CRISIS AND HOPE FOR AMERICAN DEMOCRACY Part 1

George Packer’s book, Last best hope: America in crisis and renewal, offers an analysis of how American democracy got to its current crisis and how it will, hopefully, renew itself and survive. He points out that American democracy has gone through similar crises in the past. He identifies key elements of a functioning democracy and four cultural narratives, moral identities, or “tribes” that have emerged in the U.S. They have fractured American politics and society.

(Vacation Note: Sorry for not posting the last two weeks. I was on vacation with grandkids in LA and friends from Salt Lake City.)

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. They present the key points I’m making. Special Note: The new, more user-friendly website for my blog presents the Latest Posts chronologically here: https://www.policyforthepeople.org/blog. The new home page, where posts are presented by topics, is here: https://www.policyforthepeople.org. Please click on the Subscribe Today button to continue receiving notification of my posts. I plan to retire the old site at some point. Thank you for reading my blog!)

George Packer’s book, Last best hope: America in crisis and renewal, offers an analysis of how American democracy got to its current crisis and how it will, hopefully, renew itself and survive. He points out that American democracy has gone through similar crises in the past and has successfully renewed itself and resumed its journey toward the visionary principles expressed in the Declaration of Independence.

He posits that a functioning democracy requires three elements:

  1. The people view each other as fellow citizens of goodwill,
  2. The people believe that their government hears and responds to them, and
  3. The people believe that their government leaders will abide by democratic rules, including that votes will be accurately cast, counted, and respected.

Right now, the American people – or at least some of them – are questioning each of these. Destructive tribalism has shattered these foundations of democracy and the shared reality that is essential for self-government. The high and growing levels of inequality that our current economic system produces makes national solidarity impossible – especially in a country founded on the principle of equal opportunity. Concentrated economic and political power in the hands of a small number of wealthy capitalists and their political allies has denied many Americans control of their lives and futures, and has taken away their economic security.

In Packer’s analysis, America fractured in the 1970s from two relatively stable cultural narratives or moral identities aligned with the Democratic and Republican parties into four rival narratives. Democrats stood for workers, social solidarity, and ensuring fairness for all. Republicans stood for business, individual enterprise, and getting ahead. In the late 1960s, both parties were undemocratic, corrupt, and often bigoted. Some of the organized constituencies that had traditionally been aligned with each party began to question their affiliation. The post-World War II, middle-class-focused, bipartisan America was being transformed.

Packer names and describes four new, rival cultural narratives, moral identities, or “tribes” that emerged from this transformation. Here’s a brief summary of two of them. (The other two and more on Packer’s analysis will be presented in subsequent posts.)

Free America: Driven by consumer capitalism and libertarian ideas, members of the Free America tribe are focused on individual freedom unconstrained by government, society, or other people. They are skeptical of democracy and view the role of government as simply to secure individual rights. They embrace the mythical self-made man, pioneer, and cowboy. Their individualism and resultant self-isolation tend to breed distrust. They support deregulation without foreseeing the resultant emergence of concentrated wealth and economic power in the hands of a small number of huge corporations and wealthy capitalists. They are strongly nationalistic, believing in American exceptionalism, ideals, and military might. They tend to be radical rather than conservative. They break down institutions and oppose rules and traditions. The quality of the leadership of this tribe has steadily deteriorated from Ronald Reagan to Newt Gingrich to Donald Trump. Ultimately, the Free America that this tribe’s members advocate for has, for many of them, eroded their economic security, their ability to enjoy their freedom, and their identity as solid members of the middle class.

Smart America: Smart America is an embodiment of the new knowledge economy. Its members believe in expertise and credentials (e.g., college degrees). They embrace capitalism and meritocracy. They support government and private programs to ensure equal opportunity, such as affirmative action, diversity hiring, and perhaps reparations to promote racial justice. They support economic and educational justice too. They are, however, individualists. The American society they have built, based on education and merit, has created a new, often hereditary, professional, white collar social class. Politically, they align with and have shaped the new Democratic Party, with Bill and Hillary Clinton as quintessential members and leaders. They and this new Democratic Party have moved away from supporting unions and blue-collar workers. Instead, they support free trade, deregulation, and the resultant concentration of economic power in huge, international corporations. The winners in Smart America are on Wall Street and in Silicon Valley. Its families strive feverishly to get their children into elite universities. The country’s education system (from kindergarten through higher education), envisioned as the vehicle for equal opportunity, has now become the enforcer of ostensibly merit-based inequality. As the professionals of Smart America have succeeded, blue collar workers have seen their economic security and opportunities diminish. The loyalty of Smart Americans is to their families and less so to America. Their identity is less American and more that of global citizen.

