America's World After 9/11, 2001-2007

The September 11 terrorist attacks shut down the nation and left people around the world in a state of confusion, fear, disbelief, and helplessness. The federal government grounded all commercial airliners for several days, stranding tens of thousands of travelers in Europe, Asia, and throughout the United States. The White House and the U.S. Capitol were evacuated, and tall buildings throughout the country emptied. The New York stock exchanges closed for a week. Meanwhile, Americans struggled to understand Osama bin Laden and the brand of Islamic extremism that he and his followers espoused. A wave of patriotism swept the nation as many Americans put aside political and cultural differences in favor of a unified patriotic front. But when the identities and origins of the terrorists became public knowledge, Arab Americans became the target of much discrimination and some violence.

In the hours and days following the 9/11 attack, New York City’s leaders and its citizenry began a grim vigil. When city officials shut down the public transportation system on the day of the attack, hundreds of thousands of New Yorkers could be found walking the streets, many in confusion and despair. Those with relatives or friends who had worked in the twin towers quickly plastered lamp posts, telephone booths, and bus shelters with flyers and pictures of their loved ones in the hopes (usually unrealized) of getting word of their whereabouts. A worker at a downtown hospital spent September 11 and 12 answering phone calls from people who were desperately looking for their loved ones. “I had the late shift on the 12th, and that was the heaviest and hardest. Only one out of 200 names could be confirmed as treated and released. The unique grief of the hospitals in the area was that we stood ready for massive casualties, and there were none.”

First responders—police, fire, and emergency medical personnel—and construction workers rushed to lower Manhattan to claw through the smoldering mountain of debris of the collapsed twin towers in the hope of pulling out survivors and then, when the hours and days passed and few were found alive, to recover the remains of those who had been killed. A New York City firefighter, who had rushed to the World Trade Center site after the towers collapsed, recalled that as he ran toward the grim scene,

The air and soot was getting thicker, and with each step we took, the mountain of destruction was becoming surreal. Twisted I-beams formed an interwoven web that looked like a huge roller-coaster track. Emergency vehicles were torn in half. City buses appeared to be the victims of their own bomb blasts. I prayed that I would wake up from this nightmare. We reached what is known as “Ground Zero.” Time stood still as we began digging for survivors.

The stench of death and toxic dust permeated the air over Manhattan, spreading to the city’s outer boroughs of Brooklyn and Staten Island.

The sense of uncertainty and fear among New Yorkers continued for weeks after the attack. Heavily armed National Guard troops and police officers required citizens who lived below 14th Street in lower Manhattan to show identification before being granted entry into their own neighborhoods. The Herculean efforts of emergency personnel and construction workers to find the bodies of victims slowly gave way to a growing sense of despair among those who were digging in “the pile”; the horror of finding body parts was made worse by the growing legions of workers who became physically ill from hours and days spent breathing unfiltered dust while they dug.

The federal Environmental Protection Agency quickly declared the air in lower Manhattan safe to breathe, although the cloud of toxic pollution that followed the collapse of the towers coated the lower third of Manhattan, inside and outside, for weeks after the attack. (One of the first priorities of the federal and city leaders was the rapid reopening of the city’s stock exchanges.) Epidemiological studies later revealed a host of health and environmental problems, especially for many of the people who had had direct contact with the site.

Initial estimates of 5,000 to 10,000 deaths dropped sharply as the grim effort to count the victims continued in the weeks after September 11. What emerged from the tally of those who died in the twin towers, a total of 2,600 people, including 343 firefighters, provides a demographic cross section of the international, ethnically diverse World Trade Center workforce that labored in the finance, insurance, and service sectors of the global economy. More than eight of every ten people who died (2,106) were U.S. born; 53 were born in the United Kingdom, 46 in the Caribbean, 34 in India, and 20 in Japan. Of those who were killed, nearly 76 percent were white, 9.4 percent were Hispanic, 7.9 percent were Black, and 6.3 percent were Asian. Most who died were in their thirties and forties, and the vast majority (three in four) were male.

In the weeks following the attacks, Americans of all ethnic groups and political and religious beliefs were caught up in a national wave of patriotism. American flags flew from homes, buildings, and car antennas. Fund-raising efforts around the country raised millions to aid the victims’ families. However, Americans of Middle Eastern descent and practicing Muslims did not necessarily share in this show of togetherness. They faced discrimination and injury from people who blamed them for the attacks, despite the fact that the hijackers’ extreme beliefs were shared by very few.

 Who was responsible for the attacks? All of the 19 hijackers were from the Middle East; 16 of them were from Saudi Arabia. They were trained and financed by al-Qaeda (a name that means “the base” in Arabic), a theocratic, militarized Islamic network that had conducted an increasingly bold set of bombings and attacks during the previous decade that were designed to rid the Middle East of both Western influence and the corrupt, authoritarian regimes that dominated the region. Al-Qaeda’s leader was Osama bin Laden, whose own political and religious trajectory mirrored that of thousands of other Islamic extremists. Raised in a wealthy Saudi family and influenced by radical Islamic scholars while at the university, bin Laden became a militant when he volunteered to fight the Soviets in Afghanistan during the 1980s. In this guerrilla war, the CIA provided money, arms, and training to a variety of Islamic warlords and Arab fighters who were conducting a jihad, or holy war, against a secular, imperial enemy. The Soviet defeat in 1989 emboldened these Islamic warriors, who now turned their ire against the West and the Saudi regime, especially after the United States established a permanent military presence there during and after the first Gulf War (see Chapter 14). Al-Qaeda wanted to destroy Israel, eliminate Western influence, and replace most Arab regimes with an authoritarian theocracy. Islamic militants were responsible for bombing the basement of the World Trade Center in 1993, attacking U.S. embassies in Kenya and Tanzania in 1998, and killing 19 crew members of the U.S.S. Cole in early 2000, when a small boat laden with explosives detonated next to the destroyer’s hull in a Yemeni port.

