The Decade is Done
The Fall of the House of Gusher

The long part of a decade produces most of its real wins, the short part of the decade is the fight over these wins. This can be a speculative frenzy to bid up the prices of what are seen as controlling assets, the rents of the future that will keep giving money forever. This can be a major political upheaval as one group in a coalition leaves and begins siding against its former allies. But whatever the "big picture" struggle, it will be mirrored by the small picture struggle, which is the fight over how society will pay for that future. "Who will get what?" is the question at the top. "Who will give up what?" is the question at the bottom.

The long thousands will have their defining "over" moment shortly. It might be in Iraq, it might be with the hedge fund crisis, where there is significant worry that high liquidity "deep investors", read the super rich, particularly the oil endowed super rich, will engage in massive redemptions, forcing an LTC style meltdown of an entire sector.

The short thousands then are going to be the fight about who gets to keep the super-leveraged gains of a borrow and squander decade. In the Republican Party three figures compete for the mantle of "I will let you. Keep. Your. Loot." : Mitt Romney, Fred Thompson, Ruddy G. In the Democratic Party, there is one: Hillary Reagan Clinton.

Let us say it together: Hillary is the last of the Reaganites, and she is hoping, quite possibly correctly, that she can ride suburbanism into power.

The suburbanism of center

Suburbanism doens't really have a name, simply because it calls itself "the mainstream" and "the center". It is neither. But it is an ideology, and really, it is the ur-ideology that the left, as people, rebel against. Forget Hitler and Segregationism: most Americans don't remember either, and most didn't live under either. Instead, the heavy hand that rested on most of us on the left, black or white, was suburbanism. Suburbanism drove segregation in the north. Suburbanism is the ideology that white progressives faced in High School.

While Suburbanism isn't responsible for many of the big evils of the world, the shape of Suburbanism determines what people, left and right, are afraid of in the shape of paternalism. The return of High School where there are no real rules, no protections, and arbitrary curbs on what little freedoms you have can come at any time for any reason, without recourse.

Suburbanism is the ideology which preaches that a stable nuclear family is the basic unit of American society, and protection of the bubble in which communities of these nuclear families live is the basic job of government, and expansion of the chances of suburbanites to expand suburbia infinitely, and profit from that expansion, is the essential engine of ordinary wealth.

It has cultural, social, financial, political and sexual components. It, not the heavy hand of black box voting, does a great deal more of slanting the political system, by systematically favoring people who own their own houses over people who rent. It, not KKK good old boys, drove red-lining and greenlining in lending. It, not the Moral Majority, does most of the self-censoring of television and other media. What "the Mainstream" wants, "the Mainstream" gets.

Reaganism was more or less the declaration that Suburbs, and suburban concerns, fears and outright hysterias, should drive public policy. The Republican version of the Reaganite coalition was an alliance between rural, ex-urban and suburban voters against urban voters. The key to making this coalition work, was to get Suburbanites to see religious extremism and neo-confederate libertarianism as the cutting edge of their own values. It cleaved the suburbs and much of the rural areas from the Democratic Coalition, and put them firmly in the Republican Coalition.

The sale on the religious front was sexual anxiety and consumerism anxiety. The sale on neo-confederate libertarianism was to remove any barrier to expanding suburbs, and any need to pay for cities. The image painted was that cities were simply wasteful sinkholes, filled with black people, sex and crime and turbulence.

Clinton did not steer the Democrats to the center, but instead, changed enough suburban districts on the Presidential level to win with a division between the wealthier suburbs, who remained loyal to the Republicans, and the poorer suburbs and near exurbs, who backed Perot the first time. The second time Clinton switched the wealthier perotistas to the Democrats on the Presidential level. Gore won the Presidency without the South, except for the the parts of the South in extreme poverty.

This entire combat is, however, within a neo-conservative frame work. And this is important, so I am going to explain it carefully. The reason that Americans routinely poll in favor of "left" positions, and these positions are routinely not enacted is that there is really a line down the middle of all of them. Cities want universality, suburbs want an end to inflation in these positions. Health care and education are the obvious examples. Suburbanites are enraged by increases in costs, and want them to go down. Urbanites want universality.

