The Price of Civilization: Reawakening American Virtue and Prosperity (39 page)

4.
Thomas Byrne Edsall and Mary D. Edsall,
Chain Reaction: The Impact of Race, Rights, and Taxes on American Politics
(New York: W. W. Norton, 1991), pp. 141–44.

5.
For 1970 and 1990 Hispanic population data, see U.S. Census Bureau, “Hispanics in the US.” For 2007 data, see Pew Hispanic Center, “Statistic Portraits of Hispanics in the US, 2009.”

6.
Zoltan Hajnal et al., “Immigration and the Political Transformation of White America: How Local Immigrant Context Shapes White Policy Views and Partisanship,” University of California, San Diego Center for Comparative Immigration Studies, International Migration Conference, March 12, 2010.

Research by Hajnal et al. confirms that the rise of the Hispanic population has led to a significant conservative shift of white Americans in locales with high concentrations of Hispanics:

[W]hite Americans who live in proximity to large numbers of Latinos tend to have more conservative views. All else equal, whites living in zip codes with larger Latino populations are less likely to want the federal government to reduce income inequality, less likely to seek increased spending on health care for the poor, less likely to want to do more to cover the uninsured, and almost significantly less likely … to view poverty as a serious problem. The implication of this set of findings is an important one. Latino context is now shaping core policy concerns of the American public. And it is doing so in a way that mirrors the negative reactions that have often faced the African American community in the past. In contexts where Latinos are prominent (and perhaps threatening), whites tend to be eager to reduce services and expenditures that benefit the bottom rungs of society. (pp. 21–22)

7.
Congressional Budget Office, “The Impact of Unauthorized Immigrants on the Budgets of State and Local Governments,” December 2007.

8.
Between 1900 and 1960, every president except Californian Herbert Hoover hailed from the Snowbelt: William McKinley (Ohio), Theodore Roosevelt (New York), William Howard Taft (Ohio), Woodrow Wilson (New Jersey), Warren Harding (Ohio), Calvin Coolidge (Massachusetts), Herbert Hoover (California), Franklin D. Roosevelt (New York), Harry Truman (Missouri), Dwight D. Eisenhower (Kansas), and John F. Kennedy (Massachusetts). After 1960, the only president from outside the Sunbelt was Gerald Ford of Michigan, who took office upon Richard Nixon’s resignation rather than by winning a national election. Ford went down to defeat in 1976, to Sunbelt candidate Jimmy Carter. The elected presidents between 1964 and 2004 include
Lyndon B. Johnson (Texas), Jimmy Carter (Georgia), Ronald Reagan (California), George H.W. Bush (Texas), Bill Clinton (Arkansas), and George W. Bush (Texas).

9.
The phenomenon at play is a result of America’s two-party system, in which the winning candidate (with 50 percent plus one vote) gets 100 percent of the power. The losing side gets no representation. This is different from a proportional representation system, as in much of Europe, where the share of national seats depends on the share of national votes. In our example, a national pro-government party would get 54 percent of the seats no matter where in the country the voters live.

10.
The following data are from the Pew Forum on Religion & Public Life, “US Religious Landscape Survey: Religious Affiliation, Diverse and Dynamic,” February 2008.

11.
For an overview of the increased sorting of American households by “education, income, race, and way of life,” see Bill Bishop,
The Big Sort: Why the Clustering of Like-Minded America Is Tearing Us Apart
(New York: Houghton Mifflin, 2008); Paul Jargowsky and Todd Swanstrom, “Economic Integration: Why It Matters and How Cities Can Get More of It,” Chicago: CEOs for Cities, City Vitals Series.

12.
The following data are from Benjamin Page and Lawrence Jacobs,
Class War? What Americans Really Think About Economic Inequality
(Chicago: University of Chicago Press, 2009).

