed to prepare the public for what was coming.

Mr. Trump’s allies and some administration officials say the criticism has been unfair.

The Chinese government misled other governments, they say. And they insist that the president was either not getting proper information, or the people around him weren’t conveying the urgency of the threat. In some cases, they argue, the specific officials he was hearing from had been discredited in his eyes, but once the right information got to him through other channels, he made the right calls.

“While the media and Democrats refused to seriously acknowledge this virus in January and February, President Trump took bold action to protect Americans and unleash the full power of the federal government to curb the spread of the virus, expand testing capacities and expedite vaccine development even when we had no true idea the level of transmission or asymptomatic spread,” said Judd Deere, a White House spokesman.

Decision-making was also complicated by a long-running dispute inside the administration over how to deal with China

The Containment IllusionBy the last week of February, it was clear to the administration’s public health team that schools and businesses in hot spots would have to close. But in the turbulence of the Trump White House, it took three more weeks to persuade the president that failure to act quickly to control the spread of the virus would have dire consequences.

There were key turning points along the way, opportunities for Mr. Trump to get ahead of the virus rather than just chase it. There were internal debates that presented him with stark choices, and moments when he could have chosen to ask deeper questions and learn more. How he handled them may shape his re-election campaign. They will certainly shape his legacy.

Facing the likelihood of a real pandemic, the group needed to decide when to abandon “containment” — the effort to keep the virus outside the U.S. and to isolate anyone who gets infected — and embrace “mitigation” to thwart the spread of the virus inside the country until a vaccine becomes available.

Among the questions on the agenda, which was reviewed by The New York Times, was when the department’s secretary, Mr. Azar, should recommend that Mr. Trump take textbook mitigation measures “such as school dismissals and cancellations of mass gatherings,” which had been identified as the next appropriate step in a Bush-era pandemic plan.

The group — including Dr. Anthony S. Fauci of the National Institutes of Health; Dr. Robert R. Redfield of the Centers for Disease Control and Prevention, and Mr. Azar, who at that stage was leading the White House Task Force — concluded they would soon need to move toward aggressive social distancing

A 20-year-old Chinese woman had infected five relatives with the virus even though she never displayed any symptoms herself. The implication was grave — apparently healthy people could be unknowingly spreading the virus — and supported the need to move quickly to mitigation.

The following day, Dr. Kadlec and the others decided to present Mr. Trump with a plan titled “Four Steps to Mitigation,” telling the president that they needed to begin preparing Americans for a step rarely taken in United States history.

a presidential blowup and internal turf fights would sidetrack such a move. The focus would shift to messaging and confident predictions of success rather than publicly calling for a shift to mitigation.

These final days of February, perhaps more than any other moment during his tenure in the White House, illustrated Mr. Trump’s inability or unwillingness to absorb warnings coming at him.

He instead reverted to his traditional political playbook in the midst of a public health calamity, squandering vital time as the coronavirus spread silently across the country.

A memo dated Feb. 14, prepared in coordination with the National Security Council and titled “U.S. Government Response to the 2019 Novel Coronavirus,” documented what more drastic measures would look like, including: “significantly limiting public gatherings and cancellation of almost all sporting events, performances, and public and private meetings that cannot be convened by phone. Consider school closures. Widespread ‘stay at home’ directives from public and private organizations with nearly 100% telework for some.”

his friend had a blunt message: You need to be ready. The virus, he warned, which originated in the city of Wuhan, was being transmitted by people who were showing no symptoms — an insight that American health officials had not yet accepted.

On the 18-hour plane ride home, Mr. Trump fumed as he watched the stock market crash after Dr. Messonnier’s comments. Furious, he called Mr. Azar when he landed at around 6 a.m. on Feb. 26, raging that Dr. Messonnier had scared people unnecessarily.

The meeting that evening with Mr. Trump to advocate social distancing was canceled, replaced by a news conference in which the president announced that the White House response would be put under the command of Vice President Mike Pence.

The push to convince Mr. Trump of the need for more assertive action stalled. With Mr. Pence and his staff in charge, the focus was clear: no more alarmist messages. Statements and media appearances by health officials like Dr. Fauci and Dr. Redfield would be coordinated through Mr. Pence’s office

It would be more than three weeks before Mr. Trump would announce serious social distancing efforts, a lost period during which the spread of the virus accelerated rapidly.Over nearly three weeks from Feb. 26 to March 16, the number of confirmed coronavirus cases in the United States grew from 15 to 4,226

The China FactorThe earliest warnings about coronavirus got caught in the crosscurrents of the administration’s internal disputes over China. It was the China hawks who pushed earliest for a travel ban. But their animosity toward China also undercut hopes for a more cooperative approach by the world’s two leading powers to a global crisis.

It was early January, and the call with a Hong Kong epidemiologist left Matthew Pottinger rattled.

Mr. Trump was walking up the steps of Air Force One to head home from India on Feb. 25 when Dr. Nancy Messonnier, the director of the National Center for Immunization and Respiratory Diseases, publicly issued the blunt warning they had all agreed was necessary.

It was one of the earliest warnings to the White House, and it echoed the intelligence reports making their way to the National Security Council

some of the more specialized corners of the intelligence world were producing sophisticated and chilling warnings.

In a report to the director of national intelligence, the State Department’s epidemiologist wrote in early January that the virus was likely to spread across the globe, and warned that the coronavirus could develop into a pandemic

Working independently, a small outpost of the Defense Intelligence Agency, the National Center for Medical Intelligence, came to the same conclusion.

By mid-January there was growing evidence of the virus spreading outside China. Mr. Pottinger began convening daily meetings about the coronavirus

The early alarms sounded by Mr. Pottinger and other China hawks were freighted with ideology — including a push to publicly blame China that critics in the administration say was a distraction

And they ran into opposition from Mr. Trump’s economic advisers, who worried a tough approach toward China could scuttle a trade deal that was a pillar of Mr. Trump’s re-election campaign.

Mr. Pottinger continued to believe the coronavirus problem was far worse than the Chinese were acknowledging. Inside the West Wing, the director of the Domestic Policy Council, Joe Grogan, also tried to sound alarms that the threat from China was growing.

The Consequences of ChaosThe chaotic culture of the Trump White House contributed to the crisis. A lack of planning and a failure to execute, combined with the president’s focus on the news cycle and his preference for following his gut rather than the data cost time, and perhaps lives.

the hawks kept pushing in February to take a critical stance toward China amid the growing crisis. Mr. Pottinger and others — including aides to Secretary of State Mike Pompeo — pressed for government statements to use the term “Wuhan Virus.”Mr. Pompeo tried to hammer the anti-China message at every turn, eventually even urging leaders of the Group of 7 industrialized countries to use “Wuhan virus” in a joint statement.

Others, including aides to Mr. Pence, resisted taking a hard public line, believing that angering Beijing might lead the Chinese government to withhold medical supplies, pharmaceuticals and any scientific research that might ultimately lead to a vaccine.

Mr. Trump took a conciliatory approach through the middle of March, praising the job Mr. Xi was doing.

That changed abruptly, when aides informed Mr. Trump that a Chinese Foreign Ministry spokesman had publicly spun a new conspiracy about the origins of Covid-19: that it was brought to China by U.S. Army personnel who visited the country last October.

On March 16, he wrote on Twitter that “the United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus.”

Mr. Trump’s decision to escalate the war of words undercut any remaining possibility of broad cooperation between the governments to address a global threat

Mr. Pottinger, backed by Mr. O’Brien, became one of the driving forces of a campaign in the final weeks of January to convince Mr. Trump to impose limits on travel from China

he circulated a memo on Jan. 29 urging Mr. Trump to impose the travel limits, arguing that failing to confront the outbreak aggressively could be catastrophic, leading to hundreds of thousands of deaths and trillions of dollars in economic losses.