The liberal theory was that there were wins in economies of scale which would both reduce costs for everyone, and provide both the humanitarian and economic advantages of universality. If everyone has an education and a car, then all the things you can sell to literate, mobile people have a vastly larger market. If everyone has an education and a car, then the work force for all of the industries that require people be able to read and move to jobs is vastly larger.

The neo-conservative theory is that scarcity, not lack of universality, is the driver of inflation, and therefore the way to end inflationary pressures is to cut people out. "Make the poor pay." The anti-poor rhetoric of the right wing is that the poor person next door is taking your kids place in college, your job, your gasoline. If he was just in prison or out of work some place, then he wouldn't be making more black kids and pushing up the prices of the things you buy.

The reason we had a neo-conservative era is that by 1972 all of the easy wins for universalization of the internal combustion economy had been gained. You can't make doctors and education more efficient with internal combustion engines. By 1972 there had been a peak of American oil, and in 1980 there was a peak of oil production globally. We are likely to see this again when oil prices go down. It won't be a final peak of oil, merely that oil is currently in production at ruinously high costs will go off line. There will be a drop in global oil production until new supplies which can be produced at lower costs, in part by cheaper labor from Chinese development, and in part from technology, come on line.

Liberalism was choked by its own success in producing a game that millions of Americans could understand: expand suburbia, and then failing to produce, in time, a way to keep that game going. The Republicans kept the bank open, even as it ran out of real money. Instead they instituted a long pyramid scheme, were the present taxed the future in order to have money today. That pyramid scheme periodically runs out, as it did in the late 1990's, and "everyone" in the suburbanite world agrees that whatever needs to be done to keep it going must be done. Invade Iraq, yeah, that's the ticket. And build a missile to Mars. Fuck why not? It's our jobs, man.

Progressivism rose from the ashes of liberalism precisely because it is the progressive realization that we do not yet have the engine of universalization, but instead the project, as with the progressive wave of what would become liberalism, is that the project is to break up the collusive monopolies and other corrupt instruments which grow up in an economy were scarcity, and therefore control of the rent on scarcity, is the road to great wealth. "No fortune has been made on the stock market, but for the use of a corner." It was observation made in the early years of the 20th century. Great fortunes are made in a scarcity driven economy by having whatever is scarce when the game starts.

This is why many old "liberals" consistently attack the rising progressive movement, because they hope to hold onto the last embers of the system which, in the main, Winston Churchill and FDR architected: the internal combustion democracy. A young FDR and Churchill might well side with them, and then leave, once they realized that it was untenable. Both started out that way in their own times: supporters of the old, until they got a taste of the new. The reason both were transformed by the navy, is that the navy was the place where the internal combustion economy replaced the coal economy to greatest immediate effect. Former Naval Person and his famous correspondent saw the future early, they watched the mirror crack. They saw that the old world was an illusion that was doomed to fall. Churchill pushed having a battleship on treads. We call it the tank. FDR saw the need to put the internal combustion economy in the vast land ocean that is the American hearland, because there is a good deal of it in New York state.

The Clinton coalition was essentially saying to the cities: "I'm the best deal you are going to get." In less skilled hands, it degenerated down to "vote for us serfs, or it is so much the worse for you."

The failure of Clinton's coalition was writ large in 1994. Clinton, and his Democratic Congress, could not do the two things the public demanded: clean up elections and do something about health care. How could they? Buying favors is essential in a scarcity economy, and health inflation cannot be combined with health universalization in any meaningful way without some kind of liberal economy of scale. And this must, repeat must, gut the profits of suburbia which makes its money by selling entrance to suburbia at a very high price.

Suburbanism dominated because it was the win that attracted the most determined to win at any cost, and the people with the persuasion skills. Reaganism is government by used car salesmen, precisely because suburbanism is about getting people to yoke themselves to perpetual job servitude in return for the wins of a green lawn, a "good" school for your children, and control.