My next post will summarize Packer’s other two rival cultural narratives, moral identities, or “tribes”: Real America and Just America. A subsequent post will discuss the interactions among the four American tribes and Packer’s analysis of where we go from here, including how we put America back together and back on track.

FINANCIAL CORPORATIONS USE ANTI-LGBTQ+ CAMPAIGN TO FIGHT COMPETITION ON CREDIT CARD FEES

Corporations and their executives will do anything to protect their profits, wealth, and power. Visa, Mastercard, and their big bank partners are working with right-wing groups using an anti-LGBTQ+, anti-wokeness campaign in a fight to protect their monopolistic price-gouging on credit card transaction (“swipe”) fees.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. They present the key points I’m making. Special Note: The new, more user-friendly website for my blog presents the Latest Posts chronologically here: https://www.policyforthepeople.org/blog. The new home page, where posts are presented by topics, is here: https://www.policyforthepeople.org. Please click on the Subscribe Today button to continue receiving notification of my posts. I plan to retire the old site at some point. Thank you for reading my blog!)

Corporate executives are totally focused on the bottom line – on profits. When profits are on the line, no holds are barred. Visa, Mastercard, and their big bank partners are using an anti-LGBTQ+ campaign to fight competition that would reduce transaction fees (swipe fees) on credit card transactions. Despite websites and social media communications claiming sensitivity and a commitment to the LGBTQ+ individuals, and some token actions supporting the LGBTQ+ community, these big financial corporations are resorting to an anti-LGBTQ+, anti-wokeness campaign to fight legislation in Congress that would require competition in the processing of credit card transactions. [1] (Note: Many corporations that claim to support the LGBTQ+ community are, nonetheless, making significant political contributions to politicians promoting anti-LGBTQ+ legislation. See this previous post for details.)

To reduce monopolistic swipe fees by introducing competition, a bipartisan group in Congress is working to reduce the dominance of the credit card market by Mastercard and Visa (and their big bank partners). Mastercard and Visa currently control over 80% of the credit card market. Therefore, they effectively set the fees that retailers (and ultimately consumers) must pay them to process credit card transactions. Since 2020, these fees have increased by 40%, even though the cost of processing transactions has gone down as technology has improved and gotten cheaper.

Swipe fees on credit and debit card transactions cost retailers and consumers $161 billion in 2022. Credit card swipe fees are, on average, 2% of each transaction’s value, but can be more for on-line transactions and up to 4% on some cards. Total swipe fees in 2022 are about eight times as much as they were in 2001, when they were about $20 billion.

For most retailers, credit card swipe fees are their second biggest cost; second only to the cost of paying their workers. For small, low-margin businesses like mom-and-pop convenience stores and gas stations, swipe fees are a higher portion of their costs than they are for bigger businesses. [2]

Therefore, a bipartisan group in Congress is looking to reduce this burden on small businesses (and their customers) with the Credit Card Competition Act (CCCA). The bill would require Visa and Mastercard, and the big banks they work with, to allow competitors to process credit card transactions, introducing competition on swipe fees. If passed, it is estimated that this competition would save retailers and their customers $15 billion per year.

A similar law regulating debit cards was passed by Congress in 2010 It, and regulations from the Federal Reserve, cap debit card swipe fees at $0.21 per transaction and 0.05% of a transaction’s value. It also requires large banks’ debit cards to allow processing by two unaffiliated computer networks, eliminating monopolistic control by Visa, Mastercard, and their big bank partners. It is estimated that these regulations save retailers and their customers over $9 billion per year.

