Last week the Arendt Center held its Sixth Annual International Conference, “Failing Fast: The Educated Citizen in Crisis.” The conference was an incredible success. More than double the number of people registered for the conference this year over last year; more than 1,000 people attended over two days; another 250 watched the conference live on the web. You can now watch the whole conference here. Above all, the conference generated incredible discussions and provocations. Here is one response we received from someone on a post-conference survey sent to attendees:
"Richard Rodriguez's opening keynote lecture was a model of lucidity and profundity. It set the tone for two days of discussion about the tense boundary between private and public personhood and citizenship. The interaction of Rodriguez's call to speak with strangers and Leon Botstein's defense of a public self was clear and powerful, and contrasted meaningfully with James Tooley's advocacy for private schools. The combination was deeply meaningful and provocative."
For your Weekend Read, here is a transcript of Roger Berkowitz's introductory remarks. You can watch his speech and the entire conference here.
Failing Fast: The Educated Citizen in Crisis
Oct. 3, 2013
In the early years of our federal-constitutional-democratic-republican experiment, cobblers, lawyers, and yeoman farmers participated in Town Hall meetings. They would judge how much to pay in taxes in order to pay for how many teachers and how many firemen. By engaging citizens in governance, town hall meetings imbue in citizens the habit of democratic self-governance.
Today, few of us have the experience or the desire to govern and we have lost the habit of weighing and judging those issues that define our body politic. Why is this so?
Are we suffering an institutional failure to make clear that participation in governance is a personal responsibility?
Do the size and complexity of bureaucratic government mean that individuals are so removed from the levers of power that engaged citizenship is rationally understood to be a waste of time?
Or do gerrymandered districts with homogenous populations insulate congressmen from the need for compromise?
Whatever the cause, educated elites are contemptuous of common people and increasingly imagine that the American people are no longer qualified for self-government; and the American people, for their part, increasingly distrust the educated elite that has consistently failed to deliver the dream of a well-managed government that provides social services cheaply and efficiently?
It is against this background that we are here to think about “The Educated Citizen in Crisis.” Over the next two days, we will ask: What would an educated citizen look like today?
Maybe it’s the homeowner underwater on his mortgage who, in 2010, disgusted with decades of failed policies that enabled the largest fiscal crisis since the Great Depression, was shocked to see Congress award a bailout to the very bankers who were responsible for the crisis.
Maybe its woman who told the pollster that people are mad about what has happened, but that they are even angrier that “no one in Washington is listening to them.”
Maybe it’s the author who concludes:
If the business of America is business, the business of government programs and their clients is to stay in business.
That author was John Rauch of the Brookings Institute. He goes on to say that the American Government
has become what it is and will remain: a large, incoherent, often incomprehensible mass that is solicitous of its clients but impervious to any broad, coherent program of reform.
Or, maybe it is a reader of Hannah Arendt who is struck by Arendt’s bracing claim that the
transformation of all government into bureaucracies… may turn out to be a greater threat to freedom and to that minimum of civility… than the most outrageous arbitrariness of past tyrannies has ever been.
In all these personas, today’s concerned and educated citizen is angry at the betrayal of American democracy. He or she is dismayed that at the power of money, the legal corruption of lobbyists, and a bureaucracy that seems impervious to popular control.
Such a citizen might, very well, in 2013—and here I beg the self-satisfied partisan liberals amongst you to suspend your disbelief for a moment—look and sound a lot like Eric Cantor, the majority leader of the House of Representatives.
To be clear, there is no claim that Hannah Arendt would be or should be a supporter of the Tea Party. She was not the type to join a movement and certainly not one with as much ugliness and racism circulating around it.
But as we stare blankly upon the theatre of the absurd in Washington, it behooves us to take Representative Cantor and his fellow House Republicans seriously; at least, that is, if we are serious about thinking about what it means to be an educated citizen.
First, let’s dispose of any elitist condescension that portrays Cantor and his fellow Republicans as wild children in need of stern parenting. This begins with Senate Majority Leader, Harry Reid, who joys in describing the House Republicans as “vexatious,” “banana Republicans” who are engaged in “kid’s stuff.” He vowed every day this week not to negotiate with “anarchists” and “extremists.”
Representative Cantor is a man who has a B.A. from The George Washington University, a J.D. from The College of William and Mary, and his MA from Columbia University in New York. Interestingly enough, his website fails to say what that Masters degree was in. A little digging shows it was in Real Estate Development. But I ask you: don’t sit here at Bard and be snarky and condescending -- and relieved that Cantor’s Masters is not in something serious like political science or philosophy.
Ok, But isn’t Senator Reid right that Cantor and his ilk are churlish juveniles laying waste to the common good? President Barack Obama—another deeply educated citizen—has put the matter clearly. The country had a debate about health care. The President and his party won. The Republicans lost. The Supreme Court has upheld the President’s healthcare law. The President was reelected. The Healthcare law is the law of the land. Given these facts, it is irresponsible and petulant for a small group of Republicans to demand concessions in return for passing a budget. As the President says, if he negotiates with the Republicans now, every future President will be subject to the same kind of shakedown on any issue every time an important piece of legislation needs to be passed. This is hardly a recipe for good governance.
Educated citizens must ask: is the shutdown of government coercion instead of persuasion? Consider this quotation reported yesterday from Cantor’s House colleague Steve King: “Now the pressure will build on both sides, and the American people will weigh in.” He is right. The American people will weigh in. And if Americans weigh in on the side of the President and the Democrats, the consequences for the Republican Party will be disastrous – something for which many here might well celebrate Cantor and King.
Cantor and his colleagues are not actually threatening anyone. They are with utter clarity of purpose standing up for a principle; and they are taking a huge risk that they can convince the American people that the Affordable Care Act and other entitlements are part of the general overreaching and enlargement of government that has eroded the power of individual self-government and thus brought about a crisis of educated citizenship.
Cantor’s is an unpopular and uphill struggle to say the least. It is further corrupted by association with racist elements. Moreover, it is also dishonest to the extent that it refuses to own up to the pain his plans will cause. For all these reasons, it is likely that the House Republicans will fail. [Update. as of today, Friday Oct. 11, it seems that the Republicans are admitting defeat and agreeing to accept the Affordable Healthcare Act, although the negotiations are ongoing.]
But success or failure is not the point.
The educated citizen must ask himself today whether good governance is what is called for. Certainly the freedom riders of the Civil Rights Movement did not think good governance was called for. Nor did the Texas State Senator Wendy Davis when she filibustered a Texas bill that restricted abortions. It will be easy to say that there is a difference between fighting for civil rights and fighting to take away health insurance. There is a difference. And yet both fights are waged in the name of freedom, albeit two very different ideas of what freedom means.
Freedom is at the very center of Hannah Arendt’s political thinking. To be free, Arendt thought, was what it meant to be human. Politics exists because it is in and through politics that human beings can build common worlds in which we can speak and act together in ways that are new and surprising. Arendt’s valuation of freedom, however, made her deeply suspicious of education, at least in its relation to politics.
In “The Crisis in Education," Hannah Arendt writes: "education can play no part in politics, because in politics we always have to deal with those who are already educated.” What Arendt means is that in democratic politics we are all equal and no one has the authority to teach others. Some may be geniuses, and others loved. Some are liberals, other conservatives. Some may be racist. And some may hate rich people. But whatever our private feelings, in politics we encounter each other on a field of equality and respect as educated citizens.
Politics for Arendt is allergic to truth claims. It is about opinion and for this reason respectful and reasoned “debate constitutes the very essence of political life.”
Arendt worried that when politicians, pundits, or people talk about educating voters—when they complain that other citizens are ignorant or condescend to speak and argue with those they demean—they are really seeking to use the rhetoric of education to achieve a unanimity that is foreign to politics.