The Long Thousands and Suburbia

There is political and social illusion which dominated the long thousands, and the 1990's. It is the delusion by suburbanites that they live in an island that floats far above the rest of world, and they are not subject to the same rules as everyone else, politically, economically, legally or socially. Of course they won't make things go bad, they are socially conditioned not to breat "the rules", and hence they don't need a government enforcing "the rules". This is patently not true, but is it is what a good suburbanist believes. To be a "centrist" in the eyes of the establishment is to pander to the idea that "the extremes" on both sides are the danger. That is that a political coalition with neither the cities nor the exurbs and rural areas is necessary.

This delusion was exploited by Rove who realized that it was possible to build a political coalition that had the force of a super-majority by dispensing with compromise. Instead have a core of roughly 40% that would move as bloc, and pick off the needed percentages with bribes. Don't manage a big coalition, when it is possible to rent one with other people's money. Chinese money, future money, arab money.

This last gasp of Reaganism has broken up, precisely because it cleaved the very group whose attachment to Republican voting habits Reagan had made his proposition. That is, to old style Reaganite, getting the suburbs to vote as a bloc is the key to a landslide victory. Rove and Bush accepted Reaganite policies, and neo-conservative economic theory. Suburbia was to expensive, therefore the deal was to cut large blocs of suburbia out of the flow of high profit money. Instead of the dotconomy which could be everywhere and anywhere, the military-industrial complex, center around Washington DC, and the resource extraction economy centered around reliably culturally Republican ares such as Dallas and Houston, would get the good stuff. The rest of suburbia was allowed to play the land game. This game was profitable only as there was generationally cheap money.

The Republican coalition of Rove realized that the suburban coalition was divided along the lines of those suburbs that are city facing: towards control of the production of cities, here and abroad, and those that are resource facing, in the expansion and maintenance of suburbia itself. The resource facing suburbs were part of the core coalition, and the question became how to pick off enough of the other suburbs to get to a solid and immovable coalition of ideology driven zealots in elected office.

This is why the suburbs revolted: they voted for centrist Reaganism, and did not get the benefits that they thought they were going to get: lower taxes, cheaper labor, oil and money, and land prices that could only go up.

As importantly, it is why "centrists" of a particular kind attack progressives at every turn. The vision of the "centrists", in quotes, is that if all fights are between the exurban/rural coalition and the suburbs, then even if the suburbs are behind in total number of representatives, that financial and media power will bend the exurbs on key issues, and if necessary they could run to the cities for votes. They allowed Bush to come to power, because people like Friedman, thought that Bush could be brought to heel. They were completely, disastrously wrong: Bush knew that he had enough of the suburbs to not listen to them, and that the war would swing enough of the suburbs to him on "security" that he, not they, had the upper hand in media power.

The "centrists" then are not centrists, but "liberal Reaganites", and they are furious about how the Progressives, by unifying the left between white suburbanites and urbanites, are fucking up their game. Yes, fucking up is the correct phrase. Take a look at Frum who blithely declares in the New York Times that "Clinton successfully steered the Democrats to the center." No, Clinton asserted that the suburbanist wing of the part, not the urbanist wing, was the dominant wing of the party, and was willing to do business with a Republican Congress which swept to power in 1994. If Clinton had "steered the Democrats to the center" then conservative Democrats would not have been massacred in 1994, and then again repeatedly. The Republican Congress was built on flipping conservative and centrist Democratic seats to reactionary Republican ones. It is Pelosi, not Bill Clinton, which has "steered the Democrats to the center." Her victory, and it was her victory more than anyone else's, was to flip reactionary Republicans in suburbanist seats across the northeast to the Democratic Party, and, as importantly, to slash the rural areas away from reflexive Republicanism.

Let me summarize then the different cleavages:

1. Within the Democratic Coalition there was a three fold divide: rural Democrats, suburban Democrats, Urban Democrats. The first Republican victory was to cleave the Dixiecratic, if not in location, in cultural pattern vote away from the Democrats, by having resource inflation and big defense budgets. Reagan then cleaved away the suburbanists as a bloc and formed a coalition.

