On Leadership: Why America is in turmoil

President Jimmy Carter (The Carter Center / Getty Images)

Of all the past American presidents who are still living, the only one who has looked truly happy and content is Jimmy Carter, now 95 and still building houses with Habitat for Humanity International.

When he was president, Jimmy Carter was cast as weak and ineffective. In 1979 he gave a speech dubbed as the “malaise speech” (malaise: a feeling of being unwell), in which he talked about what ailed America and why the country was in turmoil. He was dealing with an energy crisis, American hostages in Iran, and rising unemployment. The mood in the country was dour and despondent. Jimmy Carter spoke about the “crisis of confidence” of the American people in the country’s institutions and leaders. During the following presidential elections, President Carter was portrayed as suffering from the same crises that he spoke about by a right-wing candidate Ronald Reagan, who presented himself as a charismatic, vigorous and strong alternative. Reagan won in a landslide. Jimmy Carter was forgotten.

Today it feels like the same history is repeating itself but with different actors and a society still in malaise but to a whole new extreme. Here is an excerpt of the so-called “malaise speech” that Jimmy Carter gave on July 15, 1979:

In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. We’ve discovered that owning things and consuming things does not satisfy our longing for meaning. We’ve learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose.

The symptoms of this crisis of the American spirit are all around us. The willingness of Americans to save for the future has fallen below that of all other people in the Western world. There is a growing disrespect for government and for churches and for schools, the news media, and other institutions. These changes did not happen overnight. They’ve come upon us gradually over the last generation, years that were filled with shocks and tragedy. These wounds are still very deep. They have never been healed.

We are at a turning point in our history. There are two paths to choose from. One is a path I’ve warned about tonight, the path that leads to fragmentation and self-interest. Down that road lies a mistaken idea of freedom, the right to grasp for ourselves some advantage over others. That path would be one of constant conflicts between narrow interests ending in chaos and immobility. It is a certain route to failure.

All the traditions of our past, all the lessons of our heritage, all the promises of our future point to another path — the path of common purpose and the restoration of American values.

Today we find ourselves in a state of chaos in the face of a deadly pandemic, the resulting economic collapse, and street protests highlighting police brutality. Back in the summer of 1979 Jimmy Carter pointed to the following indicators of a crisis in America:

• Americans were not saving much and instead were trying to find meaning in material possessions and consumption.
• There was an erosion of trust in government, church, media and other institutions.
• According to President Carter, lessons from history and tradition pointed to a path of common purpose. However, Americans were on a path of individual self-interest at the expense of one another.

If we look at America today, the picture hasn’t changed much. If anything, the same pointers of decay have been amplified. President Carter’s speech could be delivered today and would be apt and applicable in its entirety. One might ask — But how did we get here? Let’s look at the converging trends that led to our current state of affairs.