New regulations that took effect July 1, 2023, have confirmed that the fee cap and network processing rules apply to on-line and contactless debit card transactions, as well as to in-store transactions. Visa, Mastercard, and their partner banks had not been living up to these rules on transactions done in these alternative modes.

Visa, Mastercard, and their big bank partners are spending millions of dollars to fight the CCCA. For example, the Credit Union National Association spent $2 million in the last six months lobbying against swipe fee reform, Mastercard spent $200,000, and the American Bankers Association spent almost $5 million over the last year on issues including swipe fee reform.

Even though the support for the CCCA is being led by the National Association of Convenience Stores and the Merchants Payment Coalition (which spearheaded the effort to regulate debit cards through the 2010 law), the big financial corporations are claiming that the CCCA is a liberal effort to reward “woke” retailers. Their ads, mailings, and lobbying claim that the CCCA is meant to reward big “woke” retailers like Target. As you may remember, Target unveiled a Gay Pride product line for Gay Pride month in June this year with prominent displays in stores and on its website. In the face of right-wing extremists’ attacks, it pulled back on the displays in some stores and on products featured on its website.

The financial corporations are working with right-wing dark money groups (whose contributors are hidden from public disclosure) to send mailings and run advertisements claiming the CCCA is a liberal handout to “woke” retailers. They are focusing on the districts of Republican supporters of the CCCA, hoping to split the bipartisan coalition for the CCCA and to defeat it by making it a target in the Republican anti-LGBTQ+ culture war.

This tactic by the big financial corporations clashes with their efforts over the past several years to portray themselves as leaders in promoting diversity, equity, and inclusion. They routinely pledge to support LGBTQ+ inclusivity in hiring. Some held their own Pride Month celebrations this past June.

This current use of an anti-LGBTQ+ tactic underscores their hypocrisy and their willingness to use any tactic possible to protect their financial interests and profits. There’s no real commitment by corporations or their executives to moral or ethical principles. Their behaviors and rhetoric only reflect an interest in maximizing their profits, wealth, and power.

I urge you to contact President Biden and your U.S. Representative and Senators to ask them to support the Credit Card Competition Act. The monopolistic control of swipe fees by Visa, Mastercard, and their big bank partners needs to end. Doing so will save small businesses and consumers billions of dollars every year. You can email President Biden at http://www.whitehouse.gov/contact/submit-questions-and-comments or you can call the White House comment line at 202-456-1111 or the switchboard at 202-456-1414. You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Goldstein, L., 8/4/23, “Wall Street stokes culture war to fight swipe fee reform,” The American Prospect (https://prospect.org/power/2023-08-04-wall-street-culture-war-swipe-fee-reform/)

[2]      National Retail Federation, retrieved from the Internet 8/11/23, “Swipe fees,” (https://nrf.com/advocacy/policy-issues/swipe-fees)

CORPORATIONS’ GOOD DEEDS ARE OFTEN JUST PR

Corporate good deeds and words are often just for public relations (PR) and do not represent any real commitment to good causes. Many corporations, despite statements and some token actions supporting the LGBTQ+ community, are making significant political contributions to politicians promoting anti-LGBTQ+ legislation. Combining state and federal level political giving, since Jan. 2022, 25 of these corporations have given $13.5 million to anti-LGBTQ+ politicians or their committees. Over 50 corporations that have actually signed the Human Rights Campaign’s LGBTQ+ pledge have, since Jan. 2020, contributed over $2.4 million to state legislators promoting bills deemed anti-LGBTQ+.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. They present the key points I’m making. Special Note: The new, more user-friendly website for my blog presents the Latest Posts chronologically here: https://www.policyforthepeople.org/blog. The new home page, where posts are presented by topics, is here: https://www.policyforthepeople.org. Please click on the Subscribe Today button to continue receiving notification of my posts. I plan to retire the old site at some point. Thank you for reading my blog!)

Corporate executives are totally focused on the bottom line – profits. Good deeds and words from them and their corporations are often just for public relations (PR). Actions speak louder than words and in terms of money, token spending on bits of PR is outweighed by significant money going elsewhere, such as to political contributions.

