There's Revolution in the Air

It's getting impossible to keep up with the rhetoric and political noise surrounding AIG, the banks, and executive bonuses. Will the government try to rein in executive pay generally, rather than just at AIG? Is this an example of the kind of misguided policy and mass hysteria which results when you try to put politicians in charge of for-profit businesses? Will it wreck the economy outright? Or is the real problem that "the administration's officials are too marinated in the insiders' culture to police it, reform it or own up to their own past complicity with it"?

I don't have any answers, but I do have a question: might we be seeing the first real rumblings of class warfare -- the genuine article, not the Republican talking-point -- in this country?

In one corner are the technocrats (not only in finance, but also in government) and the media: people who can understand the importance of distinguishing between a $250,000 base salary, a $2.5 million bonus, a $250 million bonus pool, a $2.5 billion bonus pool, a $250 billion bailout package, a $2.5 trillion monetary stimulus, and so on.

In the other corner are the real people, the angry people, the unemployed people -- and with them their elected representatives in Congress. They're not interested in such distinctions any more. They're not interested in what's fair or what's sensible. They saw their real wages stagnate for decades as the orgy of plutocratic self-congratulation reached obscene levels only to keep on growing. All they ever had was the American Dream: the idea that they, too, might one day become dynastically wealthy and join the overclass.

Now, of course, that dream is shattered -- and, what's worse, it turns out that very overclass is responsible for the working class's own present straits. While the talking heads in New York and Washington throw around their millions and billions and trillions before commuting home to their comfortable middle-class-and-better lifestyles, the rest of the country is mad as hell, and ain't gonna take it any more. They're not interested in constructive solutions or in leveraging private capital or in the sanctity of contracts: fuck that shit. Those days are over. They want to see jail time, confiscatory policies, and worse.

As inequality grew in America over the past 30 years, there was always the risk that it would snap back violently and dramatically. That day is not yet here, but it's closer than it has ever been, and its possibility cannot be discounted. Barack Obama smells the public mood, and is trying to respond to it in a grown-up and non-incendiary way. Congress smells it too, and is being rather less grown-up about things. And Wall Street still largely remains inside its bubble, watching the tour buses on the outside with fear and incomprehension. But unless some very senior executives start smelling the coffee sharpish, they might end up facing the biggest tail risk of them all.

Comments

[ThatGuyInTh...:]

The wealthy oligarchs that run the USA's and the world's governments have failed. Their short-term, insular and insulated thinking guaranteed it. Yes, revolution will happen. When the rich become government, a revolution against government becomes de facto class warfare.

Much like an enema, revolution is an uncomfortable process, but sometimes, nothing else will suffice.

Mar 23 09:56 AM

[Bruce Vande...:]

Yes, there may be the beginnings of unrest. I still think the private sector is by far better at running things than the government.

The "Bonus issue", "Private Jet Issue", "Golden Parachute issue" are very real to most Americans, even though these issues may be distractions from what is really important: fixing the system.

"We the Public" are now owners to varying degrees in financial institutions. Also, "We the Public" has fiery representatives in Congress who need votes. Wall Street will have to change their image if they are as smart as they claim to be.

Less arrogance, more humility, prudence and frugality are the order of the day, especially for those who who don't think they need these virtues. Not a good time to park your Lexus near Walmart.

Mar 23 10:14 AM

[kelm:]

The term you are looking for is "Populism" - a political ideology that has ruined more countries around the world than I can count. It is especially rampant on South America with results that I'm sure we all know. Congress and the administration are in a reactive mode to populist protest - they are not leading it - yet. It is only a matter of time before they do start leading it and the AIG bonus issue may be the starting gun. If true populism gets going we can expect a radicalization of opinion beyond what we have seen. It is entirely possible that both mainstream US parties will try and outdo the other. Populism doesn't leave much room for serious, rational thought. One hallmark of populist governments is that they usually end up nationalizing and ruining vast swaths of their economy. (Argentina, Bolivia, and Venezuela to name a few).

Mar 23 10:47 AM

[Jan Baker:]

"They want to see jail time, confiscatory policies, and worse."
And worse. Yes we're capable of much worse than the legal steps of jail time and confiscation. We're capable of marching through the streets with machetes. The same devolution of morals that has accompanied the sexual revolution and the infidelity of business practices has affected our ability to restrain our anger or to channel it through legal, constitutional expression. We are neo-pagans now. We can smile one minute and claw your face off the next, like the chimpanzes paganism is next to.

"Barack Obama smells the public mood, and is trying to respond to it in a grown-up and non-incendiary way."

