The Present Crisis and the End of the Long '90s

The constitutional settlement that once governed the United States has broken down. The world that we knew is gone. The second Trump Administration is working their hardest to forge a new settlement: an ugly settlement, based on personal authoritarian power and MAGA culture war.

Is Trump II a structural result of a breakdown, or is Trump himself a singular and contingent cause of breakdown? At this point it hardly matters. Something has broken. The world that we were born in no longer exists. It is the task of this essay to ask what broke and what Trump II is trying to put in its place.

But what broke is not any singular thing. The constitutional settlement that governed America from the end of the Volcker Shock in 1982 to the re-election of Donald Trump in 2024 encompassed three profound domains: politics, economics, and culture. Most commentators today are like the blind men and the elephant: legal commentators see legal crises, social commentators cultural crises, economic commentators economic crises. But there is only one elephant.

You can call it neoliberalism, if you like. I call it the Long '90s.

The asset economy

Let us begin with the economic component of the constitutional settlement of the Long '90s; it's as good a place as any. This settlement is sometimes called neoliberalism, but that suggests an obsession with deregulation—and is therefore profoundly misleading. The Long '90s was defined by the asset economy.

After the crisis of stagflation and the pain of the Volcker Shock, macroeconomic policy was reoriented away from maintaining full employment and towards managing inflation. The downside was depressed wage growth and depressed overall economic growth. In the period 1950-1980, per capita output grew at 2% per year; in the period 1980 to 2012, that shrunk to 1.3% per year (120).  A seemingly small difference—but such differences compound dramatically over the course of decades.

The decrease in income growth was softened by an increase in asset growth—in particular housing, but not just housing. The steady, faster-than-inflation, faster-than-wages growth of home equity increased the wealth of Americans.  Between 1980 and 2022, nominal wages increased 410%.  In that same period, house prices increased 576%. Our homes became our retirement accounts, and thus needing to save less out of our incomes for retirement, we spent and consumed more.

Home equity was inflated in a number of ways. First and foremost is the artificial scarcity of housing. Government regulation radically restricted the supply of housing via a variety of means. Most obvious is zoning: in most cities in America, it is simply illegal to build anything other than detached single family homes on 75% of the residential land area. Less obvious are design mandates, such as setbacks, parking minimums, minimum lot sizes, floor-area-ratio restrictions, and others, which combine together to make it impossible to build dense housing in the most desirable areas. This artificial scarcity inflated the price of housing, and also modulated who receives the windfalls of asset inflation—de facto racial redistribution of wealth was possible via de jure geographic distribution.

It would be a mistake to see this settlement purely in terms of cynical self-interest, the old "homevoter" hypothesis. Other powerful constituencies got something out of this settlement. Its anti-development effects pleased environmentalists, who were able to leverage anti-development laws to achieve various environmental wins, some real, some illusory. It pleased anticapitalists, who liked "sticking it to developers."  It pleased ideological NIMBYs who wanted to "preserve neighborhood character" and ensure their nostalgia would never be impinged on by physical change. It pleased social reformers who thought that mandating single family housing would transmute poor or criminal Americans into prosperous single-family-homeowners.

But of course money matters too. And in addition to artificially scarce supply, money was pumped into the housing market by government policy. This included direct downpayment assistance, tax breaks like the mortgage interest tax deduction or California's Proposition 13, and financial supports like government backstopping of fixed-rate 30 year mortgages. International capital flows seeking safe assets also contributed to the inflation of both housing and financial assets in America. These international capital flows were matched by international trade flows—we took the money foreign countries loaned us and used it to buy foreign imports.

Non-housing assets, especially financial assets, were also inflated in this period. Decreases in the capital gains tax induced the rich to divert more of their earnings into assets. The cult of short-term "shareholder value maximization" and the coupling of executive pay with stock performance led to a frenzy of mergers and acquisitions to juice the asset prices of stocks.

This is the thing about the asset economy. In a world where sixty percent of Americans are homeowners, asset inflation benefits a great many people—but it benefits the rich most, and the poor least. The asset economy operated on the Matthew Principle: "for unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath."

