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When Do the Peasants Have Permission to Revolt?

October 17, 2009

This past week, as the Dow briefly topped 10,000, you could hear a few feeble cheers emanating from America’s shell-shocked investors. The experts were less optimistic.

“Not out of the woods.” “Bubble-like atmosphere.” “No organic economic growth.” And, as more than one jaded observer pointed out, the Dow first crossed the 10,000 barrier back in 1999. You do the math: ten years, zero growth. In fact, given the decline of the dollar since 1999, we’re looking at negative growth.

As for the NASDAQ, don’t ask. In its glory days before the dotcom bubble popped back in March 2000, the tech-heavy index topped out at 5132. Today, nearly a decade later, the NASDAQ struggles to hold its battered noggin above the 2000 mark. Technology might represent the future, but apparently it makes a lousy long-term investment.

In short, the new millennium has been a bust for the average investor. All those starry visions of endlessly expanding net worth and plush retirements have gone dark. We should have known better than to expect that the system would work for us.

The Great Recession has been even deadlier for folks who can’t afford stocks. The U.S. economy continues to shed jobs at the rate of a quarter of a million a month, and the official unemployment rate is flirting with ten percent. That figure doesn’t even account for the legions of workers who have simply dropped off the map: the downsized, outplaced, terminally frazzled souls who have given up on the business establishment and prefer to live by their wits. They peddle their possessions on eBay, await bankruptcy and watch in disbelief as the authorities grab the keys to their homes.

But you might be happy to know that not everyone is losing out. Goldman Sachs, home to some of Wall Street’s savviest and most sinister money manipulators (including CEO & Master of the Universe Lloyd Blankfein, who currently dwells in a $27,000,000 apartment overlooking Central Park), has hocus-pocused its way to record quarterly earnings — and the firm will be handing out record bonuses, of course — just a year after the financial collapse its employees helped orchestrate. A.I.G., now 90% owned by the American people, has repeatedly expressed a need to enrich its “financial products” traders with staggering bonuses for fear that they’ll jump ship otherwise. (I say let them jump, and let the waters be full of sharks.) Meanwhile, Andrew Hall, a top energy trader for Citigroup and proud owner of a thousand-year-old castle in Germany, is still looking forward to his annual $100,000,000 Christmas bonus.

Clearly $100,000,000 is a lot of pocket change, but numbers in that exalted range can appear abstract and vague. Let me attempt to put $100,000,000 into real terms for you.

Let’s say that Joe Average earns $50,000 a year toiling at his day job. It’s not a terrible salary or an especially generous one; it’s about average. Just how long would Joe have to work if he aspired to Andrew Hall’s $100,000,000 single-year earnings?

Well, he’d have reported to his job sometime around 9 A.D. He could have hired a youthful Jesus to mow his lawn on weekends. A few centuries later, he might have chatted with Attila the Hun at a local bar. Midway through his efforts, he’d have been taking his lunch break as Vikings pillaged the coastal towns of Northern Europe. Later in his career, he might have seen Joan of Arc go up in smoke and attended Shakespeare’s first play.  After helping George Washington cross the Delaware, he’d have only another paltry 233 years to go before he reached the $100,000,000 mark.

Of course, Andrew Hall did it in a year… and he did it not by producing things, but simply by betting on things. We can thank him for driving up the price of gasoline to $4 a gallon in 2008, and now we’re expected to reward him with a pay package that would take Joe Average two thousand years to earn.

The more conventional moderates would undoubtedly scold me for stirring up populist resentments. What am I, some kind of militant socialist? No, I’m a diehard moderate.

As a moderate, I believe in balance. And wherever I see an imbalance, my first instinct is to correct it. When leftist academics continually rant about the destructive influence of White European Males (dead or alive), I’m inclined to see the imbalance and oppose it. Ditto when it comes to lobbyists who use our elected representatives to push their agendas at the expense of the people’s interests. And when I see a tiny, self-appointed economic elite “game” the system so that only the elite can prosper, I have to cry “TILT!”

