Politics, et Cetera
A publication from The Political Forum, LLC
Tuesday, February 26, 2013
They Said It:
Plato, I have said, followed Socrates in his deﬁnition of the philosopher. ‘Whom do you call true philosophers? Those who love truth’, we read in the Republic. But he himself is not truthful when he makes this statement. He does not really believe in it, for he declares in other places rather bluntly that it is one of the royal privileges, of the sovereign to make full use of lies and deceit: ‘It is the business of the rulers of the city, if it is anybody’s, to tell lies, deceiving both its enemies and its own citizens for the beneﬁt of the city; and no one else must touch this privilege.’
‘For the beneﬁt of the city’, says Plato. Again we ﬁnd that the appeal to the principle of collective utility is the ultimate ethical consideration. Totalitarian morality overrules every-thing, even the deﬁnition, the Idea, of the philosopher.
Karl Popper, The Open Society and Its Enemies, 1945.
AT LONG LAST: THE NEW POLITICAL PARADIGM!
Eighteen years ago, in the midst of the budget standoff between Bill Clinton and Speaker of the House Newt Gingrich, we took our first stab at noting the dissolution of the traditional “political paradigm.” The budget crisis, which resulted in the furlough of non-essential federal government workers for a total of 28 days over a two-month span and which was called a “shutdown,” made it clear to us that the world had changed in the years since the end of the Cold War and that this nation’s political climate would never, ever be the same again. On November 29, 1995, in a piece titled “Conservatism? What Conservatism?” we put it this way:
The battle between the White House and Congressional Republicans over the size and spending priorities of the government is in many ways a classic confrontation between liberalism and conservatism. One side wants big government; the other side wants smaller government. Most of the principal players in the drama see it in these terms, and from a political writer’s standpoint, the use of the liberal-conservative paradigm greatly facilitates analysis and comment.
It has certainly been comfortable for us to view the budget fight this way this past year. But throughout the period it has become increasingly clear that this is not really a battle between “conservatism” and “liberalism,” in the sense that these terms were understood only a few decades ago. This is a fight about something else, something quite new in American politics. It involves a new post-cold-war political paradigm that is not yet fully formed, but is, to paraphrase Yeats, still a rough beast slouching toward Washington to be born . . .
For starters, we would argue that most of today’s “conservatives” are little different from yesterday’s liberals. This is not so much a criticism as a simple observation about the political realities of the day. The concept that every problem demands a government solution has burrowed so deeply into the American psyche that the transformation of most conservative politicians into old-style liberals was all but inevitable.
To be a “conservative” politician today is to be one who seeks “conservative” government approaches to the nation’s problems (i.e. less costly and/or more efficient) rather than “liberal” government approaches. The difference between the two is primarily a matter of spending levels and the locus of power.
Sixteen years ago, after a nasty and occasionally bloody strike by the Teamsters against UPS, we continued this thought, observing that conservatism was not alone in changing and faltering in the post-Cold-War era, but that contemporary liberalism too had grown distorted and that the old ways of talking about politics in this country were simply inadequate. As in 1995, we mentioned the “new paradigm,” which was only fitting, we suppose, given that the title of the piece in question was “The New Political Paradigm.”
The old labor vs. capital paradigm, which was a principal feature in American politics for almost exactly a century, is no longer of much importance. This once all-important tension, which actually defined the Republican and Democratic parties for decades, took root during the Marxist and utopian socialist movements that followed the Civil War, bloomed in 1886 when Samuel Gompers founded the American Federation of Labor, began to wilt in the early 1970’s with the advent of Richard Nixon’s appeal to the “new Republican majority” of blue collar workers, and became an endangered species in 1989, when the Berlin Wall fell, and a new era of global competition emerged from the rubble.
Throughout most of the 20th century, the Democratic Party was the preferred political home for blue-collar workers. Today, Republicans get a majority of their votes from these so-called “Joe Sixpacks” and their wives. Conversely, the Republican Party was, from the time of the so-called “Robber Barons” in the late 19th century until very recently, the home of big business.