The United States responded ineffectively to al-Qaeda during the years and months leading up to September 11. Although bin Laden was harbored by the Afghan regime, whose Taliban leadership shared his reactionary ideology, al-Qaeda remained a largely stateless formation that enjoyed support in a number of countries, including Pakistan, Egypt, and Saudi Arabia itself. Episodic military retaliation against al-Qaeda during the Clinton administration therefore proved largely fruitless, especially when the stalemated Israel-Palestine peace process increased Middle East tensions in the late 1990s. The Bush administration actually downgraded its assessment of the threat posed by al-Qaeda in the months before 9/11 because the new Republican administration thought that “rogue” states such as Iran, North Korea, and Iraq were primarily responsible for the growing terrorist incidents around the world.

The September 11 attacks transformed U.S. politics and its military posture internationally. Although nearly half of all Americans questioned the very legitimacy of his presidency during the first months of 2001, George W. Bush finally assumed the moral and emotive presidential cloak after a stirring September 20 speech before a joint session of Congress. Declaring a “war on terror,” Bush asserted that the United States would use its military might to crush not only the terrorists who were responsible for the attacks, but also any government that supported those groups or individuals. He attributed the rise of Islamic terrorism not to the vexing politics of the Middle East, but to “the murderous ideologies of the twentieth century; by sacrificing human life to serve their radical visions, by abandoning every value except the will to power; they follow in the path of fascism, Nazism, and totalitarianism.”

President Bush claimed expansive federal authority to fight the “war on terror.” Republican majorities in both houses of Congress, with the support of many Democrats, passed legislation that centralized domestic security agencies into a cabinet-level Department of Homeland Security and dramatically increased the federal government’s power to monitor and prosecute citizens and noncitizens alike in the pursuit of national security. In the spring of 2003, the U.S. defied much of world opinion and invaded Iraq, insistent that Iraq’s development of chemical, biological, and nuclear weapons posed a worldwide threat. Although  the president famously declared, “Mission Accomplished” after six weeks of fighting, the occupation of Iraq proved far more difficult, dangerous, and costly to both the United States and Iraq.

In the fall of 2001, meanwhile, because the Taliban regime in Afghanistan refused to shut down al-Qaeda training camps or expel bin Laden, the U.S. government began military operations in that remote central Asian nation. From new air bases in the former Soviet Union, American bombers and fighter planes roamed Afghani skies at will, supporting an insurgent and Afghani-led Northern Alliance that occupied Kabul, the capital, in early November 2001. The Taliban regime disintegrated shortly thereafter, but not before bin Laden and many of his fighters had escaped to the remote tribal provinces of northwest Pakistan, from where he periodically denounced on video and audiotape the United States and its Middle East allies. Although a multinational force stayed in Kabul and other cities to sustain the moderate Islamic regime, headed by Hamid Karzai, that replaced the Taliban, the influence of regional warlords subverted the growth of Western-style constitutional government in Afghanistan.

The war in Afghanistan enjoyed broad support at home, but the Bush administration’s effort to open a front against potential domestic terrorism proved far more controversial. Unlike many European and Latin American nations, the United States had never had an “interior ministry” that centralized all of the state’s police and border security functions within one high-profile bureaucracy. Post-9/11 investigators blamed the attacks on the failure of the FBI and the Immigration and Naturalization Service (INS) to detect the hijackers and on the poorly paid and privately employed airport screeners who had not stopped the terrorists at the boarding ramps. Oversights and miscommunications convinced many member of Congress, as well as many other Americans, that a more systematic and centralized approach to internal security was now necessary.

Within a month of 9/11, Bush created a new White House office of “homeland security,” initially headed by Pennsylvania governor Tom Ridge. Fourteen months later, Congress passed a Homeland Security Act, establishing a new cabinet post that was the largest reorganization of government functions since the creation of the Defense Department a half century before. The new Department of Homeland Security absorbed twenty-two government agencies, including the INS, Coast Guard, Border Patrol, Customs Service, and Federal Emergency Management Administration (FEMA). The new law placed airport security screeners on the government payroll as part of a new Transportation Security Administration (TSA). Conservative Republicans, who controlled Congress, chafed at this dramatic expansion of government power. They stripped TSA personnel of their collective bargaining rights and weakened union and civil service protections for the 170,000 other federal workers who had been incorporated into the new Department of Homeland Security.

With a compliant Congress, the administration also pushed through a sweeping expansion of federal prosecutorial power called the USA Patriot Act. This law extended government power to monitor telephone and e-mail communications and authorized federal officials to seize, without search warrants, financial, medical, computer, and library records. It created a new crime category called “domestic terrorism” that many civil libertarians considered far too expansive and administratively pliable. Indeed, public sentiment, including that of many conservatives who were suspicious of overweening federal power, soon turned cool toward the Patriot Act. By 2005, seven states—Alaska, Colorado, Hawaii, Idaho, Maine, Montana, and Vermont—and 389 cities and counties had passed resolutions condemning the new law for undermining civil liberties.

The Bush administration made Iraq the next target of the “war on terror.” For more than a quarter of a century, Saddam Hussein had ruled Iraq in a brutal and dictatorial fashion. Hussein instigated wars against neighboring Iran and Kuwait and used chemical weapons against his own internal enemies, including the restive Shiites in the south and the independence-seeking Kurds in the northern part of Iraq. But Hussein and the fascist Baath Party apparatus with which he ruled Iraq were secular nationalists. No credible evidence existed that linked Hussein with al-Qaeda, bin Laden, or the September 11 attacks.

