It took a little time but the American public is in a state of growing fury, looking for who is to blame for their declining economic fortunes. It's being called a "populist fury."
Jon Stewart has a hilarious graphic of angry citizens armed with sticks moving across his TV screen to represent the protests he knows will be coming. Three million marchers in France this past week can't be all wrong. What has been someone else's crisis is now everyone's problem and the public is pissed off.
Some government officials are dismissive.
Of AIG, Lawrence Summers, Obama's top economic adviser quipped, "The easy thing would be to just say... off with their heads... "
He added, "AIG's hands are tied."
How does he know? The last time I looked, he wasn't a lawyer or a judge. In fact, glib comments are far easier than analysis of this catastrophe. At any rate, those AIG bonuses are only small part of a bigger rip-off.
The wisemen pundits of the press have joined in to pacify the public. Yes, it's bad, they say, but put down those pitch forks, ha ha, there's nothing you can do.
Here's financial columnist Steven Pearlstein in the Washington Post:
"We're angry. We're frustrated. We feel cheated and abused. We're not going to take it anymore.
But then again, we don't have much choice, do we? Sure, we can demand that a few more heads roll on Wall Street, or at the Treasury, or that a few hundred million are clawed back from financiers who never deserved it. But the reality is that no matter what we do now, tens of trillions of dollars in wealth have been lost. All that's left is simply an elaborate exercise in settling up the accounts."
Accept, Accept, Accept, counsels this wise man.
Some in the industry are starting to quake. "Several industry executives, observing the pressure being exerted on AIG and other big banks, say they are worried about joining in government efforts to rescue the financial system in the newly charged political environment. ‘Am I afraid of the populist outrage? Yes,' said Lynn Tilton, chief executive of Patriarch Capital, a private-equity firm that has weighed making such an investment."
Others are afraid for more than their capital. One AIG executive told a reporter he had been threatened and that even his kids had been abused. A few weeks back, Bill Maher publicly praised the Chinese government's way of dealing with corporate criminals. They shoot them, he said approvingly. Ponzi purveyor Bernie Madoff had attracted stalkers outside his former penthouse prison with signs that said "JUMP."
Now, the financial Times reports, "US federal regulators have warned of a ‘rampant Ponzimonium' as they disclosed they are investigating hundreds' of possible scams in the aftermath of the $50bn fraud allegedly perpetrated by Bernard Madoff."
The New York Times has predictably put down the outrage, noting, "Some people are vengeful, calling for jail, public humiliation or even revolution over the decision by A.I.G. to award $165 million in bonuses to employees who were in part responsible for the insurance giant's near collapse - though few go as far as Senator Charles Grassley, Republican of Iowa, who has suggested that company executives should ‘resign or go commit suicide.'" The outspoken Grassley later said he overspoke and then denounced companies sucking on the "tit of the taxpayer."
The LA Times report that a cultural shift is underway with the notion that the wealthy are not worthy is catching on:
"With financial crisis and scandal as backdrop, Americans are questioning whether plutocrats are either indispensable or deserving.
'We may soon come around to George Orwell's view that the only difference between rich and poor is income - ‘The average millionaire,' as he put it, ‘is only the average dishwasher dressed in a new suit.'
There's also a social value in suppressing income inequality. In a country with only a slightly less ingrained tradition of civility than the United States, the AIG affair would provoke rioting in the streets.
Robert Shiller, a Yale University economist and coauthor of ‘Animal Spirits,' a new book about the psychology of economics, comments on the current crisis: ‘there's anger and a sense of injustice taking hold, and it's not in the interest of wealthy people -- you don't want people on the poor side of town to be angry with you.'"
Yet, who are the real "animals?" The victims of the collapse or the profiteers?
The US government is preparing for real unrest as incomes and homes disappear. New laws have been passed to curb civil unrest. Michel Chossudovsky writes on Global Reseach on plans to set up Guantanamo-like detention centers on military bases:
"The outgoing administration has laid the groundwork. Various pieces of ‘anti-terrorist' legislation (including the Patriot Acts) and presidential directives have been put in place since 2001, largely using the pretext of the ‘Global War on Terrorism.;
A bill entitled the National Emergency Centers Establishment Act (HR 645) was introduced in the US Congress in January. It calls for the establishment of six national emergency centers in major regions in the US to be located on existing military installations.
The stated purpose of the ‘national emergency centers' is to provide ‘temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster.' In actuality, what we are dealing with are FEMA internment camps. HR 645 states that the camps can be used to ‘meet other appropriate needs, as determined by the Secretary of Homeland Security.'
There has been virtually no press coverage of HR 645."
In England, some anarchists are calling for class war saying the only way to stay warm in a financial crisis is to "burn a banker." The British government is taking this rhetoric seriously and reportedly put the Army on alert for an expected "summer of rage."
Overall expect more crime, protests and unrest. It doesn't take a weatherman to see which way this wind is blowing.
The challenge of course is that most activists are no clearer on a comprehensive program for change than the politicians, the business world or the media. Republicans are focusing their fire on Tim Geithner, who they perceive as the weak link in Obama's chain. Democrats are bashing business and each other, as is often the case. There seems to be no extra-Congressional opposition/movement to challenge all the finger pointing.
We need a serious plan for the public to rally behind, a set of demands that make sense. We are in a whole new period with an enraged public ready to act. How do we avoid descending into empty slogans, conspiracy distractions and a blame game to target "irresponsible borrowers," or that old standby that the Jewish cabal of bankers or whoever else seems most blameworthy?
Don't think these issues will go away. Will political activists be able to rise to the occasion?