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Revolt of the Rich: Have Our Financial Elites Already Seceded from America?

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But this peculiarly American creed took a severe hit after the crash of 1929, and wealth ceased to be equated with godliness.   While the number of Wall Street suicides has been exaggerated in national memory, Jesse Livermore, perhaps the most famous of the Wall Street speculators, shot himself, and so did several others of his profession.   There was then still a lingering old-fashioned sense of shame now generally absent from the uber-rich.   While many of the elites hated Franklin Roosevelt -- consider the famous New Yorker cartoon wherein the rich socialite tells her companions, "Come along.   We're going to the Trans-Lux to hiss Roosevelt" -- most had the wit to make a calculated bet that they would have to give a little of their wealth, power, and prestige to retain the rest, particularly with the collapsing parliamentary systems of contemporary Europe in mind.   Even a bootlegging brigand like Joe Kennedy Sr.   reconciled himself to the New Deal.

And yet, tycoons like Henry J. Kaiser constructed the Hoover Dam and liberty ships rather than the synthetic CDOs that precipitated the latest economic collapse.   In the 1950s, many Republicans pressed Eisenhower to lower the prevailing 91% top marginal income tax rate, but citing his concerns about the deficit, he refused.   In view of our present $15 trillion gross national debt, Ike was right.

General Motors CEO and Secretary of Defense Charles E. "Engine Charlie" Wilson said he believed "what was good for the country was good for General Motors, and vice versa."   However clumsily, he expressed the view that the fates of corporations and the citizenry were conjoined -- a view that is a world away from the present regime of downsizing, offshoring, profits without production, and financialization.   The now-prevailing Milton Friedmanite economic dogma holds that a corporation that acts responsibly to the community is irresponsible.   Yet somehow in the 1950s our country eked out higher average GDP growth rates than those we have experienced in the last dozen years.

After the 2008 collapse, the worst since the Great Depression, the rich, rather than having the modesty to temper their demands, this time have made the calculated bet that they are politically invulnerable -- Wall Street moguls angrily and successfully rejected executive-compensation limits even for banks that had been bailed out by taxpayer funds.   And what I saw in Congress after the 2008 crash confirms what economist Simon Johnson has said:   that Wall Street, and behind it the commanding heights of power that control Wall Street, has seized the policy-making apparatus in Washington.   Both parties are now in thrall to what our great-grandparents would have called the Money Power.   One party is furtive and hypocritical in its money chase;   the other enthusiastically embraces it as the embodiment of the American Way.   The Citizens United Supreme Court decision of two years ago would certainly elicit a response from the 19th-century populists similar to their 1892 Omaha platform, which called out the highest court, along with the rest of the political apparatus, as rotted by money.


We live in a nation brought to the verge of moral, political, and material ruin

Corruption dominates the ballot-box, the Legislatures, the Congress, and touches even the ermine of the bench.   The people are demoralized.   " The newspapers are largely subsidized or muzzled, public opinion silenced, business prostrated, homes covered with mortgages, labor impoverished, and the land concentrating in the hands of capitalists.   The urban workmen are denied the right to organize for self-protection, imported pauperized labor beats down their wages.   " The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind, and the possessors of these fortunes, in turn, despise the Republic and endanger liberty.  

From the same prolific womb of governmental injustice we breed the two great classes:   tramps and millionaires

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It is no coincidence that as the Supreme Court has been removing the last constraints on the legalized corruption of politicians, the American standard of living has been falling at the fastest rate in decades.   According to the Federal Reserve Board's report of June 2012, the median net worth of families plummeted almost 40% between 2007 and 2010.   This is not only a decline when measured against our own past economic performance; it also represents a decline relative to other countries, a far cry from the post-World War II era, when the United States had by any measure the highest living standard in the world.   A study by the Bertelsmann Foundation concluded that in measures of economic equality, social mobility, and poverty prevention, the United States ranks 27th out of the 31 advanced industrial nations belonging to the Organization for Economic Cooperation and Development.   Thank God we are still ahead of Turkey, Chile, and Mexico!   But barely.

