I do not believe this is all that is wrong with our system, but I believe it is a part.
Quite simply, public policy is not a zero sum game. But partisan politics is.
Obviously in public policy, groups compete for advantage and there will be winners and losers. But there are plenty of things that hurt everyone. Say, for instance, starting a stupid, senseless war that drags on and on with no prospect of victory in sight. Or allowing a weakened economy to collapse. And there are things that benefit all of us, like effective law enforcement, good infrastructure, and a good education system. Even where there are winners and losers, there are ways to widen the benefits, or soften the blow. So public policy leaves plenty of room for cooperation and compromise.
But partisan politics really is a zero sum game. Every office won by one party is necessarily an office lost by the other. Perhaps in a multi-party system, the participants can make complex coalitions so that who gains and who loses in any election is not so simple. But given the binary nature of US politics, there is no other way to see it. The parties really do compete on a zero sum basis for all available offices.
Most of the time, however, the parties have managed not to think in such zero sum terms because they still saw the objective of partisan politics as public policy. Even the most corrupt part of our political system, the drawing and re-drawing of election districts was not seen in purely zero sum terms, at least by incumbents. Rather, they competed on zero sum terms with outsiders to protect incumbent seats, regardless of party.
But somewhere along the line, Republicans really have started seeing partisan politics as an end in themselves and not even remotely as a means of public policy. They have concluded that defeating the Democrats ranks above any concern for the public good. They have concluded that so long as they are out of power, any harm they cause will be blamed on the Democratic incumbent, so they should not hesitate to harm the country if it will win elections.
Why this should be so is more controversial. Mike Lofgren believes that the more dysfunctional Republicans can make government, the more votes they can get for the party that is against government, with the presumed end goal of repealing the New Deal. Others believe the Republican Party has been taken over by the right wing media that really prefer to stoke outrage over Democrats running things than to win. A recent survey of the Tea Party (too lazy to find link) suggests that (1) the Tea Party is currently a small majority of the Republican Party and a large majority of its most active and organized members, (2) it is thinking the long game. The changes it wants are too radical to be politically palatable now; its primary goal is to shift the Overton Window. Another theory, which I personally holds, is that this is about power, plain, pure and simple. Republicans have developed a sense of entitlement to power and are unwilling to accept any Democrat in office as legitimate. They are behaving like an insanely jealous husband -- If we can't govern this country, then no one will.
I am not so naive as to believe that there was ever a golden age in which the parties thought solely about the public good, and that disagreements were purely debates on how to achieve it, untainted by the personal desire for power. Human nature does not work that way. But human nature is capable of enough civic virtue that public policy at least enters into the equation and domestic politics is not treated as a zero sum game.
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