Sinners in the Hands of an Angry Market

SINNERS IN THE HANDS OF AN ANGRY MARKET

“The truth is, we are all caught in a great economic system which is heartless.”
Woodrow Wilson

January 11, 2010

Dear Citizens and Elected Officials:

Introduction:

It’s been some time since my readers have received a posting, since September 22, as a matter of fact, so there is a lot of ground to cover in this the first month of 2010, and I intend to cover it.

If 2010 stays within the pathways etched by the acid climate of 2009, it could well turn out to be like some other notable American years: 1859, 1968, 1973, and 1994. Although the latter two are more likely, if we veer towards the streets as in 1968, it will probably be the Right, not the left, causing the commotion – or worse.

Since these postings have consistently been about political economy, we will begin with the politics of late 2009, where the “Rubicon” has been crossed, by the Republican Party, as well as President Obama, especially with his commitment, despite the hedging and alleged “exit ramps,” to what looks like the permanent war on terror so dear to the heart of Dick Cheney. There appear to be new countries popping up all the time for further interventions and “nation building,” yet the nation directly to our south, with whom we share centuries of cultural exchanges, is close to being a failed state itself. If the war against drugs which heavily involves Mexico hasn’t gone so well, what are the prospects for a far more complex war many more thousands of miles away, inside a country, and region, whose culture is even more of a mystery to us? Truly, this is a President who believes in American Exceptionalism, our inheritance from the Puritan’s “City on A Hill,” and a denial that our fate could be the fate of other “empires” in the mountains and valleys of AF-PAK – and beyond. The shock and awe inflicted on Iraq was supposed to teach radical Islam a lesson; instead of shrinking, American intervention expands and the dynamics of “blowback” are growing, not diminishing. With our revealingly named “Predator” and “Reaper” drones, there is a new race begun: can they kill the terrorist leadership faster than they generate fresh recruits from the newly alienated “neutral” onlookers? This would be damaging enough for America in “ordinary times”; given the economic state of the home front, it is pushing this nation towards strains we haven’t seen since the 1960’s – or is it the 1850’s?

The title of the attached essay, Sinners in the Hands of an Angry Market, gives you direct clues as to the grounds we are about to cover: the power at the center (I almost wrote heart, before I caught myself ) of the Right’s coalition: fundamentalist religion and fundamentalist economics. Historian Tony Judt has reminded us in a December essay, that what we Progressives in the U.S. face is a Right, now nearly synonymous with mainstream Republicanism, that “has inherited the ambitious modernist urge to destroy and innovate in the name of a universal project.” Universal Project: one never hears Democrats speak in that way about the Right. At the very core of that project are the disparagement of government and the elevation of The Market to a position of quasi-religious power over the whole of society, and the blank check written by religious conservatives to market fundamentalists for the exercise of that power. We have to state, however, regardless of what discomfort it might cause to Democrats inside, and close to, the Beltway, that many prominent names in their midst also signed a blank check to The Market. That would include Bill and Hillary Clinton, Robert Rubin and (at some point in time) Larry Summers, and our current president, even as they can, in fairness, support more flexible policy positions than the truest believers who reside way over on the far right, next to the ghosts of Friedrich von Hayek, Ayn Rand, and Milton Friedman.

What comes as a surprise to these Democratic “centrists” like Bill Clinton and President Obama (preceded by President Carter) is that no matter how much flexibility and compromise they display, their market interventions of necessity still produce a solid block of Republican Right opposition, no defections, and, demonstrating the power The Market holds over many Democrats, they lose significant portions of their party on the major policy votes, like financial “reform” in the House. And in the Senate, on health care, they can only achieve “party unity” by trading away the ability of a bill to actually accomplish its stated objectives.

So I have some bad news for the different streams that go to make up the Progressive river, from the environmental community to labor, from the LGBT community to peace activists and beyond: there is a common obstacle in the form of The Right, and no matter how nicely one finesses the policy presentations, they’re not going very far at all under the present conditions - until we make a better case for rejecting the Right’s project in the minds of “independent” voters. That’s what the enclosed essay will attempt to do in terms you probably have not heard before.

There is no better illustration of the power of the Right’s “universal project” than the homage paid by Democratic Senator Ben Nelson of Nebraska, just before the Christmas Eve passage of the health care bill. Senator Nelson said this about his pending vote in a New York Times article: “‘I believe in the free market system as the foundation of our economy and as the primary focus that should drive our health care system and our debate. That’s why I opposed the public option and yet supported the market exchanges.’” Now we don’t expect, or support, anything close to a full repudiation of the market across the broad economy, but rather a much greater appreciation of where it can work and where it can’t. However, in the wake of its steady failures since 1945 to deliver universal health coverage at an affordable price, and given the spectacular failure of free market economics in the very core of the financial system, to make a pronouncement like Nelson’s in late 2009 is to make a declaration of nothing less than a secular faith which transcends the facts. And, as George Lakoff has said, when the facts don’t fit the frame, the facts get tossed, the frame remains.

In fact, the dynamics of the health care debate, both the politics and the emotions, were in good part responsible for the title and directions of the essay which follows. Here’s how events and ideas came together. The idea of the Market as a near Deity in the United States should surprise no one after nearly 40 years of the Right’s pursuit of their universal project; but the image of an “Angry Market” was triggered by columnist Thomas Friedman’s Op-Ed from October 7, 2009: “Our Three Bombs.” The Market is, along with Mother Nature, one “of the two most merciless forces on the planet.” He tries to soothe us a bit by noting that it’s “just a second by second snapshot of the balance between greed and fear.” But, “you can’t spin it or sweet-talk it. And you never know when that balance between greed and fear on the dollar is going to tip over into fear in a nonlinear way.” (Translation of “nonlinear”: a panic run against or away from the dollar in the currency and/or bond markets.) In the face of this fear that the great shadow of The Market casts over all of us, we had better make some significant sacrificial gesture on its altar – like “some spending and entitlement programs supported by liberals.” (More details, and the fact that President Obama may well support the call for reductions in Social Security and Medicare spending, follow below and in the essay.)

It was Maryland’s Progressive State Senator Jamie Raskin who inspired the other half of the title by his memorable comments at a health care forum at the Rockville Library on October 24, 2009. What caught my attention was this – paraphrased - but I trust, close enough to the actual words: on our way, eventually, to a good universal health care bill – something that probably wouldn’t be achieved in the first one that Congress passes – we want to get to the point where coverage was seen as a basic human right, not something that one “earned” because the presiding powers deemed one “worthy enough.” Then, shortly thereafter, Brown University political science Professor James A. Morone was quoted in a November 7th New York Times article documenting the nasty tone the health care debate had taken for over-weight Americans – they were being blamed for driving up costs for allegedly healthy and more worthy citizens: “‘All national health insurance systems are built on the idea that we’re all part of a community, we all get sick or die, so we’re going to take care of one another…the best philosophical way to stop national health insurance is to say we’re not community, it’s us vs. them.’”

Professor Morone’s comments flow right out of the main themes of his 2003 book, Hellfire Nation: The Politics of Sin in American History, out of the “Great American Moral Dialectic,” passed along to us by our Puritan ‘founders,’ which is: “Who do we blame for trouble, the sinner or the society?” More often than not, we blame a sinful “Other” – in this instance – overweight people. Does this sound far-fetched for 21st Century secular citizens in MoCo and the Beltway region? If so, try this quote on for a “fit,” from a commentator on January 1st, 2010, to a New York Times article entitled “Is Community Rating in Health Issues Fair?” by Uwe E. Reinhardt. One of the very first comments reads: “ ‘I am 54 and I believe it is poor public policy to have my children be unable to buy a house or send their kids to college because they are compelled to provide subsidies to my overweight, sedentary peers. As a demographically wealthy group, the baby boomers need to suck it up and pay for their own Viagra.’” The commentator, perhaps not so ironically, is from Massachusetts.