13.
Professor Larry Bartels of Princeton University has found similar views in his own recent analysis of survey data. He identifies several characteristics of public attitudes, including strong support for equal opportunity and a belief that “some people don’t get a chance to get a good education,” and for the view that “rich people … pay less [in taxes] than they should” (53.1 percent). Larry Bartels, “Homer Gets a Tax Cut: Inequality and Public Policy in the American Mind,”
Perspectives on Politics
3, no. 1 (March 2005).

14.
Pew Research Center, “Trends in Political Values and Core Attitudes: 1987–2009,” May 21, 2009, pp. 72–73, 140.

15.
Ibid., p. 106.

16.
USA Today
/Gallup Poll, June 11–13, 2010.

17.
Jon Cohen, “Most Americans Say Regulate Greenhouse Gases,”
Washington Post
, June 10, 2010.

18.
Rasmussen Reports, “Support for Renewable Energy Resources Reaches Highest Level Yet,” January 2011.

Chapter 6: The New Globalization

1.
Adam Smith,
An Inquiry into the Nature and Causes of the Wealth of Nations
(Oxford: Oxford University Press, 1993), Book 4, Chapter 7.

2.
United Nations Conference on Trade and Development (UNCTAD), “Largest Transnational Corporations,” Document 5,
http://www.unctad.org/templates/page.asp?intItemID=2443&lang=1
.

3.
For details on General Electric, see General Electric website and annual 10-K filing.

4.
Foreign profits are equal to corporate earnings from abroad minus domestic earnings paid to foreign investors. Earnings from abroad include both the foreign profits of U.S. multinationals and the dividends received by U.S. residents paid by unaffiliated foreign corporations. The rising trend in the figure reflects in part the rising share of corporate profits earned by U.S. companies in their overseas operations, but may also reflect a rising tendency of U.S. companies to book their profits in overseas tax havens through artificial transfer pricing (that is, using artificial prices for cross-border transactions within the firm for the purpose of shifting reported corporate revenues to low-tax jurisdictions). Even if part of the rising share of foreign profits reflects artificial transfer pricing rather than actual changes in the location of corporate activities, the increased use of transfer pricing to avoid taxes would itself be a manifestation of the new globalization.

5.
For U.S.-China trade: U.S. Census Bureau, “Foreign Trade: Trade in Goods with China.” For U.S. value-added data: U.S. Department of Commerce, Bureau of Economic Analysis, “Industry Economic Accounts.”

6.
U.S. Bureau of Labor Statistics, “Current Employment Statistics: National.”

7.
U.S. Bureau of Labor Statistics, “Establishment Data: Historical Employment.”

8.
Ibid.

9.
Shan Jingjing, “Blue Book of Cities in China,” Chinese Academy of Social Science.

10.
UN Population Division Home Page.

11.
The current shorthand for the emerging economies is the BRIC group: Brazil, Russia, India, and China, with a combined population of around 2.7 billion. If we define an emerging market to be any fast-growing developing country that is able to attract market-based private capital for a rapid scale-up of industrial production, we would want to include dozens more countries, including Chile, Egypt, Mexico, Nigeria, South Africa, and Vietnam. The combined real GDP of the developing world grew by around 7 percent in 2010, showing the scope of rapid growth in today’s developing countries.

12.
H. Garretsen and Jolanda Peeters, “Capital Mobility, Agglomeration and Corporate Tax Rates: Is the Race to the Bottom for Real?,”
CESifo Economic Studies
53, no. 2 (2007), pp. 263–93.

13.
See Table 2.3 of the Office of Management and Budget Historical Tables.

14.
For example, see Rasmussen Reports, “Energy Update,” April 2011.

Chapter 7: The Rigged Game

1.
In the 2010 Swedish elections, for example, eight parties entered the Parliament and four are part of the governing coalition. The American political system, and to a lesser extent the systems of the United Kingdom, Canada, and Australia, are majoritarian; the parliamentary democracies of Western Europe tend to be consensus systems.