The Obama we've been watching on CNN? I don't think so! That Obama has been fake coughing in fake anger, making numerous incentiary statements against those execs his legislation enabled, and doing everything possible to stir it up and divert attention from his complicity. The Obama we've been watching on CNN has taken a note from China and attempting to spark a cultural revolution. In case you missed the one in China, it consists of encouraging the public to take private actions against those it deems enemies of the state. You don't necessarily kill them, but you can beat them, parade them through the streets, raid and loot their homes and businesses, humiliate them, and fire them at will. It worked 'great' in China to destroy what was left of Chinese culture before communism. No laws that might be unconstitutional are necessary. You just praise anger, model ire, and make no moves against those who act out. You just wink at the usually youthful perpetrators. It's as old as civilization, and Obama is playing it. Please! Moderate? If you call his failure to put legislative restraints (I mean explicit strings) on TARP money and tendency to threaten those who don't subsequently read his mind in the virtuous usage of said monies 'moderate,' you don't have enough experience yet to read the danger signs. But anyone who's ever had a bad boss can read it well enough. Talk about toxic! Obama is the father who refuses to tell his kids what time to get home because they 'should know' and then flips out when they're late. It's an incredibly dangerous game, given our history.

Mar 23 10:58 AM

[Pat Shuff:]

Rousable rabble ain't a bad thing, in and of itself. It's just that the management tends to evolve towards self-interested goals and intents quite different from originally stated aims. See: Bolsheviks

Mar 23 11:16 AM

[ain't no fo...:]

Good "framing of the issue" Felix - like it or not we are where we are, and while the clash of the political and corporatocratic (I think I just made that one up) egos builds, the PEOPLE are getting restless.

Send lawyers guns and money dad, the schitt has hit the fan.

Mar 23 11:43 AM

[Fred Swartz:]

If you think about this as a dollars issue, you're missing the point; this is about ethics, fairness, and accountability.

The wrongdoings of the past few years were supposed to be righted by Obama -- that's why I voted for him. But now I'm mad that he talks no earmarks and controlling excessive salaries, but acts otherwise! He asks Geithner to "use all legal means" to recover the bonuses paid to wrongdoers, but it looks like find all legal means to defend them.

Is the US still being run by the same corruptocracy? Congress may be responsible for many of the problems, but they are at least willing bend with the wind to address the core ethical issues better than either the companies themselves or the administration.

Disclosure: Long pitchforks.

Mar 23 12:32 PM

[LKofScotland:]

Best column you've ever written. Thomas Jefferson himself said "a revolution every now and then is a good thing." Keep the Constitution--everything else must go.

Mar 23 01:22 PM

[carey_jim:]

America is one of the few countries that has never had a truly populist, socialist revolution or government with the possible exception of the Franklin Roosevelt presidency (most of his proposals were struck down by the Supreme Court. www.hpol.org/fdr/chat/ )

England had Cromwell and its Puritan revolution. France had Napoleon and the French revolution and Germany had communism in the east, not to mention the populist and quasi-socialist (really fascist) Nazi dictatorship of Adolph Hitler.

China, Russia, the east European countries, and many south American countries including Cuba have been socialist.

But the American oligarchy has always managed to suppress organized labor and its populist and socialist tendencies.

This suppression began with the corporate war against the union movements after the Civil War, and continued into the 20th century with the suppression of socialism and communism, before, during and after World War I. www.creators.com/opini...

Eugene Debs, for example, who ran for president in 1920 as a socialist from his jail cell and got almost 7% of the popular vote, was jailed under the pretext that he advocated (sedition) that America stay out of World War I. (Woodrow Wilson called Debs 'a traitor to his country.' en.wikipedia.org/wiki/... )

America reignited its war on labor and socialism after World War II when Congress passed various laws against unions (Taft-Hartley, etc.) and began a communist-socialist witch hunt known as McCarthyism. www.amazon.com/War-Hom...

Joseph P. McCarthy and his aid Bobby Kennedy, along with many members of Congress (the House Un-American Activities Committee or HUAC), en.wikipedia.org/wiki/... including Richard Nixon and J. Edgar Hoover, created a reign of terror against the left which only ended with the revolution of the "sixties" (the period from about 1965-75) www.learnhistory.org.u...

As everyone knows, the Ronald Reagan presidency brought a new age of financial and social conservatism which has lasted into the present time.

America remains one of the few industrial countries in the world without a sizable socialist party or labor party and has the smallest union base (if government unions are excluded) of any industrial country in the world.

You might say that the American worker has been stewing in a pressure cooker since the Civil War.

