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The Wisdom of Crowds

When populist rage leads to smart policy.

 

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John Dingell is one of the few people in Washington who remembers the last time so much populist anger gripped the country. It was early 1933, the worst year of the Great Depression. The Michigan congressman, now 83, was a wide-eyed kid listening to his father—also a congressman—speak at the family dinner table about losing his entire net worth of $7,500. "Americans all hated the damn bankers, they hated Wall Street," Dingell tells NEWSWEEK. "We had more communists in this country than there were in the Soviet Union because" of rage against the so-called banksters. No one knew this better than the incoming president, Franklin D. Roosevelt. The story is told that a supporter warned FDR that if he failed now, with the nation in chaos, he'd be known as "our worst president," and Roosevelt supposedly replied: "If I fail, I'll be your last president." FDR exhorted his New Dealers, "Above all, try something!" While it took time to get going, the hodgepodge of recovery programs he came up with—some successful, others not—managed to appease most of the populist outrage.

Barack Obama isn't saddled with the same degree of economic disaster as Franklin Roosevelt; the nation suffers 10 percent unemployment, which is bad, but it's not 25 percent. Yet the 44th president may face a political problem almost as sticky. Obama, like FDR, must appease populist anger rising from both left and right. Obama's giant stimulus, his health-care plan, and his continuation of the Bush administration's various bailout programs have ignited a prairie-fire backlash from the right (fueled in part by cynical Beltway Republicans). They call themselves tea partiers. The left's outrage is less organized (it's the left, after all), but reflects a visceral sense that the president has coddled Wall Street and given short shrift to Main Street. "The Democratic base is out of patience here," says a senior labor leader. "We're at a breaking point." There's something deeper at work beyond politics. We've witnessed an epic failure of the establishment—political, financial, business, even cultural.

All of which adds up to a very unhappy moment for Obama. The president and the Ivy Leaguers he has surrounded himself with are not natural populists. Since its appearance on the scene in the late 19th century, the language of populism has been one of opposition and incitement, clashes and fights—the Eastern bankers vs. the Midwestern farmers, rich white urban elites vs. poorer rural whites. That's not the language Obama traffics in. When the cerebral Obama inveighs against "fat-cat bankers," the phrase doesn't trip off his tongue. He's a community organizer, not a rabble-rouser. And he must know that populism, generally speaking, has been the refuge for losers in the American political process. No populist candidate has even come close to the presidency, though Teddy Roosevelt hit the 27 percent mark with his Bull Moose run in 1912 (he'd already been president, after all) and Ross Perot amassed an impressive 19 percent in 1992. William Jennings Bryan, the original Populist candidate, was the Democratic nominee in 1896, 1900, and 1908, but received fewer votes in each successive campaign.

Above all, populist uprisings usually careen out of control, driven by mindless anger. To some extent that's what is happening now. By the time of his confirmation vote last week, Federal Reserve chairman Ben Bernanke had been blamed for everything from Alan Greenspan's deregulatory policies to the flawed oversight of Wall Street, even though most of the worst-hit financial institutions were outside the Fed's supervisory reach. Yes, Bernanke made mistakes—serious ones—in the run-up to the financial crisis. But he also arguably did more than anyone to pull the global economy back from the brink of a Great Depression. Bernanke survived, but his populist penance was to suffer the largest "no" vote ever in the history of the Fed chairmanship, 70 to 30, with damage to the Fed's reputation that could be permanent.

Even so, smart presidents don't confront the populists head-on, they defang them by giving them some of what they want. After FDR launched the New Deal—and John Dingell's father helped to write the Glass-Steagall law separating commercial from investment banking—the nation slowly recovered and Roosevelt's personal popularity soared. Populist rabble-rousers like Huey Long on the left and Charles Coughlin on the right lost their resonance (or, in Long's case, were assassinated).

In recent weeks Obama has tried to mollify both populist camps. To satisfy the left, he announced a $100 billion fee on large banks, a new jobs program, infrastructure investments, and middle-class tax cuts. He also abruptly embraced a proposal from one his most prominent progressive critics, former Federal Reserve chairman and sometime adviser Paul Volcker, to ban banks from risky trading. Appealing to the right—and, increasingly, a piqued center that includes deficit-hawk Dems like Evan Bayh—Obama has announced a three-year spending freeze for discretionary programs that don't include defense and national security, Medicare, or Social Security. Above all, hoping to appeal to both sides, Obama has become far more strident in speaking against Wall Street.

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Member Comments

  • Posted By: NewsWkDickG @ 02/17/2010 1:05:26 PM

    To make realistic and rational decisions that can be expected to have value, it is first necessary to see the truth, most importantly starting with being honest with one's own self. If we only look for information to support the rationalizing of predetermined decisions, it is the same as accepting being lied to. The following are truths that if ignored or rationalized, they make resulting decisions highly questionable at best.