Diligent readers may recall that in September of 2008, in the midst of the Presidential election, I encouraged them to read Robert Kuttner’s book, Obama’s Challenge, which had just come out in August. Kuttner’s advice, in addition to his high hopes for Obama, was to postpone health care reform to the second year, after easier lifts had built momentum. Well, here we are, awaiting the final bill from joint Senate-House negotiations, or reconciliation, as the formal process is called. Because the debate has consumed so much time, and so much energy, my readers deserve my take on it. You can’t get a better mirror of my thought process, and feelings, than by watching the following Bill Moyers Journal segment (of December 18th) with Matt Taibbi, the Rolling Stone author we introduced in September 2009, and Kuttner himself, representing two generations on the left.
At http://www.pbs.org/moyers/journal/12182009/profile.html

The segment is not only informed commentary on the process and product patched together on health care, it’s also an assessment of the Obama Presidency so far. Taibbi and Kuttner agree on 95% of the assessment and the product; Taibbi won’t support the bill because he doesn’t think it will work and will backfire on the Democrats, and Kuttner holds his nose and recognizes those possibilities yet says the Democrats cannot come away empty handed, it’s the end of them in the 2010 elections if they do. I side with Taibbi on this, but understand Kuttner’s decision. Bob Herbert, writing on January 5, 2010 in the NYTimes, called the outcome “a bloated Rube Goldberg legislative mess that protects the insurance and drug industries and does not rein in runaway health care costs.” In another take which echoes Taibbi’s reasoning, Dr. Marcia Angell, from the Harvard Medical School, didn’t think the House bill was worth it in her November 8, 2009 commentary on the Huffington Post: “Is the House Health Care Bill Better than Nothing?” at http://www.huffingtonpost.com/marcia-angell-md/is-the-house-health-care_...

And the Obama Presidency itself? My readers know that I never climbed the Obama mountain with the millions he mobilized, and in fact, I declined tickets to the Inauguration because I thought some citizens in Prince Georges County would better appreciate the occasion, and there were many other more deserving workers in the Donna Edwards’ campaigns. I only stuck my neck out for Obama in March of 2008, before the primary was decided, because I did not want to end up with Bill Clinton’s old economic advisors – like Bob Rubin and Larry Summers. Silly me; we got them, or very close relations, anyhow, and a foreign policy that has that sunset glow of late Empire stamped all over it. What we have in Obama, The Great Conciliator, is someone who will not undertake the educational task of a “transformative presidency,” who will not explain how he differs from the conservative structural changes that the Right’s great universal project has wrought over nearly 40 years. (If he indeed does differ greatly.) Bob Herbert has it exactly right, but leaves out the guiding ideology, when he observes in his column “An Uneasy Feeling,” on January 5, that “this is a society in deep, deep trouble and the fixes currently in the works are in no way adequate to the enormous challenges we’re facing.”

One of the best written and insightful articles on the subject can be found in Drew Weston’s “Leadership, Obama Style, and the Looming Losses in 2010: Pretty Speeches, Compromised Values and the Quest for the Lowest Common Denominator” at http://www.huffingtonpost.com/drew-westen/leadership-obama-style-an_b_39...
The article, which appeared on December 20th, has drawn a remarkable 4,330 comments as of early January. Weston observes that Obama has managed a notable feat: alienating both his base and the independents. For a good part of the article he sounds like the best of George Lakoff; the only place where I would disagree with his assessment is that Weston claims if it was a matter of ideology, you could alienate the base but not the center, or vice-versa, but never both. I disagree, and the attached essay explains why: Obama’s apparent indecisiveness does flow from his worshipping at the same University of Chicago free-market altar as the far Right. He is more flexible than they are, as Bill Clinton was, but just as Bob Herbert has noted, he’s bound by Market deference to limit the nature of his interventions, and where. Indeed, one of the realities that guided my essay over the past three months is that Obama has not changed the nature of the politic dynamics at all: it is still center-right, not center left. So I wanted to show why the Right’s coalition has held, in spite of the grand market failure, and where it is likely to lead in 2010-2012.

The truth is, 30-40 years indoctrination of the American middle by the Right’s universal project in Market Utopianism cannot be undone even by someone as gifted as Obama, certainly not in one year, and especially if he will not undertake the explications necessary. Perhaps the clearest way to state the nature of the problem would be to explain to the public how both Ronald Reagan and Tom Delay were engaged in the same “universal project” for the Right, and that Tom Delay far better represented the actual consequences for the American workforce and the brutality of the project - which Reagan’s demeanor obscured. For example, Obama won’t get at the structural changes (and emotional consequences) that Frank Rich grappled with in his December 13, 2009 column about the George Clooney movie, “Up in the Air.” Let’s see what Rich was writing about, because it’s a good example of the deeper themes of “Sinners in the Hands of an Angry Market.”

The movie is about someone whose task is “Liquidation,” bringing the news of layoffs and terminations to employees in such a way that it will not result in workplace shootings. (Liquidated is the title of Karen Ho’s book about Wall Street practices and values, and we spend a lot of time looking at what she found…). Rich gets right to the heart of the matter: “What gives our Great Recession its particular darkness – and gives this film its haunting afterlife – is the disconnect between the corporate culture that is dictating the firing and the rest of us…” ‘Up in the Air’ …makes palpable the cultural and even physical chasm that opened up between the two Americas for years before the financial collapse…those at the top are separated from the consequences of their actions. They are exemplified by Robert Rubin…” For the full piece, go to http://www.nytimes.com/2009/12/13/opinion/13rich.html

Sinners in the Hands of an Angry Market begins with the findings of anthropologist Ho’s field work on Wall Street, especially its practices, including some jaw-dropping revelations about what the recruiting process has led to at Harvard and Princeton, a finding so amazing that I sent the President of Harvard a letter about it and have surprisingly received a reply from her that her staff will be in touch on the matter. Ho’s work is readable, but complex. It’s about bringing The Market down from its high altar to show that it really is not a new Deity, although it certainly continues to be “cast” in that role, but is rather a human construction very much from Wall Streets’ own evolving practices and values. Wall Street, in a way that wasn’t true in the 1960’s, has imposed those values on corporate America, and presents itself as the chief “interpreter” of the Market it has largely shaped.

My essay started out as a review of Ho’s findings, but I was so startled by her presentation of the fierce work ethic on Wall Street, and how it has been wielded over its employees and directed against the corporate world, and their employees, justified by the rationale of “shareholder value,” that it led me to reconsider Max Weber’s Protestant Ethic and the Spirit of Capitalism (1905). That ethic, religious in origin, also generated a ferocious attitude toward work, and an inclination of the religious “elect” to turn brutally upon those who were not so chosen. My interpretation of some of Ho’s finding’s about Wall Street is this: in a fully secularized way, fitting for the 21st century, their notion that they are the ‘best and the brightest,” (“smartest” is their current term) and the bearers of the true “work ethic,” has turned their inner uncertainty about their own jobs into a ferocious assault upon the allegedly “lazy” practices of the old bureaucratic corporate welfare state of the 1960’s, paving the way for the corporate raiding, hostile takeovers and mergers and acquisitions right up to our present day. Luther gave Protestantism its “Justification by faith”; Wall Street has its own “Justification by smarts and hard work,” for which it collects ample fees whether the deals go bad or not. We’ll see, in the essay, that in some cases the same investment bank has advised both ends of a sour deal: going in and getting out.

If Wall Street could be so brutal towards its own employees’ job security, and be perfectly willing to lay off middle management in the hundreds of thousands to meet the demands of the “discipline through debt ” imposed by mergers and acquisition, you can imagine how the line workers further down in the corporate chain of being fared. And that’s another powerful message contained in Ho’s findings: employment is a very secondary consideration, if that, in a world justified by “shareholder value.”

The nature of work on Wall Street, and the way its values have been translated to the broader American workplace and its workforce led me to directly consider two books by Richard Sennett: The Corrosion of Character: The Personal Consequences of Work in the New Capitalism (1998) and The Culture of the New Capitalism (2006). Sennett takes us not to the high Wall Street offices next to the Market’s Altar, where the smartest try to gauge the mood of the Deity, but to the shop floor and former middle manager’s office, and the interviews and conversations he’s had with so many who have had to face “the specter of uselessness.” Sennett had a reputation for being hard to read, but I found myself “driven,” if Max Weber will forgive me, to zip through his painful findings on the damage that has occurred to the character and psyches of both those who are disposable, and the survivors who still think they are not. In the final chapter of Corrosion of Character, Sennett poses the question a decade ahead of the Great Recession: “Who needs me?” as he explains the “indifference which radiates out of flexible capitalism.” It leads to his powerful concluding sentence, which I’ve never seen anyone quote, perhaps because in 1998, it was such an isolated voice in the desert: “But I do know a regime which provides human beings no deep reasons to care about one another cannot long preserve its legitimacy.”

So that’s a bit of an introduction to the intensity on Wall Street, hidden, we have to note, from the general public, of course, by the most impeccable of manners, and interpersonal skills, which is why the interviewing process at Harvard and Princeton might run to many months and many interactions. And that’s one side of the Right’s alliance, The Market side. But what about the intensity or passion level over on the religious fundamentalist side, what might be driving that? We’ve already seen that the health care debate has thrown out the issue of community, and who is worthy of inclusion and who isn’t, so it was very natural, in exploring the religious Right’s intensity, or passion, to turn to a book entitled Hellfire Nation: The Politics of Sin in American History. For readers who are wondering about the staying power of the religious Right and its emergence in the health care debate over, once again, the issue of abortion, I strongly recommend this book which fairly propels the reader through its marvelously well-written pages. But it was the subtlety of Morone’s connection between economic disturbance and reverberations in the moral and religious realm which got me to thinking…that and the importance he attaches to the Roe vs. Wade decision of 1973 as a moral rallying cry of the religious Right, which marked their ascent and the decline of moral passion on the left.