During the recent presidential election, the candidates frequently appealed to education as the panacea for everything from our flagging economy to our sclerotic political system. How to solve poverty? Education. How do we address global warming? Education. How to heal our divided country? Education.
Behind such arguments is the unspoken assumption: “If X were educated they would see the truth and agree with me.” But that is not the way human nature or politics works. Education will not make people see eye to eye, end political paralysis, or usher in a more rational polity.
What then is the value of education? And why is that we so deeply need great schools and great teachers?
Hannah Arendt saw education as “the point at which we decide whether we love the world enough to assume responsibility for it." The educator must love the world and believe in it if he or she is to introduce young people to that world as something noble and worthy of respect. In this sense education is conservative, insofar as it conserves the world as it has been given.
But education is also revolutionary, insofar as the teacher must realize that it is part of that world as it is that young people will change the world. Teachers simply teach what is, Arendt argued; they leave to the students the chance to transform it.
For Arendt, Education teaches self-thinking. Education propels us from the darkness of private life into the bright light of the public sphere. In short, education leads us into the common world where we can take our place as an equal and free already-educated citizen.
We are asking over the next two days, “What is an educated citizen?” And “why is the educated citizen in crisis?”
We might ask, then, why it is that so few on the left are responding to the attack on the healthcare bill and entitlements more generally? Why is it that the only Americans who are upset enough at what is going on in Washington to protest, mobilize, and get involved are members of the Tea Party? Where is the new left that pundits like Peter Beinart argue is in ascent? Where is Occupy Wall Street? Are they biding their time? Are they waiting for the right time to pounce and to respond? In my world, they are qvetching on Facebook and Twitter.
Or might it be that Americans on the left—especially younger Americans who have grown up in an era of state-sponsored capitalism and Occupy Wall Street—harbor such a deep cynicism toward the federal state and government that their support for entitlements is deflated by their disdain for government.
We are witness today to a widespread distrust and disdain for government. Few people seem to care. On both left and right, government and politics no longer embody our collective aspirations to care for the common good. Government is administratively necessary, but an irritant to daily life; it is a set of services we outsource rather than an activity we engage.
Confronting unprecedented challenges from the environment to terrorism and the decline of the middle class, we need to resurrect our political institutions. We need to inspire citizens to once more care about the common world that we—through politics—build together. New institutions are needed—political, technological, and social—to bring citizens together to speak and act alongside those with whom we disagree but share a more fundamental commitment to a common good.
Our goal, over the next two days, is to think together about what it means to be an educated citizen. In the most literate and technologically savvy society of all time, we have produced politically uneducated and disengaged citizens. What would it mean to reverse that trend? And how do we do so? These are the questions I ask you to keep in your mind as you listen to the excellent speakers who have generously agreed to guide and provoke us over the next two days.
You can watch Roger Berkowitz deliver his speech and the entire conference here.
The crisis must matter.
The most important divide in political and intellectual life today is between those who see society undergoing a transformative crisis and others who believe that the basic structures the 20th century industrial welfare state will persist.
The divide over how to understand the crisis of our times was front and center at the recent Hannah Arendt Center conference "Does the President Matter? A Conference on the American Age of Political Disrepair."
A number of speakers worried about the language of crisis. They rightly see talk about a "crisis" as code for an attack on the institutions of the welfare state. It can be an excuse to not only scale back the unsustainable aspects of our entitlement programs, but also to lower taxes on the wealthiest Americans while doing so.
It is true that many want to misuse the crisis as an attack on the poor and the middle class; that potential abuse, however, is not an excuse to deny the fact of the crisis itself. It is simply no longer possible to responsibly deny that we are living through a transformative crisis that will change the character of America and much of the world. The drivers of that crisis are many and include technology and globalization. The effects are profound and won't be fully understand for decades. At present, the first consequence is a crisis of institutional authority.
We in the US have indeed lost faith in our basic institutions. We don't trust scientists who warn us about global warming; we doubt economists who warn us about debt; we deny doctors who tell us that vaccines are safe. Very few people trust politicians or Ph.D.'s anymore. In fact, according to a 2009 General Social Survey, there are only two institutions in the United States that are said to have "A great deal" of confidence from the American people: the military and the police. This faith in the men with guns is, as Christopher Hayes writes in The Twilight of the Intellectuals, deeply disturbing. But it is not an illusion.
According to John Zogby, who spoke at the Hannah Arendt Center Conference last weekend, the crisis of faith in institutions is widespread and profound. Zogby said:
We call this the greatest economic crisis since the Great Depression and it is. But this is much more than that. This is a transformational crisis. Much more than simply the Great Depression, this is equivalent on the global stage to the fall of the Roman Empire. To the demise of Feudalism. What we have at this moment in time is a myriad—if not almost all—of our familiar institutions unprepared to deal with multiple crises all at once. Whether it is the federal Government or the near bankrupt states or the Democratic Party or the Republican Party or the banking institutions or the brick and mortal halls of higher education. Whether it is the Boy Scouts of America or the Roman Catholic Church, a number of our institutions that make up the superstructure of our society are simply unprepared to deal with the force of change, where we find ourselves.
Zogby was not the only speaker at our conference who noted that "our minds as well as our institutions have not caught up with the failure that they represent." Tracy Strong pointed to the outdated capacity of political primaries and Jeffrey Tulis spoke of the ways that Congress has, over the last century, increasingly abdicated its governmental and constitutional responsibilities. Institutions today spend more resources on self-sustenance (like fund raising) than on problem solving. Today our most important institutions are not only unable to solve the problems we face; the institutions have themselves become the problem.
Walter Russell Mead compared our current period to that era of American politics between 1865 and 1905. Mead noted that few people can name the presidents in that period not because of a failure of leadership but, rather, because in that period the U.S. was going through a cultural and societal transformation from, on one level, an agrarian to an urban-industrial society. We today are experiencing something equally if not more disruptive with globalization, technology, and the Internet. It is a mistake, Mead argued, to think that government or any group can understand and plan for such profound changes. There will be dislocations and opportunities, most of which are invisible today. While Mead offered optimism, he made clear that the years before the new institutions of the future emerge will be difficult and at times dark. There is little a president or a leader can do to change that.
Todd Gitlin and Anne Norton spoke of Occupy Wall Street and also the Tea Party as U.S. movements founded upon the loss of political and institutional power. Gitlin began with the widely quoted quip that the system is not broken, its fixed, an expression that feeds upon the disaffection with mainstream institutions. Norton especially noted the difficulties of a movement that at once decries and yet needs governmental power. The one constant, she rightly noted, is that in a time of institutional decay, those with the least to lose will lose the most.
Rick Falkvinge, founder of the Swedish Pirate Party, situated his party precisely in the space of institutional distrust that Mead and Zogby described. Falkvinge noted that the primary value held by 17 year-olds today is openness and transparency, which he distinguished from free speech. While free speech respects the rights of government and the media to regulate and curate speech, the radical openness embodied by the new generation is something new. The Pirate parties, for example, follow the rule of three. If three members of the Party agree on a policy, then that policy can be a platform of the party. There is no hierarchy; instead the party members are empowered to act. Like Wikileaks, with which it has strong affinities, the Pirate Party is built upon a profound distrust of all institutional power structures that might claim the authority to edit, curate, or distill what ought to be published or how we should govern ourselves.
Hannah Arendt wrote frequently about crises. "A crisis," she saw, "becomes a disaster only when we respond to it with preformed judgments, that is, with prejudices." The recent Arendt Center Conference sought to think about one particular crisis, namely the crisis of leadership in responding to the various crises that beset our age. It was born from the sense that we are increasingly confronting problems before which we cower helpless.
