The Rotten Crowd Gap
“They’re a rotten crowd,” I shouted across the lawn. “You’re worth the whole damn bunch put together.”
I’ve always been glad I said that. It was the only compliment I ever gave him, because I disapproved of him from beginning to end. First he nodded politely, and then his face broke into that radiant and understanding smile, as if we’d been in ecstatic cahoots on that fact all the time.
—The Great Gatsby
I saw some folks puzzling a few days ago over the fact that Bernie Madoff has a non-zero approval rating. I told one of them that I had some sympathy for that point of view amidst the ruins of the Second Gilded Age just as in an unguarded moment Nick does seem to approve of Gatsby despite the fact that he “disapproved of him from beginning to end.” Of course I don’t really approve of Madoff and his fraud. But the more it looks like a huge swathe of the big money game was just an elaborate fraud, the more an undercurrent of respect for the very boldness and criminality of Madoff’s fraud comes through. He plead guilty in a court of law, while the architects of Citibank’s bankruptcy remain wildly wealthier than the average American—people who no doubt would be completely competent to destroy a major business as well as anyone else—slinking around somewhere and various finance types skulk around the streets of New York feeling sorry for themselves because congress might screw around with their bonuses.
All of which is by way of introducing Michael Hiltzik’s point about changing attitudes toward the wealthy:
For decades, the wealthy have been held up as people to be admired, victors in the Darwinian economic struggle by virtue of their personal ingenuity and hard work. [...] One factor fueling the public fury over the AIG bonuses, so inescapably in the news this week, is the recognition that so many huge fortunes landed in the hands of the undeserving rich. Some of them added little value to the economy but merely moved money around in novel, excessively clever and ultimately destructive ways; others are corporate executives who were ridiculously overpaid whether they succeeded or failed at their jobs. [...] The shift in sentiment should surprise no one. As the management sage Peter Drucker once predicted, “In the next economic downturn there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions. In every major economic downturn in U.S. history the ‘villains’ have been the ‘heroes’ during the preceding boom.” Drucker was speaking in 1997, two downturns ago.
A lot of people, myself included, spent a lot of time in 2007 and 2008 observing that a lot of the old gaps inside the progressive camp had narrowed or vanished since the 1990s. But I think the Panic of ‘08 is tending to reopen a new gap. On the one hand you have people basically inclined toward Hiltzik’s that a lot of the people making the big bucks for the past 10 years are basically scammers who lucked into the ability to siphon tons of money out of the economy without really doing anything useful or valuable, and between people who think that they’re genuinely smart hard-working people who just happen to deserve to pay somewhat more in income taxes than they currently do.
In other words, was Madoff really a black hat among honest businessmen, or was he just one unusually crude player amidst a rotten crowd?
54 Responses to “The Rotten Crowd Gap”
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March 19th, 2009 at 7:18 pm
That’s probably pretty close to the worst way to think about the issue.
You can’t take virtue ethics and apply it to social contract democracy (and social contract democracy necessitates capitalism) and remain within social contract democracy (and thus capitalism). The homo economicus of modern economics theory is the same as the homo politicus of modern political theory.
You can either reject social contract democracy (whether because you believe in virtue, the Superman, worldwide worker revolution or a number of other things) or accept it. You can’t both reject it’s basis (by believing in virtue in this particular instance) and then also argue for the continuation of social contract democracy.
March 19th, 2009 at 7:19 pm
In the next economic downturn there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.
Sadly, no. Most people get their news from four or five corporations, that have every incentive to avoid addressing those issues. Instead you get stupid message-of-the-day like the ongoing “AIG bonus outrage”. And half of the country will be convinced poor people buying houses is the cause of the economic meltdown.
March 19th, 2009 at 7:29 pm
Rotten crowd.
March 19th, 2009 at 7:29 pm
I think the great unwashed are more than capable of distinguishing between those playing Monopoly with other people’s money and those playing with their own. You don’t notice anybody whining about all the expensive toys the Googlers are buying, do you?
