Ethics Newsline®

Proclaiming that “the business of America is business,” U.S. president Calvin Coolidge famously defined one of the basic objectives of the dozen years of Republican governance that followed the end of World War I. Seventy years later, another Republican administration — an equally ardent exponent of pro-business tax, environmental, and social policies — champions a similar goal. Have we entered a new “Jazz Era,” with all of the opportunities — but also all of the risks — demonstrated by the history of the 1920s?

Now as then, Republicans have embarked on a potentially extended period of dominance, a derivative of President Bush’s decisive leadership in the aftermath of September 9/11 and the public’s confidence in Republicans as custodians of the nation’s security interests. Meanwhile, divided and leaderless, the party of James Cox, John Davis, and Al Smith — the three defeated Democratic candidates of the 1920s — struggles to make significant inroads into President Bush’s popularity.

Against this background, greed and irresponsibility of Biblical proportions have spilled over, 1920s-like, into a long string of high-profile corporate scandals. The collapse of Samuel Insull’s massive 1920s gas and electric empire is echoed in the tribulations of Enron, WorldCom, and a host of other companies afflicted by ethical lapses. In foreign policy, too, a taste for unilateralism — “isolationism” as it was earlier called — characterizes both periods.

And in another, more profound way, the current era has some of the ominous moral overtones of the 1920s. During the early twenty-first century, as during the 1920s, the nation appears unusually self-absorbed, self-indulgent, and heedless of the warning signs that point to long-term dangers.

On the surface, a stock market substantially above its post-9/11 lows provides a respite from worry. But below the surface, the combined effects of budget hikes and mounting deficits are shattering GOP economic orthodoxy. Only in part because of 9/11, federal spending — typically an anathema to conservatives — has risen by 20 percent since the start of the Bush administration. Meanwhile, government revenues have fallen 12 percent, the result of a sluggish economy but also of tax cuts of unprecedented magnitude. The result: an annual federal deficit that could exceed the half-trillion-dollar mark this year alone, washing away a budget surplus and an earlier bipartisan consensus that runaway deficits are bad for the United States.

If tax cuts fail to generate hoped-for revenues — an open question in the mind of most experts — Medicare and Social Security could be threatened with bankruptcy. Adding to the burden, a new, $40-billion-per-year prescription drug benefit has been added to Medicare that, whatever its merits, no one has any idea how to pay for. Meanwhile, the generally U.S.-friendly International Monetary Fund now warns that, by forcing up global interest rates and slowing global investment and economic growth, U.S. profligacy could threaten the financial stability of the entire global economy, with no small implications for the United States’ own economy.

All of which prompts sobering questions. Who is taking moral responsibility for the next generation? Is the U.S. public as reality-averse and inattentive to today’s warning signs as the isolationist generation of the Jazz Age was to the fragility of 1920s prosperity? Have the White House and GOP lawmakers, in an effort to lay the foundations for long-term Republican dominance, thrown fiscal caution to the winds? Would an absence of solvency undercut the social and public services — quality public education, veterans’ benefits, law enforcement, infrastructure improvements — upon which any party’s success depends? Would that loss have a dramatic bearing on future political loyalties, as happened in the early 1930s?

If leadership lies in providing strength and comfort to a nation under attack — as President Bush has so ably done — it also lies in discerning and acting on the nation’s fiduciary obligations, which Congress and the administration have dangerously ignored. However one feels about the merits of either party, one thing is certain: Nobody wants a repetition of the kind of economic crisis that brought the Jazz Era to its dramatic conclusion. Now as then, such a seismic event would decisively end Republican Party dominance — and perhaps usher in a new version of the Roosevelt revolution of 1932 and a replay of the Democratic “New Deal” — with whatever benefits and risks that may imply. Surely there are better ways for nations to change direction than by watching history repeat itself.

©2005 Institute for Global Ethics