In other words, the asset economy fit nicely with the racial and gender hypocrisy to be discussed below: a superficially free market, but one which in practice benefited the white and the wealthy, one which in practice solidified patriarchal control over family assets.

But the asset economy has broken down. The name of that breakdown is the cost of living crisis. The asset economy delivered a steady stream of ever-cheaper consumer goods. But life's essentials have only gotten more expensive: housing, health care, education. Security. This is of course the inevitable logic of the asset economy. It diverts more and more and more money into assets without a matching increase in their real production. It magnifies inequality, which functions as a further brake on economic growth.

Bidenomics was an attempt to forge a new economic consensus. But the asset economy was defined by tight macroeconomic policy and artificial scarcity. Biden ran a hot economy—but didn't touch the problem of artificial scarcity. The result was something no one liked.

More than anything, it is economic malaise that led to Trump's victory over Harris. So what is Trump II's plan to forge a new economic order? An incoherent stew. Trump personally is obsessed with tariffs; he appears to believe they are a tax other nations pay us. The China hawk faction in his administration wants to rebalance world trade into two imperial spheres, one centered on America, the other on China. The national conservative wing wants to reindustrialize America in order to put women out of work and make us dependent on men. The Musk wing thinks that artificial general intelligence is a year or two away, and will replace all white collar jobs instantly. As we have seen in recent days, these radical visions add up to an incoherent mess of an economic policy that appears, at the moment, to be succeeding only in crashing the world economy.

A racial and sexual hypocrisy

The Long '90s was also a cultural settlement. The cultural settlement was not embodied in any single law or policy, but rather shaped the basic assumptions of Americans about our country—and, most especially, who was a full citizen. Surprisingly, the consensus can be expressed quite simply. On the one hand, explicit racial or sexual discrimination would end. On the other, America would remain de facto a white man's republic.

From the perspective of 1982, this seems like a good bargain for all concerned. The bruising unrest of the 60's and 70's—including the violent terrorism the New Left had degenerated into, including the violent terrorism of Jim Crow or COINTELPRO—all that would end. The insurgents—the feminists, the civil rights activists—would get a major improvement on the status quo. And the status quo—the white patriarchy—would in practice get to keep most of its privileges and power.

The compromise broke down with the election of Barack Obama. After forty years, the "insurgents" were no longer the children of Jim Crow and white-picket-fence patriarchy. They were the children of the Long '90s, who had been promised the world. We told all America's children—men, women, and otherwise, black and white and otherwise—that they could be anything they wanted to be. Unsurprisingly, they believed us.

Meanwhile, the old guard of the white man's republic—men and women both, it turns out—were shocked and appalled at the possibility of a black man being president—of black people demanding an end to routine police brutality—of women demanding an end to routine sexual assault. Both MeToo and Black Lives Matter were shocks to the conservative psyche it has not yet recovered from.

The Trump II theory of the case is bizarre and conspiratorial. Trump II appears to believe that this sea change in American culture—the belief that America is not a white man's republic, but a republic in which all men and women are endowed with certain inalienable rights—was a result of a cabal of Marxist professors and other elites, the "Cathedral," which brainwashed the youth of America, and if they can simply find the Cathedral's funding and cut it off, Americans will go back to loving the boot. They just need to kill the woke mind virus. The demand that Harvard accept a group of political commissars to ensure "viewpoint diversity" (aka affirmative action for rightwing incompetents) embodies this.

Their actions across the federal bureaucracy reflect this goal. Under Hegseth, the Pentagon has begun to change grooming standards to inflict more pain and injury on Black men; removed memorials to the Navajo codetalkers of WWII; and banned transgender Americans from service altogether. Other departments have attacked "DEI," which is to say, any attempt to recognize the contributions of anyone other than a white man to American history. The point is to resegregate the federal workforce.

Fundamentally, this crisis is about who counts as a full citizen of America. Perhaps unsurprisingly then, the crisis has erupted in its most dramatic and violent form at the border. The immigration politics of the Long '90s reflected the inherent hypocrisy: unwilling to stop immigration, unwilling to enable a straightforward path to citizenship for the mostly non-white immigrants. Under Trump II, conservative obsessions with birthright citizenship, with "anchor babies," with "the great replacement," have all boiled over—into a dramatic constitutional crisis.

