Why Everything Feels Broken — And Who Broke It

Why does everything feel so broken — housing, healthcare, the sense that the economy works for everyone but you? It didn't happen by accident. As season 2 begins, I go back to Franklin Roosevelt's forgotten "economic bill of rights" — the promise of a living wage, a home, and healthcare for every American — and trace how it was deliberately dismantled over fifty years, by both parties, until we forgot it ever existed.   This is the story of what we lost — and the fight to get it back. 

Check out my substack page where I tackle some of the episode topics in depth and write about other issues our country and the world are facing today. https://substack.com/@ktdpodcast 

Transcript

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We have come to a clearer realization of the fact, however, that true individual freedom cannot exist without economic security and independence. Necessitous men are not free men. People who are hungry, people who are out of a job are the stuff of which dictatorships are made That was Franklin Delano Roosevelt from a speech in 1944, speaking words that are as true now as they were back then Welcome back to Khannecting the Dots. I've been away for a few months doing a lot of reading and a lot of thinking about what I wanted this second season to be, and this is it. Our system is broken. We are living in a world designed to benefit the few at the expense of the many. We had a chance at something better, and it was taken from us on purpose. That's what this season is about, what we lost and the fight to reclaim it. Because here's the thing about that fight. It's old, older than this country, as old as human history itself. And every time real progress gets made, those same forces go to work to undo it. That's exactly what we're living through right now, the culmination of a decades-long project to undo the real progress that had been made in this country. This is the story I've wanted to tell, and lately, for the first time in a while, I've had a real reason to feel hopeful about where it might lead because that old fight is being picked up again right now, today. Progressive candidates running on the very ideas we've been told for decades are radical, unrealistic, un-American are winning. In New York, three congressional candidates backed by Zohran Mamdani all won their primaries, beating incumbents endorsed by the party establishment and the House Democratic leader himself. In California's Central Valley, Randy Villegas, a political newcomer backed by Bernie Sanders, beat the party's handpicked moderate even after more than two million dollars poured in to stop him. And in Sacramento, Mai Vang, a forty-one-year-old city councilwoman, overtook an incumbent whose family has held a seat for decades. And then at the end of June, in Colorado, twenty-nine year old Melat Kiros, a first-time candidate who'd never held office, unseated a fifteen-term incumbent in Denver. She ran on a simple charge that we are not living in a democracy, but an oligarchy, and that the Democratic Party had to reckon with its role in maintaining it. And they're not alone. Across the country, candidates running on economic justice are outrunning the establishment of both parties. Not everywhere, but in enough places to matter. For the first time in a long time, it feels that there might be a light at the end of a very dark tunnel. Not a way back to how things used to be, but a way forward. And that way forward isn't something I'm dreaming up on my own. There are people who have spent their entire careers studying what ails this country and our planet and thinking hard about how to fix it My goal is to take that work, which lives across a lot of different books, each making its own cohesive argument, and bring it together, organized into distinct arcs about what's gone wrong, and what it would take to make it right. And to add what I can from my own corner of it, what I've seen firsthand working in healthcare. Because I've seen the results of this broken system up close. Patients so desperate for shelter, they tried to stay hospitalized just to have a roof over their head. People whose depression wasn't just a chemical imbalance, it was a response to financial devastation. Things that no one in the richest country in the history of the world should ever have to endure. And over the years, it's only gotten worse. Seeing these things is what crystallizes for me a basic set of beliefs. That there are four fundamental rights every person must have. All people deserve a livable wage. Housing is a right, not a luxury. Healthcare should be guaranteed for all. And all people deserve to live in an environment that is safe and clean. These sound like basic ideas, things most people would agree with, and yet, in this country, they aren't guaranteed at all. Ideas like these have been championed by progressive leaders and movements almost since the founding of this nation. But the most striking expression of them came from the man you heard at the top of this episode, Franklin Roosevelt. In January of nineteen forty-one, with the world at war and America still climbing out of the Depression, Roosevelt stood before Congress and described what he called the Four Freedoms: freedom of speech, freedom