My essay suggests that it was no mere coincidence that the rise of the religious right happened in the same decade which also witnessed great economic turmoil and loss of national prestige, and the rise of the economic fundamentalists of the Chicago School. Just as Richard Sennett has outlined the “disposable” nature of workers under the New Capitalism, I suggest that a possible reason for directing a disproportionate amount of moral sympathy to those not yet here – a polite way of saying, that is, towards the fetus, is that protesting abortion became a reachable and defendable symbol of what many in working and middle class America could not protest in the workplaces evolving over these same years: their own disposability. And, as Morone emphasizes, and as we quote in the essay, the anti-abortion cause was a way of trying to control sexuality, women, and the poor, who were the first to lose federal aid for abortions. In other words, it was also a way to put the demons back in the bottle, from that Decade of Demons that had unleashed them all in the minds of The Right: the 1960’s.

Because you can’t write about a Hellfire Nation without talking about sin, and you can’t talk about sin without talking about Puritans, Morone introduces us to a classic American
literary form we inherited from them, “the jeremiad (a lament that the people have fallen into sinful ways and face ruin unless they swiftly reform.)” What strikes anyone who takes a close look at its most famous expression, the findings of the Synod of 1679, is the remarkably modern sounding list of sins brought forth for examination, including too much litigation and too much sex – in the taverns of the day. In fact, it is very close in form and listings to Pat Robertson’s book of 2004 – The Ten Offenses. I could argue, and I do in the essay, that the fact that the list of offenses has dropped from 12 to 10 over the past 325 years or so refutes the notion of moral decline, but I suspect Rev. Robertson would take “offense” at that suggestion. But what strikes this writer as remarkable, aside from the continuity of human shortcomings over the centuries, is the fact that what Robertson alleges as the root cause of the offenses in our current time - secular liberalism, and liberals, especially the ones that have wormed their way to appointments on the court – were in no way present, even in the mind of philosophers, much less in society – to bear the burden of the alleged decline of New England in the year 1679. They had lots of sins, and no “liberals.” Who did they blame? Themselves: until they found better candidates in Salem in 1692.

As good as Morone is, and there are few better at explaining the deeper cultural and political dynamics in current American society, his handling of the Puritans left something out for me. New England was both a fundamentalist Protestant founding and a capitalist one. And in those early days of capitalism there were no other rival models except the barter of the frontier and the faint remaining traces of the medieval achievement: Catholic opposition to usury and unjust prices. So how did such a rigid, fundamentalist code in New England cope with change, changes brought about by the economy, despite the Synod’s best attempt to pin them on individual sins, and sinners (which had collective implications for their “beacon” of a society)?

Well, for that story, and as a way to build the tension into how our current day fundamentalists in religion and economics cope with the changes brought about by “their” economy, I turned to one of the most famous of American historians and the Dean of New England Puritan writing, Perry Miller, whom I know is still a dinner table topic over in Potomac. Blurred by the passage of thirty years, I had forgotten how daring the allegedly conservative Miller was for one writing in the 1950’s. From a chapter called “The Protestant Ethic” in one of his most famous books, he helps us set the stage for understanding our fundamentalists of 2010. Speaking of the Puritan’s covenant and their original charter, he states “that the code resisted change, and therefore change became declension; the jeremiad recognized the facts, but refused to accommodate theory to them.” (Sounds like the echoes of Lakoff and what frames do when facts don’t fit) But the remarkable thing, Miller tells us, was that New England was not declining, despite the list of sins from the Synod, and the hundreds of thousands of sermons which followed the formula. Instead, New England was thriving, especially economically, and it was those changes that were driving up the tensions and contradictions within the ideology/theology that was in the covenant that bound them. Miller is blunt about it: “Pious industry wrecked the city upon the hill…” But the Puritans couldn’t face the facts, bound tightly by their fundamentalist views. They were moving towards an explosion in their society, and Miller tells us the tale in some of the most powerful writing ever in American history.

Now what happens, I ask my readers, when fundamentalism – in economics and in religion – that is, the contemporary Right of American politics, comes face to face not with the faux declension of New England in 1679, but the genuine plunge from the material heavens of the American economy in 2008-2009, a real declension measured in millions upon million of foreclosures, and tens of millions of the unemployed and underemployed, the rise of China and our long-standing and growing trade deficit, a declension so obvious that even David Brooks has to write about it? In his January 5th column in the NY Times he tells us that “The United States opens this decade in a sour mood. First, Americans are anxious about the future. Sixty-one percent of Americans believe the country is in decline, according to the latest NBC News/Wall Street Journal Survey.”

For the answer to my question I turn to a number of sources: George Lakoff’s take on what Strict Father Christianity is all about, and Chairman of the Religion Department at Columbia University, Mark C. Taylor’s sketch of the four grim alternative that result when one fundamentalist system confronts another…and finally, to Fritz Stern’s Letter-to-the-Editor of the NY Times in the wake of Paul Krugman’s charge that the Right’s takeover of the Republican party has led to the “ungovernability” of the US at time of major economic crisis. Fritz Stern, for the record, is arguably the most distinguished living historian of 19th and 20th Century German history, whose specialty is the origin and the rise of the National Socialist Party. When Fritz Stern speaks, alert citizens listen.

The essay concludes by coming back to the question we posed in September: why is there a passion deficit on the left, and a seemingly endless well of it on the Right? This issue forms a good part of Tony Judt’s essay in the December 17, 2009 print edition of The New York Review of Books: “What is Living and What is Dead in Social Democracy?” It also echoes the call from Professor Morone in Hellfire Nation for a “revival” of the Social Gospel. Easier said than done. It can only come from a broadly shared vision of what has gone wrong, and “organically grown” anger over the injustices built up during the long decades of the Right’s universal project for Market Supremacy. Tony Judt tosses out one small but brutal fact as evidence as to where we are today: the U.S and China now have a similar “Gini co-efficient – a measure of the distance separating rich and poor.” Let’s be clear, because of that fact, there are a lot of grateful workers and a thriving middle class. Unfortunately, they are in China, and not the U.S.

To illustrate the gap between the modern Progressive temperament and one from a career which spanned the Social Gospel days Morone summons up for us, consider the following passage from religion department Chairman Mark Taylor (at Columbia U.) at the conclusion of his fine book, Confidence Games. Movie goers might even ponder some insights into the nature of Avatar from his drift:

Virtual reality is the current guise of what once was called sacred or perhaps even God. Virtuality, however, is a strange God. In a world where reality is virtual, nothing is certain or secure. Purpose and meaning are as elusive and shifty as the constantly morphing networks in which they emerge…risk cannot be completely hedged. Who would want it otherwise? Risk, uncertainty, and insecurity after all, are pulses of life…In the final analysis; the problem is not to find redemption from a world that often seems dark but to learn to live without redemption in a world where the interplay of light and darkness creates infinite shades of differences, which are inescapably disruptive, overwhelmingly beautiful, and infinitely complex.

Since these thoughts were published in 2004, and Professor Taylor included an actual, not virtual, chart of the looming financial crisis in his book, we can perhaps forgive him for this dreamy meditation. After all, he’s head of a religion department, and has warned us of the terrible outcomes when different fundamentalisms glare at each other, and this was written before the economic carnage of 2008-2009. It is, however, a philosophy and response better suited to the entrepreneurial upper-middle class than for the citizens of the middle and bottom as portrayed for us by Richard Sennett. And it’s a very different take than Cass Sunstein’s call for enacting FDR’s Second Bill of Rights, as advanced in his book of that title from – 2004. Sunstein’s inclination is to work for greater security for a world that doesn’t supply any in the realm of employment – which is why the first right in the Second Bill of Rights is for “… a useful and remunerative job…” Sunstein’s inclination is supported by Judt’s idea that if social democracy has any future it must respond to the great insecurities generated by The New Capitalism. And, I must add, it must respond to the looming attack on what’s been left to us from the New Deal, from that potential Congressional Budget Commission that will assume the role of placating the “angry God of the Market” with Social Security “sacrifices.”

