As a former government teacher, I used to try to get my students to be able to took at the economic and political history of America and see the actions and reactions to various sets of circumstances, from wars and rumors of wars to depressions and times of economic prosperity. I had a professor who was fond of saying, “it all comes out in the wash.”
And so it does. The Book of Ecclesiastes tells us that “there is nothing new under the sun.” As far as it goes, that’s still true.
So why is the latest wave of American “populism,” which is credited this time around for electing a Democratic party majority in both houses along with an election majority that mandated the Obama administration, drawing the kind of attention that makes it seem like it is the most unusual thing we have ever seen?
First, it’s just been a long time since there has been a wave of populism which swept across the country and changed the political spectrum as much as this has done. It was a war, Vietnam, rather than an economic crisis that triggered it. The youngest veterans of that war are now in their mid-50’s, and two whole generations have been born since then. If you haven’t figured out yet that what is new to the younger generation is considered “new” to the media, you will eventually. That’s the product of a culture that worships youth.
Second, for true economic and political conservatives, the Bush years were a disaster in every way. The shortsightedness of its economic policy, which basically resulted in the kind of government spending and debt producing that would horrify a Reagan (or Goldwater) Republican appeared to be designed to keep the economic growth moving along just long enough to guarantee a second term to take away the sting that many administration members felt when Clinton denied Bush I a second term. Apparently, many in the corporate world read W’s laissez-faire economic attitude as an opportunity to grab and stuff, like kids at a party with all the cake and ice cream they can eat. And so along comes AIG, Sachs Goldman, J.P.Morgan and a host of others. ( see http://www.americanchronicle.com/articles/view/95747) We had an eight year economic free-for-all in the corporate sector with the stock market soaring to 13,000. Ponzi schemes, and all kinds of devious ways to hide debt, inflate assets and turn gigantic profits came about. Tax loopholes were exploited to the point where, in spite of the massive size of the profits that some companies were raking in, the government was losing out. And in squeezing every possible dollar out of the economy, during a period that showed in the stock market and among the investor class as prosperity, the middle class and working class saw their employee benefits cut, their wages decline, and the prices of the goods and services they purchased inflated. The cost of credit was particularly disastrous for many working people. Frustration mounted, because this segment of the electorate essentially did not have a voice during the Bush Administration.
True conservative capitalism strikes a balance between the ability of a business to earn a reasonable, fair profit and the wages and benefits its employees receive to compensate them for their work which helps to produce the product that earns the profit. It also strikes a balance between the cost of goods and services and a fair, reasonable profit from their sale. But all of the shenanigans in the corporate, banking and insurance world of the past eight years threw that balance off. The end result was that consumer spending fell, especially in the sale of “big ticket” items like housing and automobiles, and the cost of all of those investment and banking shortcuts to profit came home to roost.
Probably no other single event triggered today’s populism like the price of gasoline. Inflated not because of shortages in supply, or even increased demand, but because of speculation in the futures market, gas soared to over $4.00 a gallon in some places, at a rate of inflation over a short period of time that boggles the mind. This hits people in their pocketbook as directly as any economic circumstance. The perception that President Bush was himself a former oil executive, combined with profits virtually unseen on the face of the planet in business created a rising storm of anger that Americans handled in typical fashion. While some may disagree, I think that two or three percentage points of the popular vote were probably affected by the “great gasoline inflation,” though by election time the price had dropped, and perhaps one or two red states turned blue as a result.
And so, here we are. We have, as we always do, turned to our government and said, “fix this for us.” That is the expectation of populism. And as it always does, populism allows for the crossing of new thresholds and the breaking of old rules and traditions. The response to that, initially, is loud, shrill, and generally futile. Down the road, those things become part of our culture. Those of us who are now a little bit older, and (I don’t mind bragging) perhaps a little bit wiser offer words of caution that seem to fall on deaf ears. It is what the young people think that matters.
They will be the ones who pay the bills in the future. I hope they know what they are doing.