of worship, freedom from fear, and the one that tends to get forgotten, freedom from want. The freedom to live without poverty, without deprivation, without the constant anxiety of not having enough. That was the vision. Three years later, he made it concrete. In his nineteen forty-four State of the Union, the speech you heard a piece of at the start, Roosevelt went further than any American president ever had. He argued that the political rights in our Constitution, speech, worship, a fair trial, were a good start, but on their own, they weren't enough to guarantee real freedom. And so he proposed what he called a Second Bill of Rights, an economic bill of rights. Listen to what he believed every American was entitled to. A second Bill of Rights under which a new basis of security and prosperity can be established for all, regardless of station or race or creed. Among these are the right to a useful and remunerative job, the right to earn enough to provide adequate food and clothing and recreation. The right of every farmer to raise and sell his products at a return which will give him and his family a decent living. The right of every businessman, large and small, to trade in an atmosphere of freedom, freedom from unfair competition and domination by monopolies at home or abroad. The right of every family to a decent home, the right to adequate medical care and the opportunity to achieve and enjoy good health. The right to adequate protection from the economic fears of old age, sickness, accidents, and unemployment. The right to a good education. That's not a fringe wish list. That's a president of the United States in 1944 telling Congress what every American had a right to. And listen again to one of them, the right of every business, large and small, to trade in an atmosphere free from unfair competition and domination by monopolies. Roosevelt understood that concentrated corporate power was a threat to our economic security But here's what happened to FDR's economic Bill of Rights: almost nothing. He died a little over a year later in April of 1945 before he could build any of it. And the fight over whether those rights would ever become real, that fight is, in many ways, the story of everything that's gone wrong in this country since. The story I'm going to lay out in this episode comes primarily from two books: Matt Stoller's Goliath: The 100-Year War Between Monopoly Power and Democracy, and Chris Hughes' Market Crafters: The 100-Year Struggle to Shape the American Economy. Between them, they give us the clearest, most thoroughly documented case I've found that the system didn't just fail us, it was designed to. To understand what we lost, you first need to understand what was actually built. The story begins before FDR. It begins with a Supreme Court justice named Louis Brandeis. Brandeis lived through the Gilded Age, the era of Rockefeller, Carnegie, and J.P. Morgan, men who had built empires so large they didn't just dominate markets, they shaped governments. Brandeis watched this and reached the conclusion that would define his entire career, that concentrated economic power is incompatible with democracy, that you cannot have political freedom without economic freedom. When corporations get too big, they don't just crowd out competitors, they capture the institutions meant to regulate them. He called it the curse of bigness, and he became an important intellectual influence on FDR before FDR ever took office. Roosevelt took that framework and turned it into a sweeping restructuring of American economic life. The New Deal wasn't charity. It was a deliberate, systematic effort to rebalance power in favor of ordinary Americans. Banks were regulated, monopolies were broken up, workers were given the right to organize. Social Security created a floor beneath which no American should fall. Public investment rebuilt the country's infrastructure. For the first time in American history, the federal government was explicitly, unapologetically on the side of working people. For it to work, the New Deal needed two things, a theory of money and a mechanism to deploy it. Both came from unlikely places. Marriner Eccles, a wealthy Utah banker, walked into FDR's Washington with an idea that upended everything the financial establishment believed, that the federal government didn't need to borrow money from private banks to fund itself, that it could create money directly. Eccles argued that a sovereign government, unlike a household or business, isn't limited by how much it can borrow because it's the source of the money in the first place. The real question, he said, was never whether we could afford to invest in people. It was whether the resources, the labor, the materials, the capacity actually existed to do it. Jesse Jones, another wealthy and by most accounts, not easy man to work with, put that kind of thinking into practice as head of the Reconstruction Finance Corporation, Deploying capital into communities, industry, and infrastructure that private markets had abandoned. Two wealthy men who looked at what their class was doing and chose a different path. By the standard that matters, did their choices make life better for everyday Americans? The answer for both is unambiguously yes. And then there was Wright