Many in the Republican Party, especially the influential group of neoconservatives who now occupied high-level positions in the National Security Council and at the Pentagon, wanted “regime change” in Baghdad. In his 2002 State of the Union address, President Bush declared Iraq, along with Iran and North Korea, part of an “axis of evil,” not because they were allied or worked in tandem, but because they were hostile, authoritarian “rogue” states that were said to be building “weapons of mass destruction”—atomic, chemical, or biological—for use against their neighbors or the West. Although North Korea and Iran were indeed on their way toward becoming nuclear powers, Iraq stood at the top of the Bush administration’s military agenda. Hussein, despite his 1991 defeat in Kuwait in the first Gulf War, remained a symbol of Arab defiance toward American power in the Middle East. He barred United Nations inspectors from Iraqi territory in 1998 and won increasing international support to lift the economic sanctions that had been imposed on his nation after the first Gulf War. Key policymakers in the White House and Pentagon, especially Vice President Dick Cheney, who had been secretary of defense during that conflict, now thought that the U.S. decision to leave Hussein in power had been an embarrassing mistake. Indeed, in an interview with CBS correspondent Katie Couric in September 2006,Bush let slip the administration’s thinking, telling her, “You know one of the hardest parts of my job is connecting Iraq to the war on terror.”

To rationalize their war policy, Bush, Cheney, and Secretary of Defense Donald Rumsfeld artfully conflated the 9/11 attacks with the anti-Americanism of the Iraqi regime, declaring both Hussein and the hijackers enemies in an increasingly ill-defined war on terror. To this end, the administration emphasized the threat posed by Iraqi weapons of mass destruction (WMD), in particular by a nuclear weapons program that war advocates asserted was well under way. However, the Bush administration faced a dilemma in making WMD the justification for a new Iraq war. If Hussein still held threatening WMD stockpiles, a new round of United Nations inspections, which got under way in late 2002, might well find and destroy them. Most U.S. allies, especially France and Germany, wanted to give U.N. inspectors time to do their work. So too did millions of ordinary people, who poured into the streets of London, Madrid, New York, Rome, and Barcelona on February 15, 2003, in the largest set of coordinated mass antiwar demonstrations in world history.

But the Bush administration would not be deterred. Democrats in Congress remained skeptical but were afraid to seem unpatriotic, especially after the 2002 midterm elections strengthened Republican majorities in both houses of Congress. Meanwhile, the American military had already begun to position an invasion force in the Persian Gulf region, so top U.S. officials came to see the United Nations as an obstacle that might delay or derail the war. With the possible exception of Secretary of State Colin Powell, all of these officials thought that a military showdown was vital and imminent. The United States had the military and diplomatic support of Great Britain, but when the invasion of Iraq began on March 19, 2003, after Hussein failed to comply with a U.S. ultimatum to leave Iraq, the U.S. government found little support in the United Nations or among most of its traditional European allies. In contrast to the 1991 Gulf War, no Muslim nation publicly supported the United States. Over 90 percent of the troops were American; the rest were British.

The invasion was a military success. With fewer  than 100,000 active combat troops, highly mobile U.S. Army and Marine forces shot forward to Baghdad, annihilating those few Iraqi tanks that sought battle. Baghdad was captured on April 5, 2003, and organized resistance ceased a few days later. President Bush declared the end of major hostilities on May 1, after he had flown by helicopter and landed on the deck of the aircraft carrier U.S.S. Abraham Lincoln, anchored off San Diego. Behind him stood a huge banner that read “Mission Accomplished.” Hussein eluded capture until December 2003, when he was found hiding near Tikrit, his birthplace and center of power. He was convicted of numerous crimes against humanity and was hanged in Iraq at the end of 2006.

 It soon became clear that the U.S. mission in Iraq was far from accomplished, and it would become increasingly difficult and contentious with each passing month. The United States and Britain conquered Iraq with fewer than 150,000 troops, enough to defeat Hussein’s army but not enough to establish order in a country with a population and territory the size of California. U.S. and British diplomats called on other nations to provide additional troops and resources, but aside from token forces sent by Spain, Italy, and Holland, they found few takers. In April, widespread looting destroyed what remained of the old governing apparatus in Baghdad and other big cities. Unemployment soared, and the restoration of public services moved slowly, in part because American occupation policy barred many Baath Party members from their former jobs as managers and technicians. Although the United States appropriated billion for the occupation and reconstruction of Iraq, it paid much of this money to large U.S. and British corporations, such as Bechtel and Halliburton, in part because the new American administrator of Iraq, L. Paul Bremer III, sought a rapid, free-market transformation of the Iraqi economy. The United States was unwilling to give the United Nations a substantial role in the reconstruction process; meanwhile, the failure of the Americans to find even a handful of WMD further delegitimized the American project in Iraq.

Although the United States sought to enlist prominent Iraqis in an advisory governing council, the occupation authorities faced a growing insurgency by the summer of 2003. Bombings and land mines planted on roadways took a steady toll of GIs and noncombatant Iraqis. By November 2006, nearly 3,000 U.S. military personnel had died in Iraq, and more than 20,000 had been gravely wounded. Civilian Iraqi causalities, both from insurgent bombs and from U.S. retaliation, were at least ten times as great. No one quite knew who these insurgents were. U.S. occupation authorities claimed that the insurgents were Hussein loyalists, criminal elements, and al-Qaeda fighters who had traveled to Iraq to kill Americans. A more likely view held that the essential motivation for the insurgency was Iraqi nationalism, especially that of the Sunni minority that was concentrated in and around Baghdad, Fallujah, and Mosel. The five-million-strong Sunni community had long provided the ruling elite in Iraq. But now the Sunnis were being marginalized, not only by the Americans, but also by the two other key groups in Iraq: the Shiites in southern Iraq, who wanted to establish an orthodox Islamic regime not dissimilar from that of neighboring Iran, and the Kurds in the north, also Muslims, who tolerated inclusion within an Iraqi state only as long as it did nothing to curb the de facto independence they had achieved under U.S. military protection.

As in Vietnam, U.S. firepower easily overwhelmed military resistance when insurgents sought to wage pitched battles. In Fallujah, where the death and public mutilation of the bodies of four American private contract employees inflamed American sensibilities in April 2004, Marines battled their way to the city center, killed hundreds of insurgents, and threw a cordon around the city of 300,000. But such battles were rare in Iraq, in part because coalition forces lacked on-the-ground intelligence about enemy movements and personnel. This intelligence deficit lay at the heart of the humiliating and inhumane treatment that was meted out to Iraqi prisoners being held at the huge Abu Ghraib prison just outside Baghdad. U.S. military and CIA interrogators sought to “soften” up Iraqi suspects in the hopes of extracting information about the insurgency, but when digital photographs of the physically and sexually humiliating interrogation techniques became public during spring 2004, the U.S. military effort in Iraqi lost much legitimacy, both at home and throughout the Middle East. Only low-level military personnel were punished for the brutality that clearly contravened the Geneva Conventions that are intended to ensure humane treatment of prisoners of war.