March 19th, 2009 at 7:34 pm
In other words, was Madoff really a black hat among honest businessmen, or was he just one unusually crude player amidst a rotten crowd?
The second thing.
March 19th, 2009 at 7:37 pm
1) I think the great virtue of Bernie Madoff — and of the CEOS who brought on this economic disaster — is that they have buttfucked MILLIONS of arrogant, middle-class Republicans. Their life savings are toast — and they are still too fucking stupid to realize it.
I get a surge of joy every week reading Peggy Noonan’s whining.
2) Richard and I predicted this 15 months ago.
First I commented:
“As I’ve noted before, there IS a silver lining to the Bush Administration. Bush has screwed millions of middle-class Republicans like dogs — their life savings are toast — and yet they lack the intelligence to realize it yet.
So those people like Fred who are still making earnest attempts to rationalize Bush’s reign give the rest of us reasons to break out in guffaws. It’s not quite as comical as Jay Leno –but close.”
3) Then Richard noted:
“Not to mention that seven or eight months from now, we will officially be in a recession – and by some accounts, a bad one.
In fact, one guy is predicting about 4.5 trillion dollars – ten percent of the wealth of the nation – is about to disappear.”
4) Nature punishes the Stupid.
But then , the Christian Republicans don’t believe in evolution. Which also cracks me up.
March 19th, 2009 at 7:38 pm
See http://matthewyglesias.theatlantic.com/archives/2007/11/the_permanent_presence.php#comment-908328
March 19th, 2009 at 7:53 pm
On the one hand you have people basically inclined toward Hiltzik’s that a lot of the people making the big bucks for the past 10 years are basically scammers who lucked into the ability to siphon tons of money out of the economy without really doing anything useful or valuable,
Banking is a form of siphoning off. Investing may (or may not) be going into productive enterprises. Trading is just smoothing the curve (that is, siphoning).
and between people who think that they’re genuinely smart hard-working people
You can be smart, and hard working, and still just siphoning off. You can smart and evil. Or hard working and evil.
who just happen to deserve to pay somewhat more in income taxes than they currently do.
If they worked that much better, and they contributed as much as people say, we shouldn’t tax them. That’s the point with Rand, after all. She says the very upper-crust of upper-crusties is doing the important stuff, and if that were true, then tax cuts would be order of the day, because we would all be way better off. On the evidence of history, we ARE better off for having banking and investing, but we aren’t so much better off that we should give everything to these guys.
If I went purely utilitarian, our aggregate utility has collapsed over the last decade, and it was wheezing during the decade previous to that. If we could wind back the clock we’d be better off. I wouldn’t want to wind the clock back to the 50’s, because we would, in fact, be worse off. Same with the 60’s, a lesser extent the 70’s, about the same for 80’s and then we hit the middle 90’s and wow, kind of a downward trajectory from there.
Unless you’re Cramer; then you’d wind the clock back to 2006 and hey!
max
['I would like the curve to turn up again, please.']
March 19th, 2009 at 7:56 pm
You know what would improve this post: painting with a broader brush. I think it’s a bit too nuanced.
March 19th, 2009 at 8:01 pm
Hell, compared to some of these pieces of trash, Bernie Madoff is a freaking saint.
The people behind Citi and Bear Stearns and Merrill and Chase and BoA and IndyMac and Countrywide and WaMu and Goldman and all these other sleeze ridden “banks,” not to mention AIG, are all every bit as bad and as vile as Bernie Madoff.
Worse yet are the pigs that are making billions off of this mess. All of these counter parties who AIG and the others owe money to.
Skip the bonus tax. Lets jack the capital gains tax rate up to 75%.
Anybody who held stock in these failing companies is already sheltered from such a hike. So that leaves the a-holes who invested in the hedge funds that are counterparties to these CDO and other derivatives that are making all these big banks insolvent.
Screw ‘em and tax ‘em.