Patman, who Stoller talks about extensively in his book. He was a Texas congressman who didn't come from wealth, academia, or the halls of power. He came from the people the New Deal was built to serve. Patman arrived in Congress in 1929 and almost immediately set his sights on the most powerful man in America, Andrew Mellon, one of the wealthiest men in the world. His fortune came from banking, oil, and aluminum. Think of him as the Elon Musk or Jeff Bezos of his day, except that he also served as Treasury Secretary under three consecutive presidents. This gave him unprecedented financial power and influence, shaping policy his own interest and that of the oligarchy, while millions of Americans suffered. He was the living embodiment of everything Brandeis had warned about. On January 6th, 1932, Patman stood on the floor of the House and on his own authority impeached Andrew Mellon for high crimes and misdemeanors. The formal impeachment didn't succeed, but Patman created enough controversy, enough public exposure, that Mellon eventually resigned. A congressman from rural Texas with a prosecutor's instincts had just driven the most powerful banker in America out of office. That was just the beginning. For the next four decades, Patman used his position on the Banking Committee as a wall, blocking financial deregulation, bill after bill, investigating the Federal Reserve, fighting concentrated banking power when both parties were gradually moving toward accommodation. He understood that the New Deal wasn't just a set of programs. It was a framework for who government serves. What these men built together was remarkable, but it was still far from perfect, and we have to be honest about that. The New Deal's benefits were denied to Black Americans and other minority groups. Agricultural workers and domestic workers were excluded from Social Security, a deliberate choice that disproportionately affected Black and Latino workers in the South. The GI Bill was implemented in ways that locked minority families out of the wealth building it provided to white families. These weren't oversights. They were deliberate compromises FDR made to hold together a coalition that included Southern Democrats who were determined to preserve white supremacy. That failure is part of the story But even with those profound moral failures, the foundation they laid, regulations, labor rights, basic guarantees, eventually produced the most broadly shared prosperity in American history, most of which occurred in the decades after the Second World War. Inequality fell to historic lows. The middle class expanded. Wages rose with productivity. For a generation, the economy actually worked for many Americans. And importantly for us today, this is proof of concept. We did this before, which means we can do it again Stoler documents what happened next with the kind of clarity that can make you angry. Because what was done to the New Deal wasn't drift. It wasn't the natural evolution of politics. It was a deliberate generational project, and it started almost immediately after FDR died. Corporate interests never accepted the New Deal. They tolerated it because they had to, because it was too popular, too embedded, and because there were people like Patman standing guard. But they never stopped fighting it, and they understood something the New Deal's defenders didn't. A program this popular couldn't be beaten head-on. It had to become reviled in the eyes of everyday citizens. And to do that, they attacked it from several directions at once. What they built over the next several decades worked because three separate forces came together, each devastating on its own, but unstoppable in combination. Think of it like a three-legged stool. The first leg was an idea, an intellectual case that markets should rule and government should get out of the way. The second was a cultural weapon, a way to make the idea untouchable and anyone who supported it suspect. And the third was a capture of the institution themselves, the courts most of all. The first leg, the idea, came out of the economics department at the University of Chicago. In the late 1940s, a group of economists began building what would become one of the most consequential intellectual projects in modern American history. One of its best-known figures was Milton Friedman, who would become the most influential economist of the twentieth century. Friedman argued that a corporation's only obligation is profit, that markets left alone produce the best outcomes, that government intervention in the economy isn't just inefficient, it's a threat to freedom itself. And in 1976, the profession gave him its highest honor, the Nobel Prize. He won it for narrow technical work, but it made him the most celebrated economist alive, and it made his worldview look less like ideology and more like settled science. But perhaps the most insidious damage came from the other direction. John Kenneth Galbraith, a Harvard economist who presented himself as a progressive, a liberal, a friend of the working person. He had nothing to do with the Chicago School ideologically, and yet Stoller identifies him as one of the era's most consequential enablers precisely because of that positioning. Galbraith argued that concentrated corporate