2.
Maurice Duverger, “Factors in a Two Party and Multiparty System,” in
Party Politics and Pressure Groups
(New York: Thomas Y. Crowell, 1972), pp. 23–32.

3.
All data from OECD Social Expenditure Database and OECD Statistical Database.

4.
Consensus is also difficult because of the vastness and diversity of America’s population, with cleavages by region, race, ethnicity, and religion. America cannot be a consensus society in the same way as Denmark, Norway, or Sweden, as each of those is a country of a few million people that is ethnically and religiously homogeneous with a geographic range and diversity far smaller than those of the United States.

5.
Institute for Democracy and Electoral Assistance, “Voter Turnout by Country.”

6.
Spending in presidential election years (2000, 2004, 2008) averages around $1.5 billion more than in nonpresidential election years, with presidential and off-year elections on the same common upward trend.

7.
Robert Kaiser,
So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government
(New York: Alfred A. Knopf, 2009), pp. 343–44.

8.
Gallup Poll, “Automobile, Banking Industry Images Slide Further,” August 17, 2009.

9.
Andrew J. Bacevich,
Washington Rules: America’s Path to Permanent War
(New York: Henry Holt, 2010).

10.
Dwight D. Eisenhower, “Farewell Address,” January 17, 1961.

11.
Peter Orszag, “One Nation, Two Deficits,”
New York Times
, September 6, 2010. He writes: “It would be tough, then, to squeeze more than a half percent of G.D.P. from spending by 2015. Additional revenue—in the range of 0.5 to 1.5 percent of the economy—will therefore be necessary to reduce the deficit to sustainable levels.”

12.
Christina D. Romer, “What Obama Should Say About the Deficit,”
New York Times
, January 15, 2011.

13.
ABC News “Summary: 2009 Polling on a ‘Public Option.’ ”

14.
Congressional Budget Office, “Estimate of Direct Spending and Revenue Effects of H.R. 2,” February 18, 2011.

15.
Consider the following passage written by political scientist Thomas Ferguson in 1995 on the Clinton-era debate on health care, and note how well it applies to the Obama case, almost without needing to change a single word. In both 1994 and 2009, the health care industry was in the driver’s seat of the legislative process:

As this essay goes to press [in 1994], the administration is finally unveiling its long-awaited (and several times postponed) blueprint for overhauling the nation’s health-care delivery system. Already, however, some of the costs of this strategy—to strike deals with as much of the existing health-care industry as possible, instead of pushing for a simple and economical “single payer” (“Canadian style”) system—are plain. While the package of benefits and universal coverage the plan promises
is carefully thought out and at least modestly appealing, the plan is fantastically complicated and not easy for ordinary voters to evaluate. The full costs of the network of oligopolies that the plan will create are being hidden, and savings are being claimed that are almost certainly not there. The basic design is heavily weighted in the direction of the large insurers and several other parts of the health-care industry, including teaching hospitals. A few years down the pike the financing system proposed may well create strong pressures to curtail benefits or skimp on care. (Thomas Ferguson,
Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems
[Chicago: University of Chicago Press, 1995], p. 327.)

Neither President Clinton nor President Obama dared to propose deep reforms to America’s astoundingly overpriced private health care system. The influence of the powerful health care lobby to prevent change is the real subtext of the past thirty years of U.S. health care policy.

16.
Campaign Finance Institute, “New Figures Show That Obama Raised About One-Third of His General Funds from Donors Who Gave $200 or Less,” January 8, 2010.

17.
Center for Responsive Politics, “Banking on Connections,” June 3, 2010, p. 1.

18.
Ibid, p. 3.

19.
The following is based on Jesse Drucker, “Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes,” Bloomberg News, October 21, 2010.

20.
See Chapter 1 of Title 26 of the Internal Revenue Code.

21.
U.S. Government Accountability Office, “International Taxation: Large US Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions,” GAO-09-157, December 2008.