An outrageous sense of entitlement has crept into American culture, rivaling  the excesses of the Gilded Age and even Bourbon France. How much longer can the peasants (and that covers pretty much all of us who don’t work on Wall Street or in Congress) stand to watch a corrupt elite prosper at their expense? How long do we tolerate a rigged game before we overturn the board and let the pieces go flying?

It’s starting to look like 1789 all over again, but this time we shouldn’t need to storm the Bastille or lop off any aristocratic heads in the aftermath. We don’t even need to redistribute the wealth by force, though the wayward thought has flitted across my mind more than once.

We simply need to pursue a radical moderate course: where the balance has tipped, tip it back to the center. Reform Wall Street so that it no longer resembles a mad gambling casino; we need to be investing in companies, not lusting after short-term capital gains. Outlaw short-selling and other nefarious financial practices. Reform Congress so that it becomes illegal for money to flow from lobbyists to representatives. Expand Congressional terms to six years or more, so that our representatives aren’t constantly in campaign mode, hungering for money. Outlaw campaign advertising and other costly expenditures so you don’t need a fortune or a political machine to propel you to office.

And yes, establish a moderate political party to check the excesses of the right and left… and to give moderate Republicans and Democrats a place to call home. 

Thinking moderates need to start acting.  If we moderates ever unified and found our voice, we’d have the power to restore some needed balance between the elites and the rest of society. It’s a big “if,” given our lamentable tendency toward apathy and detachment. But we have to start now.

As much as I revile those investment bankers for their evil ways, I really don’t want to see their heads rolling in the streets.

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13 Comments leave one →
  1. October 17, 2009 6:50 pm

    Rick, been hitting the caffeine a bit? I hope it’s not that bad, but wait, reforms are on the way- financial, health, but not congressional. I agree, Wall Street and the bankers were allowed to go to far. Many of the things you site were abused using excess leverage and loose internal controls. However, because they were abused, doesn’t mean they are inherently bad. Bringing back the Spanish Inquisition as the lefties would want, could do real harm. Look at the mess Health Reform is in. Washington, including Clinton, Bush, Frank, Dodd and others all helped blow up the bubble. Some, even had good intentions about what they were doing at the time.
    Although none of them will ever admit a mistake (the privilege of being a politician). “Solutions, I don’t need no stinking solutions.” I just hope some of these people get replaced (with moderates) and with reduced leverage on Wall Street (and for us too) dampens future bubble creation. (Weak Reply #1)

    • October 19, 2009 2:09 pm

      dduck: Good point about the system being abused rather than inherently evil. I’ve often said that the kind of capitalism we had back in the 1950s would be ideal: we invested in actual companies rather than “financial products,” CEOs typically earned no more than about 20 times as much as their average underlings, and our financial system didn’t exist to be “gamed” by Wall Street insiders. You could call it “democratic capitalism.” (Hey, I like that; maybe I should trademark it.) I think the loosening of regulations under Clinton, of all people, probably contributed to the current mess. And I agree that the lefties, if unchecked, would probably inaugurate their own reign of terror. That’s why we moderates are indispensable… if only more Americans realized it!

  2. October 17, 2009 7:18 pm

    Don’t ya love when you start writing, and you just get on that roll of brilliance…
    We totally need a balance.. I’m not a ‘Beck-ion’, but I totally believe the pendulum theory he gets from the book The 5000 Year Leap.. If the pendulum were to ever swing this far back to the right, who knows what kind of trouble we’d be in..
    If we replace any democrats in congress, it would be pointless to replace them with moderates, because in Washington, moderates don’t need much arm twisting for legislation to be passed. There would still be an imbalance..

    • October 19, 2009 2:15 pm

      h1jen1: Funny you should think I was on a roll: that post took me forever to iron out to my satisfaction. (Usually I dash them off in less than an hour.) Well, I’m glad I gave the impression that I was “in the Zone”: that’s every writer’s goal.

      I think the problem with Congress is that moderates are the poor stepchildren of both parties; they can barely get themselves elected in their own primaries these days. If they had a party to call their own, they’d siphon votes away from Democrats and Republicans — AND they’d have more clout voting on the issues in Congress. Wouldn’t it be nice for the pendulum to hang in the middle for a change?