power was here to stay, that trying to break up the monopolies was futile, even naive. The answer, he said, was to accept them And to balance them with other big forces, big labor, big government. Friedman told us to trust the market. Galbraith told us to stop fighting the giants. And between them, they left the New Deal tradition, the one that said break concentrated power up, with nowhere to stand. But ideas can be debated. Fear can't, and fear was the second weapon. Corporate interests had one ready: the Red Scare and its public face, Senator Joseph McCarthy. Waving lists of supposed communists, destroying careers on accusation alone. But McCarthy was a front man. Behind him stood money. Texas oil millionaires were among his most devoted backers. They kept him supplied with cash. And when one of them bought the senator a Cadillac and McCarthy wrecked it, they simply bought him another. McCarthy provided the spectacle and concentrated wealth, picked up the tab. Suddenly you didn't need to argue against a living wage on its merits. You just called it socialism. You didn't need to defend concentrated power. You just called its opponents communists. The New Deal itself, Social Security, labor rights, banking regulation, was recast as un-American, as Soviet. It made the language of economic rights toxic, and the people who believed in it suspect. The Red Scare didn't end with McCarthy. The weapon, branding any demand for economic justice as un-American, as communist, got used for decades, and it still is. And one of its clearest targets was a man we now honor with a national holiday. We remember Martin Luther King Jr. for the dream and the march, but that's not where his story ends. On April fourth, nineteen sixty-seven, one year to the day before he was killed, King stood at Riverside Church and called on America to shift from a thing-oriented society to a person-oriented society. He named what he called the giant triplets: racism, materialism and militarism. He had stopped talking only about civil rights and started talking about economic power, poverty, a war machine that robbed the poor to feed itself. The economic rights FDR had named but never built. The establishment turned on him overnight. He lost President Johnson. He was condemned by 168 newspapers, The New York Times and The Washington Post among them, many reviving the old whisper that he was tied to communists. And the FBI, which had watched him for years, escalated. He had become a far greater threat to the government the moment he stopped talking only about race and started talking about money and power Same label, same machine. The closer he got to the economic root of it, the more dangerous he became. While ideas and fear were deployed to discredit the New Deal, work was underway on its replacement, and to make that replacement permanent, they needed the courts. And here too, the trail leads back to Chicago. Aaron Director, Friedman's brother-in-law, and a law professor at the University of Chicago, worked quietly building the legal framework that would translate these ideas into courtrooms and government policy. He published almost nothing himself, but his influence shaped generation of jurists, including future Supreme Court Justice Antonin Scalia and Chief Justice William Rehnquist. He built a pipeline from the classroom directly into the highest court in the land. And one student in particular, Robert Bork, would do more to dismantle American antitrust law than anyone in the 20th century. Bork took that framework and applied it to antitrust, arguing in the antitrust paradox that monopolies are acceptable as long as consumer prices stay low. Brandeis' curse of bigness became, in Bork's telling, a blessing. And it wasn't just theory. The standard Bork built still governs American antitrust law today. It's a central reason a handful of corporations have been allowed to swallow entire industries While all of this was happening in academia and the courts, the corporate world was building its own strategic infrastructure. Lewis Powell was a prominent corporate lawyer and tobacco industry advocate who understood better than almost anyone how to wield institutional power on behalf of concentrated interests. In nineteen seventy-one, just two months before being confirmed to the Supreme Court, he wrote a confidential memo to the US Chamber of Commerce. He titled it Attack on American Free Enterprise System, and it was exactly what it sounds like, a call to arms. Powell argued that business needed to stop playing defense and mount a coordinated long-term campaign to take back the institutions that shaped American life, the universities, the media, the courts, the political system itself. The Powell Memo, as it came to be known, became the strategic blueprint for the modern conservative movement, the nineteen seventies version of Project twenty twenty-five. It found its audience among the wealthiest right-wing donors in the country, the Koch brothers chief among them. And over the next fifty years, they funded exactly what it called for, the think tanks, Heritage, Cato, the Manhattan Institute, the endowed university chairs, the legal networks that trained a generation of judges to see the world the way business did. Powell himself spent fifteen years in the Supreme