2. Within the surburbanists, there is a division between those that make their money from cities, and those that make their money from defense, resources and sprawl. It was the Rovian understanding that the resource suburbanists were more closely tied to the resource exurbanites than the city suburbanists were to the urbanists. That in a series of political conflicts, the resource bloc would vote as a bloc against two blocs that could easily be divided over a variety of issues.

3. Within the present Democratic coalition, there is a conflict between whether the urbanist or suburbanist wing of the party will be dominant. This division is rapidly closing, because Iraq and corruption are seen by all of them as benefiting the exurbanists.

4. Within the Republican coalition there is a division between the resource extractionists tied to oil, and those tied to agriculture. The agricultural rural voters have been slapped silly by both the war, which has bled them of precious young people, and by high energy prices.

The recent elections saw the Republican cleavage become an outright defection: Wyoming, Kansas and Nebraska were put into play on the Congressional and gubenatorial level. The right flank of the Democratic coalition is no longer the South, but the West and Midwest. The healing of the suburbanist/urbanist divide over Iraq put Pelosi in power, and gave the Democrats the Senate. The Democratic Congress is right now hated because it is not getting the very reality that brought it to power, and the very reality that is destroying the long thousands: city suburbanists and urbanists are beginning to polarize as a bloc in favor of an digital future, against a sprawlconomy future.

The Bushites were right about how the conflict between city suburbanists, stripped of their urban allies, and exurbanites plus resource suburbs would go: the exurban/resource wing would win every single battle of any importance, and the question was simply which orifice the city suburbanites would have to offer up. Again, there is no nice way to say this: the city suburbanites got a short term land boom, and in return they lost every thing else.

However, the Bushites were wrong about the almost everything else. One part is that the top of the financial pyramid is not suburban run hedge funds, but urban money center banks. These urbanite forces realize, ultimately, that cities run the financial universe, because only cities provide the high powered hothouse needed to do so. The attempt to replace New York with Houston as the financial center of America was a dismal failure, and however profitable hedge funds are, it is still the urban banks that, as now, must bail them out in times of trouble.

The Bushites also wildly over-estimated their ability to turn Iraq into Texas, the Annex. In short, the Bushites got sweeping powers, and did not effectively execute their business plan.

The division between the finance suburbs and the cities centers around several key issues. One is "trade", or more exactly, the use to which globalism is to be put. One kind of globalism is to create an urban model here, and export it. That isn't the kind we have, instead, it is Europe and to a lesser extent South Korea and Tokyo that are become the urban models. The other model is to expand the American supply chain to cities around the world. Suburbanist, not ites ists, like Spouting Thomas, like this one because it both reduces the costs of labor, and increases the amount of demand for suburban managers to go around the world and manage aircraft engines in China, textile production in Vietnam and so on. The other cleavage is between reducing the costs of health care, and universalizing it on the the other hand.

Washington is out of touch with, however, a fundamental, and essential, indeed crucial change that is happening: the rift between cities and financial suburbs is rapidly healing, over issues which are in the short term more important than the dwindling wins of offshoring and the rapidly disappearing differences over inflation containment of health and education versus universalization. For one thing, both groups are pro-immigration: since both groups rely on waves of new entrants. For another, off-shoring is now gutting suburbanist jobs as fast as urbanist jobs. For a third thing, the urbanists have an ideology which makes cities, not rural hinterlands, seem the cutting edge of political, economic and social values.

The Death Throes of Decade

The last year has seen a collapse of the ability to keep all of the long thousands games going: the military build up, the hedge fund boom and the land boom are incompatible with each other. As I've recently pointed out to a friend in a different context, high interest rates and cheap money are not possible in a context of monetary stability. Simply because interest is the cost of money. Money can't be cheap and expensive at the same time.

We have had the gain, the question is how to distribute the pain. Who, exactly, has their ox gored.