March 19th, 2009 at 8:35 pm
Slightly off track thought, but I think there is something else going on here also. For most of the last 20 years the average person looked to the wealthy as aspirational and motivational. If they could make that kind of money, live in those houses, etc then maybe we can do it too. And for a while, with rising house prices, 401k’s and easy credit most felt they were sharing the wealth (despite increased wealth disparity and flat wage growth).
Now, feeling broke, insecure and afraid of the future, and realizing it was all a mirage, people are angry. Most have been left with scraps and now it makes them angry at the ones still apparently living the luxurious life. People just didn’t get it before, but now they do – they will never have that life, so now they want to take it away from those who still do. Not a healthy circumstance I believe.
March 19th, 2009 at 8:53 pm
I saw awhile back that 10% of Americans thought they were in the top 1%, income or asset wise I am not sure, and that 40% thought they might get to the top.
Now I won’t stand by those numbers but the point is well taken. Many think if they can just get that one big break they can capitalize on it and get right to the top just like that.
A very destructive illusion which served the top very very well. As the more typical small ‘d’ democratic contempt or at least skepticism to wealth rises the political landscape will undergo a huge change.
March 19th, 2009 at 9:04 pm
I saw awhile back that 10% of Americans thought they were in the top 1%, income or asset wise I am not sure, and that 40% thought they might get to the top.
Now I won’t stand by those numbers but the point is well taken. Many think if they can just get that one big break they can capitalize on it and get right to the top just like that.
Three words: Joe the plumber. That’s many Republican voters: delusional millionaire-wannabes who are enraged by tax rates they will never actually face.
March 19th, 2009 at 9:20 pm
My sister writes structured settlements and annuities and ocassionally does business with another brokerage with close ties to AIG.
The other broker had brought his son in because he’s worthless at anything and was failing. A few years ago AIG threw their big party out in Vegas for their good clients and the son went out. They are there partying it up, and they had bought a floor of some swank ass casino. The guy who ran (runs?) the structures division invited the son and a bunch of other brokers out to a strip club.
Because they had rented the floor, they had a limo at their disposal and when they got there, AIG guy stiffed the driver on his tip and the brokers covered for him. They went in and proceeded to destroy enough Cristal and lapdances the tab was over $20k.
The idea behind these trips is AIG is rewarding it’s better clients. AIG guy realizes what he’s done and really, really, doesn’t want to explain to his expense account what he did, so he talks the dim-witted son of the broker into covering the tab on his father’s brokerage credit card with the promise that he’ll find a way to work the expense account and pay him back.
He never did.
These are our best and brightest.
March 19th, 2009 at 9:22 pm
I presume that you don’t think that we can have an economy without a financial sector or without CEOs. So what difference does it make that you dislike the people who do this. How does hating CEOs vs. not hating them make any difference if both sids have the same public policy ideas?
March 19th, 2009 at 9:24 pm
Re Al at post 8, anyone remember some of the past gems Al has given us on the investment front?
1) About 14 months ago (January 2008) in response to Matthew noting that Paul Krugman was seeing storm clouds, Al responded:
“Re ‘Krugman votes for doom’
That’s the best news we could possibly have about the economy. Krugman is, after all, about as bad a predictor of the economy as one could be. Remember when he predicted deflation? Didn’t happen. Howabout when he predicted stagflation? Didn’t happen either. Howabout when he predicted recession repeatedly over the last several years? Hasn’t happened either. What would really scare me is if Krugman ever predicted smooth sailing for the economy.
Posted by Al | January 11, 2008 10:33 AM ”
————-
ha ha ha ha. So how’s that Krugman-contrarian approach working with the ole investments, Al? Got any stock tips.
hee hee
Ref: http://matthewyglesias.theatlantic.com/archives/2008/01/the_coming_cut.php
March 19th, 2009 at 9:32 pm
If you’re really asking, then the answer is the latter. How can any just society allow the ‘most talented’ to make over a hundred times the minimum wage? We should all be kicking ourselves for opening up this Pandora’s box.