Today, while the GOP still has a huge following in the small business community, the board rooms of most of America’s corporate giants are filled with Democrats, who aggressively support the Washington colossus in exchange for huge amounts of business, for important tax breaks and direct subsidies, and most importantly, for a steady stream of regulatory initiatives and trade rulings that serve to cripple their smaller competitors both at home and abroad . . . .
Liberal commentators still appear to labor under the misconception that the Democratic Party represents the blue-collar worker in his fight against the “capitalist dogs.” Conservative pundits, on the other hand, seem to believe that “we are all capitalists now” and that no significant threat to free enterprise exists anymore. Both assumptions are wrong.
Fourteen years ago, as the Clinton presidency was growing to a close, we penned three separate pieces detailing our expectations for the new administration, the new century, and the “Dawn of a New Political Era,” (parts, I, II, and III, naturally). Although we didn’t know then who the next president would be or how he would run his administration, or even whether he would profess to be a “conservative” or a “liberal,” we knew that it didn’t matter – or at least it didn’t matter much.
The new political era would dawn regardless, and it would be marked principally by the triumph of the administrative class, of what we have come to know today as the “clerisy.” Government would grow, at all levels, and we, the governed, would be told that it was for our own good. Modern society is simply too complex to be managed by amateurs and must, therefore, be run by the professionals, the people who know what they are doing and can do the best to ensure the greatest happiness for the greatest number. In the third installment of the “New Political Era” series, we summed up said era as follows:
The rough bureaucratic beast, which politicians created to help them implement their ideas and plans, now has, as predicted by [Alexis de] Tocqueville and [Max] Weber, and analyzed by [Theodore] Lowi, a mind of its own and a voracious appetite. It demands to be fed an ever-increasing share of the national treasure, snarling at even a hint of a cutback in its huge rations. It routinely refuses to obey orders it doesn’t like. It issues, with little oversight, tens of thousands of “regulations” a week, which have the full force of law behind them and which directly affect virtually every aspect of American life.
In addition, as Lowi pointed out, the beast is constantly joining with giant private interest groups to build new, and to shore up old, coalitions, many of which are more powerful than any of the three traditional branches of government . . . .
In many ways this bureaucracy is a benevolent beast. It gives generously of its treasure to huge numbers of citizens, buying both their loyalty and their complacency. But it is also a jealous creature that works night and day to eliminate any and all competitive private sources of power, including the traditional family ….
For many Americans this is the ideal government. Those who receive more than they give to government love the idea of a dispassionate, impartial bureaucracy redistributing the nation’s wealth, based on some idea of “equity” that, wonder of wonders, favors them.
This is all well and good, except that “the beast” is neither dispassionate nor impartial.
Three years ago, as reality began to set in, and as Americans began to grasp the fact that a health care law that they detested had been passed nonetheless and that the powers that be in Washington were completely unconcerned about the public opposition to the new law, we began, once again, to discuss the “new paradigm” and the “new political era” and to sketch their outlines.
We understood that the midterm elections that fall would be, in large part, a referendum on the health care “reform.” But we understood as well that the results of that referendum would go unheeded, that the denizens of official Washington – of BOTH parties – cared more about power, prestige, and their role in “governing” than they did about the petty needs and wants of the people.
As we began to sort through the most compelling political stories and themes of the day, we began to see clearly how the old political distinctions had been all but obliterated and that the only constants in the “new” American politics were the hunger for power, the thirst for privilege, and the ever-present lever of that power and source of that prestige, the near-fully automated bureaucratic state. Liberal vs. conservative? How quaint.