Recent examples relate to the LGBTQ+ community. Corporations, their executives, and their websites and social media communications claim sensitivity and a commitment to the LGBTQ+ community. Despite statements and some token actions supporting the LGBTQ+ community, many corporations, nonetheless, are making significant political contributions to politicians promoting anti-LGBTQ+ legislation. Here are two studies that document this.

First, a study by Popular Information of 25 corporations that had excellent ratings on the Human Rights Campaign’s (HRC) annual Corporate Equality Index (which rates over 1,200 companies on their treatment of LGBTQ+ employees and customers) found that, since Jan. 2022, they or their political action committees (PACs) have given $13.5 million to anti-LGBTQ+ politicians and their committees at the state and federal levels. HRC’s methodology for calculating its Corporate Equality Index has NOT to-date taken political donations into account. The top ten corporate contributors to state and federal anti-LGBTQ+ politicians are: [1]

  • AT&T $1,396,650
  • Charter Communications $1,167,000
  • UnitedHealth $1,139,050
  • Comcast/NBC Universal $1,046,000
  • Home Depot $   784,200
  • General Motors $   767,350
  • Deloitte $   669,800
  • Walmart $   650,250
  • Amazon $   488,000
  • CVS Caremark $   479,500

Other corporations in the top 25 are: UPS, Wells Fargo, Delta, Aflac, Verizon, Fed Ex, Cigna, Google, Toyota, T-Mobile, Microsoft, Visa, Anheuser Busch, American Airlines, and Capital One. Each of these gave $200,000 or more to anti-LGBTQ+ politicians.

Second, a study of state-level campaign finance reports by Open Secrets found that over 50 corporations that have signed the HRC LGBTQ+ pledge (or their political action committees) have, since Jan. 2020, contributed over $2.4 million to state lawmakers promoting bills deemed anti-LGBTQ+ by the American Civil Liberties Union. [2] As-of June 1, 2023, 323 corporations have signed the HRC pledge “stating their clear opposition to harmful legislation aimed at restricting … LGBTQ people in society.”

In the first six months of 2023, these state lawmakers have played key roles in passing 62 anti-LGBTQ+ bills in 18 states. There are at least another 270 anti-LGBTQ+ bills under consideration in 33 states.

Nine corporations accounted for 83% of the $2.4 million in contributions to anti-LGBTQ+ state politicians:

  • AT&T $517,550
  • Altria (tobacco) $362,260
  • Amazon $273,993
  • Union Pacific $188,750
  • Disney $166,991
  • Pfizer $163,525
  • CVS Caremark $137,550
  • Merck $105,800
  • General Motors $100,750

The state lawmakers receiving these contributions have passed bills that include bans or criminalization of gender-affirming medical care, requirements to use bathrooms and pronouns based on biological sex at birth, restrictions on transgender youth participating in sports, and banning events where people are dressed in drag.

Corporations that appear to have a real commitment to the LGBTQ+ community have often capitulated when faced with pushback from right-wing extremists. Target, for example, unveiled a Gay Pride product line for Gay Pride month in June this year with prominent displays in stores and on its website. It had signed the HRC pledge two years ago and had not contributed to any of the anti-LGBTQ+ state lawmakers. Nonetheless, in the face of right-wing extremists’ attacks, it pulled back on displays in some stores and on products featured on its website.

My next post will describe how financial corporations are using an anti-wokeness campaign to fight efforts to reduce credit card fees, despite their past pledges to support LGBTQ+ inclusion and diversity.

[1]      Legum, J., Zekeria, T., & Crosby, R., 6/5/23, “These 25 rainbow flag-waving corporations donated $13.5 million to anti-gay politicians since 2022,” Popular Information (https://popular.info/p/these-25-major-corporations-donated)

[2]      Ratanpal, H., & Giorno, T., 6/9/23, “Companies that publicly condemned legislation targeting the LGBTQ+ community send political contributions to state lawmakers who advanced anti-LGBTQ+ bills,” Open Secrets (https://www.opensecrets.org/news/2023/06/companies-that-publicly-condemned-legislation-targeting-lgbtq-community-send-political-contributions-to-state-lawmakers-who-advanced-anti-lgbtq-bills/)