In the modern world, the border is everywhere. Much as the Fugitive Slave Crisis transformed the boundary between slave and free from a geographic line charted by Mason and Dixon into a notional line running through every community in the nation, the border has spread itself into every community in America. The logical problem is simple. Free men had legal rights; escaped slaves had no rights, not even the right to prove they were free—which is just to say that free men also had no rights, since they might summarily be transformed into unpersons by being kidnapped by slave-takers and brought south.

In much the same way, Trump II has taken the enormous discretionary authority of the executive, the "Constitution free zone" of the border, and asserted that they may take anyone, anywhere, declare that they are not a citizen, ship them to an El Salvadoran gulag, and they will have no recourse to prove that they are in fact an American citizen deserving of due process. This power is already being used to suppress speech and intimidate political opponents.

The atrophy of Congress

The political settlement of the Long '90s was defined by the steady atrophy of Congress. The national agenda is balanced between an overweening executive and an overweening Court. This can be seen in numerous domains. The Authorization for the Use of Military Force, passed in 2001 after the September 11 attacks, remains the justification for ongoing operations around the world—for instance, Biden-era airstrikes against the Danab Brigade in Somalia in 2023, more than a decade after the death of bin Laden. Likewise, Biden's attempts at student debt relief and immigration reform meant wrangling not with Congress but with the courts—dueling court rulings, executive orders, temporary stays and temporary programs, etc. etc. 

Environmental law, in the form of the National Environmental Policy Act, has become almost entirely a creature of the courts, elaborated on through endless caselaw built atop a bizarre reading of the law itself—but of course Congress has little interest in taking up these basic questions of land use. Even fundamental questions of climate change became a tussle between the judicial and executive branches, culminating in the West Virginia v. Environmental Protection Agency ruling that carbon dioxide could not be considered a pollutant under the Clean Air Act. Congress could at any time have settled this fundamental matter—but remained silent, because it was easier that way.

How did we get here?  One can enumerate the internal features of Congress that have produced deadlock—the filibuster, a failure to expand with the nation, plain old cowardice—but the fundamental reason is that the power of Congress has atrophied because the link between Congress and the people has broken down.  The average legislator is no longer accountable to the mass of citizens in their district, but only to their own most vocal partisans.

To see how this works, consider the path that Alexandria Ocasio-Cortez took to office. She defeated incumbent Joe Crowley in the 2018 primary by just over 4,000 votes in a race in which only 29,778 people voted. Because NY-14 is heavily Democratic, the general election outcome was never in question.  Whoever won the primary was going to win the general, and indeed Ocasio-Cortez won with over 78% of the vote. In other words: it took just over 15,000 votes in order to be guaranteed victory in a race in which 141,122 people voted and represent a district in which 740,963 people live.

This is not a comment on Ocasio-Cortez personally, who has higher political ambitions than simply retaining her seat and has done her job well. Instead, it serves to illustrate the dysfunctional structure of our congressional party system. For too many seats, winning means appeasing a tiny sliver of activated primary voters, not a majority of general election voters, never mind a majority of district residents.

This kind of dysfunction is often attributed to gerrymandering.  And gerrymandering to produce always-reliable red or blue districts and always-reliable red or blue majorities has exacerbated the problem.  But it is also a result of shifts in the American electorate.  Americans have been geographically sorting themselves along partisan lines for decades: Democrats move to live near Democrats, Republicans move to live near Republicans.  Dense cities produce Democrats, sparse ruralities produce Republicans.  Meanwhile, the parties themselves—especially after the collapse of the Democratic Party's racist wing, the "Solid South"—became increasingly ideologically coherent.  Vanishingly few legislators represent competitive districts.

