Hayes - Twilight of the elites: America after meritocracy

Copyright 2012 by Christopher L. Hayes

All rights reserved.
Published in the United States by Crown Publishers, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York.
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Library of Congress Cataloging-in-Publication Data
Hayes, Christopher, 1979
Twilight of the elites : America after meritocracy / Christopher Hayes.
1st ed.
p. cm.
1. Elite (Social sciences)United States. 2. Business and politicsUnited States. 3. Corporate powerUnited States. 4. Power (Social sciences) 5. United StatesPolitics and government21st century. 6. United StatesEconomic conditions21st century. 7. United StatesSocial conditions21st century. I. Title.
HN90.E4H39 2012
305.520973dc23 2012002435

eISBN: 978-0-307-72047-4

Jacket design by Ben Wiseman
Jacket photography Ryan McVay/Getty Images

v3.1

To my mom and dad,
who taught me how to see the world.

Now see the sad fruits your faults produced,
Feel the blows you have yourselves induced.

R ACINE

A MERICA FEELS BROKEN .

Over the last decade, a nation accustomed to greatness and progress has had to reconcile itself to an economy that seems to be lurching backward. From 1999 to 2010, median household income in real dollars fell by 7 percent. More Americans are downwardly mobile than at any time in recent memory. In poll after poll, overwhelming majorities of Americans say the country is on the wrong track. And optimism that todays young people will have a better life than their parents is at the lowest level since pollsters started asking that question in the early 1980s.

It is possible that by the time this book is in your hands, these trends will have reversed themselves. But given the arc of the past decade and the institutional dysfunction that underlies our current extended crisis, even a welcome bout of economic growth wont undo the deep unease that now grips the nation.

The effects of our great disillusionment are typically measured within the cramped confines of the news cycle: how they impact the Presidents approval rating, which political party they benefit and which they hurt. Most of us come to see the nations problems either as the result of the policies favored by those who occupy the opposite end of the ideological spectrum, or as an outgrowth of political dysfunction: of gridlock, bickering, and the increasing polarization among both the electorate and the representatives it elects.

But the core experience of the last decade isnt just political dysfunction. Its something much deeper and more existentially disruptive: the near total failure of each pillar institution of our society. The financial crisis and the grinding, prolonged economic immiseration it has precipitated are just the most recent instances of elite failure, the latest in an uninterrupted cascade of corruption and incompetence.

If that sounds excessively bleak, take a moment to consider Americas trajectory over the first decade of the twenty-first century.

The Supreme Courtan institution that embodies an ideal of pure, dispassionate, elite cogitationhanded the presidency to the favored choice of a slim, five-person majority in a ruling whose legal logic was so tortured the court itself announced it could not be used as precedent. Then the American security apparatus, the largest in the world, failed to prevent nineteen men with knives and box cutters from pulling off the greatest mass murder in U.S. history. That single act inaugurated the longest period of war we have ever known.

Just a few months later Enron and Arthur Andersen imploded, done in by a termitic infestation of deceit that gnawed through their very foundations. At the time, Enron was the largest corporate bankruptcy in the history of the nation, since eclipsed, of course, by the carnage of the financial crisis. What was once the hottest company in America was revealed to be an elaborate fraud, aided and abetted by one of the most trusted accounting firms in the entire world.

And just as Enron was beginning to be sold off for scraps in bankruptcy court, and President Bushs close personal connection to the companys CEO, Ken Lay, was making headlines, the Iraq disaster began.

Iraq would cost the lives of almost 4,500 Americans and 100,000-plus Iraqis, and $800 billion, burned like oil fires in the desert. The steady stream of grisly images out of the Middle East was only interrupted, in 2005, by the shocking spectacle of a major American city drowning while the nation watched, helpless.

As the decade of war dragged on, the housing bubble began to pop, ultimately bringing about the worst financial panic in eighty years. In the wake of the bankruptcy of Lehman Brothers in September 2008, it seemed possible that the U.S. financial system as a whole would cease to operate: a financial blackout that would render paychecks, credit cards, and ATMs useless.

In those frenzied days, I watched Federal Reserve chairman Ben Bernanke and Treasury secretary Hank Paulson defend their three-page proposal for a Troubled Asset Relief Program (TARP) in front of a packed and rowdy Senate hearing room. When pressed on the details by members of the Senate Banking Committee, Bernanke and Paulson were squirrelly. They couldnt seem to explain how and why theyd arrived at the number they had (one Treasury staffer would tell a reporter it was plucked more or less at random because they needed a really big number).

Watching them, I couldnt shake a feeling in the pit of my stomach that either these men had no idea what they were talking about or they were intentionally obfuscating because they did not want their true purpose known. These were the guys in charge, the ones tasked with rescuing the entire global financial system, and nothing about their vague and contradictory answers to simple questions projected competence or good faith.

Washington managed to pass the bailout for the financial sector, and while Wall Street would soon return to glory, wealth, and profitability, the rest of us would come to learn in gruesome detail all the ways in which the source of its prosperity had, in fact, been the largest Ponzi scheme in the history of human civilization.

The cumulative effect of these scandals and failures is an inescapable national mood of exhaustion, frustration, and betrayal. At the polls, we see it in the restless, serial discontent that defines the current political moment. The last three elections, beginning in 2006, have operated as sequential backlashes. In 2006 and 2008, Democrats were able to point to the horrifyingly inept response to Katrina, the bloody, costly quagmire in Iraq, and, finally, the teetering and collapsing economy. In 2010, Republicans could point to the worst unemployment rate in nearly thirty yearsand long-term unemployment rates that rivaled those of the Great Depressionand present themselves as the solution.