It is into this environment that Hillary Reagan Clinton steps. On one hand she is the only figure in the Democratic party that can unify the suburbanist bloc of the party. The only one. This gives her a base of between 35% and 40% of the party. Enough to win the nomination doing nothing but playing defense. While she waited to long to abandon the capitulationist creed on Iraq, she has merely moved to being a more charismatic Joe Lieberman, she is in favor of ending the war, but not the occupation. She is in favor of ending the war, but not the war time spending. She proposes health care reforms that help the suburbs, but not the cities. She offers bailouts to suburban home buyers, but nothing for urbanists.

In short, Hillary moved far enough to the left to convince self-deluded suburbanists that she won't gut the cities. But she is proposing exactly that, and the cities, and the rural voters, understand this. She offers exactly nothing.

Her two rivals, Edwards and Obama, slot into the two places that Hillary leaves hollow: Edwards is strong among the lower rungs of the Democratic Party and rural voters, and Obama has a base in the urban areas. Since Obama has a mortal lock on the Vice-Presidency, an agreement with Edwards is impossible. Both men want the top spot, Edwards does not want the vice-presidency, and as long as Edwards is in, it gives Obama a chance at taking down Hillary if Edwards can gut enough of Hillary's support in New Hampshire and other primaries.

However, the very "no brainer" road to the White House as a liberal Reaganite dooms Hillary in the short Thousands as much as it makes her the obvious choice in the long Thousands. This for the simple reason that while the city facing suburbs can defeat the rural and urban elements of the Democratic party as long as those elements are divided, it cannot govern. It cannot govern because of the packing of urban districts, which are now filled with legislators who are immune to suburban pressures, since they have almost no suburban voters any more. A generation ago the pizza slice districts combined urban and suburban votes. It cannot govern because the suburbs do not float above the rest of the planet. It cannot govern because the oil resource Republicans are going to demand enormous, and unpayable, concessions to not attack Hillary into the ground.

There is not enough money in the treasury to bribe the hinterlands, and fix the suburbanists problems with medicare and social security.

Let me repeat that: there is not enough money to both pay out huge bribes in the form of defense budgets, phony fuel psuedo-fixes for the energy problems and a continued security state, and fix the housing meltdown, the coming medicare crunch, and the continued pressures on suburbias bottom lind in education and present health care. This means that Hillary will lose the congress in 2010, which will be celebrated by Frum and Friedman because it will seemingly end the "progressive threat." However, this will be by losing conservative Democrats back to Reactionary Republicans. Progressives will continue to make gains in both the House and Senate, by flipping reactionary Republican seats in suburban and rural areas to progressive Democratic seats.

Thus Hillary is the figure who is now because she is promising a slice of the Reaganite coalition that it will be protected from the meltdown of Bushism. However, there isn't enough money to do this, and Hillary will be wedged between a progressive wing that hates her, and a reactionary wing that hates her even more. Both will have good reasons to see her as a calculating betrayer, and we are back to the reality that suburbs alone cannot command a majority of either the Senate, or the the House.

However, this is not set in stone. While it is very unlikely that Hillary listens to anyone but her close circle of Reaganites, and certainly none that she will listen to anyone who doesn't abase himself before Her Royal Clintoness - but why should I be nice? there's no percentage in it for me - there is another scenario.

There are, presently, three real contenders for the Democratic nomination. It is to the advantage of the Democratic Party, as a governing party, to unify the three wings of the party - urban, suburban, rural/working - early. It is not always so, but in this case the unification of politicians would require a unification of positions. The current "winner take all" approach to policy leads to catastrophe.

The urgent need for the Democratic coalition, both in Congress and in the Presidential race, is to let go of the delusion, and it is a black helicopter-flat earth-tin foil insanity, that they can ever do business with the reactionaries. That is the whole idea of slicing out the urbanists except when needed, or even pounding them down into a subordinate role in the coalition, is an idiocy, a suicidal egoïsm that will lead to a war between the wings of the party. Correction, has led to a war between the wings of the party, at the very moment when it is possible for someone who is a statesman, or woman, to firmly chart a very different course.

Part Four: The decade that wasn't, the decade that might yet be.