The uninvited message could not have conflicted more with the president’s approach at the time of playing down the severity of the threat. And when aides raised it with Mr. Trump, he responded that he was unhappy that Mr. Navarro had put his warning in writing.

From the time the virus was first identified as a concern, the administration’s response was plagued by the rivalries and factionalism that routinely swirl around Mr. Trump and, along with the president’s impulsiveness, undercut decision making and policy development.

Even after Mr. Azar first briefed him about the potential seriousness of the virus during a phone call on Jan. 18 while the president was at his Mar-a-Lago resort in Florida, Mr. Trump projected confidence that it would be a passing problem.

“We have it totally under control,” he told an interviewer a few days later while attending the World Economic Forum in Switzerland. “It’s going to be just fine.”

The efforts to sort out policy behind closed doors were contentious and sometimes only loosely organized.

That was the case when the National Security Council convened a meeting on short notice on the afternoon of Jan. 27. The Situation Room was standing room only, packed with top White House advisers, low-level staffers, Mr. Trump’s social media guru, and several cabinet secretaries. There was no checklist about the preparations for a possible pandemic,

Instead, after a 20-minute description by Mr. Azar of his department’s capabilities, the meeting was jolted when Stephen E. Biegun, the newly installed deputy secretary of state, announced plans to issue a “level four” travel warning, strongly discouraging Americans from traveling to China. The room erupted into bickering.

A few days later, on the evening of Jan. 30, Mick Mulvaney, the acting White House chief of staff at the time, and Mr. Azar called Air Force One as the president was making the final decision to go ahead with the restrictions on China travel. Mr. Azar was blunt, warning that the virus could develop into a pandemic and arguing that China should be criticized for failing to be transparent.

Stop panicking, Mr. Trump told him.That sentiment was present throughout February, as the president’s top aides reached for a consistent message but took few concrete steps to prepare for the possibility of a major public health crisis.

As February gave way to March, the president continued to be surrounded by divided factions even as it became clearer that avoiding more aggressive steps was not tenable.

the virus was already multiplying across the country — and hospitals were at risk of buckling under the looming wave of severely ill people, lacking masks and other protective equipment, ventilators and sufficient intensive care beds. The question loomed over the president and his aides after weeks of stalling and inaction: What were they going to do?

Even then, and even by Trump White House standards, the debate over whether to shut down much of the country to slow the spread was especially fierce.

In a tense Oval Office meeting, when Mr. Mnuchin again stressed that the economy would be ravaged, Mr. O’Brien, the national security adviser, who had been worried about the virus for weeks, sounded exasperated as he told Mr. Mnuchin that the economy would be destroyed regardless if officials did nothing.

in the end, aides said, it was Dr. Deborah L. Birx, the veteran AIDS researcher who had joined the task force, who helped to persuade Mr. Trump. Soft-spoken and fond of the kind of charts and graphs Mr. Trump prefers, Dr. Birx did not have the rough edges that could irritate the president. He often told people he thought she was elegant.

During the last week in March, Kellyanne Conway, a senior White House adviser involved in task force meetings, gave voice to concerns other aides had. She warned Mr. Trump that his wished-for date of Easter to reopen the country likely couldn’t be accomplished. Among other things, she told him, he would end up being blamed by critics for every subsequent death caused by the virus.

The postwar boom, when measured by the purchasing power of the average paycheck, continued into the early 1970s and then abruptly stoppe

Starting in 2000, two related developments added to worsening conditions for the middle and working classes.

that year marked the end of net upward mobility. Before 2000, the size of both the lower and middle classes had shrunk, while the percentage of households with inflation-adjusted incomes of $100,000 or more grew. Americans were moving up the ladder.

After 2000, the middle class continued to shrink, but so did the percentage of households making $100,000 or more. The only group to grow larger after 2000 was households with incomes of $35,000 or less. Americans were moving down the ladder.

The second adverse trend is that trade with China, which shot up after China’s entry into the World Trade Organization in December 2001, imposed far larger costs on American workers than most economists anticipated

If one had to project the impact of China’s momentous economic reform for the U.S. labor market with nothing to go on other than a standard undergraduate economics textbook, one would predict large movements of workers between U.S. tradable industries (say, from apparel and furniture to pharmaceuticals and jet aircraft), limited reallocation of jobs from tradables to non-tradables, and no net impacts on U.S. aggregate employment. The reality of adjustment to the China shock has been far different. Employment has certainly fallen in U.S. industries most exposed to import competition. But so too has overall employment in local labor markets in which these industries were concentrated. Offsetting employment gains either in export-oriented tradables or in non-tradables have, for the most part, failed to materialize.

High wage workers find it relatively easy to adjust and “do not experience an earnings loss,” argue Autor and his colleagues. Low wage workers, in contrast, “suffer large differential earnings loss, as they obtain lower earnings per year both while working at the initial firm and after relocating to new employers.”

The recipe for populism seems pretty clear: take a surge in manufacturing imports from China and continued automation in the US workplace and add a tepid macroeconomy. The result is a combustible stew sure to sour the stomach of party leaders nationwide.

The stew, to continue Hanson’s metaphor, began to boil over with the cataclysmic financial collapse in September 2008, which many people left and right felt was caused by reckless financial engineering on Wall Street. The collapse and the destruction it left in its wake was, without question, the most important economic and political event in recent years.

“It was the financial crisis, what it revealed about government-Wall Street links, and the fumbling of the response to it that put the nail in the coffin of trust in government,

, TARP insulated the very institutions and executives that caused the collapse and the disastrous recession that followed.

The widespread sense that all the elites in Washington and New York conspired to bail out the miscreants who caused the disaster and then gave them bonuses, while the rest of us lost our houses or saw their value, the biggest and often only asset of Americans, plummet, lost our jobs or saw them frozen and stagnant, and then saw gaping inequality grow even more, is just palpable.

On Jan. 10, 2010, the Supreme Court granted those in upper income brackets additional privileges in its Citizens United decision (buttressed by subsequent lower court rulings) that allowed wealthy individuals, corporations and unions to make unlimited political contributions. By opening the door to the creation of SuperPACs and giving Wall Street and other major financial sectors new ways to buy political outcomes, the courts gave the impression, to say the least, that they favored establishment interests over those of the less well off.

A Bloomberg poll last September found that 78 percent of voters would like to see Citizens United overturned, and this view held across a range of partisan loyalties: Republicans at 80 percent; Democrats at 83; and independents at 71.

. Obamacare, a program many in the white middle and working classes perceived as reducing their own medical care in order to provide health coverage to the disproportionately minority poor.

By the midterm elections of 2010, voter dissatisfaction among whites found expression in the Tea Party movement, which produced the sweeping defeat of Democrats in competitive congressional districts as well as of moderate and center-right Republicans in primary contests.Voter anger was directed at two targets — the “undeserving rich” and the “undeserving poor.”

To many of those who cast their ballots in anger in 2010 and 2014, however, it appeared that their votes had not changed anything. Obamacare stayed in place, Wall Street and corporate America grew richer, while the average worker was stuck going nowhere.

Already disillusioned with the Democratic Party, these white voters became convinced that the mainstream of the Republican Party had failed them, not only on economic issues, but on cultural matters as well.

A September 2015 Ispos survey asked voters if they agreed or disagreed with the statement “More and more, I don’t identify with what America has become.” 72 percent of surveyed Republicans concurred, compared to 58 percent of independents and 45 percent of Democrats. Two thirds of Republicans, 62 percent, agreed with the statement “These days I feel like a stranger in my own country,” compared to 53 percent of independents and 37 percent of Democrats. Here is one place where Trump’s scathing dismissal of political correctness found fertile ground.

