Much commentary on current events in the United States could be improved upon by adopting a more comparative perspective. For example, in his 2000 essay on “The New Separation of Powers” (PDF) Bruce Ackerman grants that the American system of government has served the USA well enough but argues that emerging democracies should consider the failures of similar systems in Latin America and shy away from it. Some of his reasoning:

It is possible, of course, to avoid the Linzian nightmare without redeeming the Madisonian hope. Rather than all out war, president and house may merely indulge a taste for endless backbiting, mutual recrimination, and partisan deadlock. Worse yet, the contending powers may use the constitutional tools at their disposal to make life miserable for each other: the house will harass the executive, and the president will engage in unilateral action whenever he can get away with it. I call this scenario the “crisis in governability.”

Once the crisis begins, it gives rise to a vicious cycle. Presidents break legislative impasses by “solving” pressing problems with unilateral decrees that often go well beyond their formal constitutional authority; rather than protesting, representatives are relieved that they can evade political responsibility for making hard decisions; subsequent presidents use these precedents to expand their decree power further; the emerging practice may even be codified by later constitutional amendments. Increasingly, the house is reduced to a forum for demagogic posturing, while the president makes the tough decisions unilaterally without considering the interests and ideologies represented by the leading political parties in congress. This dismal cycle is already visible in countries like Argentina and Brazil, which have only recently emerged from military dictatorships. A less pathological version is visible in the homeland of presidentialism, the United States.

In unrelated developments, the President has proclaimed that there are no “hostilities” in Libya and the hot policy debate among intellectuals is about whether or not the administration should circumvent the statutory debt ceiling by exploiting a loophole in the existing coinage statutes that grants the Treasury Secretary discretion to mint coins of arbitrary denomination as long as they’re made of platinum.

RF writes:

Several times in the past year you have alluded to the idea the the civil rights movement somehow eliminated the one issue that had motivated America’s two political parties to collaborate and compromise with each other. The implication being that the modern era of more intense polarization is an artifact of that one re-alignment.

I don’t challenge this assertion, but I don’t understand it. Can you explain it further in a post or, if this is conventional wisdom, direct us to the books/articles that lay it out?

If you want to see this demonstrated quantitatively, you should look at the McCarty/Poole/Rosenthal work that makes it look all scientific.

For a qualitative description, I think you can find no better example than the Glass-Steagall Act. Most progressives, whether or not they favor a return to the specific rules enacted by this law, would certainly cite it as an example of the kind of “get tough on the banks” attitude they favor. Why can’t we have real liberals in congress like that anymore? But these guys were both white supremacist southerners. Rep Steagall, the more moderate of the two, was apparently known as “Marse Henry” by black Alabamians. Senator Carter Glass, by contrast, was the kind of guy who looked at the state of Virginia in 1900 and decided that the problem with it was that living conditions were too good for black people. He helped rewrite the constitution and remarked “Discrimination! Why that is exactly what we propose. To remove every negro voter who can be gotten rid of, legally, without materially impairing the numerical strength of the white electorate.”

So the southern version of the Democratic Party included many members who were left-wing on economic issues but right-wing on race. But it also included members who were right-wing on economic issues and right-wing on racial ones. What’s more, the line between racial and economic issues often isn’t totally blurry, so many populist southern members might defect from a progressive economic coalition unless some given program was modified in such a way as to be detrimental to the interests of African Americans. Meanwhile, many northern Republicans with moderate-to-conservative views on economic policy had relatively progressive views on race. And for several decades racial issues were highly salient. Congress spent a lot of times debating measures that were seen as having a hefty racial element. So ideological coalitions would shift from time to time. That in and of itself meant a less “polarized” environment, but it also had the knock-on consequence of simply meaning that the parties as such weren’t defined in clear ideological terms. The party system in any given state or city would be built around one or more patronage machines, and the national parties were stitched-together networks of patronage machines and ethnic loyalties. The Democratic machine in New York City had no particular ideological affinity to the Byrd Organization in Virginia but they were partners in a nationwide partisan endeavor and linked historically by a shared animosity to the antislavery and anti-catholic proclivities of the 19th century GOP.

But at a certain point non-southern Democrats tilted so strongly in favor of civil rights that “lets all be Democrats regardless of what we think on other issues in order to advance white supremacy” became a moot idea. Southern African-Americans were enfranchised and “should black people be subject to massive formal discrimination” went from a very high salience to a very low salience issue. Southern whites with left-of-center views on economics formed a coalition with southern blacks, and southern whites with right-of-center views on economics joined the right-of-center Republican Party. Northern Republicans who opposed segregation ceased having anything interesting in common with liberal Democrats since everyone opposed segregation. Now congress still represents a range of views, but the vast majority of the voting behavior can be understood in simplistic “the Republicans are to the right of the Democrats” terms. In principle other issues exist that would scramble the party coalitions, but party cartel dynamics create a large incentive to keep those issues off the table. If people in American society started to suddenly feel very strongly about some brand new topic, it could start forcing its way onto to the agenda and potentially scramble the coalitions. But in practice, that hasn’t happened. I, personally, am interested in a number of low-salience issues (parking regulations, patents) but most people aren’t.