The French Revolution, the Russian Revolution, the English Revolution, the collapse of communism ..... and even World War I, took virtually all intelligent observers by surprise.

History seems to teach us that we can't really know if America will have another spectacular recovery and another twenty year bull run or we will collapse into revolution.

But that's what makes life interesting.

Mar 23 01:26 PM

[blkmtnbear:]

Obama and ALL politicians are best described:
"Who you are speaks so loudly, I can hardly hear a word you say"
Ralph Waldo Emerson

Mar 23 01:37 PM

[goldhammer:]

While I was gardening this weekend, my neighbor -a postman- invited me to a "populist" rally on April 15th. He said, "Bring your pitchfork."

I don't know... is NZ still a viable option for emigration? I don't think I want to hang around during a "populist movement".
/goldhammer

Mar 23 01:48 PM

[Chancer:]

The real class divisions in this country are going to be:

1-The political class who run the country.

2-The public employee class (Fed and state) who have superior pay and benefits protected by union contract and the political class.

3-The rich who will continually be attacked to pay for it all and will shrink by wealth confiscation, or their obvious choice to flee the USA (as Sir John Templeton), which wiil also be the choice of more and more of corporate America (moving corporate HQ's offshore).

4-And all the rest of us in a middle class driven down to merge with the poor. We will all become dependent on the power elites running the government.

Obummer's new America is dumbing down and driving down the US standard of living in every conceivable way.

Universal health care is a perfect example. The liberal idiots (falsely) believe we will get current health care quality for everyone at lower cost. We will get lower quality health care for everyone at higher cost for all. All healthcare will be rationed according to what the US government wants to pay. Cancer patients will receive outpatient chemo, instead of medically recommended surgery (declared too costly). The elderly will be denied surgery (e.g. hip) based upon "flexible" Federal life span estimates, even when your health and family history suggest a longer life span.

When Obummer and the libs in congress pass a new VAT tax, more companies manufacturing for the US market will be driven offfshore (e.g. Japanese auto companies). New business model will encourage imports for US consumers. US wages will be driven even lower.

Obummer's grey new world reminds me of movies like: 1984, Soylent Green, and Fahreheit 451. It won't be pretty.

Mar 23 02:10 PM

[Gedankonomist:]

We don't need a revolution. Just return to the Constitution. The government will be 1/10 it's current size, so would taxes, there would be no FED and the Council on Foreign Relations would have nothing to do.

Mar 23 02:13 PM

[henarl:]

If the President of the United States works for a fixed salary, without performance bonuses, by what stretch of arrogance and hubris do the bankers, Wall St. hotshots, and corporate executives feel that they deserve greater compensation than that. Cap their salaries at whatever the President makes, and no "bonuses". After all, they're just employees. If they're so damned smart, let them start their own business. No wonder the middle class American is pissed off.

Mar 23 03:07 PM

[fireball:]

i am trying the peaceful legal route first. this has drawn the anger and ire of some of your readers lately. my peaceful solution was to retire to cease paying income taxes. i believe this movement is growing.
violent revolution by a disorganized, under-armed rabble would play straight into the statists hands. a civilian that opposes organized, disciplined, military is soon to be buried.
when the army became voluntary and training became exclusive to professional soldiers the envisioned protections of the 2nd ammendment were greatly compromised. the draft gaurenteed that regular guys who just wanted to do their duty and get out were in the population. pitchforks and machetes are not good weapons when soldiers are involved. those are only good to terrorize the helpless.
i would guess that some of the culprits are within the wallstreet ranks. most of the real villians are probably names we would not know. the rotten politicians, the dishonest ceo s, the visible fed officers, the banksters, make your best guesses to add to the list, are probably third level lackeys.
i would guess that reagan was an upset that came in line after the ass. attempt. jfk turned on these men in the shadows after the missle-crises. if you say it is the bankers, the catholic church, the hebrews, the arms dealers, the fascists, the capitalists, the socialists, the industrialists, the communists, the monopilists, the royalties, pick your favorite culprit you are falling for it.
it will take much careful thought, research, and level headed intelligence to identify the guilty. i would guess you will find them in many countries.
a mob revolution will do nothing but serve to strengthen the bonds on the common man. the u.s. constitution was written for the common man. a better resistance would be to vote for men who adhere to it. that would mean voting against nearly every incumbant. it would start with the population living up to their responsibility of understanding the concepts of the founders. we, the u.s. citizens have abdicated our responsibilities and the long term erosion of the constitutional republic now invites disaster.
kelm
hits the nail on the head with the danger of a populist revolution. that is anarchy which will be siezed by a strongman making the desired promises. this too plays into the hands of the statists.
this squeeze comes from above and below. the ignorant, the lazy, the criminal, etc. vote as the elitists wish because of promises of largesse. the outcome will be no middle class, a small elitest class and billions of dumbed-down serfs who cannot identify their oppressers.
electronic voting is a terrible liability. i would suggest as a starting point to read "the battle of athens". this occured in small town america after ww2. it is most interesting. i knew some of the old veterans involved.
i understand the anger. i just hate to see it misdirected. i would also hate to see americans slaughtered like the chinese at tianiman (sp?) square. many should stand trial for treson. none should be lynched.

