I write in an editorial style, if you have any contentions, suggestions or refutations of my words, I welcome them.
Thank you for the overwhelming response to my first diary. It was an incomplete introduction into the eye opening novel "The Money Changers" (1908) by Upton Sinclair. In this diary I shall expand on some of my observations in the last diary, and highlight some more interesting passages from the book which are still enormously relevant today. In particular, I believe we can retrofit some of Sinclair's observations of the 1907 financial crisis to help provide context for our current financial mess and election year rhetoric.
It is quite ironic that JP Morgan Chase is currently in the news for conducting risky market speculations, when a century ago, the proprietor of the firm was conducting the same risky practices, resulting in the same ends. Why is it that after all this time, we are still letting the greedy pigs get away with it?!
In the first diary I highlighted an interaction between the protagonist and a young capitalist in which they discuss the implications of businessmen taking over politics to further the interests of capital. In this diary I shall highlight two more passages that are relevant to our current election cycle and provide insight into the fundamental outlook of the corporate political agenda.
Chapter XVIIBear in mind, that the President in 1908 was Republican Theodore Roosevelt who had adopted the populist message of trust-busting and financial regulation (back when there were still progressives in the Republican party). Roosevelt was pushing an agenda called "The Square Deal" in which he used the power of the Sherman Anti-Trust act to fight the power of the monopolies which had taken been cultivated from the Gilded Age. This naturally left him in hot water with the titans of industry and finance. So, in response, the big money interests attempted to subvert the national dialogue and lay the blame for the crisis at the feet of the President. These ad hominem attacks must have struck a chord, because we are still seeing them being rehashed a century later.
It was a period of great anxiety in the financial world. Men felt the unrest, even though they could not give definite reasons. There had been several panics in the stock market throughout the summer; and leading financiers and railroad presidents seemed to have got the habit of prognosticating the ruin of the country every time they made a speech at a banquet.
But apparently men could not agree about the causes of the trouble. Some insisted that it was owing to the speeches of the President, to his attacks upon the great business interests of the country. Others maintained that the world's supply of capital was inadequate, and pointed out the destruction of great wars and earthquakes and fires. Others argued that there was not enough currency to do the country's business. Now and again there rose above the din the shrill voice of some radical who declared that the stock collapses had been brought about deliberately; but such statements seemed so preposterous that they were received with ridicule whenever they were heeded at all. To Montague the idea that there were men in the country sufficiently powerful to wreck its business, and sufficiently unscrupulous to use their power—the idea seemed to him sensational and absurd.
These same attacks have been used by the pro-business crowd at every possible opportunity. In our current election, they have decried President Obama for conducting "class warfare" and labelled him a "Socialist" seeking to redistribute wealth. In 1907 there was a relatively healthy Socialist party in the United States, so there was no way they could have called Roosevelt one, because unlike today, everyone knew what a Socialist actually was. The absurdity of these attacks knows no bounds.
The President has little or no direct control over the business cycle. It is very well established that commerce, like nearly all things, runs in a cyclical pattern. The 2007 financial meltdown may have been inevitable, however, its severity and recovery should have been entirely manageable. Drawing from the economists I regularly read, there is a consensus that if Glass-Stegall had remained intact and other existing regulations had been aggressively enforced, then the financial turbulence of 2007 could have been mitigated without resorting to the enormous bailouts and subsequent "quantitative easing" by the Fed. (A term that makes little sense when seriously considered.) There is no doubt that it all began under President Bush's administration, but the Republican attack dogs have been viciously tearing into President Obama for not conducting the "proper" measures for a speedy recovery (which include tax breaks for business, the wealthy, dropping of regulations, and a whole laundry list of failed or disputed tactics).
The pundits on TV today saying that the President is "anti-business" and that his policies hurt business, so businesses in return are required to heap the pain upon their employees and customers are using an ancient argument. For some reason it still carries weight and we need to figure out a way to refute it once and for all. One method which I think may be simple, yet effective is to simply enlighten people about how long this argument has been used. Remind them of our history, and how the same economic prophets have been preaching doom and gloom and laying it at the feet of any President who disagrees with them for over a hundred years yet the American economy kept chugging along. Then remind them that when unregulated corporatism reigned supreme or was loosened, it led to upheaval of the 1890's, the Great Depression, and our situation today.
Chapter XVIIIIHere is another passage which particularly caught my attention as seems like it is straight from the playbook of the GOP and their corporate sponsors. It is the "Don't attack the job creators" meme which has been on a full out media blitz since Frank Luntz found it resonated with the electorate. It has almost become the rallying cry for the Republican party for the past two years. I hear it escape the lips of nearly every conservative or Republican who is interviewed on TV, writes an editorial, pollutes talk radio, or works for Fox News. In short, it is the rallying cry for the 1%. Sometimes it seems as though they want us to treat them as peasants used to treat lords; to offer them total deference and beg them for the slightest favor since we worship the almighty dollar and they have the power to anoint us with it.
"And wait!" exclaimed the other; "then they got on to politics. I would have given one arm if I could have got a photograph of Dan Waterman at that moment—just to spread it before the American people and ask them what they thought of it! David Ward had made the remark that 'A little trouble mightn't have a bad effect just now.' And Waterman brought down his fist on the table. 'This country needs a lesson,' he cried. 'There's been too much abuse of responsible men, and there's been too much wild talk in high places. If the people get a little taste of hard times, they'll have something else to think about besides abusing those who have made the prosperity of the country; and it seems to me, gentlemen, that we have it in our power to put an end to this campaign of radicalism.'"
In 1907, the financial elite believed the exact same thing. It is a throwback to an aristocratic line of thinking which has existed since the first king claimed birthright. The United States was founded on principals meant to diminish this role, and establish a somewhat more egalitarian society, (which we are still struggling to reach today), but never managed to remove the arrogant notions of the financial elite.
Waterman's (a fictional representation of JP Morgan) words in this passage say a lot about this philosophy and the underlying delusions of the 1%.
"...they'll have something else to think about besides abusing those who made the prosperity of this country..."First, that they created the prosperity is a fallacy of epic proportions. It was created on the backs of labor under the command of capital. Second, the complaint that the "little man" is abusing the provider of capital by daring to question his motives and requesting greater compensation for the labor committed is preposterous. If any abuse occurred, it was at the expense of those who created the wealth so dearly cherished by the "responsible men."
I hear same cries are daily in the media. The rich and their surrogates are continuously complaining, "Why do you want to punish us for being successful?" Forgetting that their wealth was built thanks to contributions of labor and money from millions of others.
Honestly, what a load of crap. Many of you here have likely either read or heard the TED speech by billionaire Nick Hanauer in which he completely eviscerated this point. If you haven't, then get on it. He rebuts this talking point better than I ever could. For me, the money quote is:
"Anyone who's ever run a business knows that hiring more people is a capitalists course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn't just inaccurate, it's disingenuous."They do not care if they employ a single soul (or at least not one in America) so long as they get theirs. When prurient self interest is the sole motivation, we all suffer the consequences of continual competition and the erosion of the human element. Upton Sinclair was very keen, and recognized this in the book. In fact, it is one of the major themes.
There are many more passages I would like to discuss, but this diary is already quite lengthy. So I shall consider writing a part three, which will discuss how government bailouts of the financial sector are nothing new and how risky speculation (gambling) has always been a part of the Wall St. ethos. If you made it this far, thank you for reading some more of my thoughts. I know they aren't always the most organized, but hopefully they are entertaining and thought provoking.
Time for dinner.