There are, of course, dangers and pitfalls in leadership. I too worry about calls for a leader to redeem us. That said, the coming seismic shifts in our world will bring great pain amidst what may be even greater opportunity. Without a workable political system that can recognize and respond to the coming changes with honesty and inspiration, chances are that our crises will morph into a disaster. Our President must matter, since men rarely accomplish anything meaningful without it. How a president might matter, was the theme of the two day conference.
If you missed the conference, or if you just want to review a few of your favorite talks, now is your chance. The Conference proceedings are online and can be found here. They are your weekend "read".
“Hence it is not in the least superstitious, it is even a counsel of realism, to look for the unforeseeable and unpredictable, to be prepared for and to expect “miracles” in the political realm. And the more heavily the scales are weighted in favor of disaster, the more miraculous will the deed done in freedom appear.”
—Hannah Arendt, What is Freedom?
This week at Bard College, in preparation for the Hannah Arendt Center Conference "Does the President Matter?", we put up 2 writing blocks around campus, multi-paneled chalkboards that invite students to respond to the question: Does the President Matter? The blocks generated quite a few interesting comments. Many mentioned the Supreme Court. Quite a few invoked the previous president, war, and torture. And, since we are at Bard, others responded: it depends what you mean by matters.
This last comment struck me as prescient. It does depend on what you mean by matters.
If what we mean is, say, an increasing and unprecedented power by a democratic leader not seen since the time of enlightened monarchy, the president does matter. We live in an age of an imperial presidency. The President can, at least he does, send our troops into battle without the approval of Congress. The President can, and does, harness the power of the TV, Internet, and twitter to bypass his critics and reach the masses more directly than ever before. The president can, and does, appoint Supreme Court Justices with barely a whimper from the Senate; and the president’s appointments can, and do, swing the balance on a prisoner’s right to habeas corpus, a woman’s right to choose, or a couple’s right to marry.
And yet, what if by matter, we mean something else? What if we mean, having the power to change who we are in meaningful ways? What if by matter we mean: to confront honestly the enormous challenges of the present? What if by matter we mean: to make unpredictable and visionary choices, to invite and inspire a better future?
On the really big questions—the thoughtless consumerism that degrades our environment and our souls; the millions of people who have no jobs and increasingly little prospect for productive employment; the threat of devastating terrorism; and the astronomical National Debt: 16 trillion and counting for the US. -- That is $140,000 for each taxpayer. -- Add to that the deficiency in Public Pension Obligations (estimated at anywhere from $1 to $5 trillion.) Not to mention the 1 trillion dollars of inextinguishable student debt that is creating a lost generation of young people whose lives are stifled by unwise decisions made before they were allowed to buy a beer.
This election should be about a frank acknowledgement of the unsustainability of our economic, social, and environmental practices and expectations. We should be talking together about how we should remake our future in ways that are both just and exciting. This election should be scary and exciting. But so far it’s small-minded and ugly.
Around the world, we witness worldwide distrust and disdain for government. In Greece there is a clear choice between austerity and devaluation; but Greek leaders have saddled their people with half-hearted austerity that causes pain without prospect for relief. In Italy, the paralysis of political leaders has led to resignation and the appointment of an interim technocratic government. In Germany, the most powerful European leader delays and denies, trusting that others will blink every time they are brought to the mouth of the abyss.
No wonder that the Tea Party and Occupy Wall Street in the US, and the Pirate Parties in Europe share a common sense that liberal democratic government is broken. A substantial—and highly educated—portion of the electorate has concluded that our government is so inept and so compromised that it needs to be abandoned or radically constrained. No president, it seems, is up to the challenge of fixing our broken political system.
Every President comes to Washington promising reform! And they all fail. According to Jon Rauch, a leading journalist for The Atlantic and the National Journal, this is inevitable. He has this to say in his book Government's End:
If the business of America is business, the business of government programs and their clients is to stay in business. And after a while, as the programs and the clients and their political protectors adapt to nourish and protect each other, government and its universe of groups reach a turning point—or, perhaps more accurately, a point from which there is no turning back. That point has arrived. Government has become what it is and will remain: a large, incoherent, often incomprehensible mass that is solicitous of its clients but impervious to any broad, coherent program of reform. And this evolution cannot be reversed.
On the really big questions of transforming politics, the President is, Rauch argues, simply powerless. President Obama apparently agrees. Just last week he said, in Florida: "The most important lesson I've learned is that you can't change Washington from the inside. You can only change it from the outside."
A similar sentiment is offered by Laurence Lessig, a founding member of Creative Commons. In his recent book Republic 2.0, Lessig writes:
The great threat today is in plain sight. It is the economy of influence now transparent to all, which has normalized a process that draws our democracy away from the will of the people. A process that distorts our democracy from ends sought by both the Left and the Right: For the single most salient feature of the government that we have evolved is not that it discriminates in favor of one side and against the other. The single most salient feature is that it discriminates against all sides to favor itself. We have created an engine of influence that seeks not some particular strand of political or economic ideology, whether Marx or Hayek. We have created instead an engine of influence that seeks simply to make those most connected rich.
The system of influence and corruption through PACs, SuperPacs, and lobbyists is so entrenched, Lessig writes, that no reform seems plausible. All that is left is the Hail Mary idea of a new constitutional convention—an idea Lessig promotes widely, as with his Conference On the Constitutional Convention last year at Harvard.
For Rauch on the Right and Lessig on the Left, government is so concerned with its parochial interests and its need to stay in business that we have forfeited control over it. We have, in other words, lost the freedom to govern ourselves.
The question "Does the President Matter?" is asked, in the context of the Arendt Center conference, from out of Hannah Arendt's maxim that Freedom is the fundamental raison d'etre of politics. In "What is Freedom?", Arendt writes:
“Freedom is actually the reason that men live together in political organization at all. Without it, political life as such would be meaningless. The raison d’être of politics is freedom.”
So what is freedom? To be free, Arendt says, is to act. Arendt writes: "Men are free as long as they act, neither before nor after; for to be free and to act are the same.”
What is action? Action is something done spontaneously. It brings something new into the world. Man is the being capable of starting something new. Political action, and action in general, must happen in public. Like the performing arts—dance, theatre, and music—politics and political actions requires an audience. Political actors act in front of other people. They need spectators, so that the spectators can be drawn to the action; and when the spectators find the doings of politicians right, or true, or beautiful, they gather around and form themselves into a polity. The political act, the free act must be surprising if it is to draw people to itself. Only an act that is surprising and bold is a political act, because only such an act will strike others, and make them pay attention.
The very word politics derives from the Greek polis which itself is rooted in the Greek pelein, a verb used to describe the circular motion of smoke rings rising up from out of a pipe. The point is that politics is the gathering of a plurality around a common center. The plurality does not become a singularity in circling around a polestar, but it does acknowledgement something common, something that unites the members of a polity in spite of their uniqueness and difference.
When President Washington stepped down after his second term; when President Lincoln emancipated the slaves; when FDR created the New Deal; when President Eisenhower called the Arkansas National Guard into Federal Service in order to integrate schools in Little Rock; these presidents acted in ways that helped refine, redefine, and re-imagine what it means to be an American.
Arendt makes one further point about action and freedom that is important as they relate to the question: Does the President Matter? Courage, she writes, is "the political virtue par excellence." To act in public is leave the security of one's home and enter the world of the public. Such action is dangerous, for the political actor might be jailed for his crime or even killed. Arendt's favorite example of political courage is Socrates, who was killed for his courageous engagement of his fellow Athenians. We must always recall that Socrates was sentenced to death for violating the Athenian law.
Political action also requires courage because the actor can suffer a fate even worse than death. He may be ignored. At least to be killed for one's ideas means that one is recognized as capable of action, of saying and doing something that matters. To be ignored, however, denies the actor the basic human capacity for action and freedom.