Liberals and conservatives continued to battle, alright, but not about the direction of the country. They battled only for control of the mechanism of governance. Their true fight – the fight they waged together – was against the rest of the people, those outside the ruling class, who would, on occasion, have the audacity to try to demand a say in their own lives. We wrote:
Given the likelihood of large Republican gains in this year’s Congressional midterms, and given the fact that all potential GOP nominees for 2012 now outpoll President Obama in head-to-head match-ups, we can expect to see this legislation axed, or, at the very least, radically watered down. Right? With the soon-to-be-majority party and a large majority of Americans hankering to undo this disastrous mistake, it’s gonna happen. Isn’t it? Even if we have to wait until the 45th president is inaugurated on January 20, 2013?
Well . . . in a word . . . NO.
Repeal is not going to happen. It’s not going to happen now. It’s not going to happen next January, when the new Congress is sworn in. And it’s not going to happen when President Barack Obama is ofﬁcially ex-President Barack Obama. It is simply not going to happen. Ever . . .
The problem with the national-level politicians in the Republican Party – or at least the biggest problem – is that they are politicians, which is to say that they like power as much as the next guy and are unlikely to do anything that will compel them to give that power away. Ideology? Who cares. Principles? Never heard of ‘em. When it comes to power, all the rest goes right out the door. Just ask Newt. Sure, he got rid of the House Barber Shop. But did he get rid of anything else? Anything at all?
If you don’t want to ask Newt, ask Barack Obama. This is a guy, remember, who was the darling of the Left throughout the campaign. He promised to shutter Gitmo. He promised to end renditions. He promised to end the warrantless wiretap programs. He promised to end the secrecy surrounding the interrogations, trials, and punishments of enemy combatants. He promised to end the assassination bombings of suspected al Qaeda and Taliban ﬁghters in Pakistan. He promised . . . well, a great many things, all of which have been relegated to the dust bin of history. And the reason he hasn’t honored his promises? It’s because he doesn’t want to. He may have wanted to at one point, but not now. Now, he’s the guy with the drones and the wiretaps; the guy with the ﬁnancial community’s gonads in a vice, right next to those of the oil producers and the docs. He’s the guy with the power. And he kinda digs it.
In order for this to make sense, you have to believe at least a couple of things. The ﬁrst of these is that the point of government in the administrative state is to accumulate power for government, which is to say that the massive incursions that the Obama administration has made into the various components of the private sector are not about improving these sectors for the beneﬁt of all Americans, but about controlling them for the beneﬁt of the power brokers…. Second you have to understand that this accumulation of power is not necessarily a partisan pursuit.
We went on, in this piece, to quote from an essay penned a few weeks earlier by our old friend Angelo Codevilla, a professor emeritus of foreign affairs at Boston University, who noted that this escalating war was being waged by “the ruling class” against “the country class,” by “them” against “us.” Codevilla put it thusly:
Republican and Democratic ofﬁce holders and their retinues show a similar presumption to dominate and fewer differences in tastes, habits, opinions, and sources of income among one another than between both and the rest of the country. They think, look, and act as a class . . .
Never has there been so little diversity within America’s upper crust . . .
Today’s ruling class, from Boston to San Diego, was formed by an educational system that exposed them to the same ideas and gave them remarkably uniform guidance, as well as tastes and habits. These amount to a social canon of judgments about good and evil, complete with secular sacred history, sins (against minorities and the environment), and saints. Using the right words and avoiding the wrong ones when referring to such matters – speaking the “in” language – serves as a badge of identity. Regardless of what business or profession they are in, their road up included government channels and government money because, as government has grown, its boundary with the rest of American life has become indistinct.
Just over thirteen months ago, in our 2012 domestic politics forecast piece, we predicted that Barack Obama would be re-elected and would be re-elected handily. That expectation was based on two critical beliefs. First, we figured, early on, that the President would find himself in the typically Democratic position of running against an opponent who represented absolutely no one, which is to say an opponent who was hand-selected by the Republican establishment but who appealed to almost nobody outside of that establishment. And as nice a fella as Mitt Romney may be, when he took control of the GOP primary, that condition was met.