March 19th, 2009 at 9:36 pm
I continue to be amazed (and disgusted) at how little criticism the Fed has received in all this. The Fed enabled a 20 year long reckless expansion of credit and apparently didn’t ask any tough questions about what their biggest member banks were doing with all the easy money. Bernanke likes to huckster himself as an expert on all the “mistakes” Mariner Eccles supposedly made during the 1930s but the best rejoinder is this classic from Joseph Stiglitz:
“To destroy the financial system in so few years was an achievement. Only somebody who had studied the Great Depression could have done it so quickly.”
March 19th, 2009 at 9:45 pm
Kafka, whatever you think of the “Greenspan put”, I can’t see a plausible set of dots between there and the set of financial time bombs that are detonating right now. Why would a tight money policy have helped anything. This is Austrian magical thinking. I’m not saying it was wise or prudent, but it’s not the *why* of where we are.
March 19th, 2009 at 9:46 pm
Not a rotten crowd. A rotten system. A crowd that did what the system incentivized them to do. A public acting gobsmacked now that 30 years of warning signs really were right.
March 19th, 2009 at 9:48 pm
Er..re that $165 Million bonus payment to AIG –and Matthew’s question re the nature of financiers — this just in:
——–
“A.I.G. Sues Government for Return of $306 Million in Tax Payments
While the American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.
A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.”
Ref: http://www.nytimes.com/2009/03/20/business/20aig.html?_r=1
————
ha ha ha Never give a sucker a break
March 19th, 2009 at 9:50 pm
But kafka, we need the Fed. A mostly unaccounatable institution that can stimulate the economy by adding money to it is absolutely necessary for our economy to function. Because as we all know, moving money around is what causes production. Circulating money is what gets the eonomy working, not producing stuff.
Criticizing the Fed for reckless credit expansion? You must be one of those Ron Paul LOONIES, because only a loonie wouldn’t trust Ben Bernanke to be our savior.
March 19th, 2009 at 9:54 pm
Re my AIG report at 23,
Had enough Matthew? Or are you thirsting for more?
March 19th, 2009 at 9:58 pm
A.I.G. Sues Government for Return of $306 Million in Tax Payments
Are we a sovereign nation anymore? These people are looting the Treasury.
March 19th, 2009 at 10:01 pm
Somebody has to be the CEO. The irony of the current crisis is that it demonstrates the massive importance of financial systems–everything goes to hell when they screw up.
But the other thing said crisis demonstrates is that paying these people lots of money does nothing to decrease the likelihood of screw-ups. This suggests a public policy change from the status quo–cap their salaries or tax them away, they do no damn good.
March 19th, 2009 at 10:07 pm
The Fed enabled a 20 year long reckless expansion of credit and apparently didn’t ask any tough questions about what their biggest member banks were doing with all the easy money.
The easy credit would have been fine, if they’d regulated. Hell, if they’d regulated, that would’ve forced more money into the real economy which would have grown a little faster.
I sometimes get the sense that what Matt is saying is that everyone involved in finance in any way is just like Madoff and the worst people at AIGFP. And if that is what he is saying, then count me in whatever other camp he is defining, because that is really a ridiculously sophomoric view of the world.
I would say that banking and finance tends to be a useful form of legalized stealing. The temptation causes thing to get out of hand really really fast.
ha ha ha Never give a sucker a break
In the end, AIG (as a whole) is an out-of-control organization. It’s like they thought the bailouts were BYOG invitations: Bring Your Own Guillotine.
max
['Next they'll be tp'ing Capitol Hill with those paper rolls printed will dollar bills.']
March 19th, 2009 at 10:13 pm
I presume that you don’t think that we can have an economy without a financial sector or without CEOs.
True, he hasn’t yet figured out how fundamentally parasitical the capitalist class is, but he seems to be making progress.
Not a rotten crowd. A rotten system.
Indeed.
March 19th, 2009 at 10:33 pm
Of course Gatsby is probably about obsessive love more than anything.
(Then make a request Linus.)