One fascinating corollary of Arendt's understanding of the identity of action and freedom is that action, any action—any original deed, any political act that is new and shows leadership—is, of necessity, something that was not done before. It is, therefore, always against the law.
This is an insight familiar to readers of Fyodor Dostoevsky. In Crime and Punishment Raskolnikov says:
Let's say, the lawgivers and founders of mankind, starting from the most ancient and going on to the Lycurguses, the Solons, the Muhammads, the Napoleons, and so forth, that all of them to a man were criminals, from the fact alone that in giving a new law they thereby violated the old one.
All leaders are, in important ways, related to criminals. This is an insight Arendt and Nietzsche too share.
Shortly after we began to plan this conference, I heard an interview with John Ashcroft speaking on the Freakonomics Radio Show. He said:
"Leadership in a moral and cultural sense may be even more important than what a person does in a governmental sense. A leader calls people to their highest and best. ... No one ever achieves greatness merely by obeying the law. People who do above what the law requires become really valuable to a culture. And a President can set a tone that inspires people to do that."
My first reaction was: This is a surprising thing for the Attorney General of the United States to say. My second reaction was: I want him to speak at the conference. Sadly, Mr. Ashcroft could not be with us here today. But this does not change the fact that, in an important way, Ashcroft is right. Great leaders will rise above the laws in crisis. They will call us to our highest and best.
What Ashcroft doesn't quite say, and yet Arendt and Dostoevsky make clear, is that there is a thin and yet all-so-important line separating great leaders from criminals. Both act in ways unexpected and novel. In a sense, both break the law.
But only the leader's act shows itself to be right and thus re-makes the law. Hitler may have acted and shown a capacity for freedom; his action, however, was rejected. He was a criminal, not a legislator. Martin Luther King Jr. or Gandhi also broke the laws in actions of civil disobedience. Great leader show in their lawbreaking that the earlier law had been wrong; they forge a new moral and also written law through the force and power of moral example.
In what is perhaps the latest example in the United States of a Presidential act of lawbreaking, President George W. Bush clearly broke both U.S. and international law in his prosecution of the war on terror. At least at this time it seems painfully clear that President George W. Bush's decision to systematize torture stands closer to a criminal act than an act of great legislation.
In many ways Presidential politics in the 21st takes place in the shadow of George W. Bush's overreach. One result is that we have reacted against great and daring leadership. In line with the spirit of equality that drives our age, we ruthlessly expose the foibles, missteps, scandals and failures of anyone who rises to prominence. Bold leaders are risk takers. They fail and embarrass themselves. They have unruly skeletons in their closets. They will hesitate to endure and rarely prevail in the public inquisition that the presidential selection process has become.
These candidates, who are inoffensive enough to prevail, are branded by their consultants as pragmatists. Our current pragmatists are Products of Harvard Business School and Harvard Law School. Mr. Romney loves data. President Obama worships experts. They are both nothing if not faithful to the doctrine of technocratic optimism, that we with the right people in charge we can do anything. The only problem is they refuse to tell us what it is they want to do. They have forgotten that politics is a matter of thinking, not a pragmatic exercise in technical efficiency.
Look at the Mall in Washington: the Washington monument honors our first President, the Jefferson Memorial, the Lincoln Memorial, the Memorial to Franklin Delano Roosevelt. There is not a monument to any president since FDR. And yet, just 2 years ago we dedicated the Martin Luther King Memorial. It doesn't seem like an accident that the leaders of the Civil Rights Movement were not politicians. Our leaders today do not gravitate to the presidency. The presidency does not attract leaders. Bold leaders today are not the people running for office.
Yet, people crave what used to be called a statesman. To ask: "Does the President Matter?" is to ask: might a president, might a political leader, be able to transform our nation, to restore the dignity and meaning of politics? It is to ask, in other words, for a miracle.
At the end of her essay, "What is Freedom?", Hannah Arendt said this about the importance of miracles in politics.
Hence it is not in the least superstitious, it is even a counsel of realism, to look for the unforeseeable and unpredictable, to be prepared for and to expect “miracles” in the political realm. And the more heavily the scales are weighted in favor of disaster, the more miraculous will the deed done in freedom appear.
It is men who perform miracles—men who because they have received the twofold gift of freedom and action can establish a reality of their own.
I don't know if the president matters.
But I know that he or she must. Which is why we must believe that miracles are possible. And that means we, ourselves, must act in freedom to make the miraculous happen.
In the service of the not-yet-imagined possibilities of our time, our goal over the two days of the conference days was to engage in the difficult, surprising, and never-to-be-understood work of thinking, and of thinking together, in public, amongst others. We heard from philosophers and businessmen, artists and academics. The speakers came from across the political spectrum, but they shared a commitment to thinking beyond ideology. Such thinking is itself a form of action, especially so in a time of such ideological rigidity. Whether our meeting here at Bard gives birth to the miracle of political action--that is up to you. If we succeeded in thinking together, in provoking, and in unsettling, we perhaps sowed the seeds that will one day blossom into the miracle of freedom.
Watch Roger's opening talk from the conference, "Does the President Matter?" here.
You know that the problem of inequality has gone mainstream when even Charles Murray has written a book about it. Not only the Occupy movement and the Tea Party, but also Murray—the conservative force between The Bell Curve and other controversial contributions to the culture wars—is now loudly screaming about the dangers of inequality in America. But with Murray, there is a difference.
If the Occupy Wall Street movement focuses on the vast income inequality that divides the country into haves, have nots, and have-it-alls, and if the Tea Party divides the country into the self-sufficient and the governmental dependents, Murray points to yet another divide: the Cultural Divide.
Murray begins with a point that I take to be essential:
Life sequestered from anybody not like yourself tends to be self-limiting.
Americans (Murray means by this term always white Americans) are living increasingly amongst those like themselves. Murray means by this that American elites (both Republican and Democrat) have separated themselves from the rest of the country. Specifically, he is worried that wealthy white Americans live apart from and are ignorant of poor white Americans. And vice versa.
In his new book, Coming Apart: The State of White America, 1960–2010, Murray argues that an enormous cultural divide has separated white Americans into classes that don't mix. While many liberals might welcome Murray's voice pointing to the rise of inequality in America, his analysis and prescriptions are radically different from those usually suggested by the left. For one thing, Murray focuses on white Americans between 30-49. Part of this focus is to support his argument that "Cultural inequality is not grounded in race or ethnicity." This itself will strike many on the left as an evasion, which it is. And yet, Murray's focus on the increasingly vast class divisions amongst white Americans points to the profound depths of the rising class and income inequality that pervades and divides American society.
Murray does not only point out the vast class divide in the United States. He points to solutions as well. His book is a call to action, but one that has little if nothing to say about the need for government to help the poor. No, for Murray, what both the lower and upper classes need are better values. The lower classes must learn from the upper classes the values of hard work, marriage, and family. The upper classes must learn from the lower classes the value of community, patriotism, and religion.
Whatever one thinks of Murray's analysis, he is right that we all need to do more to read and think and interact with others with whom we don't always agree. Those interested in and concerned by inequality in American can learn from Murray's book, and they should, even as they should wonder at his single-minded concern with white people. Problematic books can teach us much. Thus, for this week's weekend read, I suggest you take a look at Murray's latest essay on "The New American Divide."
Occupy Wall Street has been looking for issues to coalesce around. Now the Canadian group Adbusters—the group that issued the initial call that began the protests—has proposed that Occupy Wall Street adopt a Robin Hood Tax on financial transactions as its first issue. Here is their call to action.