Rather than directly respond to John Quiggin let me just suggest that a serious examination of privilege and redistribution in the United States needs to widen its horizons a bit beyond a hyper-narrow focus on the fabled top one percent of households. If I think about the neighborhood where I grew up, a lot of people living their are NYU professors earning an average of $175,000 a year. That’s a lot more than I make, and a lot more than most people make, but it’s still not enough to put you in the top one percent. But then you need to consider that NYU professors get access to subsidized university-owned rental housing located in America’s best and most expensive city. They get a good benefits package, and the tenured professors have drastically above average job security. What’s more, they have above-average job quality. A position as a faculty member at a high-quality university is a pretty sweet gig. You get lets of autonomy in your work, time and money is available to travel to conferences and professional events you think are interesting, etc. And this is all built, in part, on a solid foundation of explicit and implicit government subsidies for universities.

The CEO of Darden Restaurants earns over six million dollars a year. But I seriously doubt that there are any tenure-track professors at NYU saying to themselves that they’re desperately eager to change places with Clarence Otis, Jr and move to Orlando to supervise chain restaurants. Certainly for me, it’s not even a close choice. I would much, much, much rather draw a comfortable salary and a subsidized apartment in Manhattan doing interesting work than make “top one percent” money as the CEO of a medium-sized business enterprise in central Florida. And unless I’ve completely misjudged the audience of my blog, I bet most of you would agree with my preferences in this regard.

That’s not to say we need to “soak the professors” rather than “soak the rich.” Taxing the consumption of high-rollers and redistributing it to the less fortunate is a great idea. But a lot of the political dialogue I see online seems to consist of a slightly strange form of class resentment in which intellectuals, nonprofit workers, or public servants express bitterness about the high incomes of businesspeople whose lives they don’t actually envy. No doubt that are millions of working stiffs in America who really do envy Clarence Otis, Jr.’s life and career starting with many of the 180,000 or so other people working for Darden Restaurants. But by the same token, there are millions of Americans who envy the lives and careers of lots of other people who have “good jobs” that are good for reasons other than very high headline salaries. My job, for example, strikes me as a pretty damn good one even though my earnings are meager compared to the NYU professor. I don’t want to quit it and go work on Wall Street. That would be horrible. And it suggests to me that the questions of inequality and privilege in the United States are more complex than a simple chart of the income distribution suggests. What’s needed is to broaden the number of people with access to better lives across multiple dimensions.

A lot of people have recently been quoting the factoid that Apple now has more cash on hand than does the US Treasury. That’s funny, though not technically relevant since the Treasury unlike Apple apparently has the legal authority to mint platinum coins of arbitrarily large value. But this does raise a question in the eyes of AJ who writes “So, Apple’s sitting on an absolutely insane amount of money, and they’re liely not the only corporation doing so. Does that help suppress demand in this economy? That’s a lot of money that’s not buying things, after all…”

I think the best way of looking at it is that you’re seeing more a symptom than a cause. The way the economy works is that people with business ideas aren’t the same as the people with money. If people with money just kept it in shoeboxes, then people with ideas would need to go around knocking on doors and asking rich people for some money which would be very time consuming. So the point of a banking system is to hire the money of the savers and lend it out to the people with ideas. When we hear that Apple has a lot of “cash” that doesn’t mean Steve Jobs’ office is full of hundred dollar bills. The money in your savings account is available to the bank to lend out. Big firms don’t have bank accounts just like yours, but their “cash” is similarly, actually a kind of highly liquid short-term investment that increases the amount of capital to borrowers.

In principle, there’s nothing wrong with that. The issue is that there’s very little demand to hire money. If we were looking at an abnormally low level of business investment, we might conclude that the issue is that Kenyan socialism is making firms leery of expansion. But the main story is actually that nobody wants to borrow money to build houses:

The solution would seem to me to be that the government should hire the money to pay people to fix century-old water mains and otherwise engage in improving the public infrastructure. That would increase incomes to the point where private housing demand returns. Then as private demand to hire money for homebuilding purposes rises, interest rates would go up, and we’d start to worry that the cost of hiring money is “crowding out” useful private sector business ideas. At that point we want to drastically curtail government borrowing to ensure the availability of funds to private firms.

One thing that I think is becoming increasingly clear is that there’s not going to be a “recovery” anytime soon. One place you see this is in the problem of the long-term unemployed:

Employers have a strong preference against hiring the long-term unemployed who face a number of barriers to employment on top of that. Unless something miraculous happens over the next six months, these numbers are only going to grow. And when you let unemployment fester like that, the line between the “cyclical” and the “structural” tends to blur away. Presumably more of the long-term jobless will drop out of the labor force altogether and this may impact the unemployment bottom line without really changing anything. Something similar can be said about youth unemployment. We’re well on the way to making a transformation into a society that will have a much larger not-worker sector on a sustained basis.