    * Bush-Cheney, with the complete and irresponsibly stubborn support of the Republican Party, were aggressively arrogant and even obnoxious in saying anything to control public opinion and then doing whatever they wanted to benefit only the few.
    * The Republican Party has constantly said anything and everything to fault every effort by the Democrats, while trying to block/obstruct all efforts to address problems.
    * The Republican Party has literally made no positive or constructive contributions.
    * With the strong support of Special Interests and the select few, who benefit, the Republican Party has relied on subterfuge to appeal to people's fears and emotions.
    * The Republican Party has clearly put their political ambitions above all else as they show no concern for responsibilities or the American people.
    * The Republican Party has openly demonstrated their efforts to intimidate and coerce their own people in demanding full support for the Party's positions, even to effectively squelching individual consciences.
    * There is an obvious intention to have Republican Party representatives be 'puppet' like in their adherence to the Party's goals and in benefiting Special Interests and the select few, most often without regard for the 'puppet's' qualifications or quality.
    * You can't trust what they say as they say anything to manipulate public opinion, then do whatever they want and then say whatever they think will rationalize what they did.
    * All of these things clearly demonstrate a grossly dishonest unified and stubborn pursuit of a private agenda to benefit the few and a total disregard for their responsibility and the substantial costs to the majority.
    * The current Republican Party is literally owned and controlled by the powerful, influential and extremely wealthy few.

    It is a shame there isn't one perfect choice but there isn't as the Democrats are far from perfect. In 2003 I became fed up and totally alienated by Bush-Cheney and the Republican Party and changed my registration from 'Republican' to 'Undeclared Party' (independent). Nothing has changed since and I remain heavily concerned over the Republican continuing gross dishonesty and for their arrogantly taking the American people for granted. There is no doubt in my mind that the Democrats, while not perfect, currently offer a more conscientious choice and then the possibility of ever returning to 'more of the same' literally scares me.

  • Posted By: NewsWkDickG @ 02/15/2010 3:28:17 PM

    The only way to reform politics is to get money out of it, to stop the control money and the money people have over politicians. It really needs to be easier for quality people to run without their becoming indebted to and controlled by the money. You want to see more competition, better candidates (not 'puppets'), maybe the rise of a strong third party or more Independents, whatever being with a real emphasis on altruistic, honest and sincerely conscience driven representatives, then make it possible by getting money out of politics. The politicians aren't going to do it. The political parties surely won't do it. And the money people with the control are going to aggressively resist ever doing it. Yet, possibly the people can force it to happen. Maybe the voters can force change by being disciplined to recognize and reject the influence of the money people. Not easy as it would take checking biases, prejudices and emotional attachments so they can't be successfully used to sway public opinion. It would need voters to be honestly rational and objective to see the manipulative efforts, to recognize the money being spent and the deception being attempted and to then vote against all of it. Easy? No, and the hardest part may be for people to become objective by not just seeking information to justify preset choices, by not just rationalizing to believe what they want to believe, and instead rationally discern decisions recognizing the subterfuge and rejecting the deceptive efforts. The other option is to continue as is. Without getting into political preferences or justifications for / rationalizations of past choices but rather just using an example that most everyone understands, consider the substantial costs and problems from the 2001-2008 years when their was a total and belligerent focus on benefit for Special Interests and a select few, the money people, with government just giving the majority only apathy, the costs and an abundance of deceptive rhetoric. Today the deceptive efforts are still flying thick and without voter discipline, we may actually go right back to where we were. I don't think this country can take more of the same and it could happen again unless the voters firmly decide that they actually want to control politics and really won't stand for the money people covertly doing it.

  • Posted By: NewsWkDickG @ 02/12/2010 12:14:49 PM

    We shouldn't become blinded by arguing over every detail or issue. That is a favorite tactic for politicians - they get the public focused on one issue or detail and then they just continue to aggressively pursue their private agenda while attention is distracted from the real negatives. With the Republican overall philosophy clearly demonstrated as benefit for only the few, the many must not allow themselves to be manipulated into concentrating on the deceptions, no matter how cutely presented. When they create smokescreens, we really need to step back and see the total picture and then firmly reject their subterfuge and them with it.

    The reason we have the drastic problems and the substantial costs is because the focus was arrogantly and irresponsibly totally on the goals of the few, while drastically neglecting all else and now 'the piper has to be paid'. The problems aren't because the Democrats are spending; the Democrats are spending because of the problems! To just ignore the problems or to return to 'more of the same' can only make matters worse. And looking at Reagan philosophies as ideal could be neglecting to see that was likely where the tolerance started with Bush-Cheney then taking it all the way to ignoring and even supporting the run-away greed, self-indulgence and gross dishonesty. Moderate conservatism is fine but as with most anything, taking it to the extreme just cause's drastic problems, is irresponsible and here benefits only the few and neglects the majority. Those lobbyists and the powerful, influential and extremely wealthy few who aggressively back and strongly support faulting / neglecting any corrective action can easily survive the problems and even have the power to substantially profit from their control and investments. With Bush-Cheney it was all pushed through by relying on an abundance of subterfuge, covertly as well as overtly perpetrated, to manipulate and control public opinion.

    Right now we are again seeing the enormous efforts and costs being spent to once more control public opinion and aggressively manipulate the voters. It isn't easy to resist being swayed because the deceptive appeals are made to people's fears, emotions, biases, prejudices and loyalties but if they are successful with this subterfuge then we can look forward to the select few gaining more and the majority loosing more, while we just endure 'more of the same'. Hopefully the majority will see through the stubbornly presented deceptions and be more aware than they were in 2000 & 2004.

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