The Challenges of the Twenty-First Century
By the end of this section, you will be able to:
- Discuss the Bush administration’s economic theories and tax policies, and their effects on the American economy
- Explain how the federal government attempted to improve the American public education system
- Describe the federal government’s response to Hurricane Katrina
- Identify the causes of the Great Recession of 2008 and its effect on the average citizen
By the time George W. Bush became president, the concept of supply-side economics had become an article of faith within the Republican Party. The oft-repeated argument was that tax cuts for the wealthy would allow them to invest more and create jobs for everyone else. This belief in the self-regulatory powers of competition also served as the foundation of Bush’s education reform. But by the end of 2008, however, Americans’ faith in the dynamics of the free market had been badly shaken. The failure of the homeland security apparatus during Hurricane Katrina and the ongoing challenge of the Iraq War compounded the effects of the bleak economic situation.
OPENING AND CLOSING THE GAP
The Republican Party platform for the 2000 election offered the American people an opportunity to once again test the rosy expectations of supply-side economics. In 2001, Bush and the Republicans pushed through a 15 million that year, roughly 950 times what the company’s average associate made. The head of the construction company K. B. Homes made 1.7 trillion by 2013. Just as importantly, the American campaign in Iraq had diverted resources from the war against al-Qaeda in Afghanistan, where U.S troops were no closer to capturing Osama bin Laden, the mastermind behind the 9/11 attacks.
With two hot wars overseas, one of which appeared to be spiraling out of control, the Democrats nominated a decorated Vietnam War veteran, Massachusetts senator John Kerry ([link]), to challenge Bush for the presidency. As someone with combat experience, three Purple Hearts, and a foreign policy background, Kerry seemed like the right challenger in a time of war. But his record of support for the invasion of Iraq made his criticism of the incumbent less compelling and earned him the byname “Waffler” from Republicans. The Bush campaign also sought to characterize Kerry as an elitist out of touch with regular Americans—Kerry had studied overseas, spoke fluent French, and married a wealthy foreign-born heiress. Republican supporters also unleashed an attack on Kerry’s Vietnam War record, falsely claiming he had lied about his experience and fraudulently received his medals. Kerry’s reluctance to embrace his past leadership of Vietnam Veterans Against the War weakened the enthusiasm of antiwar Americans while opening him up to criticisms from veterans groups. This combination compromised the impact of his challenge to the incumbent in a time of war.
Urged by the Republican Party to “stay the course” with Bush, voters listened. Bush won another narrow victory, and the Republican Party did well overall, picking up four seats in the Senate and increasing its majority there to fifty-five. In the House, the Republican Party gained three seats, adding to its majority there as well. Across the nation, most governorships also went to Republicans, and Republicans dominated many state legislatures.
Despite a narrow win, the president made a bold declaration in his first news conference following the election. “I earned capital in this campaign, political capital, and now I intend to spend it.” The policies on which he chose to spend this political capital included the partial privatization of Social Security and new limits on court-awarded damages in medical malpractice lawsuits. In foreign affairs, Bush promised that the United States would work towards “ending tyranny in the world.” But at home and abroad, the president achieved few of his second-term goals. Instead, his second term in office became associated with the persistent challenge of pacifying Iraq, the failure of the homeland security apparatus during Hurricane Katrina, and the most severe economic crisis since the Great Depression.
A Failed Domestic Agenda
The Bush administration had planned a series of free-market reforms, but corruption, scandals, and Democrats in Congress made these goals hard to accomplish. Plans to convert Social Security into a private-market mechanism relied on the claim that demographic trends would eventually make the system unaffordable for the shrinking number of young workers, but critics countered that this was easily fixed. Privatization, on the other hand, threatened to derail the mission of the New Deal welfare agency and turn it into a fee generator for stock brokers and Wall Street financiers. Similarly unpopular was the attempt to abolish the estate tax. Labeled the “death tax” by its critics, its abolishment would have benefitted only the wealthiest 1 percent. As a result of the 2003 tax cuts, the growing federal deficit did not help make the case for Republicans.
The nation faced another policy crisis when the Republican-dominated House of Representatives approved a bill making the undocumented status of millions of immigrants a felony and criminalizing the act of employing or knowingly aiding illegal immigrants. In response, millions of illegal and legal immigrants, along with other critics of the bill, took to the streets in protest. What they saw as the civil rights challenge of their generation, conservatives read as a dangerous challenge to law and national security. Congress eventually agreed on a massive build-up of the U.S. Border Patrol and the construction of a seven-hundred-mile-long fence along the border with Mexico, but the deep divisions over immigration and the status of up to twelve million undocumented immigrants remained unresolved.
One event highlighted the nation’s economic inequality and racial divisions, as well as the Bush administration’s difficulty in addressing them effectively. On August 29, 2005, Hurricane Katrina came ashore and devastated coastal stretches of Alabama, Mississippi, and Louisiana. The city of New Orleans, no stranger to hurricanes and floods, suffered heavy damage when the levees, embankments designed to protect against flooding, failed during the storm surge, as the Army Corps of Engineers had warned they might. The flooding killed some fifteen hundred people and so overwhelmed parts of the city that tens of thousands more were trapped and unable to evacuate ([link]). Thousands who were elderly, ill, or too poor to own a car followed the mayor’s directions and sought refuge at the Superdome, which lacked adequate food, water, and sanitation. Public services collapsed under the weight of the crisis.
See pictures of the aftermath of Hurricane Katrina and read and view accounts of survivors of the disaster.
Although the U.S. Coast Guard managed to rescue more than thirty-five thousand people from the stricken city, the response by other federal bodies was less effective. The Federal Emergency Management Agency (FEMA), an agency charged with assisting state and local governments in times of natural disaster, proved inept at coordinating different agencies and utilizing the rescue infrastructure at its disposal. Critics argued that FEMA was to blame and that its director, Michael D. Brown, a Bush friend and appointee with no background in emergency management, was an example of cronyism at its worst. The failures of FEMA were particularly harmful for an administration that had made “homeland security” its top priority. Supporters of the president, however, argued that the scale of the disaster was such that no amount of preparedness or competence could have allowed federal agencies to cope.
While there was plenty of blame to go around—at the city, state, and national levels—FEMA and the Bush administration got the lion’s share. Even when the president attempted to demonstrate his concern with a personal appearance, the tactic largely backfired. Photographs of him looking down on a flooded New Orleans from the comfort of Air Force One only reinforced the impression of a president detached from the problems of everyday people. Despite his attempts to give an uplifting speech from Jackson Square, he was unable to shake this characterization, and it underscored the disappointments of his second term. On the eve of the 2006 midterm elections, President Bush’s popularity had reached a new low, as a result of the war in Iraq and Hurricane Katrina, and a growing number of Americans feared that his party’s economic policy benefitted the wealthy first and foremost. Young voters, non-white Americans, and women favored the Democratic ticket by large margins. The elections handed Democrats control of the Senate and House for the first time since 1994, and, in January 2007, California representative Nancy Pelosi became the first female Speaker of the House in the nation’s history.