• The American household income had risen for nearly 150 years from 1820 to 1970, including during the great depression. Because of this unprecedented and extended period of prosperity, the idea of American exceptionalism took root in the American psyche. How could it not? Self-interest had led to prosperity. Greed must be good. A decade later in the 80s a fictional character called Gordon Gekko epitomized that spirit in the Hollywood film Wall Street.
• According to the economist Richard Wolff, sometime after 1970, real income stagnated and has remained more or less the same for the majority while the cost of living has gone up steadily, increasing the gap between income and purchasing power. To maintain their standard of living, the working class started working more hours and more than one job. Women who had been stay-at-home moms now had to step out to find jobs to make ends meet for the family.
• This was also the time when neoliberalism saw a resurgence among our political class — that means that politicians overwhelmingly adopted policies that encouraged privatization, deregulation, globalization, free trade, and laissez-faire principles of free market libertarianism. Neoliberalism’s greatest sponsor was Ronald Reagan who championed supply-side economics or the “trickle-down” theory. It was made easy for corporations and the wealthy to “donate” to political campaigns, that resulted in the co-opting of the government by the corporate sector. The politicians now worked for the corporations and the wealthy, not for the people who elected them.
• At the same time, credit cards were introduced to the ordinary middle class and the working class in the 70s by Visa and MasterCard. Before that, credit cards were used only by businessmen and the wealthy. Credit card companies and banks “donated” large sums to the political class, in return getting laws passed that made it possible to make unsolicited offers of credit to the working class that was short of cash and was working longer hours to make ends meet. Now they were able to take on debt, and they did, because prosperity could not be stopped.
• After Ronald Reagan, neoliberalism was tightly embraced by George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama. The party was too good to stop. Since politicians now worked for the corporate interest, it was made easier through trade agreements to take jobs overseas where costs were lower, which made it more profitable for these corporations. This trend decimated the industrial towns of the American Midwest, which came to be known as the Rust Belt for their disintegrating and abandoned factories.
• But debt was the only way to have the people keep on consuming and to keep up the pretense of prosperity. Debt was offered and given to even those who couldn’t afford to pay it back. And so sub-prime mortgages were born. Securitization of questionable mortgages led to the collapse of the economy in 2008. People lost jobs and homes were foreclosed at an unprecedented scale. However, the government bailed out the banks while the working class suffered. The rich got richer and the poor became poorer, while the middle class stagnated further. No banker went to jail for defrauding ordinary people. The industry took the bail-out money and invested that in automation. When the economy came back, all the jobs did not. Around 10% of jobs had been eliminated by technology.
• Since the rising cost of living also increased the cost of college education, we now had a new type of debt — student loans. Since new jobs required college education, students from middle and working class had no option but to incur heavy debt to compete in the job market. Working class parents were mostly not able to send their kids to college.
• So the working class that felt that it had nothing to lose, elected a Reality TV star who ran against the neoliberal establishment and promised to burn down the system that hadn’t worked for the workers. It was the culmination of rage and weaponization of identity politics that split the country into two tribes. Since experts and scientists were largely in the opposing tribe, they were discredited and we saw the greatest rise in anti-intellectualism and anti-science attitude in living history. Conspiracy theories took the place of reason and “truthism” entered our vocabulary.
• The new president cut taxes on corporations making it possible for them to make greater profits. However, instead of using these profits to increase workers’ wages, corporations bought back their stock and gave their executives larger bonuses. The economy that was already well oxygenated, got an adrenalin shot through lowered taxes and deregulation. We got the lowest ever unemployment rates and a soaring stock market. Then came the Coronavirus pandemic.
• In a spate of deregulation, the current president had also shut down the office of pandemic response. The social distancing required to control the spread of the disease resulted in the widespread shutting down of businesses. This has resulted in job losses mostly for the working class. Bailout packages larger than one can fathom, have been given out to corporations again, but with no stipulation of keeping employees in their jobs. Politicians have continued to work for the corporate interest, treating the working class as expendable. The corporate sector has been bailed out and people have still lost their jobs.
• Of the people who lost their jobs, African Americans have suffered the most. It is estimated that 50% African Americans have lost their jobs. This disproportionate impact gave this pandemic a racial dimension. The murder of George Floyd was the spark that this tinderbox environment needed to explode into mass street protests. It is not just Black Americans among the Black Lives Matter protesters, it is also other Gen Z and Millennials who will have to pay back the debt that is financing the corporate bailout while they lose their jobs.

And that’s how we got where we are. Because of greed. Because of openly blatant corruption.

In short, it is corporate greed and co-opted politicians sacrificing ordinary Americans to consolidate more wealth and power, who have created a situation that will continue to get worse for the American working class. In the wake of the loss of 40 million jobs, the stock market has done perfectly well. That means that the economy is controlled by those who own stocks, which is about 30% of Americans, and the fate of the working class is decoupled from the fate of the prosperous. An almost fundamentalist belief in individualism has desensitized the free market neoliberal elite to the plight of those who are outside that circle. The tinderbox is now a powder keg.

Let’s go back to the words of Jimmy Carter — “..the lessons of history point to a path of common purpose”. If we continue to discredit common purpose as the enemy of capitalism, of which material possessions are a centerpiece, then we may never recover and continue on the path of extreme wealth concentration on the one hand, and worsening poverty on the other.

Our preoccupation with celebrity has led us to ignore the un-celebrity president Jimmy Carter, and embrace charismatic populists and free market fundamentalists who rile us up and distract us while they pick our pockets.

True leaders are ultimately proven right even when they are discredited in the moment of reckoning. Only those who have the strength to risk and even lose everything as a consequence of speaking truth to power, or the inconvenient truth, will be remembered as true leaders.

Our tragedy is that we find Gordon Gekko real and Jimmy Carter fictional.