Chapter 40: The American People Face a New Century

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Okay, let's unpack this.

We are jumping into a deep dive covering, well, arguably the most chaotic and defining period for many of us listening,

2001 right through to 2018.

Absolutely.

It's quite the span of time.

It really is.

This era, it starts in just deep political division.

Remember the super contested 2000 election?

Oh yeah, hanging shads and all that.

Exactly.

Then it's briefly, maybe artificially unified by a massive crisis only to end up completely submerged in extreme polarization and huge economic upheaval.

That's a perfect way to frame it.

And if you really want to get a handle on these two decades, you've got to grasp, I think, three core challenges the U .S.

was grappling with.

Okay.

What are they?

Well, first, there's this fundamental shift in foreign policy right after 9 -11.

Suddenly, it's all about a global war on terror, primarily playing out in Afghanistan and later Iraq.

Right.

The focus just narrowed instantly.

Second, you have these really intense debates happening at home over things like financial reform, the role of government, the social safety net, big, big questions.

Still arguing about those today, mostly.

We are.

And finally, you see this truly massive widening of economic inequality.

The gap just explodes even while the middle class is sort of credding water.

It's a stark picture.

So our mission here is to guide you through these two decades, defined by wars, a massive recession, and really, a fundamental rethinking of what it means to be American.

Let's start at the beginning.

The controversial arrival of George W.

Bush.

Yeah, Bush.

He came into office promising to be a, quote, compassionate conservative.

That was the phrase.

I remember that.

But his early actions, while they quickly showed a leaning toward what the text calls a crusading ideologue,

domestically, for instance, he backed federal funding for faith -based social programs.

And the stem cell issue.

Oh, definitely.

He consistently vetoed government funding for embryonic stem cell research.

That really aligned him firmly with religious traditionalists who saw it as destroying potential life.

He also wasn't afraid to ruffle feathers elsewhere, was he?

Like with environmentalists.

Not at all.

He immediately angered them by pulling the U .S.

out of the Kyoto Treaty.

The international agreement meant to curb greenhouse gas emissions.

A big move early on.

Huge.

And then fiscally, this is where you see the immediate dollars and cents impact.

He pushed through these massive tax cuts in 2001 and again in 2003.

Right.

Arguing they'd stimulate the economy.

That was the argument.

But combined with new military spending, especially after 9 -11, they just rapidly turned those late 90s budget surpluses.

Remember those.

Vaguely feels like ancient history now.

Doesn't it?

Well, they turned into soaring deficits.

By 2008, the U .S.

was facing like a nearly half trillion dollar deficit for the year.

A massive swing.

Wow.

But all those domestic fights, they just got completely overshadowed, didn't they?

On September 11, 2001.

Totally eclipsed.

That day.

I mean, the long -held belief in America's, quote, impregnable national security.

It just violently ended.

Suicidal terrorists crashing planes into the World Trade Center towers, the Pentagon.

Roughly 3 ,000 people killed.

It was just a different world after that morning.

The immediate enemy was identified pretty quickly.

Osama bin Laden and his al -Qaeda network.

And they were being sheltered by the Taliban regime in Afghanistan.

Right.

And when the Taliban refused to hand bin Laden over, the U .S.

launched a military campaign.

It actually toppled the regime fairly quickly.

But bin Laden himself got away, slipped into Pakistan.

But the impact here at home, the atmosphere of fear, it led to this dramatic restructuring of domestic security, didn't it?

It really did.

In October 2001, just weeks later, Congress passes the USA Patriot Act.

That sounds familiar, but what did it actually do?

Well, it allowed for really extensive surveillance of domestic phone calls and emails.

And it permitted the detention and even deportation of immigrants suspected of terrorism, often with limited legal recourse.

A huge expansion of government power.

Massive.

And then a year later, you get the creation of the huge cabinet -level Department of Homeland Security.

But this, right here, marks the beginning of this defining tension for the whole era.

What tension is that?

It's the balance, right?

Hundreds of captured Taliban fighters were sent to the Guantanamo Bay detention camp in Cuba.

And they just languished there in this legal limbo, no clear status.

Prisoners of war.

