I did not invent the term, of course. “The Gilded Age” was the title of an 1873 Mark Twain novel about political corruption; from there it became a label for the crude form of capitalism that prevailed from the 1870s to about 1900. The phrase “New Gilded Age,” meanwhile, began showing up in print occasionally in the 1980s to describe the wealth-worship of the Reagan years; I myself picked it up from Kevin Phillips, who wrote in “The Politics of Rich and Poor” that “The 1980s were a second Gilded Age.”
Since 1997, however, the expression has gone from obscure to ubiquitous. In 2000, it was used as the title of a New Yorker anthology; in 2002 Paul Krugman employed it in memorable fashion in a New York Times Magazine story, and then went on to make it one of his recurring catchphrases. In recent years it has been used to describe everything from the supercharged prosperity of Washington, D.C., to the complicated relationship between plutocrats around the world. But above all the phrase “new Gilded Age” denotes inequality on the grand scale—the lush, Vanderbiltian lives of the One Percent and the increasingly desperate lot of everyone else.
One of the reasons the phrase appealed to me, 17 years ago, was my belief back then that there was something essentially brutal about raw capitalism; if the nation was to suppress the regulations and the workers’ organizations that had tamed the beast over the years—even if we did so with the best of intentions—the economy would return quite naturally to its savage, Gilded Age habits. Mainstream opinion of the 1990s held the exact opposite, however: That those regulations and those workers’ organizations were no longer needed because we had entered a “New Economy” in which the old rules no longer applied. Perfect information was building perfect markets wherever you turned. The Dow and the NASDAQ were mounting toward unbelievable highs, and our leaders assured us that it was all because history had turned a corner and the common people had been financially enlightened in some miraculous way.
Has there ever been an episode of economic mania so delusional and, ultimately, so destructive? In those days, CEO salaries were smashing every precedent in living memory and yet here were our thought leaders, telling us that what was really happening was a consummation of the nation’s democratic promise. For me, meanwhile, Mark Twain’s phrase seemed exact, almost clinical: What everyone thought to be a golden age was in fact merely gilded.
It is gratifying after all these years to find that Hillary Clinton likes the phrase too, but her confirmation is a little hard to take when I recall how the ’90s actually felt. As I looked around back then, it seemed like the 19th century was bursting out all over. Thanks to a ferocious Illinois labor dispute that caught my attention in those days, I understood that unions were barely able to protect their members, let alone the middle class. Thanks to a number of fundraising scandals—admittedly, minor scandals by the standards of today—the nation was learning what politicians would do for lobbyists and donors. The point that really nailed the Gilded Age comparison, however, was the obvious return of monopoly in industry after industry. The concentration of media ownership, a development facilitated by Clinton’s 1996 telecom deregulation, was particularly scary: The Nation magazine ran a big chart showing who owned whom in the “National Entertainment State”; I myself called it the “Culture Trust.”
The same kind of monopoly-building was happening in the ’90s in food processing and meat packing. It was happening in oil. It was happening among defense contractors, with the Clinton Administration’s active encouragement. And, as we all know, it was happening in the financial sector, a process that culminated in the much-celebrated repeal of the Glass-Steagall Act in 1999. Then there were Bill Clinton’s beloved free-trade deals; one effect of these, according to Barry Lynn of the New America Foundation, has been to expose our economy to monopolies based overseas, which have proceeded to gobble up sectors like the beer industry, 80 percent of which is controlled today by just two foreign companies.
If we really want to understand how the economy of a nation was turned into an ATM for the One Percent, it is critical to remember the bad things that happened in the ’90s as well as the good ones (like full employment, which was truly a great thing). One reason we need to remember these episodes is because members of President Clinton’s former economic team desperately want us not to remember them. As one of them said to the Washington Post recently, inequality “just didn’t exist then as a public issue.”
But of course it did. It existed then more sensationally than at any time until the second George Bush brought it back in full force in 2008. In 1992 the country was basically in flames over the economic effects of Reaganism. That year, Jerry Brown, Ross Perot, Pat Buchanan and, yes, Bill Clinton all ran as populists who would rescue the declining middle class by one method or another. On the campaign trail, Clinton reportedly carried with him and quoted from a copy of a three-alarm best-seller called “America: What Went Wrong?” Get it off the shelf today and you’ll find that its first two sentences run as follows: “The wage and salary structure of American business, encouraged by federal tax policies, is pushing the nation toward a two-class society. The top 4 percent make as much as the bottom half of U.S. workers.” And here are the first few paragraphs of a New York Times story that ran in May of 1992:
When Bill Clinton wants to galvanize his audience, he thunders from the podium that the top 1 percent of families got 60 percent of the gains from economic growth during the 1980s and owns more wealth than the bottom 90 percent.
Governor Clinton, the likely Democratic Presidential nominee, had been searching for months for facts to illustrate his claim that America’s middle class benefited little from 12 years of Republican rule. The explosion of riches at the top struck him as a perfect vehicle. Not only did the widening gap between the rich and the rest of Americans conflict with traditional notions of democracy, but it also went right to the pocketbook sources of middle-class discontent.
In 1992, one might conclude, the nation chose to reverse the plutocratizing effects of neoliberalism. What we got was something else—a soft Reaganism that admitted, “the era of big government is over.” And that’s why, in the months and years to come, we will see Clinton loyalists do all they can to delete that New Gilded Age from memory even as they rail against the current New Gilded Age. Were we to judge Bill Clinton by the standards of 1992, his presidency was something of a failure, eight years of deregulation and New Economy platitudes. If we judge him by the rich rewards that his booming stock market showered on the wealthy, however, his term in the White House was a towering success.
The original Gilded Age ended when Democrats and Republicans came together around the old populist program of financial regulation, antitrust enforcement, income tax, and legitimacy for organized labor. This time around there is no end in sight, because Republicans and Democrats have come together on a program that is almost the opposite—dismantling the regulatory state at the behest of the One Percent while assuring an ever angrier public that they feel our pain, that they’re Putting People First, that they’d be great to have a beer with, that Yes We Can. The heart sickens at the thought of these many long years of fake populism, and the stomach turns to imagine how little time there is before we are swept up in it all over again.