If U.S. military efforts to defeat the insurgency proved costly and futile, a political solution also eluded Bush administration policymakers. The capture of Saddam Hussein in December 2003 and his subsequent trial for crimes against his own people merely inflamed Sunni sensibilities and threatened to turn the former dictator into a national martyr. In June 2004, the United States transferred “sovereignty” to an interim Iraqi government, and in January 2005, Iraqis participated in their first multiparty election in a generation, choosing representatives for a 275-member Constitutional Assembly. Because the Sunnis had boycotted these elections, the Shiite majority and Kurdish separatists largely shaped in their own interests the constitution that emerged. Although ratified in October 2005, the new constitution lacked legitimacy, especially in Sunni eyes. Indeed, by early 2006, it was becoming increasingly difficult to distinguish the U.S.-Shiite fight against the insurgency from an increasingly brutal civil war that Sunnis and Shiites waged against each other.

The 9/11 attacks shook the American economy just as the nation was beginning to emerge from a recession that had begun the year before. A series of scandals involving major corporations, most notably the energy company Enron, exposed the dangers of unregulated free-market capitalism and eroded public support for corporate America. Although the economy appeared to improve beginning in 2004, declines in real wages and soaring health care costs meant that most Americans found themselves on a continued downward economic spiral. That same year, the presidential election broke a decades-old pattern of declining public interest in presidential campaigns. The Republican and Democratic parties spent far more money than they had in any previous election, and voter interest, turnout, and mobilization exceeded those of any contest since 1968. George Bush again won a narrow and sharply polarizing electoral victory over the Democratic nominee, John Kerry, confirming the profound social and ideological divisions that characterized American politics in the early twenty-first century.

The booming 1990s ended when the deflation of the high-flying “dot-com” stocks in March 2000 resulted in massive bankruptcies and layoffs in the high-technology sector. By one calculation, nearly 250 Web-based businesses collapsed in a few months’ time. In the San Francisco Bay Area, Boston, Seattle, and Denver, salaries and stock portfolios all came crashing down. In March 2001, the overall stock market recorded its worst week since 1989. Consumer confidence fell, corporate profits plunged, and layoffs spread throughout the manufacturing economy. The recession might have remained confined to the financial and high-tech sectors of the economy, but the terrorist attacks had a devastating impact on airlines, hotels, restaurants, and tourism in general. Despite congressional appropriation of more than billion in emergency funds for the airlines, every major carrier was in or near bankruptcy within months of the 9/11 attacks. Four hundred thousand hotel and restaurant workers lost their jobs when Americans slashed their travel and shopping plans. Service sector employment fell faster in the last quarter of 2001 than in any three-month period since World War II.

The spectacular and shameful series of corporate scandals that came to light early in the new century did nothing to sustain confidence in the nation’s financial and business structures or their leaders. Executive misconduct, speculation, and sudden bankruptcy were rife among the energy and telecommunications companies that had benefited from Clinton era deregulation and political and financial connections to powerful Republican politicians, including key Bush administration officials. Houston’s Enron Corporation had once been a staid oil and gas pipeline company, but in the 1990s, it purchased a far-flung set of utility companies and established a highly profitable and managed market supplying electricity. Hailed as a pioneering model of free-market economics and high-tech forecasting, Enron claimed assets of billion in 2000, making it the sixth largest corporation in the United States. But the company was corrupt. In 2000, it manipulated its West Coast electricity supply to generate rolling blackouts in California and panic the state into signing ultra-profitable long-term service contracts. Meanwhile, Enron executives sustained its high-flying stock price only by an increasingly convoluted and desperate series of illegal financing schemes. When the inevitable crash arrived, the company cheated thousands of employees out of their retirement savings even as they lost their jobs.

The Enron collapse was followed by bankruptcies and huge layoffs in the telecommunications industry, which had borrowed enormous sums to overbuild revenue-losing fiber-optic networks in the 1990s. Lucent Technologies, the telecommunications giant that had once been a pillar of U.S. manufacturing as the supplier of millions of prosaic telephone receivers, cut nearly one hundred thousand jobs in 2001. Global Crossing, a high-speed voice and data carrier, and WorldCom, the nation’s second-largest long-distance carrier, both declared bankruptcy the next year amid accusations of executive looting and self-dealing. Also charged with financial criminality were the top executives of Adelphia Communications, who had looted the family-owned TV-cable business of a billion dollars. In all, these corporate criminals squandered a combined 0 billion in shareholder value and destroyed hundreds of thousands of jobs and pensions.

In the wake of these scandals there was much finger pointing from the business press and from Democratic critics of “crony capitalism.” The chairman of Goldman Sachs, a major Wall Street investment bank, declared, “I cannot think of a time when business . . . has been held in less repute.” But few thought that anything more than a beefed-up regulatory apparatus was necessary to resolve these problems. This regulation came in the form of the 2002 Sarbanes-Oxley Act, which made top corporate executives take more responsibility for the financial dealings of their underlings and forced the big accounting firms to maintain an arms-length relationship with the companies that they audited. The Bush administration initially opposed even this mild reform, and its officials actually congratulated themselves for doing little to avert the corporate meltdowns, asserting instead that the disappearance of Enron and the others vindicated the free market. Bush’s first Treasury Secretary, Paul O’Neill, saw the bankruptcies as more of a validation than an indictment of contemporary capitalism. “Companies come and go,” he said. “Part of the genius of capitalism is people get to make good decisions or bad decisions and they get to pay the consequences. . . . That’s the way the system works.”