If he prevails, a constituency that could force politicians to confront the problems of the working and middle class will waste its energies on a candidate incompetent to improve the lives of the credulous men and women lining up to support him.

the consequences of disillusionment with old guard Republicans:The intersection of inequality driven by real wage/income stagnation and the fact that the folks perceived to have blown the damn economy up not only recovered first, but got government assistance in the form of bailouts to do so. If you’re in the anxious middle and that doesn’t deeply piss you off, you’re an unusually forgiving person.

This election has demonstrated that there is no Republican Party organization, per se. The Republican Party exists as an array of allied groups, incumbent office holders, media organizations, and funding vehicles (e.g., SuperPACs, 501(c)(4)s, and the like). When people ask why the “establishment” or “the party” has not done anything to stop Trump, it is not exactly clear who they mean.

The tragedy of the 2016 campaign is that Trump has mobilized a constituency with legitimate grievances on a fool’s errand.If he is shoved out of the field somehow, his supporters will remain bitter and enraged, convinced that a self-serving and malign elite defeated their leader.

In these circumstances, Bernstein wrote, the logic supporting the traditional Republican Party fell apart:The core theme of Republican establishment lore has been to demonize not unregulated finance or trade or inequality, but ‘the other’ – e.g., the immigrant or minority taking your job and claiming unneeded government support. And yet, none of their trickle down, deregulatory agenda helped ameliorate the problem at all. So they lost control.

Missing in your narrative were 2 other factors that contributed to American anger and the turn to Mr. Trump. Those two factors are: the group of very wealthy American's who were convened by the Koch brothers to pool their resources to destroy President Obama and the Congressional Democrats and moderate Republicans, e.g. Senator Lugar.

were suffering from a major contraction and the drying up of credit & jobs and the President unwisely & wrongly appointed the Simpson-Bowles commission to rein in the debt. Remember Harvard's Rogoff & Reinhart who came up with that Debt to GDP ratio? And the rally of our elites & Pete Peterson et al that Deficits were the problem, when the truth, based on history, was just the opposite.

The 2nd factor which can also be attributed to the White House as well as Democrats in the Congress who joined Republicans in misdiagnosing the problem as deficits and debt.

the growing divisions between red and blue states represent a reversion to the lines of separation through much of the nation’s history.

“very similar, both geographically and culturally, to the divides between the Union and the Confederacy. And those dividing lines were largely set at the nation’s founding, when slave states and free states forged an uneasy alliance to become ‘one nation.’”

he’s warning that the pressure on the country’s fundamental cohesion is likely to continue ratcheting up in the 2020s

the “MAGA movement”—as the U.S. equivalent to the authoritarian parties in places such as Hungary and Venezuela. It is a multipronged, fundamentally antidemocratic movement that has built a solidifying base of institutional support through conservative media networks, evangelical churches, wealthy Republican donors, GOP elected officials, paramilitary white-nationalist groups, and a mass public following

Virginia has voted like a blue state at the presidential level, and Arizona and Georgia have moved from red to purple. With these three states shifted into those categories, the two “nations” are almost equal in eligible voting-age population, and the blue advantage in GDP roughly doubles, with the blue section contributing 48 percent and the red just 35 percent.)

This divergence itself creates enormous strain on the country’s cohesion, but more and more even that looks like only a way station

the underlying political question of the 2020s remains whether majority rule—and democracy as we’ve known it—can survive this offensive.

Podhorzer defines modern red and blue America as the states in which each party has usually held unified control of the governorship and state legislature in recent years.

By that yardstick, there are 25 red states, 17 blue states, and eight purple states

the red nation houses slightly more of the country’s eligible voting population (45 percent versus 39 percent), but the blue nation contributes more of the total U.S. gross national product: 46 percent versus 40 percent

it is determined to impose its policy and social vision on the entire country—with or without majority support

The hardening difference between red and blue, Podhorzer maintains, “empowers” the 10 purple states (if you include Arizona and Georgia) to “decide which of the two superpower nations’ values, Blue or Red, will prevail” in presidential and congressional elections

that leaves the country perpetually teetering on a knife’s edge: The combined vote margin for either party across those purple states has been no greater than two percentage points in any of the past three presidential elections

That’s a reversal from the middle decades of the 20th century, when the basic trend was toward greater convergence.

One element of that convergence came through what legal scholars call the “rights revolution.” That was the succession of actions from Congress and the Supreme Court, mostly beginning in the 1960s, that strengthened the floor of nationwide rights and reduced the ability of states to curtail those rights.

Key moments in that revolution included the passage of the Civil Rights and Voting Rights Acts and the Supreme Court decisions striking down state bans on contraception, interracial marriage, abortion, and, much later, prohibitions against same-sex intimate relations and marriage.)

Simultaneously, the regional differences were moderated by waves of national investment, including the New Deal spending on rural electrification, the Tennessee Valley Authority, agricultural price supports, and Social Security during the 1930s, and the Great Society programs that provided federal aid for K–12 schools and higher education, as well as Medicare and Medicaid.

The impact of these investments (as well as massive defense spending across both periods) on states that had historically spent little on public services and economic development helped steadily narrow the gap in per capita income between the states of the old Confederacy and the rest of the country from the 1930s until about 1980.

Since about 2008, Podhorzer calculates, the southern states at the heart of the red nation have again fallen further behind the blue nation in per capita income.

red states, as a group, are falling behind blue states on a broad range of economic and social outcomes—including economic productivity, family income, life expectancy, and “deaths of despair” from the opioid crisis and alcoholism.

other measures that show those places in a more favorable light

Housing is often more affordable in red states; partly for that reason, homelessness has become endemic in many big blue cities. Red-state taxes are generally lower than their blue counterparts. Many red states have experienced robust job growth

And red states across the Sun Belt rank among the nation’s fastest growing in population.

blue states are benefiting more as the nation transitions into a high-productivity, 21st-century information economy

red states (apart from their major metropolitan centers participating in that economy) are suffering as the powerhouse industries of the 20th century—agriculture, manufacturing, and fossil-fuel extraction—decline.

The gross domestic product per person and the median household income are now both more than 25 percent greater in the blue section than in the red,

The share of kids in poverty is more than 20 percent lower in the blue section than red, and the share of working households with incomes below the poverty line is nearly 40 percent lower.

Gun deaths are almost twice as high per capita in the red places as in the blue, as is the maternal mortality rate.

Per capita spending on elementary and secondary education is almost 50 percent higher in the blue states compared with red

All of the blue states have expanded access to Medicaid under the Affordable Care Act, while about 60 percent of the total red-nation population lives in states that have refused to do so.

All of the blue states have set a minimum wage higher than the federal level of $7.25, while only about one-third of the red-state residents live in places that have done so.

Right-to-work laws are common in the red states and nonexistent in the blue, with the result that the latter have a much higher share of unionized workers than the former

No state in the blue section has a law on the books banning abortion before fetal viability, while almost all of the red states are poised to restrict abortion rights

Almost all of the red states have also passed “stand your ground” laws backed by the National Rifle Association, which provide a legal defense for those who use weapons against a perceived threat, while none of the blue states have done so.

During the seven decades of legal Jim Crow segregation from the 1890s through the 1960s, the principal goal of the southern states at the core of red America was defensive: They worked tirelessly to prevent federal interference with state-sponsored segregation but did not seek to impose it on states outside the region.

Jim Crow segregation offers an important reference point for understanding how far red states might take this movement to roll back civil rights and liberties—not that they literally would seek to restore segregation, but that they are comfortable with “a time when states” had laws so “entirely different” that they created a form of domestic apartheid.