For a contrast in temperaments and passion levels, let’s consider a figure from the Social Gospel era and the Progressive movement of the first decade of the 20th Century, Rabbi Stephen S. Wise (1874-1949) who was involved “through the honor roll of reform struggles – The Triangle Shirtwaist fire and investigation, The (founding of) the NAACP, the Jimmy Walker ouster (corrupt mayor of NY City)…At his seventy-fifth birthday dinner at the Hotel Astor in New York, the firm-jawed old man listed the accomplishments and disappointments of a lifetime full of causes, and then brought the assembly to its feet with a closing ‘I’ll Fight! I’ll Fight! I’ll Fight.’” (From Otis L. Graham, Jr.’s An Encore for Reform: The Old Progressives and the New Deal, 1967, Page 116.)

This writer is not the only one noting the shift in passion levels from the left to right during the past year (Morone would say since 1973…). David Brooks, whom I don’t always read, has a well-worth-your-time column called “The Tea Party Teens” which asserts that “a year ago, the Obama supporters were the passionate ones. Now the tea party brigades have all the intensity.” Brooks lays out some truly troubling polling data on public attitudes and their shift towards the anti-government feelings in the Tea Party “movement.” But he makes it far too generic, and underestimates how much influence the existing Right has played in getting it off the ground and supporting the early rallies.
He is not a fan of them, but he sees the potential for a lot of trouble, and I agree. And based on what he’s laid out, it would result in only a further continuation of the Right’s “universal project,” a “project” he fails to acknowledge. It’s worth a quick read at http://www.nytimes.com/2010/01/05/opinion/05brooks.html?scp=1&sq=The%20t...

Picking up right in the spirit of this Introduction, the essay which follows and the Brooks’ Tea Party column, comes a dialogue from three voices on the left: Don Hazen, Les Leopold and Bruce E. Levin, which appeared on January 7 at AlterNet, under the question-heading of: “Are Progressives Depressed or Too Privileged to Produce Social Change? Or are We Just Failing to Organize Effectively?”
http://www.alternet.org/story/144982/are_progressives_depressed_or_too_p...

As you ponder these good questions, I would like you to keep in mind some closing thoughts about the readings I covered on the way to the essay. As Thomas Frank has shown us in One Market Under God, there was a prodigious outpouring of management consultant books in the 1990’s touting, and pushing for “revolutionary” changes in the structure and values of corporations. In this literature, and in corporate reality, the burdens of change and “adjustment” fell most heavily on those with the fewest means for coping – the mid-level managers and the line workers. These management manuals demanding “change” culminated, Frank tells us, in a bestselling book, Who Moved my Cheese? whose demeaning attitude towards employees is conveyed directly in the title.
Cheese “recommends” an attitude of unquestioning child-like innocence on the part of workers, who have to keep running the maze with a smile on their face even as they face downsizing. And in these workplaces, unlike the abstract realms on Right wing talk radio, which continually proclaim its threatened loss under Obama, “Liberty” for workers gets checked at the door. And with all these adjustments to change being directed, and demanded of workers, how does management react when in Congress there are attempts to moderate or repair the damages its philosophical and practical system has wrought in the real economy? Well, K Street can tell you a lot about how quickly change isn’t on the agenda anymore.

And inside the Conservative Coalition, where the religious side dreams up the tactics for its permanent culture war against all the various manifestations of “instant gratification,” allegedly exported from the 1960’s, what exactly has emerged inside the citadel of modern capitalism over there on Wall Street, its partner in the universal project? Could it be nothing less than a culture of the New Capitalism focused on short-termism, the next quarterly stock report, and an eagerness to ride the latest, hottest trend until it bursts, and then immediately start to look for the next bubble – a pattern which Karen Ho has described as a “bulimic culture of expediency that is detrimental to shareholder value.”? It’s a characterization which deserves wider circulation, and who knows, maybe Professor Ho will get a chance to testify about it in front of the Financial Crisis Inquiry Commission, which holds its first hearings on January 13-14, 2010.

As historian Tony Judt tells us, it is now Social Democrats who have something to conserve; Wall Street’s version of capitalism is all about chaos and the destruction of enduring values. For those religious leaders (and secular ones too) promoting The Family and Stable Marriages as lasting human ideals, if one set out consciously to design an economic system bound to undermine them at every turn, one couldn’t come up with a “better” model than that presented by “The New Capitalism.” “Stability,” let me introduce your new marriage partner “Chaos.” This Union can only survive by passing the blame for the unhappy results on to the liberal demon “Other.”

And now for our traditional economic review. It will be briefer than usual, for several reasons. One, the economy is in a strange, very hard-to-call place somewhere between a muted recovery and a possible relapse into further recession – or worse. Second, the full essay is loaded with economic commentary and examples from current press accounts, plus the works we cover which provide a framework for understanding the news. For example, we cover the job losses and implications for the broader economy from the Hewlett-Packard-EDS deal (August of 2008); the pending bankruptcy of the Simmons Bedding Company, which has been bought and sold 7 times by various raiders and private equity firms over the past twenty years; and most recently, announced in early November, 2009, the merger of Stanley Works and Black & Decker, with immediate negative fall-out for Towson, Maryland due to the closing of B&D’s headquarters there, and the overall loss of some 4,000 jobs to both companies as operations are “consolidated.” We’ll also tell you which Wall Street Banks will do well with this last deal, even with those projected job losses or, maybe, because of them.

The New York Times carried a front page article by Peter Goodman on January 5, 2010, entitled “Divergent Views of Signs of Life in the Economy,” which illustrates the ambivalent moment for either recovery or relapse. The stock market is up strongly, manufacturing activity indexes are back to the pre-crisis levels of April, 2006, and around the world, especially in Asia, growth is on the upswing, with talk of their having over-reacted to the financial panic of the fall of 2008. Allen Sinai, a major name in economics, is quoted as saying that “we’re really coming back…the expansion is picking up the pace.” At (http://www.nytimes.com/2010/01/05/business/economy/05econ.html?scp=1&sq=... )

However, just a month earlier, the same reporter, Peter S. Goodman, was quoting the same Alan Sinai as saying that jobs may not be coming back even if the recession is over: That’s because there has been “ ‘… a change in the structure of the business cycle…there appears to be a new tendency to substitute against labor. It’s permanent, as long as there are alternatives like outsourcing and robotics.’” At http://www.nytimes.com/2009/11/08/weekinreview/08goodman.html?_r=1&scp=1&sq=The%20Recession's%20Over,%20but%20Not%20the%20Layoffs&st=cse

On January 4, 2010, Paul Krugman’s column was entitled “That 1937 Feeling,” citing a year when FDR eased off in federal spending and direct job creation in the false belief that the Depression had finally lifted. Krugman works through an analysis that says much of the data moving upwards is temporary in nature, reflecting inventory replenishment rather than stocking for an anticipated consumer upsurge. Then he gets to the “grim fundamentals.” The last boom was driven by consumer spending and the housing boom, and neither area is in any shape to lead a sustained recovery; neither is business investment, because “industry is awash in excess capacity, and commercial rents are plunging in the face of a huge oversupply of office space.” And he worries that the Fed may stop fighting the recession before the recovery has “fundamental” legs to stand on. At http://www.nytimes.com/2010/01/04/opinion/04krugman.html?scp=1&sq=that%2... )

My take on this difficult call comes from interpreting the rail shipping data that we have previously mentioned in our postings, from Railfax. Shortly after our September 22 piece, Look Back in Anger, I noticed the very first weekly increases in rail activity, which has grown over the past few months. But one has to look carefully to make sense of the upticks. The latest data, from the week ending December 26, 2009, show increases in every category: grain, chemicals, food, forest products, metals, autos, and Intermodal – but not in coal shipments, which were down 20.0% from the same week in 2008. And the year of comparison is important; data is given for this week of December 26 compared to the same week in both 2008 and 2007. Because December 2008 was near the steepest part of the curve in plunging indicators, it makes sense that if we are seeing at least an inventory replacement bounce, that this week should be doing better compared to 2008. But the data for every one of these categories compared to 2007 is still in the red, ranging from 50.4% down for autos to 25.3% down for food. That means there is still a long, long way to go to demonstrate a sustained recovery. And the fact that coal shipments are still down compared to December 2008 does not bode well because coal consumption ought to be a broad indicator of overall energy demand, and thus industrial activity in general. That tells me factory utilization is way under capacity still. Readers can gaze into the rail shipping data for themselves at http://railfax.transmatch.com/

My interpretation, and Krugman’s, was supported by a January 9th AP story carried in the New York Times, “Consumer Borrowing Fell Once Again in November.” The first sentence tells the story: “Americans borrowed less for a 10th consecutive month in November with total credit and borrowing on credit cards falling by the largest amount on records going back nearly seven decades.”