But the system was misshapen and dysfunctional for most Americans. By 2004 and 2005, the media and the government had largely turned their attention away from corporate scandals. In 2004, the economy grew over 4 percent, its best performance since 1999. Yet most families actually fell behind economically, the average middle-class family losing real income for the fifth year in a row. Behind the disconnect between economic growth and family incomes lay the extremely lopsided nature of the economic recovery that began in 2001. Corporate profits leaped forward by 50 percent, but real wage and salary income was up less than 7 percent. This imbalance was partly a function of government policy: Bush’s tax cuts favored corporations and the wealthy; the evaporation of the minimum wage, and the increase in trade with low-wage Asian nations cut the real wages of millions of U.S. workers; and the soaring cost and decreasing availability of employer-funded health insurance battered the disposable income of white- and blue-collar workers alike.

One company seemed to symbolize the new realities of work in twenty-first-century America. By 2006, Wal-Mart was the largest company in the world, employing 1.6 million women and men in more than six thousand “big box” stores, 80 percent of which were in the United States. An oil price spike in the first half decade of the new century temporarily gave Exxon-Mobil more revenue than Wal-Mart, but few observers doubted that the retail giant had a far greater impact on international trade, on domestic living standards, and on the very fabric of modern capitalism. Wal-Mart was important not just because it was big, but because its hyperefficient combination of sophisticated telecommunications, centralized distribution, ruthless price cutting, and close supplier links generated a productivity surge that was comparable only to results of the Ford Motor Company’s invention of the assembly line at the start of the twentieth century or IBM’s mass deployment of the mainframe computer in the 1950s. The Reaganite evisceration of labor law (see Chapter 13), combined with a precipitous drop in the real value of the minimum wage, had also helped to create the social context that enabled Wal-Mart, Kmart, Home Depot, and other huge discounters to build retail empires that transformed the very structure of world capitalism.

The mass retailers were now king. For more than a century, from about 1880 to 1980, the manufacturing enterprise stood at the center of the American economy’s production-distribution nexus. Big firms such as U.S. Steel and General Motors, as well as a host of consumer goods manufacturers that included Procter & Gamble and Kraft Foods, set the prices, established the distribution networks, and dominated the market for their product, both at home and abroad. By the early years of the twenty-first century, however, the big box retailers stood at the apex of the world’s supply chains, leveraging their enormous buying power to squeeze their suppliers, bankrupt less efficient and smaller competitors, and move into new markets, such as groceries and pharmaceuticals, that had once sustained a higher-wage, unionized workforce. These companies became manufacturing giants in all but name, tracking consumer behavior with meticulous care and then transmitting buying preferences down the supply chain.

This marketing system shifted the worldwide production of most consumer goods to East Asia—to China above all. Wal-Mart located its world buying headquarters in Shenzhen, a booming city of seven million located just north of Hong Kong in Guangdong Province. With more than forty million migrant workers and 130,000 garment factories Guangdong produced one-third of China’s total exports in the early twenty-first century, most transported to the West Coast ports of North America by a trans-Pacific conveyor system that relied on huge containerships. Wal-Mart and the other U.S. retailers owned no factories in China, but their demands for rock-bottom prices and on-time delivery created a world of industrial sweatshops, usually staffed by tens of thousands of young women, that mirrored the chaotic industrialization of early nineteenth-century England or turn of the twentieth-century New York City. Not unexpectedly, strikes and protests have mushroomed in coastal China since the 1980s.

Wal-Mart’s rapid expansion also generated a wide range of social conflicts in the United States, extending from the small towns of rural America to Los Angeles, New York, and Chicago. In the 1980s, Wal-Mart located most of its big box stores in southern and midwestern small towns, generating howls of protest from Main Street merchants and neighborhood groups. These protests proved largely ineffectual, but a decade later, when Wal-Mart moved into metropolitan America with its grocery-selling “supercenters,” the company’s antiunion, low-wage, low-benefit policies came under intense scrutiny and increasingly vocal opposition. Indeed, Wal-Mart’s prospective entry into the Southern California supermarket industry precipitated a bitter, four-month strike in 2003–2004, when executives at several grocery firms locked out almost 70,000 unionized workers in order to negotiate a new contract that would bring the wage and benefit standards of their own labor force down to the Wal-Mart level. The strike ended in a union defeat, which sent a jolt through the entire labor movement and its liberal and Democratic Party allies. Thereafter, the reform of Wal-Mart’s employment policies, especially the company’s inadequate health care benefits, became a political flashpoint within American politics. Labor and community mobilizations stopped Wal-Mart from building stores in some large cities, even as city councils and state legislatures, angry that so many Wal-Mart employees were forced to rely on state-funded programs for routine medical care, debated ordinances and laws that would force the big box retailers to pay higher wages and better health insurance. In national politics, where Republican control of the government stifled social reform, labor unions and the Democrats kept Wal-Mart, whose executives had contributed heavily to the Bush reelection effort in 2004, under a steady drum beat of criticism.

In his campaign for reelection, President Bush attracted intense support from just over half of the American voters. The extremely high approval ratings he enjoyed immediately following the 9/11 attacks dwindled in subsequent months, peaking only during combat operations in Iraq in spring 2003 and again following the capture of Saddam Hussein in December of the same year. But these fluctuations hardly mattered, because as Bush confidant and political strategist Karl Rove once put it, “We have cement under our base.” Republicans campaigned as the party that was most determined to wage a “war on terror,” reinvigorating the national security issues that had served conservatives so well during the Cold War. Throughout the campaign, Bush did not emphasize the actual conflicts that were being waged by American troops in Iraq, Afghanistan, or other parts of the world. He appealed instead to the generalized insecurity that many Americans felt in the aftermath of September 11. Thus, the Republicans held their 2004 nominating convention in New York City, where, despite massive street demonstrations attacking the President and his Iraq war policy, Bush sought to recapture the sense of unity, crisis, and fearfulness that had made him seem such a strong and steadfast leader in the immediate aftermath of 9/11.