The flurry of socially conservative laws that red states have passed since 2021, on issues such as abortion; classroom discussions of race, gender, and sexual orientation; and LGBTQ rights, is widening this split. No Democratic-controlled state has passed any of those measures.

he documents a return to historical patterns from the Jim Crow era in which the dominant party (segregationist Democrats then, conservative Republicans now) has skewed the playing field to achieve a level of political dominance in the red nation far beyond its level of popular support

Undergirding that advantage, he argues, are laws that make registering or voting in many of the red states more difficult, and severe gerrymanders that have allowed Republicans to virtually lock in indefinite control of many state legislatures

how the United States will function with two sections that are moving so far apart.

History, in my view, offers two models

bedrock differences dating back to the country’s founding are resurfacing. And one crucial element of that, he argues, is the return of what he calls “one-party rule in the red nation.”

in the last years before the Civil War, the South’s political orientation was offensive: Through the courts (the 1857 Dred Scott decision) and in Congress (the Kansas-Nebraska Act in 1854), its principal aim was to authorize the expansion of slavery into more territories and states

Podhorzer, like Mason and Grumbach, believes that the MAGA movement’s long-term goal is to tilt the electoral rules in enough states to make winning Congress or the White House almost impossible for Democrats

Then, with support from the GOP-appointed majority on the Supreme Court, Republicans could impose red-state values and programs nationwide, even if most Americans oppose them. The “MAGA movement is not stopping at the borders of the states it already controls,” Podhorzer writes. “It seeks to conquer as much territory as possible by any means possible.”

The Trump model, in other words, is more the South in 1850 than the South in 1950, more John Calhoun than Richard Russell

it does mean that the 2020s may bring the greatest threats to the country’s basic stability since those dark and tumultuous years.

Cuomo's favorable rating jumped to 77%. Just two months earlier, his favorable rating had been 44% -- a paltry figure for a Democrat from a blue state. close dialogThe world is watching as the Biden administration takes office.Get updates on US politics delivered to your inbox daily. Sign Me UpNo ThanksBy subscribing you agree to ourprivacy policy.The world is watching as the Biden administration takes office.Get updates on US politics delivered to your inbox daily. Please enter aboveSign Me UpBy subscribing you agree to ourprivacy policy.Success! See you in your inbox.</

California was one of the earliest states hit in the pandemic, and most voters applauded Newsom's response. His approval rating among likely voters in Public Policy Institute of California polling topped out at 64% in May 2020. That was up from 52% in February 2020 and 49% in January 2020. Newsom, though, has been criticized for how he handled lockdowns and business and school reopenings during the last year

His favorable rating is down to 44% and a mere 36% of voters want him to run for reelection, according to a March Quinnipiac University poll. The one piece of good news for Cuomo is that most Democrats (60%) have a favorable view of the governor, a slim majority (50%) want him to run again in 2022 and just 21% want him to resign.

More prominently, Cuomo is dealing with multiple allegations of inappropriate behavior toward women. The attorney general's office is investigating the claims, and the state Assembly speaker has allowed an impeachment investigation to begin. Many state and federal officials are calling on Cuomo to resign.

Still, the fact that Newsom is facing a recall and that his approval rating is averaging only about 50% right now is not a great position for a Democrat in California. Of course, both Cuomo and Newsom are in better political shape than Trump. While Trump ended up losing the election, at least in part to his response to the pandemic, voters actually had rallied around him early.

By the summer, Trump's overall approval rating dropped into the low 40s. He consistently low on who would better handle the pandemic compared with Democrat Joe Biden, who's now president. Indeed, Trump may very well have won the election without the pandemic. His approval rating on the economy was better than that of any of the incumbents who had lost in the last 45 years before him.

the flood of 200,000 black men into the U.S. Army and Navy inspired them — and others — to claim the vote as their due. “If we are called on to do military duty against the rebel armies in the field, why should we be denied the privilege of voting against rebel citizens at the ballot-box?

In the early 1800s, as organized political parties began to fight over issues like banking and infrastructure, that changed; turnout rose to 70 percent in local and state elections. Still, presidential polls remained dull and ill-attended. That changed in Jackson’s second run for the presidency in 1828. Heated debates and even-hotter tempers attracted men to the polls

Democracy for white men did not, however, spill over to democracy for everyone; in this same period several states rolled back laws that permitted free black men to vote.

For white men, the United States became a democracy by degrees, not by design, and it showed in the chaotic voting systems

While colonial Americans cast beans, peas, and corn into containers or called their vote aloud, in the 1800s most men either wrote the candidate’s name on a blank sheet of paper or turned in a ballot helpfully printed for them by the local political party or newspaper. Outside of Massachusetts, almost no one registered to vote

Today, the ubiquity of voter registration blinds us to its impact. It is a price we all pay for voting and so no longer think of as a price at all. But nineteenth-century Americans understood the costs. Registering in person months before the election minimized the chance of fraud but doubled the difficulty of voting and the possibility of interference

Alexander Keyssar’s excellent history of voting called the 1850s a period of “narrowing of voting rights and a mushrooming upper- and middle-class antagonism to universal suffrage.”

Once the war came, hundreds of thousands of Irish and German immigrants enlisted in the U.S. Army. For a time this flood of foreign-born soldiers swept nativism away. In the years after the Civil War, 12 states explicitly enfranchised immigrant aliens who had declared their intention to become naturalized but had not yet been made citizens. Voting by non-citizens who planned to become naturalized was “widely practiced and not extraordinarily controversial” in this period, political scientist Ron Hayduk argues.

Another way to bar African-American men was to expand the number of disfranchising crimes. Cuffie Washington, an African American man in Ocala, Florida, learned this when election officials turned him away in 1880 because he had been convicted of stealing three oranges. Other black men were barred for theft of a gold button, a hog, or six fish. “It was a pretty general thing to convict colored men in the precinct just before an election,” one of the alleged hog thieves said.

By the fall of 1867, more than 80 percent of eligible African-American men had registered. During the subsequent elections, at least 75 percent of black men turned out to vote in five Southern states. Democracy has a long history, but almost nothing to match this story.

Smalls and his compatriots tore down racial barriers; established public school systems, hospitals, orphanages, and asylums; revised tenancy laws; and tried (sometimes disastrously) to promote railroad construction to modernize the economy. Reconstruction governments also provided crucial votes to ratify the 14th Amendment, which is still the foundation of birthright citizenship, school desegregation, protection against state limits on speech or assembly, and the right to gay marriage.

, South Carolina, the counter-revolution was brewing in the upcountry by summer 1868. Ku Klux Klans and other vigilantes there assassinated Benjamin Franklin Randolph, a wartime chaplain, constitutional convention member, and newly elected state senator, as well as three other African-American Republican leaders. Nevertheless black South Carolinians turned out in force, carried the 1868 election, and helped elect Ulysses S. Grant president.

In his March 4, 1869 inaugural, Grant called on states to settle the question of suffrage in a new 15th Amendment. Anti-slavery icon Frederick Douglass said the amendment’s meaning was plain. “We are placed upon an equal footing with all other men.” But the 15th Amendment did not actually resolve the question of who could vote or establish any actual right to vote. It merely prohibited states from excluding voters based on “race, color, or previous condition of servitude.” Its own language acknowledged that states could legitimately strip the vote away for other reasons

proposed prohibitions on literacy, education, property, or religious tests died at the hands of northeastern and western Republicans who feared expanding the power of Irish and Chinese immigrants.

Nor did the 15th Amendment protect voters against terrorism. As Smalls and other African-American Republicans gained seats in Congress, they and their white allies tried to defend black voting through a series of enforcement acts that permitted the federal government to regulate registration and punish local officials for discrimination. But the Supreme Court soon undercut those laws

Using data painstakingly compiled by Philip Lampi, historians have discovered that somewhere between half and three-quarters of adult white males were eligible to vote before the Revolution; by 1812, almost the entire adult white male population could cast a ballot.