Although no one can be sure which way the economy is going to tilt over the next six months or so, there should be no illusions as to where we stand right now, a terrible situation on unemployment and foreclosures, on top of all the hidden problems in the workforce from the success of the Right’s Utopian project. Here’s the situation, as outlined in The U.S. Department of Labor’s Bureau of Labor Statistics Press Release from December 4, 2009. In November, the unemployment rate stood at 10%, with 15.4 million Americans out of work. To this, add another 2.3 million “marginally attached,” who are not counted because they haven’t actively looked for work in the 4 preceding weeks. Add in another 3.4 million not mentioned in this release who have stopped looking well before “the preceding 4 weeks” and I count 21.1 million out of work. On the housing front, a New York Times article from November 20, 2009, “Mortgage Delinquencies Soar,” by David Streitfeld, stated that “…five or six million foreclosures” were “…in process.” Although there would be some overlap between those foreclosures and properties which are being withheld from the residential market, a Bloomberg.com article from November 12, 2009 indicated that 7 million properties were “yet to hit the markets.”

But perhaps the most powerful reminder of the catastrophe that has hit the American people where it hurts the most, in their need for jobs, came in late September, 2009, from two Rutgers University professors in a report entitled “America’s New Post-Recession Employment Arithmetic.” This report was the original source for the “lost decade” concept that has been surfacing in so many later accounts of the job market: that the decade from 1999-2009 was the first ever since World War II to see no net job growth: any growth from the earlier years was wiped out by the loss of more than 7.1 million jobs since the beginning of the Great Recession in December of 2007 and the failure to create 1.3 million new jobs each year to just keep up with the growth in the labor force. The authors, James Hughes and Joseph Seneca, “contrasted this decade with the 1990’s, when the number of private-sector jobs climbed by 19.2 million, and with the 1980’s, when the nation added 16.2 million private-sector jobs.” Here is a fuller account from the New York Times, where the title breaks the news to the citizens of the U.S. that, under conventional policy assumptions, “Wait Until 2017 Before the Job Market Recovers…” At http://economix.blogs.nytimes.com/2009/09/30/wait-until-2017-before-job-...

If 2017 sounds like just a bit too long to wait, than I have a couple of recommendations for my readers. This is my take on which policy handle to grab onto, among the competing ones for Progressives. Make the three words – “Full Employment & Intervention” the core of your vocabulary when you talk to elected officials and all those Emails thrown your way by the Obama apparatus. Full employment is bigger than just these two words; as my essay will show, it has a history reaching back to the Great Depression, the Truman Administration and the debacle decade of the 1970’s when a toothless Humphrey-Hawkins Bill for full employment was passed. We don’t get to what the American people deserve without reaching into the toolkit from the New Deal for direct public job creation, as in the WPA and the Civilian Conservation Corps. There is no need for “make-work,” none whatsoever. There will be scores of practical considerations thrown in the path of this concept, but let us not deceive ourselves: the real obstacles, in the minds of not only the Right, but also in the minds of centrist Democrats, are ideological, not practical. It’s a Rubicon that they will not cross, even if it costs them the 2010 elections and the Presidency. This is a call for full employment as a policy tool, a value, and a right. We should ask our elected officials: for a culture which so stresses the Protestant Work Ethic via its current phrase “hard-working families,” why is it so daunting to pick up the cry, and the achievement, of “Full Employment?” Here are the links that can build the case for such a national direction:

The first is a report from the very establishment McKinsey consulting firm, “Unlocking Energy Efficiency in the U.S. Economy,” from July 2009, which lays out the costs of and potential energy savings from making the nation’s 100 million buildings – businesses and residences – more energy efficient, a task which could create millions of jobs and because of its vast scope, have them last for decades. Here’s the link at http://www.mckinsey.com/clientservice/electricpowernaturalgas/US_energy_...

From the Levy Institute of Bard College: “It isn’t Working: Time for More Radical Policies” by Eric Tymoigne and L. Randall Wray, from October, 2009 at http://www.levy.org/vdoc.aspx?docid=1206 ;

From the New America Foundation’s Policy Roundtable of October 18, 2009 we again direct you to L. Randall Wray’s work, “The time Has Come for Direct Job Creation.”
What Wray has to say is so compelling that we’re going to share a brief selection:

Now, of course, our labor market is in dire straits – having lost more than 6 million jobs, with official unemployment approaching 10% and with millions more workers facing reduced hours and even reduced hourly pay. According to a New America Foundation report released late last spring, if we add ‘marginally attached’ workers, those forced to work part-time, and those who would like to work but have given up looking, the effective unemployment total is over 30 million. Add to that another 2 million incarcerated individuals – many of whom might have avoided a life of crime if they had enjoyed better economic opportunities, and it is likely that a more accurate measure of the unemployment rate would be about 20%. These numbers are similar to those I obtained for the Clinton boom when I estimated how many potential workers remained jobless even when the economy was supposedly at full employment.

And on those “incarcerated” 2 million, Wray has reminded us of exactly what Professor Morone has in his Hellfire Nation, which was written well before (2003) our great economic crisis: “The most startling neo-Puritan product is the army of Americans in jail. In fact, it may be the most startling fact about American society. Despite a decade of falling crime (by 2000, our murder rate was the same as the murder rate back in 1911), the United States has more than 6 million in jail or prison, under probation, or on parole. Our incarceration rate runs up to five times higher than that of other industrialized democracies.” Readers who want to find out more about what I call “The Great Incarceration,” please see the attached essay.) Now here is the link to the call for Direct Job Creation:
http://www.newamerica.net/publications/policy/policy_roundtable_the_chal...

And finally, my own book review of Robert D. Leighninger Jr.’s Long-Range Public Investment: The Forgotten Legacy of the New Deal (2007) which can be found at http://www.amazon.com/Long-Range-Public-Investment-Forgotten-Problems/pr..., a review which was completed in March of 2008.

So that’s some background on two of the words I would like my readers to keep right on the tip of their tongues: Full Employment. As for the third word, Intervention, it is both a noun and a tragedy: for the Interventions which will be so hard to get, those to create the 20 to 30 million jobs that are needed…and the Interventions that will bring only heartache and blowback, those in foreign lands that don’t want us…that have been so easy to come by over the past 20 years…And coming up fast, just around the bend, is another potential tragedy, one we fought off in January of 2009, that Congressional Commission aimed at cutting (and gutting) Social Security and Medicare being pushed by Blue-dog Democrats and the Right…here is Bill Greider’s plea from an early January 2010 article carried on AlterNet:

Above all, people need to make a lot of noise, because this issue represents one more fleecing for people already struggling. If the Democratic party and the Democratic president decide to go down this road, arm-in-arm with the billionaire (Pete Peterson) and the Washington Post, they may find themselves in a civil war much like the one tearing up the Republicans. At http://www.alternet.org/media/144961/conservative_mogul_buying_up_report...

For your convenience, the Congressional Switchboard number is 202-224-3121.

Until the next posting, the very best to my readers,

Bill Neil
Rockville, MD
w.neil@att.net

SINNERS IN THE HANDS OF AN ANGRY MARKET

“The truth is, we are all caught in a great economic system which is heartless.”
Woodrow Wilson

January 11, 2010

Karen Ho’s Liquidated: Wall St. as the “New Exotic”
Anthropology has done many things over the years for citizens of the “first world” trying to understand allegedly “exotic” cultures. It has shown us the humanity beneath the too easy stereotypes about foreign lands and cultures, and often revealed their surprisingly complex systems of practices and values. It has also held up a mirror to “modern” world values – one which has not always been flattering to our own self-images and definitions of how we think things “have to be” organized. Would it be unfair to say, then, that anthropology has had just a bit of the “deflator” about it, having a partly unintended message, implicit at least, and sometimes more than that, a message of a shared humanity despite the differences, especially for the high-perched civilization that would be receiving the field reports? The exercise of observing and reporting has also raised those exquisite modern methodological problems of “the Western white upper-middle class male anthropologist studying the less-powerful ‘native’ in the context of the colonial and postcolonial encounter.” That’s author and anthropologist Karen Ho’s voice inside the quotation marks, and she’s set out to take contemporary readers on a journey to what she calls “the new exotic:” not to some newly discovered culture in the South Pacific, but instead to the seat of the most powerful symbol of the economic forces of modern day, “free-market” capitalism and “globalization” – Wall Street itself – via her fascinating book, Liquidated: An Ethnography of Wall Street.

And to this effort I say: why not? Economists, historians, reporters, and even Rolling Stone writers have thrown everything they’ve got at trying to explain Wall Street behavior, especially in the wake of the great financial crisis – and to what effect, we have to ask, if by effect is meant an easing of The Street’s hold over our elected officials in Washington? When I use the term “Wall Street,” I mean to cast it additionally in the role of chief augur of that difficult deity, part secular and part religious, “The Market,” which casts such a pervasive, chilly shadow over so much of modern life. Although Ms. Ho’s main focus is upon investment banks, when she uses the term “Wall Street,” she inclusively means “the concentration of financial institutions and actor-networks (investment banks, pension and mutual funds, stock exchanges, hedge funds and private equity firms) that embody a particular financial ethos and set of practices, and act as primary spokespeople for the globalization of U.S. capitalism.” (Page 4).