I will. The Japanese government and in particular its immigration ministry might be on some kind of suicide mission but at some point will the American news media dispense with the idea that this is some kind of l’ancien honor bound culture in which everyone kills themselves when their job doesn’t work out. Japan has the 11th highest suicide rate as in not the highest, or third highest, or eighth or tenth highest.
Also: Gatsby has probably the most perfect plot in American letters.
March 19th, 2009 at 10:40 pm
So Obama’s handpicked Pakistan/Afghanistan envoy, Richard Holbrooke – AIG director from 2001 to 2008 who paid himself hundreds of thousands of AIG’s dollars to drive the company into the ground – which type is he?
Qua diplomat, Holbrooke’s legit. Qua financier, I’d say he’s running a scam. I mean, clearly he wasn’t providing valuable services to AIG or its clients.
March 19th, 2009 at 11:35 pm
Closely examined, the public trusted highly regarded and respected institutions with their hard earned money and debt. What’s different from the Madoff fraud? The whole economic growth policy, consumer not production based, in the hands of a Wall Street operating in the style of the Wizard of Oz.
March 19th, 2009 at 11:42 pm
Well who else but the filthy rich would we use up our innate stock of bitterness and contempt on? The people like us who drone through the day doing boring things so people will give us money? The poor young schleps suffering from ambition, which is nothing but a hoax on the young to get them to work for less? Bloggers with too many opinions? Politicians, Real Estate Agents, and Lawyers? (well maybe, but too obvious). No, I think the filthy rich is the right choice, and I support it.
A dark horse choice would be people who make a lot of money saying obvious things, like “people will feel bitterness & contempt toward the filthy rich”. Nah, you really have tot ip your hat to that.
March 20th, 2009 at 12:05 am
Wow, the first time I’ve seen the alborg right on something. Holbrooke is certainly part of the rotten crowd. Thrown in Daschle. Don’t forget Phil (I love subprime) Gramm, or his wife, Cruella de Ville, sitter on the Enron board.
These and other rotten creameaters are paid in order to bung up and make sure that nothing happens to the system. They operate politically, as rentseekers, to keep the unholy triangle of the media, the financial sector and the political market connected. They are, in total, scum.
So there is a “gap” on the progressive side? That explains the puzzling fact that one of the great openings – a wonderful symbol of Bush capitalist excess, the whole AIG narrative, from the slimy 15 billion weaseled through AIG to Goldman Sachs to the incredible bonuses has not piqued those rational “progressives” who aren’t going to get distracted by symbols. So sweet of them! Let’s not investigate, after all, the TARP business with Goldman Sachs – after all, we want to help the American people here! And what helps them more than circulating money to the wealthiest? I mean, let’s not get carried away about trickle down – it works, honest!
Instead, the gap seems to be between those who tweak the system, click their heals together and wish for the party days of neo-liberalism, 1999, to come around again. If only good witch Larry Summers could make it so! – and those who were under the delusion that we needed change.
Except the delusives have reality on their side. The sweet dream of the financial system coming back is a pipe dream. The money dropped into it from the gov is also not coming back – I wonder how much the damages will add up to in the end? But at least we didn’t try to politicize the rational economic decisions of bankers. Thank god for that!
As for looking up to the rich freaks – as cargo cults go, it is boring. Mexican drug dealers come up with much more interesting and colorful cults than ones woven about overweight white guys with toupees and the imaginative power of your average cricket.
March 20th, 2009 at 12:09 am
Criticizing the Fed for reckless credit expansion? You must be one of those Ron Paul LOONIES, because only a loonie wouldn’t trust Ben Bernanke to be our savior.
Fuck the Fed. I could make a case for it or make a case against it. Does it have fuck-all to do with this? It’s like dealing with republicans wanting to blame Mexicans for everything. The problem is unregulated, crazy as hell, 50X levereged bets. They weren’t made because the quants and their bosses sat around a board room and chortled that they were too big to fail. They were made because they were allowed to and and the finance industry convinced themselves and their patrons that they were too damn smart to get themselves into trouble.