Criminals.

Nobody seemed sure.

Exactly.

And it raised this critical question.

Did the threat of terrorism warrant such drastic encroachments on America's traditional protections for civil liberties?

That debate started then, and honestly, it's never really stopped.

And the policy changes kept coming.

In January 2002, Bush really threw down a marker, didn't he?

Calling Iraq, Iran, and North Korea an axis of evil.

Yeah, that phrase really landed.

It signaled a pretty radical shift in American military thinking.

How so?

What was so radical about it?

Well, what's fascinating is the ideology behind it.

Later in 2002, the administration laid out this new national security strategy.

And it openly, explicitly advocated for something called preventative warfare.

Preventive, not preemptive.

Or is that the same?

Well, sometimes used interchangeably, but the idea here was preventative.

It was a really sharp break from the Cold War strategies, you know, containment and deterrence.

Right.

Keeping the Soviets in check.

Exactly.

The logic here was different.

Traditional threats, like other nations, you could maybe contain or deter them.

But stateless terrorists like al -Qaeda, or so -called rogue states with WMDs, the argument was you couldn't deter them.

You had to hit them before they could hit you.

Wow.

That's, that's a massive change in strategy.

It sounds like it basically gives the US permission to attack first, almost anywhere.

That's certainly how critics saw it.

And it directly led to the focus on Iraq.

But the justification for invading Iraq, it seemed to keep shifting, didn't it?

It did.

Bush offered, well, several reasons.

There was the claim about weapons of mass destruction, WMDs.

Which turned out not to be there, largely.

Right.

Then there was supposed ties to al -Qaeda, which are also pretty tenuous.

And then this more idealistic goal of, you know, bringing democracy to Iraq and the wider Middle East.

A whole mix of reasons.

And despite the UN Security Council refusing to authorize force, the US and Britain went ahead and launched the invasion in March 2003.

And Saddam Hussein's military, it collapsed really fast.

Yeah.

But what came next was just chaos.

Absolute chaos.

The invasion removed Saddam, but it also uncorked these long -suppressed sectarian tensions, mainly between the minority Sunni Muslims who had dominated under Saddam, and the majority Shia Muslims.

Violence just erupted.

And didn't disbanding the Iraqi army make things worse?

Massively worse.

It created this huge pool of unemployed, armed, and angry men, many of whom joined the insurgency.

And then adding shame to the violence was the Abu Ghraib prison scandal in 2004.

Oh, I remember the photos.

American guards torturing and humiliating Iraqi prisoners.

Yeah, it was a terrible black eye for the US mission.

And it's a really sobering fact that by the end of 2006, the number of American soldiers killed in Iraq actually surpassed the death toll from 9 -11 itself.

Just tragic.

Yet despite all this turmoil in Iraq, Bush won re -election in 2004 against John Kerry.

He did, largely by positioning himself as the strong, decisive wartime leader needed in dangerous times.

But his second term, domestically at least, was really marked by policy failures.

Like what?

Well, he had this really ambitious plan to privatize a big chunk of social security.

Oh yeah, I remember that push.

It was met with just massive public opposition across the political spectrum, really.

And the whole idea basically vanished within about six months.

Total non -starter.

What else?

Immigration.

He also tried for comprehensive immigration reform.

But that got blocked too, interestingly, by opposition from both sides.

From anti -immigrant, nativist groups, and from some immigrant advocates who felt it didn't go far enough or was too punitive.

Gridlock.

And then came a natural disaster that turned into a political disaster.

Hurricane Katrina in 2005.

Oh Katrina, that was devastating for New Orleans and the Gulf Coast.

But the government response, particularly from FEMA, the Federal Emergency Management Agency, was just terribly botched.

Yeah, the images of people stranded, the slow response.

It was bad.

It really damaged the administration's reputation for competence.

It led to this widespread political consensus across parties that Bush was, as the text puts it, a feckless leader in that crisis.

And all that disaffection, especially over Iraq and Katrina, it had consequences in the 2006 midterms, right?

Big time.

Democrats regained control of both the House and the Senate.

It was largely seen as a repudiation of the Bush administration, especially the handling of the Iraq War.