Our second expectation was that Obama would not run a traditional presidential campaign, but would instead run an unorthodox and, frankly, extraordinary campaign designed to assemble the smallest winning coalition possible. We put it this way:
Obama will, we believe, win re-election by engaging this battle [against fiscal reality] directly; by promising his supporters that he will be their paladin, their General, their Horatius at the Bridge; that he will ﬁght against all odds and against common sense for their “rights” and their share of the diminishing pie.
It is important to note here, we think, that the Democratic base is comprised almost exclusively of people who stand to gain from a perpetuation of the status quo in the allocation of public resources and who stand to lose big from reform. Teachers, higher education professors and instructors, other public employees, minorities, the poor, and the political class more broadly speaking. These are Obama’s supporters. This is his base. And these are the men and women on whose support he will count to return him to the White House.
Another important factor to note here is that Obama will be perfectly open in his pandering to this constituency, promising that he will stand for “honoring the commitments” that the United States has made to its citizens, never acknowledging for a second that these “commitments” are, in many cases, unreasonable and undeliverable. He will turn this campaign into one over the question of “fairness” and “decency,” of the “haves” being asked to give up just a little bit for the “have nots.” In short, he will wage a class war in which he will deﬁne the makeup of the classes. And he will do so openly and proudly.
Four weeks ago, we brought this nearly two-decade-long discussion of the “new political paradigm” fully into the Obama era. We didn’t realize it at the time we wrote the piece, (“Makers, Takers, and the Obama Economic Model”), but the “Obama” model is not Obama’s at all. It is, rather, the inevitable economic outcome of the post-Cold-War political evolution in this country. The economic bifurcation we are currently witnessing in these here United States – and which the government forcefully encourages – is the unavoidable result of the bifurcation of the country in spheres defined almost exclusively by their attachment to government. On the one side, you have the ruling class and its dependents; and on the other you have the country class. Or, as we put it:
The Obama economy is very much shaped by the age and by his belief in the necessity and efficacy of government on a massive scale. The Obama economy is, for all intents, the “service economy” on steroids. The key players and the principal job providers are those that deal not in manufacture or creation of tangible goods, but those that deal in ideas, creative ventures, finance, and, most important, government services. Obama and his fellow Leftists decry the decline of American industrialization and bemoan the “outsourcing” of good manufacturing jobs. And yet their economic policies and priorities promote nothing except big banks, big IT companies, and big government. Small business, manufactures, and start-ups, by contrast, are singled out for retribution . . .
The net effects of this type of economy, naturally, include a greater number of Americans without jobs and a greater emphasis on the growth of government, at all levels and across all professions . . .
Of course, to any observer outside of the cult of Liberalism, this is the Progressive welfare state in parody, i.e., a small handful of those lucky few in the creative and properly educated class are allowed to grow richer and richer, even as they “guide,” direct, and oversee the less productive classes, supporting expansive government and its various dependents out of their largesse. Under their “enlightened” tutelage, the masses remain placated, while their own fortunes continue to grow.
When all is said and done, then, we are left with a political paradigm that pits those who believe that Plato’s Republic is a how-to manual intended to provide a guide to constructing the Kallipolis (the “good” city) against those who agree with the smarter figures in Western Civilization that Plato’s effort was intended to be esoteric or representational, which is to say those who believe in natural law, in inalienable rights, and in the inherent dignity of the individual.
In a column/blog post last week for the Daily Beast/Newsweek, the eminently sensible Megan McArdle varied from the usual analogy (and the one we use above and have used countless times before), and compared the American ruling class not to the Platonic Guardians, but rather to Mandarins of Imperial China:
I think that we are looking at something even deeper than that: the Mandarinization of America.
The Chinese imperial bureaucracy was immensely powerful. Entrance was theoretically open to anyone, from any walk of society—as long as they could pass a very tough examination. The number of passes was tightly restricted to keep the bureaucracy at optimal size.