This raises disturbing questions for those who call themselves conservatives.   Almost all conservatives who care to vote congregate in the Republican Party.   But Republican ideology celebrates outsourcing, globalization, and takeovers as the glorious fruits of capitalism's "creative destruction."   As a former Republican congressional staff member, I saw for myself how GOP proponents of globalized vulture capitalism, such as Grover Norquist, Dick Armey, Phil Gramm, and Lawrence Kudlow, extolled the offshoring and financialization process as an unalloyed benefit.   They were quick to denounce as socialism any attempt to mitigate its impact on society.   Yet their ideology is nothing more than an upside-down utopianism, an absolutist twin of Marxism.   If millions of people's interests get damaged in the process of implementing their ideology, it is a necessary outcome of scientific laws of economics that must never be tampered with -- just as Lenin believed that his version of materialist laws were final and inexorable.

If a morally acceptable American conservatism is ever to extricate itself from a pseudo-scientific inverted Marxist economic theory, it must grasp that order, tradition, and stability are not coterminous with an uncritical worship of the Almighty Dollar, nor with obeisance to the demands of the wealthy.   Conservatives need to think about the world they want: do they really desire a social Darwinist dystopia?

The objective of the predatory super-rich and their political handmaidens is to discredit and destroy the traditional nation state and auction its resources to themselves.   Those super-rich, in turn, aim to create a "tollbooth" economy, whereby more and more of our highways, bridges, libraries, parks, and beaches are possessed by private oligarchs who will extract a toll from the rest of us.   Was this the vision of the Founders?   Was this why they believed governments were instituted among men -- that the very sinews of the state should be possessed by the wealthy in the same manner that kingdoms of the Old World were the personal property of the monarch?

Since the first ziggurats rose in ancient Babylonia, the so-called forces of order, stability, and tradition have feared a revolt from below.   Beginning with Edmund Burke and Joseph de Maistre after the French Revolution, a whole genre of political writings -- some classical liberal, some conservative, some reactionary -- has propounded this theme.   The title of Ortega y Gasset's most famous work, The Revolt of the Masses, tells us something about the mental atmosphere of this literature.

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But in globalized postmodern America, what if this whole vision about where order, stability, and a tolerable framework for governance come from, and who threatens those values, is inverted?   Christopher Lasch came closer to the truth in The Revolt of the Elites, when he wrote, "In our time, the chief threat seems to come from those at the top of the social hierarchy, not the masses."   Lasch held that the elites -- by which he meant not just the super-wealthy but also their managerial coat holders and professional apologists -- were undermining the country's promise as a constitutional republic with their prehensile greed, their asocial cultural values, and their absence of civic responsibility.

Lasch wrote this in 1995.   Now, almost two decades later, the super-rich have achieved escape velocity from the gravitational pull of the very society they rule over.   They have seceded from America.

Now an Independent, Mike Lofgren served 16 years on the Republican staff of the House and Senate Budget Committees.   He has just published The Party Is Over:   How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted .  

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Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

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Bill Moyers: The title of your book is "The P... by Richard Clark on Thursday, Sep 6, 2012 at 9:01:53 AM
view; Lofgren's naive not to see that we're a bana... by Jill Herendeen on Thursday, Sep 6, 2012 at 11:22:41 AM
are sociopaths. That's how they came to control so... by intotheabyss on Thursday, Sep 6, 2012 at 5:18:31 PM
We won't have to search for them, we'll know right... by Tommy Wright on Thursday, Sep 6, 2012 at 5:24:10 PM
This entire situation is yet another example of wh... by Laurence Almand on Friday, Sep 7, 2012 at 3:53:43 PM
If as you propose, everyone would have to pay 12-1... by Richard Clark on Friday, Sep 7, 2012 at 7:02:26 PM
The fact that the rich don't have to live amongst... by Robert Cogan on Sunday, Sep 9, 2012 at 8:36:02 PM
Important points.... by Richard Clark on Sunday, Sep 9, 2012 at 10:45:50 PM