The Financial Transaction Tax (FTT) is an idea that has lots of support amongst some economists. My friend David Callahan has been arguing for the FTT for a while now. By far the best and most balanced analysis of an FTT is by the IMF, here. On the positive side, the FTT has the advantage of being simple and intuitively attractive. But is a Financial Transaction Tax really a good issue for Occupy Wall Street to coalesce around?
The main problem is that the FTT employs a sawed off shot-gun approach to a real but specific problem and unintended consequences. Thus, the IMF study cited above concluded that a FTT would not clearly target financial excesses:
Where the goal is to curb financial market excesses, [FTT] offer a less specific remedy for the excessive leverage that is believed to cause them than other tax and/or regulatory solutions. Financial complexity does not derive solely or even primarily from trading activity. The buildup of hidden financial risks in the recent crisis resulted predominantly from excess leverage, risk concentration, and product innovation such as asset securitization, which would have been largely unaffected by a transactions tax. An [FTT] also does not directly address systemic risk.
The point is that the real problem in speculation is leverage and volatility. The FTT doesn't address leverage, and it doesn't target the high frequency traders who drive volatility. Instead, the FTT taxes ALL transactions.
What is more, the FTT will penalize smaller and retail investors—precisely those in the 99%. As the chart below shows, most stock in the U.S. is held by middle-class investors—those between the 80th percentile and the 99th percentile. They are responsible for the vast majority of financial transactions (this is especially true since a large percentage of the equity holdings of the 1% in the chart are enormous trusts containing dividend paying stocks that have been held for generations and which never trade). Thus, the FTT falls most heavily on the people who own the most stock in the country and depend on that stock for our retirements and investments.
Another problem is that if the Financial Transaction Tax is not adopted globally, it may well drive trading off shore to even less well-regulated markets than our own. The U.S. tried a similar tax in the 1960s and repealed it when trading moved to London. Sweden tried a FTT tax in the 1980s and 1990s and repealed it later when trading fled to other countries.
Finally, the IMF concludes that the FTT would increase consumption and reduce savings by lowering the returns of investment and savings—a result directly opposite to at least some of the goals of Occupy Wall Street. In addition, the FTT discourages the rebalancing of portfolios, thus depressing total returns on mutual funds investments and 401ks.
So what might be some other ideas for Occupy Wall Street—and also our political leaders (such as they are)—to consider? Here are a few ideas that a number of professionals I spoke with mentioned:
1. Ban all High Frequency Trading. It has no purpose except to make some very big and wealthy firms money while increasing volatility for the rest of us. High frequency traders justify the practice as increasing market efficiency. But there is no economic justification to prefer a system that makes 1000 trades per second to one that makes 10 trades per second. Such trading is disruptive and very profitable. Ban it outright. Doing so would be much easier than getting the global cooperation needed to make a Financial Transaction Tax workable. And doing so would also make the U.S. markets more stable and thus give them a competitive advantage over other markets worldwide.
2. A Cancelled Order Tax. It turns out nearly 99% of the orders placed on Wall Street are never filled, but cancelled. A small percentage of these cancellations are just people changing their minds. But the vast majority of cancelled orders are used to manipulate prices by tricking other traders into thinking that a stock is moving in a particular direction. According to one study on an average trading day in 2010, only 1% of all the 89.7 billion orders were executed, which means that nearly 99% of all orders placed can be attributed to high frequency traders trying to manipulate stock prices. A tax on cancelled-orders has distinct advantages over a tax on all financial transactions. First, it will fall primarily on hedge funds and large high-frequency traders, and will not affect retail investors. Second, it will specifically target the casino-like aspect of Wall Street. A cancelled-order tax is not as simple or sexy as a financial transaction tax. Less has been written on it. But it actually seems like a better idea. Read more about the idea here and here.
3. Reinstate the Uptick Rule. Nearly every market professional I polled supports the re-instatement of the "Uptick Rule," a rule that was imposed in 1938 during the Depression and repealed in 2007—just before the market crash and the financial crisis. The Uptick Rule prevents hedge funds and traders from betting on falling stock prices when the markets are already falling, thus reducing volatility and reducing the ability of traders to make money by encouraging market panics. There is a debate about how effective the Uptick Rule is, but there seems to be little or no downside to reinstating it. The only people who oppose doing so are traders.
4. Taxing Corporate Debt and Leverage and Raising Margins. The IMF proposes taxing not financial transactions but corporate debt, thus discouraging corporations from using debt and leverage to finance their activities. As part of this approach, it would be wise to raise margin requirements, the amount of money that someone has to put up before buying a stock or financial instrument on credit.
While Hannah Arendt may not have been much interested in the minutiae of Wall Street regulation, she did care deeply about the importance of facts in thoughtful and reasoned argument. In just one week, on Friday Oct. 28, the Hannah Arendt Center will open our two-day conference on Truthtelling: Democracy in an Age Without Facts. When facts and opinions blur, reasoned argument falls prey to spin and deception. Politics is a realm of conflicting opinions, Arendt argued, but the opinions must necessarily be grounded on facts.
Whether or not the Financial Transaction Tax is a good idea, the debate around it should be based on solid knowledge of the financial system, the affects of such a tax, and also the alternatives. These are very complex issues and, in all honesty, much of the debate so far has traded in simplifications, soundbites, and falsehoods.
If Occupy Wall Street really wants to distinguish itself from the Tea Party and change our political culture, let's use this first foray into politics as an opportunity to model adult argument, something that has been absent from our public life for far too long. If they do want to model a future of fact-based decision making, they will do well to look deeply into the cons as well as the pros of a financial transaction tax. They would also do well to consult those people who work in financial markets daily. Many of these people—both those in the 99% and the 1%—want to eliminate market excesses and reign in the speculation and insanity that helped lead to the recent financial crisis. In the name of common sense and a way forward, let's have a real debate based in both fact and expertise.
I recall Hannah Pitkin, one of my teachers at UC Berkeley, once describing her own experience at a protest. She arrived with a sign, upon which she had taped a multi-page dissertation announcing her well-considered views. Amidst the slogans around her, she realized that the simplifications that are the oil of a well-functioning protest were just not for her.
I share Professor Pitkin's visceral aversion to sloganeering, which is why I sometimes get frustrated with the culture of Occupy Wall Street, a movement whose basic goals I share. I am convinced that the Occupy Wall Street protests are important—we are at a crossroads in the country and the world, and it is absolutely necessary that we take back the future. Simple slogans, I fear, risk de-legitimizing and neutralizing the protests. If you want to see why, let's look at two documents. The first, a pull from the gut. Take a look at this sign:
It is hard to argue with the sentiment that this man expresses—that what is going on in the world, in our economy, and in our political system, is deeply unjust. He is right. He expresses important ideals. He played by the rules, and he got steamrolled. That is not right.
As justified as this man's complaint may be, there has never been a promise that the world is or will be fair. What is wrong, in the end, with living with one's daughter and grandson? When one compares that to how most of the world lives, it sounds downright luxurious. It is, I think, sad, that we as a country are cutting off home-heating-oils subsidies to people who otherwise cannot afford to heat their homes. I wonder at times what life was like before home-heating subsidies. It seems a better world to have them. And while having your own home is a luxury, it is one that many of us value. But it has never been a right. Indeed, one of the basic problems of the last ten to twenty years was the policy to incentivize people to buy homes they could not afford. While I certainly sympathize with this man's disappointment with where his life ended up, justice does not mean a big house with two cars out front. And justice is not a right, something to be given to one.
We aspire to achieve justice, and revolution, as Hannah Arendt argued in On Revolution, is the striving to restore ancient liberties. The protests at Wall Street are torn between conflicting goals. First, a legitimate anger at the corruption of our political and economic systems that has led to an unconscionable distribution of income and a radical distortion of the political process. To me, this is the core of the protests.