They were following your glibertarian, bullshit, economics and I’m sick to death of hearing you whine about it. Take away the Fed, why shouldn’t they have been allowed to make stupid bets? It’s their money, their investors. They leveraged 50x because the Fed gave them a couple points on the principle? Lie down fool, yer dead.
March 20th, 2009 at 12:56 am
You have the story from the Daily Beast that the market-making op served as a loss-leader for the Ponzi scheme.
Point is, the scuttlebutt is that everyone who invested in him thought he was cooking the books, but assumed he was insider-trading off the market-making, and that he was too smart to be caught, or the SEC was too weak and understaffed. The surprise was that it was an old-school Ponzi. (Of course, we still don’t know the extent to which the operation worked over time, given that he took the guilty plea and went directly to jail.)
March 20th, 2009 at 1:12 am
On the one hand you have people basically inclined toward Hiltzik’s that a lot of the people making the big bucks for the past 10 years are basically scammers who lucked into the ability to siphon tons of money out of the economy without really doing anything useful or valuable
This reminds me of the bumper sticker on Ron Paul’s desk.
March 20th, 2009 at 3:31 am
Re: Drucker –
CEOs are managers – not owners. They’re not SUPPOSED to get super-rich.
Americans have no problem with owners of businesses getting wealthy. Warren Buffet, Bill Gates, Sam Walton – billionaires and rightly so. They owned the business they built – and they took risks to do so.
As the dot-com bubble inflated, some lucky CS geeks got very rich. But at least they started businesses, developed software or technology, and sold out to Microsoft or old media. America never begrudged the lottery-winners of Silicon Valley.
The problem is that the CEOs and traders want to be as rich as owners of the businesses they run and the wealth they manage. They interact with billionaires regularly – why should they not join the crowd?
Dot-com millionaires are like home-owners… the CEO is your fucking gardener.
March 20th, 2009 at 10:51 am
Hahaha. So true.
The gap isn’t some mysterious new conflict within leftism; it’s simply the gap between populism and, you know, smart people. This gap isn’t just on the left, you can find it on the right. (Though lately the right can’t claim very many smart people, sadly.)
I certainly don’t think that all business executives are crooks; nor that all wealthy people are crooks. I’ve known too many business executives and wealthy people to believe this. But I do believe that certain segments of our business culture periodically get infected with a larger-than-average representation of people who are not too unlike crooks (and some who actually are, too).
This occurs whenever there’s a confluence of several factors; primarily large amounts of money to be quickly and easily made in conjunction with lax regulation. Nowhere has this been recently more true than in the mortgage and investment banking businesses. And, historically, this seems to be a pattern with so-called “high finance” and property. I’d bet that we’d find a lot of corruption in the home-building/property business in the last six years if anyone really looked. Easy money, lots of it, low regulation, and everything happening very quickly. A recipe for corruption.
Populism, however, especially in bad times, tends to see all the well-off and privileged as practically demonic. It frightens me because a lot of the most horrific massacres in history have occurred during populist uprisings during really bad times. Who’s aiming to be our Robespierre, I wonder?
March 20th, 2009 at 11:56 am
Ellis’s point is funny.
It would be nice to have a Robespierre. Or at least a proxy – instead of off with their heads, up with their marginal tax rates.
But when it comes to killers, ours are oh so much cleaner, of course. They operate out of D.C. and wouldn’t harm the hair on an Iraqi refugees head – although they will fight to the death to prove that it wasn’t 600,000 Iraqis that died in the occupation, it was, well, who knows, but it brought about freedom and victory.
I think the inhabitants of Baghdad would have gladly traded places with the inhabitants of Paris in 1793.
But at least there aren’t any scary American populists who are going to inflict liberation on Americans – that would be so icky.
ps – Robespierre opposed war. He was overruled on that issue, the reactionary forces assembled and attacked France, the French army, made up of the people, made a successful defense, and wars thereafter swept across the continent until 1815. At least a million people were killed in them. Compared to Pitt, or Napoleon, Robespierre was a lamb.
