Congressman Pete Sessions (R-Dallas) has been churning out the quotable quotes.  First, he suggested that the Republicans need to launch a Taliban-style “insurgency” against Barack Obama and the Democrats.  Then, while still attempting to extricate foot from mouth, Pistol Pete accused Obama of deliberately attempting to push up the unemployment rate, drag down Wall Street and destroy American capitalism.

This is the same Texas politician who denounced Janet Jackson for forcing her “liberal values” on conservative Americans by flashing at the Superbowl  then organized a fundraiser at a raunchy Las Vegas Gentleman’s Club.

In Mr. Sessions’ defense it should be noted that historical precedent exists for politicians conspiring to increase unemployment (permanently) even if it meant a weakened stock market.

The year was 1979 and for the first time since the WWII American profits were sagging in comparison to the European and Asian competition.  Meanwhile, wages were soaring and so was inflation.  Something had to be done.

Desperate for a quick fix, Jimmy Carter appointed Paul Volcker chairman of the federal reserve.  When Carter was eclipsed by Ronald Reagan a year later, Volcker and his tough economic remedies lived on.  By creating a largely artificial recession, Volcker and associates placed extreme downward pressure on wages, weakened the union movement and set the stage for the surging profit margins that were the hallmark of the next three decades.

By outsourcing manufacturing jobs to the developing world, American business ensured that domestic wage-earners would never recover the leverage they enjoyed during the halcyon days of the 1960s.  Thus we have seen a gradual widening of the gap between the haves and the have-nots.  There was nothing accidental about all of this; it was perfectly intentional.

What is more, the anti-labor, pro-business policies Volcker instituted enjoyed solid bipartisan support.  So did the war on drugs and the mad rush toward mass incarceration.  The prison boom and the welter of new felonies and draconian sentencing guidelines churned out by tough-on-crime politicians were an inevitable response to an immense surplus population created by neo-liberal economic policies.  Across America, inner city ghettos expanded or were created from once-thriving neighborhoods. 

This is an over-simplification, of course.  There was a lot more going on in America than tycoons and their political employees driving up profits by driving down wages.  The anti-civil rights backlash Rick Perlstein chronicles in “Nixonland” was also part of the mix.  Racism and cognitive dissonance created a twitching vein in America’s furrowed brow, allowing mean-spirited politicians to sell mass incarceration as the New Jim Crow. 

But at the heart of the prison-buidling boom lay the universally acknowledged necessity of making America safe for business.  According to the received wisdom of the age America couldn’t have goodpaying jobs for everybody.  High levels of unemployment were the price you paid for prosperity.  If that meant locking up the surplus population, so be it.

Of course, nobody wanted to put it that indelicately; hence the war on drugs.  By sucking all legitimate enterprise out of the inner city, American policy makers created a thriving underground economy.  If you want to see the outworking of all this rent a season or two of The Wire.

I don’t see a groundswell of interest in criminal justice reform out there.  On the other hand, I don’t hear a lot of politicians beating the tough-on-crime drum either.  The collapse of the old paradigm has opened the door to Keynesian job creation policies.  In the midst of the deepest recession since the 1930s, America can no longer afford its Gulag.  Crime was once the number one issue on the political calendar; post 9-11 it hardly registers.

Barack Obama isn’t trying to destroy Wall Street; but there are no guarantees that he will be able to save it either.  When the bubble bursts you can’t pump it back up.  An economic boom built on speculation and Ponzi scams holds little appeal for most Americans–at least for the moment. 

But lets face facts.  In the 1980s America stopped building televisions and started building prisons.  The two developments were intimately related.