A Realist's Guide to the American System

Friends,

I’m devoting the next several Fridays to what I’m calling a “Realist’s Guide to the American System.” If you hadn’t noticed, almost everything’s going to hell.

Why? Trump is horrendous, but he isn’t causing all the failures of that system. He’s a consequence of that system. Think of him as a boil on its backside — an infected pustule on the giant ass of the American system. The boil would have become infected eventually because of deeper flaws in how the system has evolved.

The best way of beginning is to introduce you to Jamie Dimon.

Jamie Dimon

In the spring of 2018, Jamie Dimon phoned me at my office at the University of California, Berkeley. I had criticized him publicly, and he was not pleased. He sounded off on the phone for several minutes without stopping.

Dimon has a great deal of influence over the system. He heads the largest bank on Wall Street, JPMorganChase, which survived the 2008 financial crisis better than any other big bank. After the crisis, The New York Times gave Dimon the back-handed compliment of being “America’s least-hated banker.” He has also headed the Business Roundtable, a lobbying group of the most powerful CEOs in America. He is featured regularly on cable news and in the business press. His opinions carry significant weight on Capitol Hill.

Dimon describes himself as “a patriot before I’m the CEO of JPMorgan.” He is a lifelong Democrat. He admirably speaks out about the injustices and inequalities of contemporary America. He is not just talk. He has pushed his bank to invest in poor cities and to create better opportunities for the disadvantaged.

I believe he’s sincere. But he is awash in self-delusion, a condition especially dangerous in people who have significant power over others.

Dimon doesn’t see how he has contributed to the mess we’re in. He doesn’t acknowledge the inconsistencies between his preferred self-image as “patriot first” and his roles as CEO of America’s largest bank and former chairman of the Business Roundtable. He doesn’t understand how he has hijacked the system.

Dimon is emblematic of an abdication of public responsibility to maintain the health of our political-economic system at a moment when a comparative few at the top have more power over it than at any time in over a century.

They have used their power to give themselves unprecedented wealth, which has bought them even more power. They have justified their wealth and power as being in the interest of the public, but the public has been shafted.

Dimon is among the most capable of American CEOs, adept at promoting and defending his corporation. He also understands some of the failings of the system and has called for some useful reforms. If he weren’t running JPMorgan, someone else would be, and probably not doing so nearly as well.

Nonetheless, a big part of Dimon’s job is to siphon off the gains of the economy for the benefit of a few at the top. As he does this, he’s eroding trust in the system. He’s undermining democracy.

This is how we got into the quagmire we’re in. Dimon is simply playing his part in the current system as it has evolved. He’s responding to how incentives within the system are designed.

To the extent Dimon or others like him are blameworthy, the fault lies in their unwillingness to buck these incentives in order to change the system for the well-being of the vast majority.

This may be an unrealistically high bar. Dimon has no legal obligation to reach it. But I believe he has a moral duty to try to change the laws and incentives so no one ever again can become as rich and powerful as he and his fellow CEOs at the Business Roundtable and as other major financiers on Wall Street. He has a moral obligation to ensure that the American system is no longer rigged in favor of people like him.

I’ll return to Dimon next week, but right now I want to talk about the consequences of all this.

The enshittification of America

Millions of Americans, whether on the left or right of the political spectrum, know something has gone profoundly wrong.

The concentration of wealth in America has created a political system in which the super-rich can buy Congress and the presidency, an education system in which they can buy admission to college for their children, a healthcare system in which they can buy care others can’t, and a justice system in which they can buy their way out of jail.

Almost everyone else has been hurled into a dystopia of bureaucratic arbitrariness, corporate greed, and the legal and financial sinkholes that have become hallmarks of modern American life.

The term “enshittification” was coined in 2022 by novelist Cory Doctorow to describe the declining quality of almost everything. Monopolistic corporations are charging more for the products they sell and cutting back on services. Stuff breaks more often than it used to. Government is being starved of tax money to provide even the most basic of public services.

The whole system seems to be collapsing in on itself.

The word “enshittification” has been officially incorporated into major lexicons like the Merriam-Webster dictionary because of people’s increasingly common experience of being crapped on by big corporations, big hospitals, big energy, and big insurance, and of being bogged down in seemingly endless legal quagmires of corporate and government bureaucracies. As the New Yorker put it, we live in the “Age of Enshittification.”

The advent of AI has highlighted the possibility of mass unemployment and also the growing impossibility of boosting workers’ share of both corporate and national income.

The oligarchs who are now spending hundreds of billions of dollars developing AI — with funds funneled to them by Jamie Dimon and others on Wall Street — have done everything in their power to keep workers’ wages low, prevent them from organizing or joining unions, and stop them from having more political power, and they’re now funding campaigns to protect their fortunes against higher taxes on capital income and wealth.

This mammoth, systemic dysfunction is generating a great deal of heat — anger, frustration, and outrage. That anger is a major reason why Trump became president, twice (even though he has further enshittified America and much of the world).

Heat in any system signals potential change. Like tectonic plates causing earthquakes and volcanoes as they crash into each other, heat is a sign of underlying tumult. In today’s America, the status quo is unsustainable. Subterranean tensions are building.

Trump exploited those tensions for his own malignant ends. But even if Trump is replaced by someone who’s noble, humble, and talented, and who cares more about America than himself — in other words, someone who’s the opposite of Trump — we’d still be in trouble.

The system is out of whack. It needs fundamental change.

The 16 Realities

If you want to understand why the American system has become so dysfunctional, and what you might do to help it to meet the needs of average people, you need to reassess many of your likely assumptions about it.