Bush buttressed his claims to patriotic leadership with a strong appeal to the conservative, evangelical, and increasingly politicized Christians who were the vaunted base of the Republican electoral coalition. To large campaign audiences mobilized through the new mega-churches that were becoming so popular in exurban America, the President asserted his belief in a “culture of life,” which implied opposition to abortion. President Bush also made clear his opposition to civil marriages for gay people, which had become a legal reform of increasing viability in some northern and western communities, and he made frequent public references to his Christian beliefs. As one Ohio campaign brochure put it, “George W. Bush shares your values. Marriage. Life. Faith.” In 2004, 78 percent of white evangelical Christians voted for the president.

President Bush and Vice President Cheney faced a Democratic ticket composed of two Senators, John Kerry of Massachusetts and John Edwards of North Carolina. Edwards had made millions as an attorney who sued large corporations and insurance companies in personal injury cases. In North Carolina, where unions were almost nonexistent and the civil rights movement had faded, such a career was one of the few venues in which a high-profile resistance to corporate hegemony might find expression. John Kerry was also a millionaire. Like Bush, Kerry had been a member of Yale’s exclusive Skull and Bones secret society as an undergraduate, but now he was one of the more liberal members of the Senate and a genuine war hero who had commanded a combat patrol boat in Vietnam. Indeed, Democrats mistakenly thought that Kerry’s valorous Vietnam service would insulate the Kerry-Edwards ticket from Republican insinuations about military weakness and lack of patriotism that had dogged President Clinton.

With a huge mobilization of money and people on behalf of Kerry and Edwards, Democrats were determined to reverse what they saw as the illegitimate verdict that Florida election officials had rendered and the U.S. Supreme Court had upheld in December 2000, giving Bush the presidency (see Chapter 14). Kerry enjoyed overwhelming support from those Americans who opposed the Iraq war, even though he failed to fully repudiate his 2002 Senate vote granting Bush authority to launch an attack. Kerry’s equivocation gave Bush the opportunity to denounce him as someone who “flip-flopped” on the issues.

Although Bush won by 51 percent of the popular vote, largely in the same states that he had captured in 2000, an astonishing eleven million additional people voted for him than had done so in the last election. The conservative support enabled the Republicans to pick up four additional seats in both the House and the Senate. But John Kerry did extremely well too, eclipsing Al Gore’s 2000 total by more than seven million votes, largely because of an unprecedented mobilization of core Democratic constituencies, chiefly union families and African Americans. Indeed, the labor movement was the backbone of the Democratic turnout. In Ohio, whose electoral votes were essential to both candidates, the unions put more volunteers on the street than at any time since the heyday of the CIO. But the Republicans mobilized even more Ohio campaign workers, some 85,000, who spurred to action a wave of religiously motivated voters that had never before been seen in Ohio politics.

President Bush was determined to “spend the political capital” he believed his victory had earned. With this self-proclaimed “mandate,” he attempted to pass an ambitious political agenda at the start of his second term in 2005. He planned to appoint more conservative jurists to the federal bench, especially the U.S. Supreme Court, should the long-expected vacancies finally open up there. He wanted to make permanent the tax reductions Congress had passed in the early years of his first term, and he hoped to transform Social Security, a public pension system that had long been thought of as an untouchable “third rail” of American politics. And, of course, Bush sought to pursue the continuing war in Iraq until the insurgency there was defeated and a regime that was amenable to American influence was firmly in place.

President Bush proved successful in moving the U.S. Supreme Court decisively to the right on social and civil liberty issues. When Justice Sandra Day O’Connor announced her retirement in July 2005, followed shortly thereafter by the death of Chief Justice William Rehnquist, Bush nominated, and the Congress confirmed, two conservative jurists who seemed certain to align themselves with justices Antonin Scalia and Clarence Thomas, the aggressive judicial radicals who had long endorsed the most expansive exercise of presidential power. A fifty-year-old appellate jurist, John Roberts, who had once worked in the Reagan Justice Department, took over for Rehnquist as Chief Justice. After unexpected opposition among congressional Republicans and right-wing pundits to his first nominee Harriet Miers, his White House counsel, Bush nominated in her place Samuel Alito, a staunch judicial conservative, who was confirmed in early 2006 after a hard-fought Senate battle.

But the rest of the president’s political agenda faced far greater difficulties. Claiming that Social Security would soon face serious funding difficulties, Bush sought to transform the retirement system by creating private investment accounts that would be paid for with money diverted from the Social Security trust fund itself. Conservatives disliked Social Security for both practical and ideological reasons. It was an efficient government-run program that redistributed funds from the young to the old and from the affluent to the poor. And it represented a huge source of potential capital and new investment that many Wall Street firms hoped to manage directly. Over time, Bush’s plan would have drained trillions of dollars from the system and stripped it of its “social” character. The president barnstormed the nation in 2005, but as most Americans came to understand the implications of this effort to privatize Social Security, they turned decisively against this “reform,” dooming, for the moment at least, any large-scale effort to dismantle the highly successful retirement system.

As the trauma of 9/11 faded over time, Americans once again turned their attention to the conflicts and controversies that were an inescapable consequence of the dramatic spread of the twenty-first-century global market in goods, labor, and ideas. The unending, disastrous war on terror and the conflict in Iraq generated a new wave of antiwar sentiment and greater popular mistrust of the Bush administration and the GOP-controlled Congress. But the everyday lives of most Americans remained structured by the ever-shifting shape of a capitalist economy that was now inextricably bound to a worldwide market. Social inequality became front-page news in 2005 when Hurricane Katrina ravaged New Orleans, Louisiana. The citizens who were left in the city to weather the storm were largely poor, African American, and working class. Images of the destitution and destruction of a major American metropolis pushed many Americans to wonder why the U.S. government was promising so much abroad but could deliver so little at home. Many blamed the growing presence of undocumented immigrants, but such xenophobia generated a countermobilization on the part of millions of Latinx immigrants and their allies, who took to the streets during the spring of 2006 in protest. With outrage over the war, economic inequality, and bigotry, the Democrats finally retook Congress in the 2006 midterm elections.