If anyone doubts that Occupy Wall Street has legitimate gripes, check out these charts assembled by the St. Louis Federal Reserve, and put together into a story by Henry Blodget. These charts are worth a real read, and this last one (below) tells a big part of the story: it shows that wages now make up a smaller percentage of our economy than ever before. In other words, hard work doesn't get you as far. This leads to anger, although it is not at all clear how this trend can be stopped or reversed. The point is not to say: "We need jobs that pay more!" That may or may not be possible in our current economy. But it does make sense to demand that if the workers are suffering, we should, out of patriotism, show solidarity and as a country all make sacrifices to help out, pull together, and do what we can to improve our collective lot.
As a whole, these charts tell a story of the extraordinary transformation of our society that goes by the name of the hollowing out of the middle class. We are becoming a "barbell" society, with a powerful class of wealthy power brokers on one side and a mass of underemployed and unemployed workers on the other, connected by a sliver of those trying desperately to hold onto the ideals of middle class life. Being middle class is not a right. And yet, any society that normalizes such radical divergences in living experiences as we now have is doomed. A political system, as Aristotle argues, requires the cohesion of liberality as well as moderation, and when such a gulf separates the wealthy and the poor, the social bonds fray. The protesters are rightly incensed at the failure of our political system to address these problems. As Michael Hardt and Antoni Negri write in Foreign Affairs,
"As protests have spread from Lower Manhattan to cities and towns across the country, they have made clear that indignation against corporate greed and economic inequality is real and deep. But at least equally important is the protest against the lack -- or failure -- of political representation. It is not so much a question of whether this or that politician, or this or that party is ineffective or corrupt (although that, too, is true) but whether the representational political system more generally is inadequate. This protest movement could, and perhaps must, transform into a genuine democratic constituent process."
Take a look at a second document, a report out from the New America Foundation by Daniel Alpert, Robert Hockett, and Nouriel Roubini. Joe Nocera outlines the report in his column Tuesday, and points you to the report itself, well worth a look. It is technocratic, written by economists. It lacks the passion of Occupy Wall Street. It has none of the anger and none of the calls for justice. Yet it addresses the reality of how difficult it will be to save the American middle class. A few highlights:
More than 25 million working-age Americans remain unemployed or underemployed, the employment-to-population ratio lingers at an historic low of 58.3 percent, business investment continues at historically weak levels, and consumption expenditure remains weighed down by massive private sector debt overhang left by the bursting of the housing and credit bubble a bit over three years ago.
The bad news continues. Wages and salaries have fallen from 60% of personal income in 1980 to 51% in 2010. Government redistribution of income has risen from 11.7% of personal income in 1980 to 18.4% in 2010, a post-war high. What this means is that as the private economy has ceased to provide for our standard of living, the government has stepped in to cushion the blow. The problem is that the current debt crisis means this must come to an end. Our standards of living are simply higher than our economy can support.
Regrettably, in our view, there seems to be a pronounced tendency on the part of most policymakers worldwide to view the current situation as, substantially, no more than an extreme business cyclical decline.
The worry is that policy makers simply don't understand the depth of the challenges we face. Nor, I fear, do many of the protesters. They continue to demand jobs and fixes, as if these were to be manufactured, when we need to address fundamental underlying problems.
In short, while we must not give up our aspirations for justice, we need a strong dose of reality. We (both rich and middle class) have had a good run at the luxurious life, but we are at the end of our gold-plaited rope. If we don't change the direction of the country, we will all (rich, middle class, and poor) fall precariously and with a collective thud. And it is not enough to say that this debt crisis is caused by "a distracting consumer culture and risky bank practices and we have a national debt crises brought about by wars and corporate well-fare"—as one commentator on my last essay wrote. There were personal decisions made by people to sell other people mortgages they couldn't afford and by others to purchase such mortgages and car loans. We need to be honest here and not pull punches on all sides.
There is plenty of blame here to go around, which does not mean that no one is at fault. It is wrong to say that where all are guilty, none are guilty. And it is thus important to say that many, many people in our country and elsewhere are at fault. They did things that were wrong: took seven and eight figure bonuses for moving money around or selling non-existent assets, moved money through off-shore accounts, lived in ways that they couldn't afford and shouldn't have. Fine. The first step to restoring our moral and economic values is being honest.
In many ways, the economists at the New America Foundation are being more honest, and thus more revolutionary, than the revolutionaries in Zuccotti Park. The economists are proposing massive reform to our economic system, proposals that would radically change our economy. What they lack is the sense of moral outrage and a commitment to fundamental democracy that Occupy Wall Street brings to the table. Thus they lack the sense that this is a political problem as much as it is an economic problem. What is desperately needed is a marriage of honesty about our situation with a conviction for a revolution, which, as Hannah Arendt wrote, is actually a restoration of ancient liberties. What is sought today by Occupy Wall Street must be a return to fundamental values of democracy and justice.
In 1970, Hannah Arendt reflected on the Student Protests of the 1960s and said:
"This situation need not lead to a revolution. For one thing, it can end in counterrevolution, the establishment of dictatorships, and, for another, it can end in total anticlimax: it need not lead to anything. No one alive today knows anything about a coming revolution: 'the principle of Hope' (Ernst Bloch) certainly gives no sort of guarantee. At the moment one prerequisite for a coming revolution is lacking: a group of real revolutionaries."
The success or failure of a revolutionary moment in becoming a real transformation hinges on a lack of real revolutionaries. Revolutionaries, Arendt writes, are people who face the reality of the present and think deeply about meaningful responses and alternatives. I seriously hope that the Occupy Wall Street protesters turns themselves into just such revolutionaries.
You can also see some very helpful charts on our Fiscal situation by the Peterson Institute here.
In the wake of Roger Berkowitz's piece on Occupy Wall Street a few days ago, Jeff Nall's article "Hannah Arendt: The Trouble With Representative Government in the US" offers a valuable perspective on the nature of representation and the political sphere.
Nall gets to the heart of Arendt's interest in revolution:
"Before we set out to remake or even just reform our nation, let's have a clear vision of what we want it to look like when we're done. Let's not aim to bring an end to government; let's not aim to use government to care for others; let's aim to reclaim the very idea of citizenship and make each person part of the decision making process, part of a government. It's time for the American public to revolt and take back the power to decide for itself."
The Arendt Center's, Roger Berkowitz posted a piece yesterday about the Occupy Wall Street protests which is generating some interesting dialogue.
Steve Maslow offers:
"Reading Roger Berkowitiz’s piece saves one the trouble of going down to the protests AND having to re-read ON REVOLUTION by Hannah Arendt. In fact, watching the video clip gives me enough detail so that I can position myself as an authority, when I go back to work and “sell” my story to my colleagues and friends and maybe even seduce lovers who find it dreamy that they might be dating someone “radical” enough to join a protest and still have a table and order a bottle of Stoli Cristal at the club.
Now are you nauseated?
For this idea IS the culture of Wall Street: voyeuristic, full of puffery, semi-literate and non-accountable. Does it really sound so far from that of our own outside of Wall Street? [Full disclosure: the author is the chairman of the board of the Hannah Arendt Center at Bard and a Wall Street investment banker by profession]..."
Maslow continues further on:
"As Arendt pointed out in the opening passages of ON REVOLUTION, this is the touchstone of a genuine revolution, the desire to return to where we began, to come full circle(the ‘revolve’ in revolution)–resorting to radical methods (nonviolent street protests) in order to achieve conservative ends (to go back to where we were before.) The spirit of free enterprise tempered by shared sense of purpose (what Roger called ‘the public happiness’) are the substrate of concepts such as unemployment insurance, social security and even class-action law suits, but also, at the other end, things like profit sharing, pay raises, dividends and maternity leave. Attacking the former, while keeping the latter for themselves, Wall Street and its allies have made a mockery of fairness and democracy. The protesters have not articulated this yet, but they know what they do not know: something in rotten in the United States: income inequality, and it is threatening the very foundations of our republic. As Justice Louis Brandeis once said “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”
Read Maslow's full response here.