March 20th, 2009 at 12:19 pm
Well, Roger, it’s clear that if the revolution comes, I’ll need to watch out for your coming for me with your axe because I’m a tool of the overclass. I’m sure you’re keeping your blade sharp, just in case it’s your lucky day.
March 20th, 2009 at 1:00 pm
Keith, Here’s a little recipe for avoiding revolutions. A. don’t ditch social insurance; b. don’t use the government to batter down the cost of labor; c. don’t then deregulate credit so that the lag in wages can be made up by accruing vast amounts of private debt; d, don’t produce an elite with such political power that it is immune to the consequences of any action it happens to undertake, and finally, e., don’t hook the whole system up to the speculative sector of the economy.
Good advice for Louis XVI. Good advice for the braindead Ameerican elite.
Of course, I get all confused about the bien-seanceness of populism. When it is in the Ukraine, we call it the Orange Revolution and welcome it. Or how bout that Velvet revolution, throwing out an unaccountable elite that fucked up the entire economy for years and mixed itself in with criminals. Hmm, what does that remind me of?
So, the AFL-CIO is hiring buses to tour the AIG neighborhoods of Greenwich, and off in the distance I hear the terror! Myself, I’m glad the unions are waking up. Left populism is an excellent opening for those who see the advantages of changing this odious system. Which, of course, is going to be changing one way or another, since it is permanently broken.
However, I can’t see you have much to fear from being beheaded by axes. The upper middle class american is perhaps the most secure human being in history – and, wierdly, the most fearful. They jump as soon as they see their shadows. But the people who make the axes, say, in a Juarez maquilladora where laissez faire has created the perfect dystopia – they don’t have that security, since they do end up, in considerable numbers, raped and whacked. Maybe that is why the upper middle so fears populism, since the system they exploit is so completely rotten.
March 20th, 2009 at 2:46 pm
First of all, I live on a disability check of less than $1,000 a month. I’ve not been even middle-class for about six years now.
Second of all, I agree with all your prescriptions for avoiding revolutions and also agree with your point about the inconsistency of conservatives about “revolution”. Lucky for me, I’m not a conservative.
Look: I realize that you are feeling a populist outrage against the GOP and monied class and thus are interested in defending populism and criticizing the GOP and the monied class. That’s fine. But I don’t really appreciate you attacking me in their place.
I think both history and even some science are on my side with regard to the dangers of populism. When mobs of people get angry, they kill other people indiscriminately. Or, I should say, they kill OTHER people indiscriminately. They identify an “other”, demonize them, and then indiscriminately identify many, many people as part of that group and, often, violently and bloodthirstily murder them in the name of “justice”. I think it’s pretty shocking that you’d defend Robespierre. So what if he was anti-war and hated the aristocrats who fought wars that killed millions? Robespierre killed thousands, quite directly. You almost never have these sorts of murderous uprisings without the context of there being a legitimate grievance they are opposing. That doesn’t make the murder right. There are examples of popular uprisings that aren’t murderous.
And the reason this is, is because people who are influential and charismatic during these times have a choice, and the choice they make reflects their essential nature. Some direct the mob’s righteous anger in more productive ways. Some direct the mob’s righteous anger into murder and oppression. And others make crucial early decisions about which influential and charismatic leaders to support.
That’s why I think it’s important to push-back against violently angry (even if, apparently, only rhetorical, like yours) populism. It means the difference between choosing the better path rather than the worse.
March 20th, 2009 at 3:01 pm
If Bernie Madoff were more like Captain Jack Sparrow, I might admire him on his own terms. Like Sparrow, he’s an unrepentant, scurvy pirate. But without the charming idiosyncrasies.