Although President Bush won reelection by asserting that his administration could best provide for and protect American citizens, a crisis at the end of the summer of 2005 put such claims in jeopardy even as the nation came to see that homeland security entailed far more than the projection of military power abroad. When Hurricane Katrina slammed into the Gulf Coast on the morning of August 29, it destroyed tens of billions of dollars in property from the Florida panhandle to the Texas state line. The greatest damage came in New Orleans, where the municipal levees, built and maintained by the U.S. Army Corps of Engineers, failed to hold back the storm’s surging water, subjecting the city to massive flooding that had not been seen since the early nineteenth century. The rapidly rising water trapped more than 100,000 residents, most of whom were African American, poor, or without cars, in their homes without electricity, water, or food. When tens of thousands of them fled to the Superdome sports arena and the city’s convention center downtown, they found themselves literally on their own for more than three days, even as television crews broadcast images of the squalor and chaos that had engulfed these bewildered refugees. At least 1,300 people died during and after Hurricane Katrina made landfall, most of them residents of low-income New Orleans neighborhoods. They fell victim not only to high water, but also to sickness, heat, and thirst because of an inadequate evacuation plan and an excruciatingly slow response from National Guard units and FEMA, now a subunit of the Department of Homeland Security. With much of New Orleans, Biloxi, Mississippi, and other Gulf Coast cities and towns destroyed, more than 1.5 million people were displaced, eventually finding shelter in schools, sports arenas, hotels, and trailers in Houston, Baton Rouge, Memphis, and other outlying southern and even northern cities. Hurricane Katrina was the most expensive and one of the most deadly disasters in U.S. history.

The Katrina debacle had two long-range consequences. First, it once again put environmental issues on the national agenda. Most scientists thought that the destruction of Gulf Coast wetlands that had been going on for decades had exacerbated the impact of the hurricane’s storm surge, and some meteorologists hypothesized that global warming was increasing the frequency and intensity of Atlantic hurricanes. Second, and more immediate, the disparate and highly graphic racial and class consequences of the storm seemed to discredit the Bush administration’s militarized ideology of homeland security and minimal government activism. FEMA head Michael Brown resigned in disgrace on September 12, and Congress quickly appropriated at least billion for reconstruction aid. Conservative efforts to make the Bush tax cuts permanent were put on hold. Opinion polls recorded a sharp drop in the number of Americans who approved of the president and the way he was doing his job. A year after Hurricane Katrina, corruption and mismanagement were key words in all government reports and newspaper stories: less than half the money that had been appropriated to assist victims had been spent, billion had been lost through fraud and waste, mobile homes costing 0 million went unused because they were unsuitable in a flood plain, and only 35 percent of New Orleans residents returned to the Crescent City.

The public’s anger at the neglect of New Orleans during and after Hurricane Katrina turned to active hostility when it came to immigration politics during the first decade of the twenty-first century. Economically hard-pressed Americans had long seen immigrants, especially those whose legal status was questionable, as competitors for jobs and a burden on schools, hospitals, and the welfare system. Many business leaders, the Bush administration, and the Democratic Party favored an expanded guest worker program and a path toward regular citizenship for undocumented immigrants, estimated at more than twelve million, who already lived inside U.S. borders. But passionate opposition was expressed by opponents of mass immigration and legalization. Encouraged by some conservative politicians and television commentators, much of this animosity turned against the recent wave of Latinx immigrants. These immigrants had recently transformed the workforce in cities across the country, including Memphis, Cincinnati, and Pittsburgh, not just those in the Southwest, the traditional locus of the nation’s Mexican American population. “I tell you that the area where I grew up now resembles Tijuana more than the U.S.,” one Nashville resident proclaimed. “My neighborhood is gone. . . . I can’t read the signs because I don’t speak Spanish—in my native country!” A vigilante group calling itself the “Minutemen” made highly publicized visits to the U.S.-Mexican border, while in Congress, many politicians backed highly restrictive measures that would criminalize undocumented immigrants and appropriate billions for a “Berlin Wall”–style fence between the two nations.

This debate divided both major political parties, but it also energized millions of Latinx citizens and noncitizens. Beginning in early spring 2006 and cresting on May Day of that year, hundreds of thousands of Latinx people marched in demonstrations all across the country. Vowing to boycott work and shopping, the May 1 “Day Without Immigrants” had its epicenter in Los Angeles, but tens of thousands of Latinx activists also marched in Denver, Phoenix, and New York as well as in such unlikely towns as Santa Maria, California, and Omaha, Nebraska. In Chicago, marchers chanted, “USA! USA!,” “Amnistia!,” and “Bush, escucha, estamos en la lucha [“Bush, listen, we’re fighting back”]!” As one participant put it, immigrants deserved “not just green cards, not just visas, but citizenship.” Because their nonunion, largely Latinx workforce participated in these marches, numerous Midwestern pork- and poultry-processing plants remained closed on May Day. For the moment, these demonstrations and boycotts returned the American protest tradition to its early twentieth-century ethnic-proletarian origins, a time when the quest for citizenship and equal rights was inherent in the fight for higher wages, stronger unions, and more political power for the working class.

Why did many South Asian immigrant men in New York City become taxi drivers and labor activists during the 1980s and 1990s?

After the May 2006 demonstrations, the legacy of the Iraq war continued to fester, helping to drain the Bush presidency of the remaining power and legitimacy it had won after 9/11. Continuing corruption and scandal fed into the rising criticism of the Bush administration, which was evident both inside and outside the Republican Party. Just two years after the 2004 election, voters dealt the president and his party a devastating blow, delivering majorities in both the U.S. House and Senate to the Democrats for the first time since 1994.