Keeping African-American people away on election day was difficult, and potentially bad publicity, so white Democrats over the 1870s and 1880s passed registration laws and poll taxes, and shifted precinct locations to prevent black people from coming to the polls at all. In 1882, the South Carolina legislature required all voters to register again, making the registrar, as one African-American political leader said, “the emperor of suffrage.

To disfranchise rural laborers, Alabama, Arkansas, Georgia, North Carolina, and other Southern states doubled residency requirements.

Without hope of victory, federal prosecutions for voting crimes fell by 90 percent after 1873.

By the 1880s, this so-called “kangaroo voting” seemed the solution to every political problem. Reformer Henry George and Knights of Labor leaders hoped the Australian ballot would free workingmen from intimidation, while reformers in Boston and New York hoped it might eliminate fraud and make it difficult for illiterate men to fill out ballots.

Massachusetts leapt first in 1889, and by the 1892 election a majority of states had passed the bill. In Massachusetts, turnout dropped from 54.57 to 40.69 percent; in Vermont from 69.11 to 53.02. One statistical survey estimated that voter turnout dropped by an average of 8.2 percent. The Australian ballot’s “tendency is to gradual disfranchisement,” the New York Sun complained.

by stripping political parties’ names from the ballot, the reform made it difficult for illiterate voters, still a sizable portion of the electorate in the late 19th century. But even more profoundly, the effort to eliminate “fraud” turned election day from a riotous festival to a snooze. Over time many people stayed home

In New York, voter participation fell from nearly 90 percent in the 1880s to 57 percent by 1920

The 1888 election was almost a very different turning point for voting rights. As Republicans gained control of the House, Senate, and White House for the first time in a decade, they tried to bolster their party by establishing federal control of congressional elections so they could protect African-American voting rights in the south (and, Democrats charged, block immigrant voting in northern cities). The bill’s dual purposes were embodied in its manager, anti-immigrant, pro-black suffrage Massachusetts Congressman Henry Cabot Lodge. Although the bill passed the House, it died in a Senate filibuster. Democrats swept the House in the fall 1890 elections and soon repealed many of the remaining voting rights provisions.

African-American registration in Mississippi soon fell from 190,000 to 9,000; overall voter participation dropped from 70 percent in the 1870s to 50 percent in the 1880s to 15 percent by the early 1900

“We have disfranchised the African in the past by doubtful methods,” Alabama’s convention chairman said in 1901, “but in the future we’ll disfranchise them by law.”

These laws and constitutional provisions devastated voting in the South. When Tennessee passed a secret ballot law in 1889, turnout fell immediately from 78 percent to 50 percent; Virginia’s overall turnout dropped by 50 percent. For African-American voters, of course, the impact was even more staggering. In Louisiana black registration fell from 130,000 to 1,342. By 1910 only four percent of black Georgia men were registered.

Poll taxes, intimidation, fraud, and grandfather clauses all played their part, but the enduring tools of registration and the Australian ballot worked their grim magic, too, and made voters disappear.

In the landmark case Shelby County v. Holder, Chief Justice John Roberts turned the disfranchisement of the 1890s into a racial and regional exception, one that had since been overwhelmed by the national tide of democracy. “Our country has changed,” Roberts wrote in the majority opinion.

This is part of what political scientist Alexander Keyssar critically called the “progressive presumption” that there is an “inexorable march toward universal suffrage” interrupted only by anomalous, even un-American, regional and racial detours.

But the tools that disfranchised Jackson Giles were not all Southern and not only directed at African-American men. When the United States conquered Puerto Rico and the Philippines, it imposed the Australian ballot there, too.

in 1903, Supreme Court Justice Oliver Wendell Holmes, a Massachusetts native, denied Giles’ appeal on the grounds that the court could not intervene in political questions. If citizens like Giles suffered a “great political wrong,” Holmes intoned, they could only look for help from the same political system that had just disfranchised them

The great writer Charles Chesnutt wrote that “In spite of the Fifteenth Amendment, colored men in the United States have no political rights which the States are bound to respect.” It was a “second Dred Scott decision,” white and black activists lamented.

By refusing to wear a facemask on camera, Trump signaled to his core supporters that he stands with their demands to get the country back to normal, despite his public health officials' warnings about a possible return of coronavirus.

Trump also hit his central campaign themes, hyping his new trade deals, escalating his effort to use China as a scapegoat for not stopping a pandemic he himself long ignored and celebrating the border wall that is crucial to his bond with his supporters. And he took a new shot at Biden's mental capacity, branding the former vice president "a Democrat that doesn't even know where he is." And even before he left the White House, Trump delivered yet another carrot to his evangelical supporters, then followed up in Michigan.

"In Donald Trump's America, the wealthy and well-connected have gotten relief -- while small business owners have too often seen their doors shutter," he added. Around a quarter of Michigan's workers have lost their jobs, according to new employment figures, showing that this debate could be pivotal in a state where Trump pulled off a narrow win over Hillary Clinton four years ago.

In many ways, Trump is playing catchup since satisfaction with his performance in the state trails public approval of the job being done by Michigan's Democratic Gov. Gretchen Whitmer, with whom he has picked a political fight that he seems so far to be losing.

Trump falsely claimed Wednesday that Michigan's efforts to help its citizens vote by mail in November, in a bid to check a resurgence of the virus, will trigger massive voter fraud. Those claims risk alienating voters who are worried about the health implications of showing up in person to vote in November. And they threaten to distract from the purity of Trump's economic message in what is in many ways an unnecessary controversy.

Trump' economic reopening message offers the promise of broadening his support beyond his most loyal supporters — in the industrial Midwest especially.

"His base is still not the majority. On questions of timing and whether people feel comfortable going out and wearing masks, polling shows people with positions much closer to the governor," said Aaron Kall, director of debate at the University of Michigan, who has written extensively about Trump and his rhetorical style.

Trump's decision to go after a popular Democratic governor — as he did last week in Pennsylvania with Tom Wolf -- is in some ways a sign of the President's weakness in that he needs to destroy and discredit opponents and cannot just rely on the strength of his own record to win reelection

Trump's few hours in Michigan also underscored his utter lack of guilt in politicizing and misrepresenting the reality of the worst domestic crisis to confront the US since World War II.

His cheerleading on Thursday — including on the issue of testing, where the US still trails other countries in per capita diagnostics -- was part of an aggressive White House effort to rewrite the history of the politics of the pandemic. Polls that show public satisfaction for Trump's leadership in the crisis suggest that he still has a long way to go.

Economists are calculating when the cost of continuing to shutter restaurants, shopping malls and other businesses — a move that has already pushed some 10 million Americans into unemployment, with millions more on the way — will outweigh the savings from further efforts to slow the virus once the infection curve has flattened out.

targets are at best mildly informed guesses based on models that contain variables — including how many people have the virus and how effective suppression measures will prove to be. The models cannot yet give us anything close to a precise answer on the big question looming over Americans’ lives and livelihoods.

Interviews with more than a dozen economists, many of whom are veterans of past presidential administrations, reveal broad consensus on the building blocks the economy needs — but does not yet have — to begin the slow process of restoring normalcy in the American economy.

That includes widespread agreement that the United States desperately needs more testing for the virus in order to give policymakers the first key piece of evidence they need to determine how fast the virus is spreading and when it might be safe for people to return to work.

rapid deployment of randomized testing for the virus could reduce its health and economic damage.

“It’s going to have to depend on being able to identify people that have the coronavirus, understanding how readily those people can transmit the disease to others and then kind of appropriately isolating people that are contagious,”

Ideally, they would sufficiently control the rate to establish so-called contact tracing in order to track — and avoid — the spread of the virus across the country.