One of the main impediments to greater citizen understanding of what has happened to all of us under the ominous shadow of both The Street and The Market is the shield of abstraction, of impenetrability, which surrounds them. That is nowhere more apparent than in the daunting nature of their derivative “products,” such as mortgage-backed- securities, credit default swaps, and interest rate swaps, which have been the focus of so much analysis, if not understanding, during the crisis. Yet what was it that enabled The Street to have such a hold over us all, to market these incomprehensible investment instruments so easily? Karen Ho acknowledges the power of those abstractions over us, noting that “many academic critics of market fundamentalism inadvertently take as foundational the notion that the economy has become ‘disembedded’ from society, that financial market logics – as utopian ideals – are being used to abstractly shape social relations, leading to social violence and inequality on a global scale…”(Page 33.) She also takes note of the trend towards “dematerialization,” away from making physical things and towards more ephemeral financial inventions. Yet she offers us, in Liquidated, a very different approach, and asks: what if we stopped accepting all the abstractions about The Market, and the aura of The Street, and actually looked at “the local, cultural habitus of investment bankers, the mission-driven narratives of shareholder value, and the institutional culture of Wall Street?” In blunter terms, she says “allowing finance to be simply abstract lets it off the hook.”(Page 34.)

There are really two main strands to Ho’s work: Wall Street practices, and the values behind them. Of course, there is a close connection between the two, and they often shade into one another. We’re going to look first at some of the startling practices of The Street, of the investment banks, in particular, and then at the values presented in a long series of interviews Ho conducted – the heart of her field work – which allows the practitioners to tell us in their own words what they believe they are doing in their job, how they see themselves in relation to corporate America, and what it means for the broader economy.

But before that, some facts, and thoughts, about Ho herself. She doesn’t waste any time in putting her own values on the line. In the Acknowledgements, she tells us that “an intellectual commitment to social and economic justice first galvanized this book’s journey” and that her “search to understand the massive sea changes occurring in American business practices during the past three decades took me to the doorstep of Wall Street investment banks…” And on the first page of the Introduction, we learn further that it was the massive lay-offs at ATT in 1995 and that decade’s compulsive downsizings, often resulting from “merger and acquisition” syndrome – and the celebratory mood on Wall Street towards these job loss tsunamis - that really got her started. So one wonders, right away, how did someone with values like these ever make it inside The Street? Well, Ms. Ho had some credentials that we come to understand The Street looks upon very favorably, primarily, her Stanford and Princeton degrees, and also the sense that Wall Street seems favorably disposed to the Asian association with smarts and hard work. So she was hired at Bankers Trust in 1996 as a “‘internal management consultant,’” but lasted just a brief time before getting “liquidated” herself. Nonetheless, she was able to network well enough to conduct 17 months of field work from February of 1998 to June, 1999, across a range of institutions.

I suppose these facts, as well as her descriptions of what she had to do in her last months actually working on The Street, might lead some observers to render the judgement that Ms. Ho has some “axes to grind.” Yet she presents her field work findings with a remarkably light touch, allowing generous room for Wall Street’s finest to tell us what they are up to and how they justify it. In her interviews, in her own questions and gentle coaxings, she reminded me very much of the verbal style of Public Radio’s Terry Gross, the voice behind the “Fresh Air” interviews. So there is no ax-wielding by Professor Ho here, just some finely turned dissection with very sharp mental instruments. And, interestingly enough, there are no charges of Wall Street hypocrisy made, or to be made, from the findings. In fact, we learn that Wall Street, in matters of hard work, its own self-inflicted job insecurities, the focus on the short term performance of the stock market, and its own corresponding lack of planning, is consistent with the values and pressures it applies to the rest of corporate America. I don’t know whether that finding comes as a relief to readers or not. As for me, the code of Wall Street is scary enough in its implications for our economic and civic life not to need any hypocrisy to embellish the damage that has been done. (However, I should note that others are raising the hypocrisy charge, and worse, specifically in regards to Goldman Sachs, in the sense that it stands accused of still selling subprime mortgage-backed securities to customers when “the firm’s mortgage traders also bet heavily against the housing market on a year-old subprime index on a private London swap exchange…” and made “other bets with hundreds of unidentified counterparties to insure its own subprime risks and to take positions against the housing market for its clients…” as well as unloading “$11 billion…of risky mortgage securities it had issued in the U.S. in 2006…after it had intensified its contrary bets.” See the fine series by the McClatchy Washington Bureau, especially “How Goldman secretly bet on the U. S. housing crash by Greg Gordon, from November 1, 2009 at http://www.mcclatchydc.com/227/story/77791.html ).

Wall St. at Harvard and Princeton: “A Communal Obsession”
As we continue to ask ourselves, “how could it all have happened,” that is, the financial crisis that nearly plunged the world into a second Great Depression, we should not forget the nature of the salespeople who peddled the faulty investments which almost brought it on. That’s conveyed to us in a startling way in Chapter One, which Ho has entitled “Biographies of Hegemony.” In an interview (individual names are changed, the institutions’ kept) with a “Robert Hopkins, a vice president of mergers and acquisitions at Lehman Brothers,” the pitch is: “‘We are talking about the smartest people in the world. We are! They are the smartest people in the world. If you (the average investor or the average corporation) don’t know anything, why wouldn’t you invest with the smartest people in the world? They must know what they are doing.’”(Page 40.) Now where do you find the smartest people in the world? Arguably, but conventionally, the answer would be mostly at Harvard, Princeton and the Wharton School at the University of Pennsylvania. Why not MIT, and Stanford, and what’s the matter with Yale? Well, maybe it isn’t quite all about smartness. In fact, it’s about cultural projection too: clothes, confidence, aggressiveness contained within good manners, body image…in brief, it’s smartness well-packaged, because salesmanship for financial products, deals and mergers, scanning the horizon for new customers, depends on wide business networking and social interaction with corporate America, and beyond...as we will see shortly. So sorry MIT, Ho tells us (“too nerdy”), Yale (“too liberal”) and Stanford (“too far” – from Wall Street, that is)…

Two things jolted me about this smartness motif and the recruiting process at Princeton and Harvard. One is the astounding numbers of undergraduates that want to ascend into this celestial orbit; at Princeton, from 37% of the class of 2001 up to 40% of the class of 2005 & 2006 “entered financial services,” with similar numbers for Harvard. How could that be done? The answer is not pretty: Wall Street’s presence “dominates campus life: recruiters visit the university virtually every week, even on weekends…the recruiting process saturates almost every aspect of campus life from the very first day of the academic year.”(Page 45.) Ho presents us with a two page spread of “Goldman Sachs Recruitment Schedule at Harvard University, 2000-2001,” and I count 30 or so events, multiples in every month from September through February. It’s so Wall Street saturated at these schools that Ho says “a glance at the campus publications…demonstrates what amounts to a communal obsession…” (Page 53.)

It was in the light of Ho’s illumination that I read with great interest Harvard President Drew Gilpin Faust’s September 6, 2009 NY Times Op-Ed, “The University’s Crisis of Purpose.” It’s a retrospective and lamentation at the same time, in the wake of the Great Financial Crisis, and what universities had become, unable to “expose the patterns of risk and denial” contained in that “bubble of false prosperity and excessive materialism…” She asks if “universities (became) too captive to the immediate and worldly purposes they serve” and, “has the market model become the fundamental and defining identity of higher education?” Noting the trend, since the 1970’s, for business degrees to outnumber by a 2:1 ratio the next most popular major, she reaffirms a mission for higher education to “offer individuals and societies a depth and breadth of vision absent from the inevitably myopic present.” This sounds hopeful, but the trends of 30 years of Market Utopianism, and the vast shadow cast by The Market, will not be lifted in an instant, barring a further economic catastrophe on the scale of the Great Depression.

When Wall St. Knocked on Local Govt’s Doors
And over those 30 years, the shadow, and the net cast by The Market, and by the salespeople of The Street, spread to even the most unlikeliest corners of America life, which perhaps should not surprise us, given Ms. Ho’s descriptions of those “communal obsessions” on the campuses of higher learning. Although it has unfortunately been just a footnote to the central plots of the financial crisis, local governments, from counties in Alabama to school boards in former industrial areas of Pennsylvania, were drawn into proposals to “reduce” their bond costs by entering into some of The Street’s more exotic instruments. The system which promoted these financial instruments became quite a network, involving most of the major investment banks, of course, but also drawing in a substantial intermediary network of local and state figures, the “middlemen” who brought the national bankers and the local governments together.