March 20th, 2009 at 3:08 pm
I don’t think either really describes the situation we’re in. It’s not because of a few bad apples or a lot of bad apples that the global economy is seizing up. It’s because of rot in the system. We can’t just let AIG (or even just AIGFP) collapse because it will effect many if not all other sectors of the economy. The problem, like Lehman, is that no one, good and bad apple alike, knows how much they are on the line because of these crazy investments in derivatives. See this:
http://www.talkingpointsmemo.com/archives/2009/03/yep_it_was_really_that_bad.php
We are in this place more because of poor policies than because of the greed of a few individuals.
March 20th, 2009 at 3:30 pm
Hiltzik sums up EXACTLY what I feel, and what is too rarely mentioned elsewhere: “Some of them added little value to the economy but merely moved money around in novel, excessively clever and ultimately destructive ways; others are corporate executives who were ridiculously overpaid whether they succeeded or failed at their jobs.”
They were lucky. Essentially, someone had to do their job, and it happened to be them. Just like someone has to stock the shelves at Wal-Mart. I don’t necessarily think they were BAD people, but they were no better or worse than anyone else, and they did not DESERVE the money more or less than anyone else. They might as well have paid the Wal-Mart worker $3 million – he contributed just as much to the actual well-being (as opposed to the fantasy of it) of AIG as most of the paper-shufflers did.
Madoff was a crook only because he didn’t tell people he was running a Ponzi scheme. The rest of the people behind the destruction of the economy were playing the same game of inventing profits where none existed – they were just able to hide it better.
March 20th, 2009 at 3:32 pm
Keith,
Don’t waste your time with the likes of roger. . .folks like him are just waiting for their version of Timothy McVeigh to do their bidding.
March 20th, 2009 at 4:02 pm
He was probably just window dressing. He only made $800,000 in 7 years (for that work). I’d like to make that much, but it’s not big time financial scam money. You could make that without being in the top tax bracket.
March 20th, 2009 at 5:18 pm
Cal, what a bizarre remark. Timothy McVeigh is about as far as you can get from Robespierre. Someone blowing up a government building in Oklahoma City is not someone landing a blow against the corrupt inside dealers on Wall Street and D.C.
The idea that raising tax margins on the wealthy is the equivalent of beheading is comical. As is the idea that we should calmly watch blackmailers pick the public pocket.
This is an excellent time to get mad at the wealthy. It is much like the period of populism that prepared the way for all the progressive pieces of legislation in the 1890-1914 period. The wealthiest five percent of the country currently own and should not own, 23 percent of the wealth of the country. Diminishing that entitlement should simply be central to liberal politics right now. You can’t have liberal politics in a society in which the inequality looks like Mexico or Turkey.
The inequality is not an accident, but the result of the dommination of the economy by the speculative sector – the financial services sector. In reality, that domination has been destroyed, as that sector is shrinking and will continue to shrink. The last corrupt act is unfolding as we watch great amounts of wealth disappear into the jaws of those zombie companies. I’d say that the McVeigh analogy is closer to what AIG is all about – randomly blowing up the lifestyles of American families.
I guess you must think the AFL-CIO is full of McVeighs, as they sponsor bus tours of AIG wealth.
March 20th, 2009 at 5:45 pm
I never made that argument. Indeed, I support raising the highest marginal tax rates to even double what they are now.
What I argued was:
…to which you replied:
Wow…you’re the one who equivocated beheading with raising marginal tax rates. I guess you amuse yourself. I’m sure you do, in fact.
I, however, never equated the two. I warned that angry populism in bad times has historically often led to excess and, yes, massacres. What really inspired the popular outrage, or focused it, were the AIG FP bonuses. Taking that outrage and applying it to employees of all bailed-out companies who make, per household, more than 250K is excessive and the opportunistic demagoguery of the politicians who passed this bill is an example of exactly the sort of thing that leads to institutionalized excess and vast injustice. You know, not unlike the GOP’s response to 9/11.
March 21st, 2009 at 9:01 am
populism = massacres
at this rate our rich progressive overlords will be adopting the republican cry of class warfare by Tuesday
March 21st, 2009 at 7:33 pm
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