Some experts have talked about quickly bringing back workers who contract the virus but recover with little effect. Testing is the best way to identify such workers, who may have had the virus with few or no symptoms and possibly not realized they were ever infected.

“I don’t think you can force hundreds of thousands of small business owners to voluntarily shut down and let failure happen to them,” Mr. Ozimek said. “They won’t do it, the public won’t support it, and frankly I don’t think local authorities would stop them.”

lawmakers should consider funneling $1,500 a month to individuals through mobile apps like Zelle in order to reach more people, particularly low-income and nonwhite Americans who disproportionately lack traditional bank accounts.

additional money for small business will be crucial throughout the full extent of the crisis — both to prevent a crush of business failures and to keep owners and customers from flouting the national effort to reduce infections.

policymakers will need to provide more support to workers who have lost jobs or hours and to businesses teetering on the brink of failure. That could mean trillions more in small business loans, unemployment benefits and direct payments to individuals, and it could force the government to get creative in deploying money to avoid bottlenecks.

Policymakers will also need to give better support and protection to Americans who are putting their own health at risk to keep the essential parts of the economy running, like doctors, nurses, grocery store clerks and package delivery drivers

those workers needed to have paid sick leave, adequate health coverage, access to coronavirus tests and affordable care for their children while they worked in order to stay healthy and to protect consumers from further spread of the virus.

“That is the economy at this point, those workers,” Ms. Boushey said. “And their health and safety is imperative to my safety.”

Restarting activity too quickly could risk a second spike in infections that could deal more damage than the first because it would shake people’s faith in their ability to engage in even limited amounts of shopping, dining or other commerce.

if we lift too early, the pandemic can take hold again. And that itself is very bad for the economy.”

business as usual might not come back until a vaccine is developed, which could take more than a year.

“We should certainly be prepared for a meaningful level of deliberate suppression of economic activity for the rest of the year,”

The Congressional Budget Office wrote on Thursday that it expected at least a quarter of the current suppression measures to last through year’s end, and that the unemployment rate could still be 9 percent at the end of 2021.

With consumers buying so little, at least relative to the Chinese economy’s productive capacity, how can the nation generate enough demand to keep that capacity in use? The main answer, as Michael Pettis points out, has been to promote extremely high rates of investment, more than 40 percent of G.D.P. The trouble is that it’s hard to invest that much money without running into severely diminishing returns.

financial repression — paying low interest on savings and making cheap loans to favored borrowers — that holds down household income and diverts it to government-controlled investment, a weak social safety net that causes families to accumulate savings to deal with possible emergencies, and more.

Part of the answer is bad leadership. President Xi Jinping is starting to look like a poor economic manager, whose propensity for arbitrary interventions — which is something autocrats tend to do — has stifled private initiative.

But China’s working-age population peaked around 2010 and has been declining ever since. While China has shown impressive technological capacity in some areas, its overall productivity also appears to be stagnating.

very high rates of investment may be sustainable if, like China in the early 2000s, you have a rapidly growing work force and high productivity growth as you catch up with Western economies

This, in short, isn’t a nation that can productively invest 40 percent of G.D.P. Something has to give.

the government was able to mask the problem of inadequate consumer spending for a number of years by promoting a gigantic real estate bubble. In fact, China’s real estate sector became insanely large by international standards.

what China must do seems straightforward: end financial repression and allow more of the economy’s income to flow through to households, and strengthen the social safety net so that consumers don’t feel the need to hoard cash. And as it does this it can ramp down its unsustainable investment spending.

But there are powerful players, especially state-owned enterprises, that benefit from financial repression

And when it comes to strengthening the safety net, the leader of this supposedly communist regime sounds a bit like the governor of Mississippi, denouncing “welfarism” that creates “lazy people.”

Japan ended up managing its downshifting well. It avoided mass unemployment, it never lost social and political cohesion, and real G.D.P. per working-age adult actually rose 50 percent over the next three decades, not far short of growth in the United States.

My great concern is that China may not respond nearly as well. How cohesive will China be in the face of economic trouble? Will it try to prop up its economy with an export surge that will run headlong into Western efforts to promote green technologies? Scariest of all, will it try to distract from domestic difficulties by engaging in military adventurism?

This needs to be addressed or else future generations of Americans will still be paying the price in decades to come.

Debt isn't always bad, however. There are times when it is useful, and now is one of those times. We need money to fight the pandemic, help the millions of people whose lives have been damaged, support businesses and prop up the economy until things get back to normal. We aren't out of the woods yet, even with the recent positive vaccine news, and we need to borrow more.

Here then is what the Biden administration should do. First, focus on getting the pandemic under control, helping those in need and supporting the economy.

Just because more debt is necessary right now doesn't mean it is harmless. We entered the last recession with debt as a share of GDP at 35%. This one is at 80% and we will leave it at well over 100%. US debt is growing faster than the economy and will break the all-time record set just after World War II as soon as 2023.

Even at today's rock-bottom interest rates, we could quadruple federal education spending or send every family an annual check of $2,200 with the money we are spending on interest.

Once the economy is strong enough, as indicated by growth and employment (rather than political whims), the administration and Congress should gradually implement sensible measures to get control of the debt. This could include repealing some or all of the irresponsible tax cuts of the past years, reducing health care costs throughout the economy, cutting some of the near $1.4 trillion of tax breaks in the code and restoring sensible spending caps.

We also need to address our major trust fund programs that are facing insolvency in the upcoming years, including Social Security and Medicare.

These could include sensible cost control measures, such as increasing the retirement age and encouraging those who want to continue to work part time into retirement to do so.

To Biden's credit, his campaign plan included trillions of dollars in revenue raisers and spending reforms, creating opportunities for lawmakers to fund new public investments in a fiscally responsible manner. It is a start, but there will be much more to do. Debt naysayers will want the new administration to opt for the free lunch approach -- borrowing rather than paying for new priorities -- but that is a dangerous economic plan in the long run that invites serious risk and leaves us vulnerable at a time we should be pursing an agenda of economic strength.

The president-elect has said the $900 billion fiscal rescue package proposed by a bipartisan group of Republican and Democratic senators is a good start. It probably isn't what his economic team would have designed if given carte blanche — that package probably would have included another round of stimulus checks to individuals, for example — but they understand that the priority is speed, and not necessarily size, as millions of Americans face eviction and the loss of unemployment insurance benefits in just a few weeks.

Powell has said more than once that lawmakers need to provide additional help to the economy, and that the risks of overdoing it are much lower than not doing enough.

Once the pandemic is over, it will take deft policymaking to get all the unemployed back to work anytime soon. Given the possibility of the Senate being under Republican control, the Biden administration could be engulfed in budget wars like those with which the Obama administration grappled

Biden will use executive orders as aggressively as Trump, in part to unwind much of what Trump did, and his economic team has the experience to do it efficiently.

A Republican-controlled Senate would make legislative wins tough to come by when Biden is president, and he will surely turn to executive orders to accomplish his goals.

From the trenches, Neera Tanden, who Biden wants as his director of the Office of Management and Budget (OMB), is well-suited to lead the charge. The OMB controls the government purse strings and thus policy priorities across the executive branch. Unless the OMB is on board with a government agency's plan, it won't get done.

President-elect Biden's most important long-term economic challenge will be to lift the financial fortunes of hard-pressed lower-income and minority households. Things were tough for these groups before the pandemic given the decades-long skewing of income and wealth distribution, and the virus has further undermined their finances.

If there is a gap in Biden's economic team it is that it lacks someone who has started or managed a business. Getting the economy back to a place in which all Americans benefit requires businesses to do well. This means economic policies also need to be considered from a businessperson's perspective. The new administration is sure to solicit many outside business voices, but policymaking would benefit from an experienced voice on the team.