Let’s see how Wall Street smarts, and the ramifications, played out in one example in this arena. Let’s zoom in to Jefferson County, Alabama, home county to the “Pittsburgh of the South,” Birmingham, whose mayor, Larry P. Langford was just convicted on October 28, 2009 on 60 counts related to bribery, and is facing up to 800 years of prison time. Ironically, Mr. Langford, who was a pro-business Democrat with an ambitious building agenda for both the county and the city, also attended Harvard University’s Kennedy School of Government in 2000. When he won a county commissioner seat in 2002, the county was facing some $3.2 billion in bond financing to pay for a federally driven remediation of its polluting sewer system. Even though interest rates were low, the county was persuaded to “issue variable-rate debt with swaps layered on top to create a ‘synthetic fixed rate,’ – by a JP Morgan banker, according to the fine account in Ken Wells' article – “Armageddon in Alabama Proves Parable for Local U.S. Governments,” which appeared on October 19, 2009 at Bloomberg.com. Bear Stearns, Bank of America and Lehman Brothers also jumped in as swaps were issued on more than $5 billion in bonds. When the auction rate securities market collapsed during the financial crisis, and bond insurance firms lost their ratings, poorly understood clauses in the contracts meant that the municipal governments, not the banks (in all of the cases I’ve come across) ended up with new payment burdens far beyond their means, thus pushing Jefferson County to the brink of what could be the nation’s largest municipal bankruptcy case. But how, exactly, did they get into this fix, beyond the promise that they would save money with the complex schemes, save money over the old-fashioned long-term bond fixed rates? Well, then Commissioner Langford revealingly told Bloomberg News back in 2005 that “‘You know, I get the impression that people think a bunch of rubes in Alabama shouldn’t be smart enough to utilize these swaps…’” But we shouldn’t be too hard on the innovation-oriented Mayor; after all, he has plenty of company according to Well’s article:

Thousands of public borrowers across the U.S. chose a similar strategy, and many are now paying billions of dollars to escape the contracts said Peter Shapiro, managing director at Swap Financial Group in South Orange, New Jersey. Even Harvard University, the world’s richest academic institution with an endowment of $26 billion, fell for Wall Street’s financing in the dark: It paid $497.6 million to investment banks during the fiscal year ended June 30 because it chose to cancel $1.1 billion of interest-rate swaps.

We should also note that the vast majority of these types of deals at the local level took place without competitive bidding. That allows for other networks to flourish, like the ones in Jefferson County, where “William B. Blount, a Montgomery investment banker and former chairman of the state Democratic Party, and Albert W. LaPierre, a Birmingham lobbyist, admitted to taking part in a scheme to bribe Langford to get bond and interest-rate swaps business.” The full seven page article can be found online at http://www.bloomberg.com/apps/news?pid=20601109&sid=a6QpSf.s4NaA

Readers may note here an additional irony: there is an eerie parallel between what happened in municipal finance and home ownership finance: customers, with lots of urging, ditched the “plain vanilla” long-term, fixed-interest rate mortgage and bond financing traditions to go for all the complexities, and uncertainties, of variable rate products. In the municipal bond fiasco, some of the instruments, as in Jefferson County’s case, were pitched as a means to hedge against risk. Also driving the local search for lower costs of capital financing is the deeper structural problem in American government: a permanent crisis in public financing, a good part of it self-induced by conservative anti-tax doctrines. One noted historian, as we will later see in this essay, goes so far as to call this American problem of a “discredited state and inadequate public resources…comparable to that which faced the Ancien Regime.”

Long Hours, Job Insecurity and Silent Purges
But not all of Wall Street’s seductive sales power was based on the “smartness” and cultural skills of its employees; there were other powerful, internal dynamics driving
its practices and shaping its culture. In particular, it is the very long hours, under intense self-inflicted time deadlines, and the “by design” constant state of job insecurity which give the investment banks the feel of a “West Point” for contemporary capitalism. This aspect is the most sophisticated and insightful part of Ho’s work, because it links the internal Wall Street life to the standard-setting for broader practices in corporate America. Now let’s bring the work culture and job insecurity into sharper focus.

At the bottom of the intense “hard work” pyramid are the “analysts,” those smart young folks hired from the schools we’ve mentioned on just two year contracts – who may end up working 110 hour weeks at a base salary of $50,000 – with the chance for end-of-the- year bonuses of between $20,000 to $50,000. They are treated like incoming Plebes – and maybe worse, because those 110 hour weeks can include many bouts of all-nighters, and weekends, at a pace so brutal that some sleep in their cars for three or four hours, not bothering to go home before crawling back in at 7:00 am. The only concession to the humanity of these aspiring Henry Paulsons and Lloyd Blankfeins is that the firms buy the dinners – delivered in-house – for those staying after 7:00 pm – which is most of the time – and, in the old days at least, would provide transportation home for those staying after nine. The rest of the story is just plain brutal, because the work is organized by the omnipresent internal hierarchies of these firms, which as Ho points out, in detail, governs everything from the spatial layout of the floors with the “back office” support staff on the lower ones (if not relegated to an outlying borough office or even to Jersey City…), the middle functions on the middle floors, and the “front offices” (made up of corporate finance, sales and trading, and asset management – the core of investment banking) having the highest floors with the best views of the city. The effects of internal hierarchies even apply to what elevators employees can ride.

Although cafeterias are plentiful, it’s bad form to actually eat in them: the food is meant to be taken back to the desks, where you can keep working as you “dine.” Bringing your lunch might be taken as a sign of old-time thrift and hard work, but it is frowned upon as, in Ho’s biting phrasing, being indicative of “…a lower-class concern with overspending, a relationship with money that was not non-nonchalant.” (Page 121.) The trick on Wall Street is to be consumed, obsessed with the money you’re going to make, your bonuses and what everyone else got, but to be outwardly as “nonchalant” about it as possible. When one learns that in bonus season – roughly “from November to February, managing directors spend more than half the work day on matters related to employees’ pay” (Page 255.) and that the employees are riveted by the question of their bonus standing, and who got what – you just have to laugh at that condescending attitude towards those who bring their own lunch: my, my, what a petty trait.

But there’s more. The internal hierarchy – analysts on the bottom, associates next (young employees, usually with an MBA from an elite program), VP’s, Directors and then Managing Directors at the top – really can echo those “dish it down to the plebes” tongue lashings that are part of the service academies traditions – or at least they used to be when I was growing up. Ho gets a humiliating harangue for being unable to keep a PowerPoint document updated. The VP’s and Directors – who work the more civil hours – leaving by 7:00 pm or thereabouts – are notorious for passing out the orders for changes to associates late in the afternoon, who then deliver the marching orders to the analysts – and, of course, because it has to be on the desk of the VP the next morning – the clock driven by the hierarchy means another all-nighter. Now if this were a once-a-month event, it wouldn’t be news. But it’s the norm for those analysts – who consequently give up any idea of a normal social life (much less family life – which is why they are chosen right out of school).

So that’s one layer. But as the analysts either go back to get an MBA on the way to becoming an “associate” or get placed with another investment bank (it’s understood that most aren’t staying where they have endured this treatment) they then have to cope with the other striking feature of the Wall Street ethic: rampant job insecurity, which Ho brings to us in detail in Chapter Five, “Downsizers Downsized.” There are several components. One is the rapid response to very bad years, as the 2001 job reduction of 116,000 showed. But the years from 2003 to 2006 weren’t so great either: 2004 saw 98,000 losses in financial services, 2006 “just” 50,000, but 2007 saw 150,000 in a warm-up for 2008’s massive loss of 260,000. Surprisingly, during these years of sizeable cuts, Wall Street is also adding tens of thousands of jobs. But Ho discloses another pattern that is unknown to the average citizen: “investment banks do not regularly publicize layoffs. Rather, they often keep downsizings quiet and away from media attention by conducting smaller, regular purges continually.” (Page 223.) So there is never really a secure period for any given Wall Street worker. All in all, “these drastic and sometimes simultaneous spikes of hiring and firing are an integral part of Wall Street’s ‘yo-yo’ employment strategy. Such an approach not only creates continual motion and unrest among bankers, but also insures that investment banks profit during both booms and busts, including some of the ‘worst’ periods in their history…”(Page 225.)