Mar 23 03:22 PM

[TinyTim:]

yeah, I can see populism coming.
Here's an interesting related read:
www.rollingstone.com/p...

There's definitely a backlash accumulating against the "high finance guys" and probably corp executives as well. What Obama called the New York mentality on 60 Minutes last nite. People who can't get by on less than $250K per year and consider it a tradgedy when they have to fly coach.

I think it's interesting that Congress appears to be taking the populist side, at least wrt bonuses. This may come back to bite them when people start realizing they're also part of the upper crust. Also, "The public employee class (Fed and state) who have superior pay and benefits protected by union contract and the political class."

Things are ready for a readjustment. I would prefer to see it smooth and constitutional.

Mar 23 06:14 PM

[Leftfield:]

This was my last read for the night and I couldn't be more encouraged. i've been incredibly frustrated my whole working life as a self-employed sole proprietor. The system has taxed and regulated ever more to make once easily attained middle class levels a moving target. BS and lies have carried the day.

This article and commentary are about the most reassuring I've seen that plenty of articulate and thoughtful people are out there and haven't sold out.

Thanks!

Mar 23 11:29 PM

[carey_jim:]

The flaw of this and other, similar summaries of world economics and politics is that it over simplifies everything.

The laws governing economics and world history are so complex that it is virtually impossible to either know them well or use the little we know about them to predict the future with any confidence.

The sad (maybe not so sad) fact is that NO NONE is in control of hardly anything and that the world lurches forwards and backwards on its own.

That doesn't mean we should give up trying to understand the world, and give up trying to change it into a better place, but we need to stop building theories of everything and explanations that assign relative guilt and virtue to all human players, institutions and events.

We don't know all the answers or even all the questions and the more we learn about life and the human condition, the more aware of that fact we should become.

History shows that the worst historical consequences often come from the governments with great and noble sounding ideals, while great prosperity and peace sometimes come from bumbling governments that simply let the people alone.

In this time of pain and confusion, we need to let the muddy waters clear themselves and resist the temptation to stir up more muck from below.

Whatever the case, if the revolution comes, it will come on doves' feet, all by itself, unannounced. And everyone will be surprised, even the revolutionaries.

On Mar 23 02:56 PM mikesa69 wrote:

> If you want to know more about what's really going on with the obama
> administration, watch this:
>
> www.youtube.com/watch?...
>
> Hurry, before it gets pulled down. Over 460,000 of your fellow Americans
> have already viewed it. Then I encourage each of you to do your
> own research after watching this and decide for yourself. In my
> opinion it's not a question of "if" there will be a revolution, but
> "when". Sounds like April 15th may be the day historians look back
> on as the start of the 2nd American Revolution.
>
> STAND FREE MY FELLOW AMERICANS. ONE NATION, UNDER GOD, WITH LIBERTY
> AND JUSTICE FOR ALL.

Mar 24 02:37 AM

[Fred Voetsch:]

I now understand that I should have voted for Ron Paul.

Mar 24 03:31 AM

[Charles A...:]

What's the chance that nobody is right and that western capitalism has driven itself over a cliff? I have lived in a pre-credit card, save then spend, post Roosveldt economy and it's not so bad after all ! My money bought more then. I saved more. Marginal tax rates were a complaint of the wealthy, especially the Hollywood types. They remained wealthy buy the way. as did the Brahmins. You could get a part time job at the soda fountain of the local drugstore, which were everywhere. Doctors saw you, when you needed them, out of their home offices.
We had "The Phone Company". Pay phones could connect you to the world. There came a time, in the 1980's when I felt I was on a financial treadmill. It's been one financial scandal after another since. "Greed is Good", but the real footings of daily life have steadily eroded. With all the great new ideas from financial geniuses, ordinary Americans are back in the shit. Congradulations to the business schools. You assholes, you have done what no foreign power was capable of doing. I feel like Charton Heston in the last scene of "Planet of the apes".

Mar 24 01:40 PM