Although, it's worth noting, the military surge in Iraq in 2007 did bring a period of modest, fragile stability there.

Okay, so that sets the stage.

Political exhaustion, a costly, unpopular war,

rising deficits, and then the economy just falls off a cliff.

Exactly.

That combination created the perfect storm for the massive economic shock we now call the Great Recession.

It really hit with a thunderclap in 2008.

What was the trigger?

It started with the housing price bubble bursting.

For years, housing prices had just gone up and up.

This led to widespread defaults on these things called subprime mortgages.

Loans to people with shaky credit, right?

Precisely.

When they started defaulting en masse, it triggered this global financial crisis.

Banks realized they were holding trillions in toxic assets.

Credit markets froze.

And it culminated in September 2008 with the monumental collapse of Lehman Brothers, a giant investment bank.

Panic.

Okay, let's slow down there because that collapse was huge.

The market just seized up and the government had to step in like on a scale we hadn't seen before.

Unprecedented scale.

The Bush administration, interestingly, nationalized the mortgage giants, Fannie Mae and Freddie Mac, took over the massive insurance company AIG because it was deemed too big to fail.

And then TARP.

Yes.

Then Congress, in this atmosphere of absolute panic, passed the $700 billion Trouble Assets Relief Program, TARP, basically to bail out banks and corporations, hoping to unfreeze credit and prevent a total meltdown.

Just an extraordinary moment.

And right in the middle of all this financial chaos, we have the historic 2008 election.

Incredible timing.

And Barack Obama, with his really unique cosmopolitan background, his message of hope and change,

he won a sweeping victory, fueled especially by young voters, minority groups, became the nation's first African American president.

A truly historic moment.

Yeah.

And his immediate focus had to be the economy, right?

Absolutely.

Job number one.

His first 100 days saw the passage of the American Recovery and Reinvestment Act, a nearly trillion dollar stimulus package.

Lots of infrastructure spending, aid to states, tax cuts.

And the auto bailout.

That was controversial.

Hugely controversial.

But the Obama administration pushed through government interventions to save General Motors and Chrysler from bankruptcy.

Ultimately, most agree it was successful in saving the U .S.

auto industry, but it was a political fight.

So did the stimulus work.

Well, the economy did stabilize by late 2009, but the recovery was just incredibly slow and sluggish, which is why economists ended up calling it the Great Recession, not just a regular recession.

The pain lingered for years.

Beyond the immediate crisis, Obama pushed for some big systemic reforms, too.

He did.

Two massive legislative achievements stand out, both passed in 2010 with only Democratic votes, by the way.

First, the Patient Protection and Affordable Care Act, the ACA or Obamacare.

Right.

What were the key parts of that again?

It mandated that most individuals had to purchase health insurance.

It created these online marketplaces or exchanges to buy it.

Crucially, it prohibited insurance companies from denying coverage based on pre -existing conditions.

A huge deal for many people.

Absolutely.

And it allowed young adults to stay on their parents' insurance plans until age 26.

Really changed the landscape of American health care.

Okay, that was one.

What was the second big one?

The second was the Wall Street Reform and Consumer Protection Act, usually just called Dodd -Frank.

Aimed at preventing another 2008.

Exactly.

It tried to curb the kind of risky speculative practices that had led to the crash.

It put new controls on banks and financial institutions, created the Consumer Financial Protection Bureau,

another major overhaul.

But those huge reforms, especially the ACA,

they triggered an immediate and pretty fierce backlash, didn't they?

Oh, fierce is the word.

Almost immediately, you saw the rise of this conservative grassroots movement, the Tea Party.

Yeah, town halls, protests.

They were incredibly energized,

vehemently opposed to what they saw as socialism government overreach, and especially the ballooning federal deficits caused by the bailouts and stimulus.

They pushed the Republican Party significantly further to the right.

And that led straight to gridlock.

Pretty much instantly.

The 2010 midterm elections were a landslide for Republicans, giving them control of the House.

And that ushered in an era of intense political polarization and gridlock.

It even culminated in a 16 -day federal government shutdown in 2013 over funding for the ACA.

Just couldn't agree.