Cornell West was one of the first celebrity academics to arrive at Occupy Wall Street last week. Because amplified sound is prohibited in Zuccotti Park—the protesters have never applied for a protest permit—the speaker's words are repeated by the audience to make them audible for larger groups. Thus West's refrain issued repeatedly in the dark and across Wall Street. The protests, still small on the ground, are growing wings in cyberspace. New protests are springing up in cities across North America, from Los Angeles to Boston and from Seattle to Toronto. Seven hundred people were arrested Sunday during a peaceful crossing of the Brooklyn Bridge (including at least 20 Bard College Students). Seven hundred United/Continental airline pilots joined the demonstration over the weekend, as did 15 U.S. Marines. Unions are pledging their support, suggesting that the protests may get a real boost from traditional organizing. Clearly, "Something is happening here, Mr. Jones." "Don't be Afraid to Say Revolution.
Suddenly--very suddenly--too suddenly?---we are living through a time of revolutionary possibility. In Tunisia, Egypt, and Libya, the possibility of revolution was joined with action. Dictators were overthrown, and a sense of possibility ignited. In Syria and Bahrain, the revolutionary movements are being suppressed, violently, quashing the hopes of local revolutionaries. Still elsewhere—in Israel, Spain, Greece, and most recently in the United States—the spirit of revolutionary hope is alive as well.
Skeptics abound, for good reason. Whether these springtime Arab blossoms will grow into hearty summer stalks is still not known. Indeed, it is unlikely. The real powers in Egypt, the military, remain in control, aligned with the Muslim Brotherhood, and the more liberal democracy protesters have seen their dreams thwarted. Revolutions must not only tear down, but also build up; and building revolutionary institutions takes time. And yet, something is in the air. Everyone wants to judge the protesters. Are they good or bad? Before we judge, let's ask: What does this revolutionary moment mean? There is something going on here, but it is less radical and more dismal, than many of its supporters realize. That is not an indictment of Occupy Wall Street. But some reflection is called for. And a few points are in order.
1. The Question of Hope: There is something very noble, yes even hopeful, in the fact that many hundreds and even a few thousands of people are trying to have their say and make a difference. The numbers on the interweb are much larger, but the feet on the ground are significant, especially at a time of acknowledged bourgeois narcissism. What is it that motivates pilots, marines, doctors, lawyers, and businessmen—not to mention the unemployed and underemployed—to occupy city squares in the Middle East, major boulevards in Israel, and parks in New York City, all to call for political change?
In an age when most people are content to be left alone by government to pursue their own private desires and dreams, how is that people around the world are suddenly acting and participating in politics?
2. One answer is public happiness. Arendt named the joy one experiences when acting in public "public happiness." Public happiness is the great treasure of all of those who live through revolutionary times and feel the exhilaration of acting in such a way as to make a difference in the world. One sees the joy in the faces and voices of the protesters. It is similar to the joy evidenced by Tea Partiers at the beginning of that revolutionary moment, before the Tea Party was taken over by ideologues. These protesters are learning, as do all revolutionaries, that freedom is found neither in the freedom from government nor in the welfare state bureaucracy, but in the "public happiness" found in acting together with others in public.
3. Another answer is anger. Where has the anger been? Banks have been bailed out; worse, so have the bankers. It is infuriating to hear bankers who have destroyed their companies and cost investors trillions defend their right to million-dollar bonuses. These are salaried employees who invest billions of dollars with great upside potential and no downside risk. These folks are not evil. The vast majority are not criminals. But they certainly are not the geniuses they think themselves to be, and most do not merit the exorbitant paydays that they have come to view as an entitlement.
Why is it that when AIG bankers insisted their contractually mandated bonuses be upheld after AIG received $182 billion from taxpayers, everyone gave in, but when pensioners demand their contractually guaranteed pensions, talking head after talking head says we have to get real and cut the pensions. The talking heads are right: the public union contracts that mayors and governors negotiated are as un-affordable as they are overly generous. But I am aghast that the senseless and unsustainable contracts of the bankers are seen as inviolable while those of public employees are rendered mere pieces of paper.
And then there is Ken Lewis, the CEO who drove Bank of America to insolvency. Lewis was not fired, nor has he been compelled to recoup the billions in bonuses he authorized for Merrill Lynch executives in 2008, the year Bank of America acquired the all but bankrupt Merrill Lynch. Indeed, all that “Pay Czar” Ken Feinberg demanded was that Bank of America limit the average size of bonuses in 2009 to $6.5 million.
And when Lewis himself finally resigned, he left with his own $125 million golden parachute, on top of the many millions he took home while bankrupting his company during the boom years. Three years later, excessive compensation of failed executives continues, as the NY Times reported just this week.
It is not radical or revolutionary to be incensed at the unqualified entitlement that pervades certain members of the financial community. There is a great deal in the Manifesto of Grievances put out by Occupy Wall Street that, as Henry Blodget admits, is downright reasonable (although much also that is nutty). This anger has been missing from our public discourse. Because of Occupy Wall Street, it may be finally coming to the fore. This is a good thing.
Anger need not be indiscriminate. There are plenty of good people on Wall Street and excellent businessmen and women. There is no need to demonize a whole profession, nor is there a value in simply insulting the wealthy. One of the ugly aspects of the Occupy Wall Street movement is the indiscriminate anger at all wealthy people, as if being wealthy were wrong. Let's hope that the protests can focus their irate passions at the fraud and hubris of those who have continued to pay themselves multi-million dollar bonuses when their firms would have failed and gone belly up but for the generosity of their countrymen.
4. A third reason for these protests is The Loss of Governmental Legitimacy. Without a doubt, there is a growing sense that the powers that be have lost their right to rule. This was true in Egypt and Tunisia and is also the case in Israel and the U.S. Respect for government is a record lows, and for good reason. Illegitimate is a mild word for what many Americans are feeling. As my colleague Walter Russell Mead writes:
"Watching so many second class talents struggle against first class problems is a dispiriting exercise, especially when one reflects on the costs of failure. It is no secret anywhere that our leaders are failing. The Europeans know their political class is floundering; the Japanese have despaired of their politicians for almost a generation; in the US the only people less popular than President Obama are his Democratic allies and Republican adversaries in the US Congress."
There may be no better example of utter government incompetence and malfeasance than the Fannie Mae and Freddie Mac fiascos. If the Occupy Wall Street Protesters want a real, live culprit, here they have one. That the Democrats are protecting Fannie and Freddie is, quite simply, just as wrong as their refusal to bring criminal or civil suits against executives who engaged in fraud.
The vacuum in leadership fanned by a global wave of anti-elite anger risks radicalizing politics in dangerous ways. Occupy Wall Street is, like the Tea Party, driven by an apparent disdain of government, elites, and traditional institutions. These protests began with a call to action from a Canadian group called Adbusters and its embrace by an organization of hackers called Anonymous, a group closely associated with Wiki-leaks. These are groups that also were intimately engaged in protests in the Middle East and around the world and they represent, above all, a particular view of democracy. The hope, it seems, is that if you just tear down all barriers to information, allow for absolute transparency, and present citizens with the facts, a citizen democracy will emerge that ushers in a more rational and fair system of government. This is actually a technological version of the communicative rationality theories made popular by Jürgen Habermas in the 20th century—the idea that in a system of transparent and perfect communication, democratic reason will lead to rational decisions. As a result, we don't need leaders, or elite institutions. A radical horizontal democracy is enough.