Passing the tests and becoming a “scholar official” was a ticket to a very good, very secure life. And there is something to like about a system like this . . . especially if you happen to be good at exams. Of course, once you gave the imperial bureaucracy a lot of power, and made entrance into said bureaucracy conditional on passing a tough exam, what you have is . . . a country run by people who think that being good at exams is the most important thing on earth. Sound familiar? . . .
Why, yes. It does sound familiar. Say . . . how is Imperial China doing these days? Still chugging along, is it?
There are, as far as we can tell, two major problems with the new political paradigm as it has emerged over the last two decades. The first is hinted at by McArdle above. This “mandarin” class, or the Guardian class, or the ruling class, or whatever you call it, is made up of people who are conditioned to think the same things, to read the same authors, to enjoy the same entertainment, and hold the same beliefs.
As Codevilla noted above, this class has fewer differences with respect to “tastes, habits, opinions, and sources of income” than any ruling class in memory. Or, as McArdle puts it, the mandarins are “prone to be conformist, risk averse, obedient, and good at echoing the opinions of authority . . .”
Over the long-term, the ruling/mandarin class grows stale. It loses its edge. It becomes incapable of addressing even the most fundamental problems of the state, which, in turn, fosters a crisis of legitimacy affecting both the ruling class and the state itself. Think of it as the human-capital version of the Irish Potato Famine.
As any schoolboy knows, the traditionally accepted cause of the “Great Famine” was Ireland’s dependence not just on potatoes as a staple crop, but on one specific genetic line of potatoes. Since all the potato plants were genetically similar, they were all susceptible to the same blight and were thus all wiped out by a seemingly manageable disease. Now, whether or not this is an entirely historically accurate picture of the potato famine is rather beside the point. And that point is that a certain amount of diversity – particularly diversity of thought – is critical to maintaining creativity and effective governance. And the American ruling class is utterly lacking in diversity of thought, belief, and the other virtues that might allow it to manage even the slightest misfortune.
One might argue that the American ruling class is also utterly lacking in the basic knowledge base necessary to maintain even a modicum of civil society. Whereas Plato’s Guardians were expected to be fully and rigorously educated – physically, mentally, and artistically – the American Guardians are, for the most part, rather poorly educated. True, Harvard, Yale, the University of Chicago, and the rest once denoted intellectual superiority and rigorousness. Today, however, they represent proper credentialing more than anything. The graduates of the Ivy League are, for the most part, no better educated than the graduates of almost any other university. And in many cases, their education is worse, relying more heavily on Leftist educational cant than on the actual conveyance of knowledge, wisdom, or the capacity to reason.
Consider: over the past four years, four of the most critical and upsetting years in several decades, the man who was in charge of the Treasury, the institution responsible for managing both federal finances and the currency, was a hack who couldn’t even do his own taxes properly. Yet he was properly connected, having attended Dartmouth and, more to the point, having enjoyed the tutelage of Democratic finance icon Robert Rubin at Treasury. Worse yet, he is to be replaced this week, at another critical juncture for the country, by a man who is even less capable, who couldn’t tell his interlocutors in the Senate how his pay on Wall Street was calculated or what, exactly, he did to earn it, but who is also properly plugged-in, having gone to Harvard and – again, more to the point – having learned the ropes of finance from Bob Rubin, this time at Citi.
Does it surprise anyone – anyone at all – that Jack Lew’s employment contract at Citi “gave him,” as the inimitable Michael Barone put it yesterday, “favorable stock option treatment if he left his job for a high federal government post but not for another governmental or nonprofit job?” Could the ruling-class ethos possibly be more brazenly and haughtily flaunted?
The bottom line here is that the American ruling class, which prides itself so on its intellect and education, is really nothing more than a group of people who are well connected and/or who take exams well. This too bodes ill with respect to long-run creativity and problem-solving ability.