Wow.

Okay, switching to foreign policy under Obama.

Yeah.

He came in wanting to end the wars.

Bush started, right?

That was a major promise.

He formally ended combat operations in Iraq in 2010 and completed the full troop withdrawal by the end of 2011.

What about Afghanistan?

Afghanistan was trickier.

He actually authorized a troop surge there in 2009, trying to stabilize the country before drawing down.

But he did pledge a gradual withdrawal throughout his second term.

But he also had a pretty dramatic success against al -Qaeda.

Absolutely.

The killing of Osama bin Laden by Navy SEALs in Pakistan in May 2011, that was a huge moment, fulfilling a promise going back to 9 -11.

Though his administration also faced criticism on the security front, particularly around drones.

Yes.

The use of drone warfare expanded significantly under Obama.

While effective in targeting militants, it sparked real controversy, especially over targeted killings, including in a few rare cases, American citizens overseas without trial.

That raised those civil liberties questions again.

So back home,

the economy is recovering slowly, politics are gridlocked,

and the issue of inequality really comes to the fore.

It does.

As the recovery crawled along, chronic unemployment and just weak growth really sharpened the national debate over class and fairness.

In 2011, you get the Occupy Wall Street movement popping up.

We are the 99%.

I remember that slogan.

Exactly.

That slogan really captured the public mood and drew attention to this genuinely alarming trend in economic inequality.

The book has data on this, right?

Figure 40 .4.

It does.

And the numbers are stark.

It shows the share of national income going to the top 1 % of households just surged dramatically.

It went from about 8 or 9 % back in the late 60s to over 20 % by 2016.

20 % of all income to the top 1%.

Yeah.

Meanwhile, wages for most working and middle -class families basically stagnated for decades.

The text points out the US was actually falling behind other developed nations on measures of income equality and poverty reduction, driven by things like globalization, the decline of manufacturing, the rise of finance and high tech.

So massive economic shifts happening.

At the same time, there were huge social changes too.

Absolutely.

Culturally, the early 21st century saw some landmark shifts.

In 2015, the Supreme Court delivered its ruling in Obergefell v.

Hodges.

That was the same -sex marriage case.

That's the one.

It granted constitution protection to same -sex marriage nationwide, a watershed moment for LGBTQ rights.

But at the same time, racial tensions seem to be really boiling over.

Severely exposed, yeah.

You saw the rise of the Black Lives Matter movement really gaining traction after events like the killing of Trayvon Martin in Florida and then subsequent high -profile police killings of unarmed Black individuals.

It brought issues like police violence and mass incarceration right into the center of the national conversation.

It did, highlighting the disproportionate impact of the justice system on Black men, leading some scholars and activists to call mass incarceration the new Jim Crow.

A really intense and vital debate.

And circling back to that security versus liberty tension we talked about earlier,

it blew up again, didn't it, in 2013?

It sure did.

With the Snowden revelations, Edward Snowden, who worked as a contractor for the National Security Agency, the NSA.

Right.

He leaked all those classified documents.

Ties of them.

And they exposed the sheer scale of the NSA's secret surveillance programs, monitoring the digital communications, emails, phone records, internet activity of millions of Americans and people globally.

So the government argued it was necessary for security to stop terrorists.

Right.

But the revelations sparked this huge impassioned debate all over again about privacy, government secrecy, and just how much liberty Americans were willing to sacrifice, perhaps unknowingly, in the name of security.

Okay, so you have all these fault lines deepening.

Economic inequality,

racial tensions, debates over government power and surveillance, plus the ongoing political polarization.

Which brings us to the, well,

truly astonishing election of 2016.

Astonishing is a good word for it.

The Democratic nomination went, as expected, to Hillary Clinton, former first lady, senator, secretary of state.

Very experienced.

But the Republican side was chaos.

Total chaos.

The nomination was captured by the billionaire real estate developer and reality TV star, Donald J.

Trump.

Someone with absolutely zero prior political or military experience.

Unprecedented for a major party nominee.

And its campaign was unlike anything we'd seen.

Totally.

Very populist, nationalist.