Court, but the ultimate consequence of the unchecked corporate power Brandeis had warned about came later, And it came from the machine Powell helped build. In two thousand and ten, a court led by Chief Justice John Roberts, a Rehnquist clerk raised in the Reagan legal movement, decided Citizens United, ruling that corporations could spend unlimited money to influence American elections. But Roberts didn't just go along with it, he engineered it. A century after Brandeis, concentrated economic power had finally captured democracy itself. Citizens United made it the law of the land. That's how the machine was built, assembled over decades, mostly out of public view, and the machine has a name, neoliberalism. A revival of an old nineteenth century idea that markets should be free from government control. Updated for the modern world. Markets treated as natural and inevitable, and any democratic check on them treated as dangerous. From the nineteen seventies on, it didn't stay in the think tanks and the law schools. It became how both parties governed. Looking back, you can see it operating in our politics, administration by administration. And a good place to start is the moment the last New Deal Democrat with real power was pushed aside. By the mid-1970s, the country was reeling. Stagflation, Vietnam, Watergate, and a new generation of Democrats had come into power who'd already absorbed the new thinking. They'd stopped believing in what their party had built, and in 1975, they made it official. They stripped Wright Patman, the man who had impeached Andrew Mellon, who had held the line for four decades of his banking committee chairmanship. The party that built the New Deal had just dismantled one of its last great defenders. A year later, Jimmy Carter became the first Democratic president to govern by the new rules. To his credit, Carter signed the International Treaty on Economic Rights, the one guaranteeing work, housing, healthcare, education, and submitted it to the Senate. The Senate refused to ratify it, and it has refused ever since. One reason? It sounds too much like socialism. But signing a treaty is one thing. Governing is another. Because here is some of what Carter actually did. He deregulated the airlines, trucking, and banking, stripping away New Deal-era rules that had protected workers and small operators from the giants. It put union jobs in jeopardy. It let monopolies form. And it freed banks to take the kinds of risks that would later cost us all, all before Reagan ever took office. The dismantling started with the Democrats. Then came Reagan, who took it to another level entirely. He didn't just cut programs. He delegitimized the whole idea behind them. "Government is not the solution," he said. "Government is the problem." He broke unions. He slashed housing. He gutted mental health services and put people on the streets. And he made the case more effectively than anyone before him that government acting on behalf of ordinary people was somehow un-American. Reagan's assault was devastating, but what made it permanent was what came next. Because the Democrats who followed didn't reverse it. They embraced it. Bill Clinton came into office promising to be different, and in some ways he was, but not in the ways that mattered here. He signed NAFTA, sending manufacturing jobs overseas. He repealed Glass-Steagall, the New Deal law that for 60 years had kept ordinary people's savings separate from Wall Street's gambling, and in doing so, lit the fuse on the 2008 collapse. He signed welfare reform and called it the end of welfare as we knew it Clinton didn't fight the Reagan consensus. He completed it, competing with Republicans to prove Democrats could be just as friendly to Wall Street. Which brings us to two thousand and nine, the worst financial crisis since the Great Depression. A Democratic president, a Democratic Congress, and a country angry enough to demand real change. Barack Obama had the moment FDR would have recognized and the mandate to use it. He didn't. instead of confronting the banks that caused the crash, he made them whole and left ordinary people to fend for themselves. Millions lost their homes. The banks were bailed out and back to profitability within a year. But it was a K-shaped recovery, up for those at the top, flat or down for everyone else. To be fair, there were real accomplishments. On paper, the economy did recover. Growth returned. Unemployment continued to fall. Regulations were tightened. The Consumer Financial Protection Bureau was created. The auto industry and millions of jobs were saved. But by the standard I used for Eccles and Jones, did it make life demonstrably better for everyday Americans? The answer is at best uncertain, and for millions it was a no. And here's the part that really stuns me. When Obama was asked why he didn't do more, why he didn't go after the banks, why he didn't fight for the people losing their homes, he didn't try to justify his approach. He decided to criticize FDR. Stoller documents his answer, and it came straight out of the other side's playbook. Obama said that FDR had waited too long, let the crisis deepen for political advantage. His Treasury Secretary, Tim Geithner, piled on, faulting FDR for not doing more to help the outgoing