The Covid-19 pandemic is sure to have long-lasting economic fallout. Just how long will depend in large part on the new president's economic policies. Judging by the economic team he has assembled, we are in good hands.

economist J. Bradford DeLong ’82, Ph.D. ’87, looking back on the twentieth century two decades after its end, comes to a similar conclusion but on different grounds.

DeLong, professor of economics at Berkeley, looks to matters of “contingency” and “choice”: at key junctures the economy suffered “bad luck,” and the actions taken by the responsible policymakers were “incompetent.”

these were “the most consequential years of all humanity’s centuries.” The changes they saw, while in the first instance economic, also “shaped and transformed nearly everything sociological, political, and cultural.”

DeLong’s look back over the twentieth century energetically encompasses political and social trends as well; nor is his scope limited to the United States. The result is a work of strikingly expansive breadth and scope

labeling the book an economic history fails to convey its sweeping frame.

The century that is DeLong’s focus is what he calls the “long twentieth century,” running from just after the Civil War to the end of the 2000s when a series of events, including the biggest financial crisis since the 1930s followed by likewise the most severe business downturn, finally rendered the advanced Western economies “unable to resume economic growth at anything near the average pace that had been the rule since 1870.

d behind those missteps in policy stood not just failures of economic thinking but a voting public that reacted perversely, even if understandably, to the frustrations poor economic outcomes had brought them.

Within this 140-year span, DeLong identifies two eras of “El Dorado” economic growth, each facilitated by expanding globalization, and each driven by rapid advances in technology and changes in business organization for applying technology to economic ends

from 1870 to World War I, and again from World War II to 197

fellow economist Robert J. Gordon ’62, who in his monumental treatise on The Rise and Fall of American Economic Growth (reviewed in “How America Grew,” May-June 2016, page 68) hailed 1870-1970 as a “special century” in this regard (interrupted midway by the disaster of the 1930s).

Gordon highlighted the role of a cluster of once-for-all-time technological advances—the steam engine, railroads, electrification, the internal combustion engine, radio and television, powered flight

Pessimistic that future technological advances (most obviously, the computer and electronics revolutions) will generate productivity gains to match those of the special century, Gordon therefore saw little prospect of a return to the rapid growth of those halcyon days.

DeLong instead points to a series of noneconomic (and non-technological) events that slowed growth, followed by a perverse turn in economic policy triggered in part by public frustration: In 1973 the OPEC cartel tripled the price of oil, and then quadrupled it yet again six years later.

For all too many Americans (and citizens of other countries too), the combination of high inflation and sluggish growth meant that “social democracy was no longer delivering the rapid progress toward utopia that it had delivered in the first post-World War II generation.”

Frustration over these and other ills in turn spawned what DeLong calls the “neoliberal turn” in public attitudes and economic policy. The new economic policies introduced under this rubric “did not end the slowdown in productivity growth but reinforced it.

the tax and regulatory changes enacted in this new climate channeled most of what economic gains there were to people already at the top of the income scale

Meanwhile, progressive “inclusion” of women and African Americans in the economy (and in American society more broadly) meant that middle- and lower-income white men saw even smaller gains—and, perversely, reacted by providing still greater support for policies like tax cuts for those with far higher incomes than their own.

Daniel Bell’s argument in his 1976 classic The Cultural Contradictions of Capitalism. Bell famously suggested that the very success of a capitalist economy would eventually undermine a society’s commitment to the values and institutions that made capitalism possible in the first plac

In DeLong’s view, the “greatest cause” of the neoliberal turn was “the extraordinary pace of rising prosperity during the Thirty Glorious Years, which raised the bar that a political-economic order had to surpass in order to generate broad acceptance.” At the same time, “the fading memory of the Great Depression led to the fading of the belief, or rather recognition, by the middle class that they, as well as the working class, needed social insurance.”

what the economy delivered to “hard-working white men” no longer matched what they saw as their just deserts: in their eyes, “the rich got richer, the unworthy and minority poor got handouts.”

As Bell would have put it, the politics of entitlement, bred by years of economic success that so many people had come to take for granted, squeezed out the politics of opportunity and ambition, giving rise to the politics of resentment.

The new era therefore became “a time to question the bourgeois virtues of hard, regular work and thrift in pursuit of material abundance.”

DeLong’s unspoken agenda would surely include rolling back many of the changes made in the U.S. tax code over the past half-century, as well as reinvigorating antitrust policy to blunt the dominance, and therefore outsize profits, of the mega-firms that now tower over key sectors of the economy

He would also surely reverse the recent trend moving away from free trade. Central bankers should certainly behave like Paul Volcker (appointed by President Carter), whose decisive action finally broke the 1970s inflation even at considerable economic cost

Not only Galbraith’s main themes but many of his more specific observations as well seem as pertinent, and important, today as they did then.

What will future readers of Slouching Towards Utopia conclude?

If anything, DeLong’s narratives will become more valuable as those events fade into the past. Alas, his description of fascism as having at its center “a contempt for limits, especially those implied by reason-based arguments; a belief that reality could be altered by the will; and an exaltation of the violent assertion of that will as the ultimate argument” will likely strike a nerve with many Americans not just today but in years to come.

what about DeLong’s core explanation of what went wrong in the latter third of his, and our, “long century”? I predict that it too will still look right, and important.

One explanation for why so many come to that conclusion in the first place has to do with the widening of the gulf between America’s coasts and the region in between them

Cities that can entice well-educated professionals are booming, even as “flyover” communities have largely seen good-paying factory work automated or shipped overseas, replaced to a large extent with insecure jobs: Walmart greeters, independent-contractor truck drivers, and the like.

a college degree has become the true mark of individual success in America—the sort of white-picket-fence fantasy that drives people well into their elder years to head back to school

the white working class that emerged in the 19th century—stitched together from long-combative European ethnic groups—strived to set themselves apart from African Americans, Chinese, and other vilified “indispensable enemies,” and build, by contrast (at least in their view), a sense of workingman pride.

this last election was a reminder that white male resentment of “nasty” women and “uppity” racial and other minorities remains strong.

That said, many Americans with more stable, better-paid jobs have blind spots of their own. For all of their professed open-mindedness in other areas, millions of the well-educated and well-off who live in or near big cities tend to endorse the notion, explicitly or implicitly, that education determines a person’s value

white voters from hard-hit rural areas and hollowed-out industrial towns have turned away from a Democratic Party that has offered them little in the way of hope and inspiration and much in the way of disdain and blame.

Well into the 21st century, two-thirds of Americans age 25 and over do not have a bachelor’s degree. The labor market has become more polarized, as highly paid jobs for workers with middling levels of education and skill dwindle away.

As much as both liberals and conservatives have touted education as a means of attaining social mobility, economic trends suggest that this strategy has limits, especially in its ability to do anything about the country’s rapidly growing inequalities

such a fervent belief in the transformative power of education also implies that a lack of it amounts to personal failure—being a “stupid” person

even some workers I spoke to—all former union members—said they felt that people without a good education did not deserve to make a good living.

The rules of meritocracy that these blue-collar workers say they admire barely apply to the very top levels of the economy. Groups of elite workers—professionals, managers, financial workers, tenured professors—continue to wall themselves off from competition. They still organize collectively, through lobbying, credentialing, licensing, and other strategies. But fewer ordinary workers have the same ability to do so

What has emerged in the new economy, then, is a stunted meritocracy: meritocracy for you, but not for me

From gripes about the backwardness and boredom of small-town America to jokes about “rednecks” and “white trash” that are still acceptable to say in polite company, it’s no wonder that the white working class believes that others look down on them. That’s not to say their situation is worse than that of the black and Latino working classes—it’s to say that where exactly they fit in the hierarchy of oppression is a question that leads nowhere, given how much all these groups have struggled in recent decades.