He promised to build a wall on the Mexican border, repeal the ACA, Obamacare,

impose tariffs, and generally drain the swamp in Washington, D .C.

Very anti -establishment.

And then there's the whole issue of foreign interference.

Yeah, that added another explosive layer.

American intelligence agencies concluded pretty definitively that Russian government hackers interfered in the election.

Primarily by stealing and then releasing internal emails from the Clinton campaign, often through WikiLeaks.

Which just poured gasoline on the already raging partisan fires online and in the media.

Absolutely.

Exploited the polarized environment perfectly.

And the outcome itself.

It was a paradox, wasn't it?

A perfect illustration of the nation's deep divisions.

Hillary Clinton won the popular vote by nearly 3 million votes.

A significant margin.

But Trump won the election.

But Trump won the presidency.

She did it by narrowly winning the electoral college, taking key states like Pennsylvania, Wisconsin, and Michigan by very thin margins.

The book has a map, map 40 .5, that shows this really clearly, right?

It does.

And it's incredibly revealing.

It shows this stark geographic divide.

Prosperous urban areas, especially on the coasts, voted heavily Democratic for Clinton.

But rural areas, the interior of the country, places feeling economically left behind, they voted overwhelmingly Republican for Trump.

It really looked like two different nations, based on geography, economics, and ideology.

That's how many described it.

Two nations, deeply divided.

So Trump takes office.

Yeah.

What were the early days of his administration like?

Well, chaotic is probably the fairest description, marked by incredibly high turnover of key officials, constant controversies, and internal battles.

They also failed, despite controlling both houses of Congress, to achieve their number one legislative goal, repealing and replacing the ACA.

Couldn't get the votes within their own party.

But they did manage one major legislative win, didn't they?

Late in 2017.

They did, a massive one.

The Tax Cuts and Jobs Act.

It passed in late 2017, and it represented a sweeping overhaul of the tax code, most notably slashing the corporate tax rate permanently, and providing temporary cuts for individuals.

And notice the pattern here.

How did that pass?

Purely on party lines.

Not a single Democratic vote in favor.

Just like the ACA passed seven years earlier with only Democratic votes, it perfectly mirrored that partisan dynamic.

And in foreign policy, Trump moved quickly to implement his America First agenda.

Immediately.

Pulled the U .S.

out of the Paris Climate Accord on climate change, withdrew from the Trans -Pacific Partnership trade deal, sharply criticized longstanding alliances like NATO,

questioned international agreements generally.

It really threatened to dismantle much of the post -World War II international order that the U .S.

itself had largely built and led for decades.

Wow.

Okay.

So we've covered almost two decades of immense change, crisis, and deepening division.

If you had to synthesize this whole era, 2001 to 2018, what's the big picture takeaway?

I think the period is really defined by maybe three overarching things.

First, this dramatic, sustained widening of the wealth gap we talked about.

Real, measurable economic divergence.

Second, profound and chronic distrust.

Not just in major institutions, government, media, banks, but increasingly distrust between fellow citizens across political and cultural lines.

That feels very accurate, unfortunately.

It does.

And third, this perpetual, seemingly irresolvable struggle to define America's role in the world post -Cold War, post -911, while also managing increasing diversity and division here at home.

And the text makes clear the essential challenges facing the country, things like inequality, climate change, civil rights, political polarization.

They weren't solved.

They persisted, often with even greater fervor.

That's a really powerful summary of a tumultuous time.

We've covered wars, economic crashes, cultural revolutions, major political shifts.

Just an incredible amount of ground today.

We really have.

So the final challenge, the final thought we want to leave you, the listener, with is this.

The chapter in our discussion really emphasizes the deep divisions and, frankly, the information warfare that characterized the mid -2010s, especially peaking around 2016.

Think about this.

How does that level of political fragmentation, that sense of maybe irreconcilable differences, compare to the struggles for national unity and cohesion seen in earlier, truly foundational moments of U .S.

history, like the revolution or the Civil War or maybe the 1960s?

That's a great question to ponder.

How unique is this moment, really?

Exactly.

Something to definitely mull over as you digest all this information.

It's been a huge period to cover.

Thank you so much for joining us on this deep dive.