Hoover administration. And then Geithner praised Alexander Hamilton, the architect of concentrated financial power in this country, as the original Mr. Bailout. He meant it as a compliment. The icing on the cake was Bill Clinton, half the people in Obama's administration. He sat down with Geithner and mocked what he called the bloodlust of ordinary Americans, the people who wanted to see the bankers who wrecked the economy face some kind of justice. Bloodlust. That was the word for wanting accountability. Let that sit for a second. A Democratic president in the worst crisis since the Depression didn't just fail to summon FDR. He'd absorbed the case against him. And the men around him didn't just disagree with the people demanding justice. They sneered at them. The project that began in the Chicago classroom, that ran on corporate money and manufactured fear, that captured the courts, was now complete. So complete that the Democratic Party's own leaders had taken it for truth. That's the through line. From Patman pushed out in 1975 to Obama criticizing FDR in 2009. The New Deal Democrats who might have fought back were gone. Retired. Defeated. Or converted. By the time the country needed them most, there was almost no one left who even remembered what they'd been fighting for. So that's how we got here. Half a century of careful, deliberate work, and we are living in the wreckage of it. The homelessness on our streets, the medical bills that bankrupt people, wages that haven't kept pace with the cost of living in two generations. A planet we're poisoning. A prison system bigger than any on Earth. These aren't separate problems. They're symptoms of the same disease: the deliberate dismantling of the one framework this country ever built to put people ahead of concentrated power But here's what I need you to hold on to. None of this was inevitable. It didn't have to be this way. This was a choice made by a handful of people who understood exactly what they were doing and then sold it to the rest of us over decades until we started to believe it ourselves and defend the very system that has been failing us. But a thing that was done on purpose can be undone. We know that because we've done it before. Not perfectly, with real failures we shouldn't gloss over, but it still worked. We checked the power of monopolies. We gave workers a seat at the table. We invested in ordinary people. And for a generation, it produced the broadest prosperity this country has ever seen. That's not a dream. It's history. It happened. And the idea behind it never fully died. It got buried. It got smeared. But there have always been people trying to keep it alive. Jesse Jackson, who ran for the Democratic nomination on economic justice and won seven million primary votes and was still treated as a fringe figure. Bernie Sanders, saying the same things for forty years to a country that mostly wasn't listening. They were called communists, socialists, radicals. It never much mattered what they actually stood for. The label did the work. But after two thousand and eight, after people watched the banks get saved and themselves get nothing, they started to listen. Sanders' twenty sixteen campaign became the most successful grassroots presidential run in modern American history. And by twenty twenty, Joe Biden, who openly said he wanted to be the next FDR and got mocked for it, actually tried. For all his faults, and there were many, his was the first administration in two generations to reach for something close to what FDR had built. Imperfect, unfinished, often blocked, but it reached. And now these ideas are breaking through. That's the hope I told you about at the start. That's why those candidates winning right now matter so much. Not just because they're winning, but because of what they're winning against. Just look at what happened when Democratic socialists swept those New York primaries. The reflex was immediate. Party centrists released a letter to announce, "We are capitalists, not socialists." Because these candidates are up against more than an opponent or a party. They're up against a neoliberal machine generations in the making, built for the express purpose of making their ideas unthinkable. But that machine is losing its grip We don't need a repeat of the New Deal. That world is gone. The economy is different. The climate is threatened. And technology FDR could never have dreamed of is reshaping everything. But listen to his economic Bill of Rights again. Most of it still holds. The principle underneath it, that government exists to serve people, not concentrated power, that economic security is the foundation of real freedom, holds as true now as it did when Brandeis warned us and when Roosevelt named it. So that's what this season will be about, arc by arc. Homelessness, the economy, healthcare, the environment, the carceral system. I'm gonna analyze the machine and show you how it works, And then I wanna talk about how we fix it, what a way forward actually looks like, built for the world we live in now. Let's get to work Thank you for listening to another episode of Khannecting the Dots. If you liked this episode, Please consider subscribing, sharing, and leaving a review. Until next time, stay curious, stay critical, and stay connected