The second major problem with the new paradigm is that its composition is inherently unstable. In contemporary American society, fully one-third to one-half of all Americans have no political representation whatsoever. The Democratic ruling class represents itself and it dependents, the people whom it purports to “safeguard,” either through employment or aid. The Republican ruling class represents itself. And NO ONE represents the “country class,” which is to say the ordinary American men and women just trying to get along, work their jobs, run their businesses, provide for their families, and save for their retirement. These ordinary Americans, of course, are the heart-and-soul of the country, and they have been since the days of the Founding. And they are not exactly happy about being essentially disenfranchised in the new political era.
Last week, in a follow-up to his original essay (and book) on the American ruling class, Codevilla appeared in the pages of Forbes to discuss just this topic. To wit:
Modern Republican leaders, with the exception of the Reagan Administration, have been partners in the expansion of government, indeed in the growth of a government-based “ruling class.” They have relished that role despite their voters. Thus these leaders gradually solidified their choice to no longer represent what had been their constituency, but to openly adopt the identity of junior partners in that ruling class. By repeatedly passing bills that contradict the identity of Republican voters and of the majority of Republican elected representatives, the Republican leadership has made political orphans of millions of Americans. In short, at the outset of 2013 a substantial portion of America finds itself un-represented, while Republican leaders increasingly represent only themselves.
By the law of supply and demand, millions of Americans, (arguably a majority) cannot remain without representation. Increasingly the top people in government, corporations, and the media collude and demand submission as did the royal courts of old. This marks these political orphans as a “country class.” In 1776 America’s country class responded to lack of representation by uniting under the concept: “all men are created equal.” In our time, its disparate sectors’ common sentiment is more like: “who the hell do they think they are?” . . .
Thus public opinion polls confirm that some two thirds of Americans feel that government is “them” not “us,” that government has been taking the country in the wrong direction, and that such sentiments largely parallel partisan identification: While a majority of Democrats feel that officials who bear that label represent them well, only about a fourth of Republican voters and an even smaller proportion of independents trust Republican officials to be on their side. Again: While the ruling class is well represented by the Democratic Party, the country class is not represented politically – by the Republican Party or by any other. Well or badly, its demand for representation will be met.
This, of course, is the impetus behind the Tea Party. It is the reason that the Tea Party will continue not just to survive, but to thrive, despite the political class’s repeated insistence that it is dead or dying.
Unfortunately, while the Tea Party is destabilizing to the Republican establishment, it is hardly unified in purpose, and that, in the end, will all but certainly prevent it from being a practical replacement to the GOP, thereby providing the representation that the country class lacks and so desperately craves.
Codevilla argues that the Republican Party of today is, in many ways, reminiscent of the mid-Nineteenth century Whig party, i.e. a party unmoored from its base and unable to provide any internal remedy to its problems, much less to recognize them as problems. Inevitably, he concludes, the GOP as it currently exists will collapse, to be replaced by a new party.
He’s right, we think. We have always thought – going back to the first Paradigm pieces – that one or both of the parties would be eventual casualties in the changing of the political template. The questions with which we are left, given that, include: What takes the GOP’s place? When does that happen? And what happens until then?
By and large, Codevilla answers the first two questions as follows:
A new party is likely to arise because the public holds both Republicans and Democrats responsible for the nation’s unsustainable course. Indebtedness cannot increase endlessly. Nor can regulations pile on top of regulations while the officials who promulgate them – and their pensions – continue to grow, without crushing those beneath. Nor can the population’s rush to disability status and other forms of public assistance, or the no-win wars that have resulted in “open season” on Americans around the world, continue without catharsis. One half of the population cannot continue passively to absorb insults without pushing back. When – sooner rather than later – events collapse this house of cards, it will be hard to credibly advocate a better future while bearing a label that advertises responsibility for the present. Why trust any Republican qua Republican?