  3. Priscilla permalink
    October 18, 2009 9:25 am

    I agree with most of your suggestions, although I would support reasonable term limits (say, 3 for senators/4 for representatives) in place of expanding term lengths for congress members….

    It seems to me that the government needs to get back to its job of regulating corporations, rather than mandating and manipulating corporate behavior. We’ve been drifting towards a kind of oligarchy for a long time, perhaps for all the “right” reasons, but the effect is still the same. Government of the people and by the people….that was the idea.

    • October 19, 2009 2:29 pm

      Priscilla: My sole reason for recommending extended terms is to get our representatives out of constant campaign mode. With the current two-year terms, members of the House are barely in office before they have to think about their next campaign. And that makes them all the more susceptible to the hypnotic spell of lobbyists with deep pockets.

      I agree that controlling Wall Street through regulations is preferable to seizing direct control. (I’m not a socialist, after all.) We need to reverse the deregulation that happened in the ’90s and earlier… then I think we need to outlaw certain types of financial activity (I’ve always felt that short-selling is unethical, for example) and I’d certainly put a leash on all those credit default swaps and other absurd financial speculations. Then the system could run itself, but we’d be able to reverse our drift toward plutocracy. (I have to wonder how our friend Barbara feels about this subject. I’d find it hard to believe that she’s one of “them.”)

  4. October 18, 2009 7:13 pm

    Too, not To, cite not site.
    I just said replace the dems with rep. moderates to be nice; you’re probably correct-little change. Rick is right, we need a moderate party. I used to think the Independent Party could expand.. Didn’t happen. Oh, well I’m going back to smoking my herring reefer.

    • October 19, 2009 2:32 pm

      dduck: Before you start smoking again… there’s already a Centrist party out there, but of course nobody knows about it. (Heck, I didn’t even know about it until a few weeks ago.) I guess it’s an uphill struggle to compete with two parties that have been established for over 150 years; in all that time, our country hasn’t produced a single viable alternative. But we desperately NEED to.

  5. October 19, 2009 6:28 pm

    The thing about pendulums is they average out to zero going from left to right. I think the reps. coming in every eight years or so helps clear out some of the damage dems do, and visa versa. Problem is that some really big programs do get permanently cemented in. So they could be bad or good. Bush years allowed financials, to go wild and environment to be ignored. Dems will probably create a monster of a bureaucracy for financials and health. Wall street uusally likes it when the White House and congress are of different parties. Sort of like taking the BB guns away from the kids (“You’ll shoot your eye out”).

  6. Priscilla permalink
    October 19, 2009 10:42 pm

    Wasn’t the whole idea of the short terms to make the Reps very much beholden to their constituency?…while I agree that this has largely evolved into their being in permanent campaign mode, I think that that is less a result of their 2 year terms than it is a general characteristic of modern politics….look at BHO, who, I submit, is in perpetual campaign mode himself. Congressmen and Senators (and Presidents?)now tend to see themselves as professional politicians rather than statesmen/women. Politicians have a great affinity for corporate money men, statesmen not so much.

    I’m fine with outlawing unethical corporate practices, as long as they are not replaced with equally unethical and unfair public practices 🙂

    And, you’re right, Barbara is definitely NOT “one of them”…

  7. October 20, 2009 10:09 am

    Priscilla, in this case, “the trend” is definitely not “our friend. A few of the politicians are not constantly campaigning, but I think you are right, it’s spreading. Over the weekend, I think I saw at least three OHB supporters commenting on that and his lack of focus. Too bad, I think he should set an example, and as you say be more of a statesman. And I was often told, “keep your eye on the donuts, not the hole”.
    Then, I think he might be very effective given the control the Dems have.

  8. Taliesin Knol permalink
    January 9, 2010 5:00 am

    The peasants can revolt when they are backed by people with money… Always dependents, sigh… Look at all those central American revolts, one white conquistadore vs. the on in power, getting the peasants to fight and die.

  9. July 6, 2012 1:11 am

    Excellent blog here! Also your website loads up very fast!
    What web host are you using? Can I get your affiliate link to your host?

    I wish my web site loaded up as fast as yours lol

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