Is it the end of the world as we’ve known it?
Who can say for sure? But as America’s second Gilded Age fissions all around us, one can sense the zeitgeist shift. If we are staring into the abyss of 1929, what do those grim times portend for us in the months ahead?
History accelerates at unimaginable speeds. Cherished beliefs and inviolable maxims are thrown overboard with hardly a farewell. So today the universal rush to embrace regulation after a quarter-century of treating it like the plague should remind us how quickly our Depression-era ancestors abandoned hoary shibboleths about laissez-faire and balanced budgets.
Rage turns into outrage. A spirit of retribution inflames popular sentiment, with calls to punish those privileged, self-regarding elites who have so badly misused their power and wealth, architects of a parasitic economy that has put the whole country in peril. It is a familiar emotional trajectory. Even before FDR took over, the Wall Street savants of the Jazz Age were getting their comeuppance, excoriated in the media and in front of Congressional investigators, pilloried for their greed, larceny, self-delusion–and, most of all, for their appalling incompetence. As then, Wall Street, so recently revered, becomes ex-communicant. The politics of retribution is parochial but full of liberating energy.
In fevered times like these, there is an urge to turn to the Hero as Autocrat. The emergency powers granted Roosevelt to deal with the collapse of the financial system were part of a general willingness to abdicate responsibility in favor of a figure of consoling authority, in his case a benign one. Soon enough, the great social movements of that era undermined this dependence. Today a long season of imperial presidential presumption and mass political passivity make the future cloudier. But the fury that greeted the Bush administration’s original design to give Henry Paulson carte blanche is heartening and suggests that the legitimacy of the old order is threadbare.
If politics is the art of the possible, then when an era comes crashing to an end what seems possible changes from moment to moment. In retrospect, FDR is often congratulated for his open-minded experimentalism. But to many back then it seemed more like he couldn’t make up his mind. That’s because the political chemistry of the country had become so volatile. The responses to today’s financial meltdown and imminent depression are likewise confused, as no one knows where the politically conceivable begins and ends. Proposals range from orthodox schemes to bail out junk at ridiculously inflated values all the way to something approaching nationalization of the financial system. That notion last surfaced during the banking crisis of the Great Depression but lost out to the less daring and more restricted remedies of the FDIC and the Glass-Steagall Act. The New Deal, in this arena as in others, was as much a story of promising roads not taken as it was one of adventurous reform.
Here the past need not be a fixed guide to the present. The collapse of the old order makes it necessary, and possible, to go further. The second Gilded Age has been a disaster in many ways. Chief among them has been the leaching away of the country’s productive wherewithal. Tidal waves of investment capital have streamed down sinkholes of speculative paper transactions, leaving in their wake a nation caught in the throes of underdevelopment.
The popular disgust with Wall Street is in part over its shameful role as the country’s economic eviscerator, a performance accompanied by shameless flaunting of misbegotten wealth. To reverse course, public authority must be robustly empowered to compel the flow of capital and credit into productive channels that meet the general interest. The New Deal feinted in this direction, as for example with the Tennessee Valley Authority’s bold experiment in regional economic planning and the public ownership of electrical power generation and distribution. The end of our second Gilded Age demands more, this time perhaps a bank for reconstruction and development to jump-start high-tech green energy conversion, the resuscitation of America’s inner cities and the root-and-branch overhaul of the nation’s decrepit infrastructure.
Two other reflections on the relevant past suggest this may be more than a quixotic crusade. Breakdown in the 1930s elicited contradictory emotions and behavior. Despair, apathy and resignation were widespread. So too were more phobic, meanspirited reactions. But the era is perhaps best known for the repoliticization of millions of formerly inert citizens. This happened in the electoral arena, but not only there, as once voiceless multitudes created out of nothing their own institutions and asserted their own powerful presence in public life. These labor unions, consumer groups, farmer alliances, civil rights associations, councils of the unemployed, local progressive parties and others helped reorient the axis of political life. The relationship of concentrated wealth to democracy, equality and the hierarchies of power, normally hidden beneath the myth of American individualism, was suddenly exposed to the light of day. Such revelations transformed the national psyche and gave the era its special frisson. Only mass movements and organizations that make “brothers and sisters” out of strangers carry with them this extraordinary capacity to reconceive the world, and in doing so to reinvent it. It’s rare enough in American history, to be sure, but we may soon see our public vocabulary once again spiced up with the contemporary equivalents of “economic royalists,” “tories of industry” and “money changers” who need to be cleared out of the temples of our civilization. That would be refreshing.