Two top political scientists tell us when America turned terribly wrong — and how the rich and powerful organized to do the turning.

By Sam Pizzigati

A review of Jacob Hacker and Paul Pierson, Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class. Simon & Schuster, 2010. 357 pp.

In the crazy 1960s, our conventional histories almost always insist, just about everything important in American life fundamentally changed. Political scientists Jacob Hacker and Paul Pierson could hardly disagree more.

In the 1960s, the pair argue in their fascinating new Winner-Take-All Politics, the single most fundamental aspect of American life — how we distribute our wealth — saw no big change at all. America entered the 1960s as a relatively equal middle class nation. America exited the ’60s just as equal and middle class.

Ten years later, that had all changed. By 1980, America’s rich and powerful had successfully redefined and restructured the nation’s politics — and begun a thirty-year war that has decimated what once ranked as the world’s most vital and vibrant middle class.

Yale’s Hacker and Berkeley’s Pierson tell an always readable story of this war. They show us how Corporate America, knocked off-stride by mid-century middle class victories on regulations and taxes, organized and struck back.

This business blitz worked — and still hasn’t been seriously blunted. Under enormous corporate pressure, write Hacker and Pierson, “America’s public officials have rewritten the rules of American politics and the American economy in ways that have benefited the few at the expense of the many.”

Hacker and Pierson take us “behind the lines” of Corporate America’s “swift and sweeping” counterattack — “a domestic version of Shock and Awe,” they call it.  

In 1971, we learn, just 175 corporations had registered lobbyists in Washington. The 1982 figure: nearly 2,500. The number of corporate political action committees: under 300 in 1976, over 1,200 four years later. In the mid 1970s, Senate incumbents took in over half their campaign dollars from labor. By the mid 1980s, that labor share had dropped to one-fifth.

But numbers alone, stress Hacker and Pierson, don’t do justice to the character of the 1970s corporate transformation. Corporate leaders, over these years, started becoming “advocates not just for the narrow interests of their firms but also for the shared interests of business as a whole.”

And those “shared interests” — weaker regulations on business behavior and lower taxes on the individuals businesses make rich — translated into a ferociously more unequal United States.

Hacker and Pierson paint a riveting portrait of the extent of that inequality and, along the way, demolish the various narratives that friends of fortune advance to “explain” — and justify — our contemporary America’s huge gaps in income.

We’ve become unequal, one typical narrative contends, because too many Americans lack the education they need to succeed. Young college-educated Americans, Winner-Take-All Politics counters, have in fact lost ground over recent decades. Lower health benefits have more than offset the less than 0.1 percent annual pay hikes these educated Americans received between 1980 and 2006.

The real rewards from America’s economic growth since the late 1970s have gone to the rich, not the educated. And political decisions, not inexorable “market” forces, drove those rewards. Sometimes, those decisions reflected the actual votes lawmakers cast. The tax giveaways to the rich that began in 1978, for instance, all had to be voted into law.

But other decisions reflect what Hacker and Pierson dub political “drift.” This “drift” amounts to more than inaction. We get drift, Hacker and Pierson perceptively note, when political leaders — in the face of changing realities — “fail to update policies, even when there are viable options, because they face pressure from powerful interests exploiting opportunities for political obstruction.”

Inflation eating away at the minimum wages? We see “drift,” a failure to keep that minimum even with rising prices. Employers using new stall tactics to prevent workers from organizing into unions? Wall Street banks dumping risky new financial products on the market? Lawmakers “drift.” The rich cash in.

Who’s to blame? Republicans? Democrats? Hacker and Pierson break some useful conceptual ground here. The wealthy, they note, see financing the GOP as “an investment.” The dollars they funnel to Republicans nurture “a cadre of elected officials committed to advancing a deregulatory and tax-cutting agenda.”

The dollars the wealthy funnel to Democrats, by contrast, function as “a form of insurance.” These dollars go to powerful Democratic incumbents and “moderates” alike, “with the goal of minimizing any prospect of distasteful legislation.”

So have these new political dynamics left average Americans helpless? Hacker and Pierson work hard to end on an optimistic note. Americans, they point out us, have faced — and overcome — deep inequalities in the past. But these two analysts do not sugarcoat the challenge we face. They specify it. To restore America’s middle class to economic and social health, they tell us, we need to trim the rich down to democratic size.

“Truly reversing the stark trend toward economic hyperconcentration at the top will take more than concerted and sustained government to improve the economic standing of the middle class,” the two conclude. “Political reform geared at diminishing the advantages of the privileged will also be essential.”

Sam Pizzigati edits Too Much, the online newsletter on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Too Much appears weekly. Read the current issue or sign up to receive Too Much in your email inbox.