However exaggerated by stereotypes, the urbane, urban values of the well-educated professional class, with its postmodern cultural relativism and its rejection of old dogmas, are not attractive alternatives to what the working class has long relied on as a source of solace.

In the absence of other sources of meaning, Americans are left with meritocracy, a game of status and success, along with the often ruthless competition it engenders. And the consequence of a perspective of self-reliance—Americans, compared to people in other countries, hold a particularly strong belief that people succeed through their own hard work—is a sense that those who fail are somehow inferior

The concept of grace comes from the Christian teaching that everyone, not just the deserving, is saved by God’s grace. Grace in the broader sense that I (an agnostic) am using, however, can be both secular and religious. In the simplest terms, it is about refusing to divide the world into camps of deserving and undeserving, as those on both the right and left are wont to do

It rejects an obsession with excusing nothing, with measuring and judging the worth of people based on everything from a spotty résumé to an offensive comment.

Unlike an egalitarian viewpoint focused on measuring and leveling inequalities, grace rejects categories of right and wrong, just and unjust, and offers neither retribution nor restitution, but forgiveness.

With a perspective of grace, it becomes clearer that America, the wealthiest of nations, possesses enough prosperity to provide adequately for all. It becomes easier to part with one’s hard-won treasure in order to pull others up, even if those being helped seem “undeserving”—a label that today serves as a justification for opposing the sharing of wealth on the grounds that it is a greedy plea from the resentful, idle, and envious.

ignorance shouldn’t be considered an irremediable sin. Yet many of the liberal, affluent, and college-educated too often reduce the beliefs of a significant segment of the population to a mash of evil and delusion

One of the few things he could really depend on was his church. He volunteered on their Sunday-school bus, leading the kids in singing songs. “It helps to be around young people,” he said. For many of the jobless workers I interviewed, religion and tradition provided a sense of community and a feeling that their lives had purpose.

While there are no simple explanations for the desperation and anger visible in many predominantly white working-class communities, perhaps the most astute and original diagnosis came from the rabbi and activist Michael Lerner, who, in assessing Donald Trump’s victory, looked from a broader vantage point than most. Underneath the populist ire, he wrote, was a suffering “rooted in the hidden injuries of class and in the spiritual crisis that the global competitive marketplace generates.”

That cuts right to it. The modern economy privileges the well-educated and highly-skilled, while giving them an excuse to denigrate the people at the bottom (both white and nonwhite) as lazy, untalented, uneducated, and unsophisticated.

many well-off Americans from across the political spectrum scorn the white working class in particular for holding onto religious superstitions and politically incorrect views, and pity them for working lousy jobs at dollar stores and fast-food restaurants that the better-off rarely set foot in

This system of categorizing Americans—the logical extension of life in what can be called an extreme meritocracy—can be pernicious: The culture holds up those who succeed as examples, however anecdotal, that everyone can make it in America. Meanwhile, those who fail attract disdain and indifference from the better-off, their low status all the more painful because it is regarded as deserved.

the shame of low status afflicts not just the unemployed, but also the underemployed. Their days are no longer filled with the dignified, if exhausting, work of making real things.

For less educated workers (of all races) who have struggled for months or years to get another job, failure is a source of deep shame and a reason for self-blame. Without the right markers of merit—a diploma, marketable skills, a good job—they are “scrubs” who don’t deserve romantic partners, “takers” living parasitically off the government, “losers” who won’t amount to anything

Even those who consider themselves lucky to have jobs can feel a sense of despair, seeing how poorly they stand relative to others, or how much their communities have unraveled, or how dim their children’s future seems to be: Research shows that people judge how well they’re doing through constant comparisons, and by these personal metrics they are hurting, whatever the national unemployment rate may be.

Early successes are crucial for presidents, since they must harness their power when it is at its apex early in their terms. Political muscle is built for later legislative fights by enacting priorities and uniting party factions behind a common cause. Presidents who struggle to get early priorities passed are not necessarily doomed. But they risk creating an impression of disarray that can hurt them in their first midterm elections, as was the case with President Bill Clinton's collapsed effort to overhaul American health care.

And progressives who were dismayed by the removal of a hike in the federal minimum wage to $15 an hour elected to bank their gains, staying behind the effort and vowing to fight another day.

The President judged the $600 billion cost of an alternative package offered by 10 GOP senators as insufficient for the scale of the crisis. In votes so far in the House and the Senate, the bill has not attracted a single Republican supporter as Biden's opponents stake out early positions for the midterm elections on the basis of a pro-Trump base of activists who are keen to deny the new President an early victory.

Various polls show that more than 60% of the public supports it, which means some Republican and independent voters are on board.

With its tax credits for children and low-income workers, an extension of health insurance subsidies and nutrition and rental assistance, the American Rescue Plan is intended to do far more than simply stimulate the economy.

"It's a real tragedy when you look at that package. We know that the result of that package is going to be middle-class tax increases," the Wyoming Republican said.

The bill is sure to be a fulcrum of the Democratic midterm election campaign next year.

But if the current pace of vaccinations is maintained and the end game of the pandemic is not derailed by a wave of sickness and death caused by Covid-19 variants, Biden can expect a much faster and more robust economic rebound.

The bill is almost the inverse of Trump's sole major legislative triumph outside of a conservative refashioning of the judiciary: a massive tax cut that cost $1.5 trillion and was targeted mostly at corporations and more well-off Americans.

His initial $1.9 trillion request, not far off half the entire US annual federal budget, is playing into Republican claims that his administration will be rooted in out-of-control socialism.

The partisan nature of the votes on Biden's recovery package also has some Democrats pondering whether to seek to abolish filibuster rules that mean most major legislation needs a 60-vote majority to pass. The $1.9 trillion behemoth was advanced using a process known as reconciliation, which applies only to budget issues and can be used only sparingly.

But it seems equally certain that Democratic priorities like voting rights will die in a 50-50 Senate.

crossing the Rubicon. Schnurer argues that this is more than just a familiar phrase. And he says that a U.S. Rubicon moment is in view—which would be triggered by a possible indictment of Donald Trump.

Crossing the Rubicon: If the United States, in recent years, has been tracking the decline and fall of Republican Rome, when do we pass the point of no return? By Eric B. Schnurer

How did a wealthy, powerful, and successfully self-governing people—proud of their frontier origins, piety and traditional values, and above all their origin story in throwing off monarchical rule—essentially commit democratic suicide and settle, more-or-less willingly, for a half-millennium of dictatorship?

From rising economic inequality, political violence, and governmental dysfunction on through the generally lackadaisical reaction of the Senate to a losing chief-executive candidate’s conspiracy to murder many of them, overthrow the government, and thereby block certifying his defeat, events in ancient Rome have remarkably paralleled some you might recognize more recently

What might signal the end of democracy as we know it?&nbsp; There is, it turns out, an easy answer at hand.

While there is no precise end date to the Republic, there was a bright-line occurrence generally recognized as the irreversible beginning of the end for participatory government.

there is indeed an event looming—probably before the end of this year— that poses almost precisely the same situation as what provoked Caesar’s crossing of the Rubicon: the possible indictment of former president Donald J. Trump.

January 6th. It is no coincidence that insurrectionists that day carried banners urging Trump to “Cross the Rubicon” and declaring “The Die Is Cast”— Caesar’s words upon alighting on the Italian side of the river—or that they will be with him to storm the forces of the Republic and ignite a civil war over Trump’s potential indictment:

Avoiding criminal prosecution is precisely why Caesar crossed the Rubicon with his army and ignited a civil war 21 centuries ago.

Caesar’s ultimate rise had begun with the Cataline conspiracy a decade or so earlier, which, as noted, bears a familial resemblance to Trump’s attempts to overturn the recent election and, both literally and figuratively, decapitate the government.