The net effect of this was that legislators became less interested in compromise, less interested in delivering material benefits to the mass of voters, and more interested in playing to their own base. Despite the fact that the parties have remained closely balanced in Congressional seats, this hasn't translated into greater competition to deliver material results.  Since so many legislators remain in uncompetitive seats come what may, they see little pressure to compromise with the opposition—or their own party, for that matter. Each caucus is split between those who have to care about general elections and those who only have to care about primaries; even when the party achieves a narrow majority, it is difficult to put together an actual voting majority.

Short-lived Republican wunderkind Madison Cawthorn emblematized this dynamic; he entered Congress with no policy team, only a comms team; these days it seems every Republican in Congress has followed his lead. They are content to yell about transgenders on prime time television, while the real business of policymaking occurs entirely out of sight in the bowels of the executive branch.

This is the promise of government without governing. The machine would simply take care of itself, administered by competent technocrats—anyone remember the "Maestro"?— while our elected officials got down to the really important business: poasting.

The system has broken down. The atrophy of Congress has left a gaping wound at the heart of our Constitutional order. The net effect has been the breakdown of our system of checks and balances and a combination of institutional gridlock and institutional unpredictability. Trump I was unable to pass much of anything through Congress, not even the repeal of Obamacare, and as a result governed almost entirely by executive order and through the slow medicine of judicial appointments. 

The crises discussed in the two previous sections come to a head in the crisis of Congress. In previous eras, it was precisely through Congress that great national struggles would be worked through. It was precisely through the passage of new legislation that new constitutional settlements would be forged. In our time, Congress has self-abolished almost to the point of nonexistence, letting an out-of-touch and unrepresentative Court struggle for control of the national tiller with an out-of-control and polarized Presidency.

In steps Trump II. Russ Vought, now the Director of the Office of Management and Budget, argued that the only solution to the sclerosis of government is a personalist authoritarian executive. In other words, he proposes to resolve the imbalance of government simply by concentrating all power in the President—a president who in a muscular and thrusting fashion ignores laws and norms in order to achieve The People's Will.

Thus despite having majorities in the House, the Senate, and on the Court, Trump II has defined itself by attempting to govern by pure executive authority. They no longer even attempt to pass their agenda through Congress; they simply act, and let Congress clean up the procedural mess—say, by declaring that a year is actually technically just a single "day" as far as Congress is concerned.

Trump II has likewise aggressively picked fights with the courts, flouting rulings and generally ignoring the normal procedures of law and order. The point is to resolve the tension between an overweening Court and an overweening Presidency in favor of Trump personally. In Trump's person all dilemmas of power are to be resolved.

What is to be done?

The news these days is overwhelming. You can drown in it. What I hope to have done here is provide a unifying theory of the problem. The various crises we are facing are in fact deeply interlinked. The constitutional settlement that once sustained our social consensus has ended. The Long '90s are over. 

Trump II is attempting to forge a new order. This is a combined vision in which all power is arrogated into the hands of a single charismatic leader. This power will be used not just to represent the people, but to decide who is a Real American^tm and who is not—with the latter persecuted, driven from education and employment, and in extremis deported to slave labor camps abroad. In other words, a vision of a leader who has the power to interpret the Will of the People not through elections or representatives but by representing the people in his person, in his instincts. And he will re-make America into a white man's republic.

The lure of strongman rule is hardly unique to America. But that means we can evaluate its track record. And its track record sucks. Personalist authoritarians promise stability, decisiveness, and competence. They promise to root out corruption and gridlock. They deliver none of this: their regimes are defined by incompetence and corruption. You don't need a political science textbook to understand this. Just look at Trump II's first hundred days.

It is perhaps our saving grace that the Trump II vision of the economy is so fundamentally stupid that they will discredit themselves in the eyes of even the most checked-out median voter. Thank the numbers for small favors.

The world that we knew is gone. Biden, bless his heart, tried to return to an America that no longer exists. Now we are all paying the price. The next Democratic administration cannot go back. We must forge a new constitutional settlement fit for the twenty-first century.

Watch these pages for the shape of that settlement.

Featured image is "Donald Trump at CPAC 2014," CC-SA 2.0 Gage Skidmore 2014. Image has been cropped and text added, CC-SA 2.0.