Although the midterm elections were focused on Iraq, scandals and legal trouble plagued the Bush administration and fed into the popular mistrust of the Bush regime. Tom DeLay, the powerful House majority leader, was forced to resign his seat in April after he was indicted on campaign finance corruption charges. Other Republican congressmen also resigned their seats, failed to stand for reelection in November, or were tarnished by the jailing of Jack Abramoff, a notorious influence peddler and staunch Republican partisan. Sexual impropriety scared the Republican base as well, as Florida Congressman Mark Foley abruptly resigned in September when it became known that he had solicited male congressional pages for sexual companionship. And the two-year long investigation by a special prosecutor into the disclosure by Bush administration officials’ disclosure of a covert CIA operative, Valerie Plame, resulted in the indictment and ultimate conviction for perjury and obstruction of justice of I. Lewis “Scooter” Libby, top aide to Vice President Dick Cheney. Libby was sentenced to 30 months in prison in June 2007, though he did not have to serve a single day in jail because President Bush commuted his jail sentence two weeks later. 

Meanwhile, the death toll of U.S. servicemen and servicewomen who were killed in Iraq continued its relentless climb, and by 2006, public opinion polls reported that more than  two-thirds of Americans thought that the Bush administration’s conduct of the war misguided. Among the chief critics were a sizable number from within the military itself—recently retired officers who now publicly attacked Defense Secretary Donald Rumsfeld, whom they charged with not having an effective “exit strategy” for U.S. troops in Iraq.

The Bush administration’s efforts to enhance presidential power in the larger “war on terror” also generated enormous controversy. In 2006, the U.S. Supreme Court declared that “unlawful combatants” who were being held at the U.S. military base in Guantanamo Bay, Cuba, and other secret prisons must be given access to U.S. courts and must be treated in accordance with Common Article 3 of the Geneva Conventions, which forbids torture. When the U.S. Congress sought legislation respecting these rights, the Bush administration insisted on highly restrictive military tribunals that denied many prisoners the right of access to a formally constituted court of law. When the Bush administration sought to redefine the Geneva Conventions in a way that would dramatically weaken accepted prohibitions against torture, prominent Republicans with close ties to the military objected. Former Secretary of State Colin Powell, who had resigned right after the 2004 elections, thought that any tampering with these international agreements would undermine the “moral basis” of the American war against terrorism. The president eventually got most of what he wanted but exposed the fissures within his own party.

Concerns about the Bush administration’s handling of the war turned the 2006 midterm elections into a referendum on Iraq. President Bush and other Republicans declared that they would “stay the course” until the insurgency within Iraq had been defeated. Anything less, they said, was tantamount to surrender in the battle against al-Qaeda. But most Americans now made a sharp distinction between the “war on terror” and the conflict in Iraq, which a report from the CIA and other intelligence agencies concluded had contributed to instability and insurgency throughout the Middle East. Within the Democratic Party, grassroots sentiment moved decisively toward a rapid withdrawal of American troops from Iraq. The Democratic victory in the 2006 elections had immediate political consequences: Defense Secretary Rumsfeld resigned from his post, and President Bush had to reconsider his strategy in Iraq.

The December 2006 report of the bi-partisan Iraq Study Group—co-chaired by James Baker, former Secretary of State in the George H.W. Bush administration and trusted Bush family advisor, and Lee Hamilton, a former Democratic congressman from Indiana—called for major changes in U.S. military and diplomatic policy in Iraq and the Middle East. Despite the moderate nature of the report’s recommendations and the broad bi-partisan support that they generated, the Bush administration stubbornly refused to consider changes in its Iraq policy. The president opted instead for a “troop surge,” which began in January 2007 and involved the insertion of nearly 30,000 additional U.S. military forces in and around Baghdad, the Iraqi capital, to quell sectarian violence and prop up the weak civilian government. Not surprisingly, U.S. military casualties dramatically increased following the surge, with no discernable decrease in the sectarian violence the continued to wrack the country. By mid year a total of more than 3,600 U.S. troops had been killed and nearly 30,000 wounded, many of them gravely, in the almost five years since the U.S. military led invasion to overthrow Saddam Hussein.

Despite the president’s repeated calls for “patience,” support for the Iraq war and America’s continued presence there weakened considerably during 2007. Democrats, while strongly opposed to the war, had trouble agreeing on a strategy to extricate American troops from the quagmire that Iraq had become. A number of Republican senators and representatives broke ranks with the president, calling for a firm date for withdrawal of U.S. military forces from Iraq or for implementation of the Iraq Study Group’s recommendations. By mid July, the president was experiencing considerable difficulty holding together his own party, many of whose elected officials were concerned that continued failure to end the war seriously jeopardized the Republican Party’s electoral chances in 2008. George Bush, like Richard Nixon before him during the Vietnam War, remained hunkered down in the White House in mid 2007, seemingly impervious to the building political and public relations crises his actions in Iraq had engendered within the United States and internationally, And, like Nixon, Bush’s overall public approval ratings continued to sink to historic lows for a sitting president, reaching 26 percent in several opinion polls, a powerful measure of how isolated and unpopular the president and his war in Iraq had become.

The shock of the terror attacks on September 11, 2001, triggered a surge of patriotism that, for a time, reshaped American politics. President George W. Bush embarked on a “war on terror” as U.S. troops invaded first Afghanistan and then Iraq. These military actions turned into military occupations that dragged on for years. At the same time, the newly created federal Department of Homeland Security oversaw increased domestic surveillance and security measures. Military and security expenditures coincided with tax cuts sponsored by the Bush administration that benefited corporations and the wealthy at the expense of the middle class and poor. Although the U.S. economy was growing, nearly total reliance on overseas manufacturing and the volatile stock market worried many Americans. An already substantial gap between the wealthy and poor became more pronounced as wages remained stagnant, and costs, especially for health care, continued to rise.

The post–September 11 wave of patriotism also helped President Bush narrowly win a second term in 2004, which encouraged Republicans to push forward an even more conservative agenda. Social and ideological divisions emerged over issues such as LGBTQ+ marriage rights, the Iraq and Afghanistan military occupations, abortion rights, and immigration policy. Mass protests by immigrants, ongoing antiwar protests, and the disastrous government response to Hurricane Katrina eroded support for Bush and his policies. This resistance to the conservative agenda and mounting anger at the continued human and financial costs of the “war on terror” set the stage for the 2007 financial crisis and a political shift in the 2008 elections.