The call is for a "people-powered" movement. Of course not all the protesters embrace this, but Occupy Wall Street is propelled by the belief in the power of networked individuals, as well as a profound suspicion of all traditional and institutional power centers. The dream is to replace a government by governors and politicians with a government by the collective wisdom of the masses.
It is thus no accident that the masks worn by many protesters pay tribute to Guy Fawkes, the English Catholic who was tortured and sentenced to be quartered (he killed himself instead) for his participation in the Gunpowder plot whose tagline read: “people should not be afraid of their governments, governments should be afraid of their people.”
The Tea party, as I noted earlier, provides us with an interesting comparison. It also began, initially, with individuals venting their anger. There was, and remains, a joy amongst the Tea Party faithful, one that comes from finding a public voice and engaging in public action. And it is a very similar joy that one can embrace amongst the protesters in Zuccatti Park. Very quickly, however, the Tea Party got directed by ideological leaders who have hijacked the Republican Party, an event that is both the source of its political strength and its intellectual incoherence.
What needs to be seen, though, is that there is a profound convergence between the Tea Party and Occupy Wall Street. On both sides, there is deep dissatisfaction with Democratic representative government. The current zeitgeist seeks to replace democratic government with people power, to replace authority with transparency, to reject professionalism and expertise for cloud governance. Thus, both the Tea Party and Occupy Wall Street need to be seen in connection to the extraordinary and surprising (again, to the mainstream media) success of the Pirates in Berlin. What all these movements share is a suspicion of representative democracy and traditional institutions.
5. It might be helpful to recall, as Hannah Arendt reminds us, that the fundamental elements of totalitarian governance are: 1) its disdain for government institutions and political limits; 2) its embrace of mass movements that overwhelm national boundaries as well as traditional moral and political limits; 3) its disdain for politics as usual; and 4) its susceptibility to coherent narratives rather than a confrontation with factual reality.
Let me be clear: I don't see fascist or totalitarian dangers at this point in the Occupy Wall Street or in the Tea Party movements . But that is largely because neither group has a message that is compelling to a large enough section of the population. Their marginality is at this point diminishing their threat. And yet, there are common elements to at least be aware of:
1) Opposition to the state: both the Tea Party and Occupy Wall Street have a deep hostility to the state, as did totalitarian movements (but not fascist movements). That said, the TP is focused on state borders in a way that is closer to fascism than totalitarianism.
2) Both are MOVEMENTS, and thus to persist cannot have realizable goals, but must have goals that continue to shift and grow so that adherents always have issues to be motivated by.
3) Both display an aversion to facts and a tendency toward coherent myths at the expense of truth. The Tea Party imagines that all government spending is bad, even when confronted with the fact that it wants funding for certain entitlements, emergencies, and the military.
Occupy Wall Street wants to bring down Wall Street, empower the 99%, and eliminate student debt. They don't seem to realize that the standard of living they aspire to was possible because of the speculative boom that Wall Street's excesses made possible, and that the loss of debt-financing for students will decimate universities that depend on such funding and make a college education inaccessible to most Americans. BOTH organizations seem to believe that the solutions are clear, but neither side is actually willing to confront the depth of our economic and political problems and think about the collective sacrifice that would be required to address them. Furthermore, both the Tea Party and Occupy Wall Street have innovative and absolute readings of the U.S. Constitution. The Tea Party has somehow decided that the government regulation and taxation are unconstitutional. Occupy Wall Street has convinced itself that it has a constitutional right to protest without seeking permits. On both sides, the din of an echo-chamber of like-minded views compresses interesting opinions into unquestioned facts.
4) Both groups have bogeymen that stand in for all evils. The Tea Party excoriates immigrants and public unionists. Occupy Wall Street rails against bankers and anyone on Wall Street. Such blanket hatred can, of course, become dangerous.
6. What distinguishes Occupy Wall Street is its youthful and optimistic faith in technocratic solutions. I hope I have made my sympathies with the protesters clear; and yet, there are good reasons to ask serious questions of Occupy Wall Street.
In 1970, Hannah Arendt reflected on the Student Protests of the 1960s and said:
"This situation need not lead to a revolution. For one thing, it can end in counterrevolution, the establishment of dictatorships, and, for another, it can end in total anticlimax: it need not lead to anything. No one alive today knows anything about a coming revolution: 'the principle of Hope' (Ernst Bloch) certainly gives no sort of guarantee. At the moment one prerequisite for a coming revolution is lacking: a group of real revolutionaries." --Ms. Arendt, 1970.
The reason that a revolutionary moment will succeed or fail to turn into a real transformation is the lack of real revolutionaries; revolutionaries, Arendt writes, are people who face the reality of the present and think deeply about meaningful responses and alternatives. Is there a serious and thoughtful confrontation with reality that underlies Occupy Wall Street?
The answer to this has to be no, at least, not yet. It is simply a mistake to think that our current problems flow from a lack of transparency and elitism. On both scores, it is more likely the opposite that is the case.
We are not suffering from a secret cabal of evil masterminds who plotted to bring down the world economy. The problem was not secrecy. On the contrary, the ballooning debt of the last 20 years, the massive student levels of student debt, the internet bubble, the real-estate bubble, the rise of speculation, the replacement of pensions with market-oriented retirement investing—none of these were secrets. Plenty of smart people warned us that we were walking on thin air, but we chose, collectively, not to listen.
Nor is elitism our present problem. In fact, we might have been served better if the so-called elites had actually acted a bit more like elites, and stood apart from the madness of the crowd feeding at the trough of easy money. If we had more true elites—people who felt themselves justified to judge the thoughtless, greedy, and common behavior of our bankers, politicians, and consumers—they might have been able to better deter us from our merry way. It may very well be that we are suffering today not from the cabal of elites, but from the absence of an elite culture that might be able to meaningfully resist and question the folly of crowd behavior.
If we really want be revolutionaries, as Arendt counsels, we must first of all face our present reality. Rather than secret evil machinations, our current world crisis is the result of millions of every day people acting thoughtlessly—knowing that they could not afford that new house, but buying it anyway; knowing they were selling and buying worthless bonds, but giddy at the possibility of flipping them to someone else at a handsome profit. Of course there was greed. But that is not going away. The information was there as well, we just did not want to see it. Transparency will not solve that.
7. The media coverage of the protesters has been excoriated. Some of it has been awful, focusing on the dirty laundry, or ignoring the protests altogether. There have also been demands for demands, which are answered either by vague manifestos or claims that this is a movement without leaders, one that like a startup will find its market as it grows. As Heather Gold notes it is telling that the metaphor for the protests comes from the lingo of internet startups. The revolution is offering a new product—the disaffected anger of the left and the center, combined with the need to believe that our lives matter and that we can make a difference. It is putting that anger out into the world, mixing it with the joy of public acting, and seeking a market for that potent brew.
The protests are growing and multiplying and undoubtedly they will lead to more clashes with the police. The question of violence will emerge, whether from the protesters’ camp or from the police. We should expect mistakes to be made on both sides. That should not diminish the demonstrators or what they are fighting for. We must break a few eggs to make an omelet, as Arendt writes in her essay, The Eggs Speak Up. Politics is, as Max Weber reminded us, not like a nursery. It is a mistake to be hyper-critical of Occupy Wall Street at this point. They will make strategic errors, (like bringing down the website of the new agency designed to regulate the banks!--why that target?). Despite inevitable missteps, the protesters are succeeding, it seems, in breaking enough eggs to finally wake some people up to the terrible tragedy that is unfolding around us. In this, they are similar to the Tea Party and yet also an antidote to the ideological rigidity that the Tea Party has adopted. For this reason alone, we should welcome Occupy Wall Street.