To represent the country class, to set about reversing the ills the ruling class imposed on America, a party would have to confront the ruling class’ pretenses, with unity and force comparable to that by which these were imposed. There will be no alternative to all the country class’ various components acting jointly on measures dear to each. For example: since the connection between government and finance, the principle that large institutions are “too big to fail,” are dear to America’s best-connected people who can be counted on to threaten “systemic collapse,” breaking it will require the support of sectors of the country class for which “corporate welfare” is less of a concern than the welfare effects of the Social Security system’s component that funds fake disability and drug addiction – something about which macroeconomists mostly care little – and vice versa.
We tend to think he’s right about this too. Unfortunately, what this suggests is that a new party – and therefore a resolution to the instability inherent in current paradigm – is nowhere near the point of coalescing. The diverse interests among the country class remain largely irreconcilable at present and appear likely to remain so for some time.
This suggests to us that the answer to question number 3 above, “what happens until the country class is adequately represented?” is “pain,” lots and lots of pain.
Over the past couple of years, we have mentioned countless times in this space and in speeches that the fiscal and more existential crises plaguing this country will not be solved by Washington, but will only be addressed by an external, non-political mechanism – the bond markets, perhaps. As the new paradigm takes shape and as Codevilla provides some insight into what will break this paradigm and push the country back on the path of representative democracy, we become ever more convinced of this.
The ruling class is totally unwilling to accept that a crisis exists. The country class is angry, frustrated, and demanding more from its representatives. But it is disorganized, disjointed, and lacking unified purpose. The ruling class, which is deficient in intellectual diversity and the foresight that comes with it, is all but certain to miss the signs of impending collapse and therefore likely to proceed on it current course until said collapse is impossible to avoid.
On the plus side, beyond this collapse, there will be an opportunity to break the stranglehold of the contemporary ruling class and its intellectual pretenses and to encourage the growth of a real meritocracy rather than the pseudo-meritocracy that characterizes American business and government today. Those companies, organizations, and individuals who have rejected the ruling class standards and have focused instead on true creativity and true edification will emerge as leaders in the post-apocalyptic paradigm.
Also on the plus side – at least from the perspective of the markets – is the fact that the interim between now and the inevitable breakdown of the current paradigm will be marked by reasonable certainty in any number of things. For example, those industries that we mentioned four weeks ago – high tech, banking, large service-sector enterprises – will continue to enjoy the protection and support of the ruling class, of BOTH parties. Just as there was no way that a hypothetical President Mitt Romney would have done much of anything to break up the big banks or to threaten the financial giants, so will it be with Jack Lew whispering in the ears of Barack Obama. “Too big to fail,” is the rallying cry and the guiding economic principle of the ruling class. And the ruling class will do everything within its power to see that its favored businesses do not fail – right up to the point at which the ruling class itself fails. And it will fail. It can’t help but fail.
For our part, when the end comes, we will, hopefully, begin again, formulating ideas on the next political paradigm, hoping that it will be better and more constructive than the current one.
In the meantime, our recommendation, pedestrian as it may sound, is simply to carry on.
We have to admit, this is a little tricky for us. We’ve spent the nearly the last two decades chasing down the new paradigm. And it seems a little silly to be talking about that paradigm’s end, having finally isolated it. Please note, the current political condition is inherently unstable, but that’s not to say that its collapse is imminent. Indeed, the catch here is that the instability can and likely will continue relentlessly for some time before there is any sort of resolution. The “pain” we forecast above is, unfortunately, not the kind of pain that will characterize the collapse exclusively. It is just as possible, if not likely, that the lion’s share of the economic and cultural pain will be felt before the collapse, during the “heyday,” if you will, of the current paradigm, while instability is the defining feature of American life.
At the same time, of course, it’s a truism in this business that one man’s pain is another man’s gain. And those who are prepared for the instability and aware of its causes can do remarkably well, even as the nation sorts out its problems. Remember who holds the proverbial cards. Remember who back their plays.