Introducing The Merciless Market
If this world of incredibly long hours and intense job insecurity was limited to just the life of investment bankers on Wall Street, we might take notice and shrug, and chalk it up as an insight to better understand their intense focus on pay structures and bonuses. Ho makes it clear however, that the long hours are used as a measuring rod, not only against the back and middle office workers at the firms themselves, but against the broader practices of American business in general, which has come to be seen, especially in the 1980’s, as slow and bureaucratic, and falling behind international competitors. And the job insecurity as well is carried over as a “metric” (to use the term popular in business consulting jargon, and of course, spreading to government) to use against the broader economy. Here’s how Ho summarizes the meshing of the local culture with broader standards:

Through constant layoffs, the attendant outplacement and headhunting industries and compensation schemes…insecurity is built into the very structures of investment banking organizations, and used as a character-building, formative experience to recommend for other workers. What I had not anticipated was that ethnographically tracking job insecurity would eventually lead me to view and understand the social construction of financial markets quite differently, and much more concretely. (Page 222.) {My emphasis.}

Living in the Shadow of The Market
Of course, what Ho is driving at, in her larger conceptual framework, is to suggest how The Market, that grand overarching “deity” looming as a shadow, and more, above much of modern life, may just take some of its main characteristics not from the nature of the universe itself, or from something just a wee notch below that high elevation – from the neo-classical economic theories of the 19th century - but from the very unique practices of Wall Street investment bankers themselves. Thus when columnist and renowned “globilizer” Thomas Friedman wants to really shake up the American public, as he attempted to do with his column “Our Three Bombs” (October 7, 2009), he refers to “the two most merciless forces on the planet: The Market and Mother Nature.” He says the market is really “just a second by second snapshot of the balance between greed and fear. You can’t spin it or sweet-talk it. And you never know when that balance between greed and fear on the dollar is going to tip over into fear in a nonlinear way.” This is Friedman’s way of getting us to confront global warming and our growing “budget deficits” – two of the bombs. If we don’t want to throw our children to the “tender mercies” of this merciless market, we better begin by appeasing it with offerings, sacrifices in the secular form of “broad-based tax increases and reductions in some spending and entitlement programs supported by liberals.”

This merciless market, and the way Friedman has wielded it in other writings, couldn’t help but remind me of that all powerful Deity in the 1741 Jonathan Edwards sermon, delivered to the congregation of Enfield, Connecticut, “Sinners in the Hands of an Angry God,” which you may or may not so fondly recall from your high school literature class. Imagine the fate of sinners in that day, standing before the wrath of an omnipotent and seemingly capricious Deity whose majesty reduced even the most powerful kings on earth to no more than “feeble despicable worms of the dust.” There was a way back, however, from “the flames of divine wrath flashing about” the “slender thread” which was all that kept you from the eternal roasting you so deserved – and that was to come forth and be “born again” in the Great Awakening revival, then underway, in which Edwards played a major part.

Today, our “angry” Market still demands, in Friedman’s scriptural readings, taken from the book of Greenspan, what it did in the 1990’s: balanced budgets. Now I don’t know if that Market’s threat to tip over against the dollar in a “nonlinear way” is quite as scary to we liberal Keynesian worms dangling by our one-stimulus threads over eternal fires – but if you remember the 777 point near instantaneous drop in the Dow immediately after Congress first balked at the bailout on September 29, 2008…you’ll get the idea of it. So we better do what the “Market” wants. Unless, as Karen Ho suggests, this Market inevitably walks with very human feet, enmeshed as it is in the strange, “new exotic” habits, and practices, of Wall Street investment bankers themselves.

A Stark Utopia from Calvin’s Invisible Hands
While Reverend Edwards’ sermon of 1741 was not a big hit in English classes in the 1960’s, and Thomas Friedman’s Market, which threatened to make “road kill” out of globalization’s laggards, especially the unions, doesn’t seem to be too much an advancement in treatment over what was meted out to those “worms,” they both serve as a reminder of what we first suggested about Karen Ho’s approach: the anthropological method may be the one to begin to allow us to “re-humanize” a Market that has grown into an at times very threatening divinity. Don’t forget the beneficent side of the market too, if citizens and societies would only choose the righteous way, and don the “Golden Straightjacket.” But in all of economic literature, there is no description of The Market as terrifying as the one delivered by Karl Polanyi in 1944 in his epochal book The Great Transformation. By that term he was describing the reorganization of English society between 1795 and 1834, the changes that created the “free labor market” that in turn was one of the chief factors which made the factory system possible. Here is that magnificent passage from the opening chapter in Polanyi’s still powerful book:

Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way. It was this dilemma which forced the development of the market system into a definite groove and finally disrupted the social organization based upon it. (Page 4).

In fact, it isn’t so surprising that one can hear echoes of 18th century Jonathan Edwards in 21st century editorials about the power of The Market. Mark C. Taylor, the Chairman of the Religion Department at Columbia University, and author of the brilliant and under-appreciated book, Confidence Games: Money and Markets in a World Without Redemption, reminds us of the direct, if not often acknowledged, link between projections of the divine and the “divinity” of the market. He also teaches us that it was not Adam Smith who first used the metaphor of the “Invisible Hand:”

Though rarely recognized, the relation between the divine and the human lies at the heart of the modern understanding of markets. Calvinism not only prepared the way for a flourishing economy but also provided principles for understanding and justifying market activity. The first person to use the image of the invisible hand was not Adam Smith but John Calvin. For Calvin, God’s providence is the invisible hand that sustains the order of the world even when it is not immediately evident. Smith appropriated Calvin’s doctrine of providence to explain the machinations of the market…In contemporary society, the market has become God in more than a trivial sense. The terms many economists and analysts use to describe the market implicitly suggest language once reserved for God: the market is omniscient, omnipotent, and omnipresent. (Pages 4, 6).

Calvin’s Elect: Origins of the Wall Street/Main Street Gulf?
As one reads through the results of Ms. Ho’s fieldwork on Wall Street, and thinks about the implications of the “character-building formative experience” created through the ethic of all-consuming hard work and rampant job insecurity, it’s not hard to hear even more echoes of Calvin and Edwards. And since investment bankers “key self-understanding is that they ‘are’ the market,” (Page 292) and they’re going to recommend their formative experience for other workers, these findings sent this writer back for a refresher course, for deeper understanding, to Max Weber’s famous essay of 1904-5, The Protestant Ethic and the Spirit of Capitalism. While the connection to the old Protestant work ethic seems obvious enough, though it is now “secularized” by the passage of centuries, what struck me was how The Street’s rampant job insecurity might function as a psychological prod to exhaustive work much in the same way as the doctrine of Predestination was the inner psychological spring that drove the emergence of the Protestant Ethic in the 16th and 17th centuries in portions of Europe, and which was then carried to New England. Weber makes clear that it was the terrible inner uncertainty unleashed for Protestants that led to the long-term, steady discipline of the religious ascetic working in society, in the capitalism of that era. Because the all- powerful Deity portrayed in the new theology knew who was saved in advance, but didn’t disclose it, everyone was searching for clues as to their religious status – a status which couldn’t be bought on that terrible Catholic “market” in indulgences and relics which Luther condemned.

Thus, however useless good works might be as a means of attaining salvation…they are indispensable as a sign of election. They are the technical means, not of purchasing salvation, but of getting rid of the fear of damnation…The God of Calvinism demanded of his believers not single good works, but a life of good works combined into a unified system…now every Christian had to be a monk all his life…those passionately spiritual natures which had formerly supplied the highest type of monk were now forced to pursue their ascetic ideals within mundane occupations…By founding its ethic in the doctrine of predestination, it (Calvinism) substituted for the spiritual aristocracy of monks outside of and above the world the spiritual aristocracy of the predestined saints of God within the world. It was an aristocracy which, with its character indelebilis, was divided from the eternally damned remainder of humanity by a more impassable and in its invisibility more terrifying gulf, than separated the monk of the Middle Ages from the rest of the world about him, a gulf which penetrated all social relations with its sharp brutality. This consciousness of divine grace of the elect and holy was accompanied by an attitude toward the sin of one’s neighbour, not of sympathetic understanding based on consciousness of one’s own weakness, but of hatred and contempt for him as an enemy of God bearing the signs of eternal damnation…(Selections from Pages 115-122, Charles Scribner’s Sons, 1958 edition. My Emphasis.)

Besides the potential for “sharp brutality” and “hatred and contempt” for those who are not among the elect, we should point out another major aspect, a more favorable one, of the Protestant Ethic and its “worldly asceticism,” and one that still has crucial implications for our economic age: its strong inclination to defer consumption, and to therefore accumulate investment capital, what Weber calls its “ascetic compulsion to save.” As anyone who is familiar with the classic form of Puritan New England’s “jeremiad” knows (and James A. Morone will later remind us of the ritual, which is still with us, through his book Hellfire Nation), there was always plenty of tension between a proper Protestant Ethic and lapses towards a too conspicuous display of consumption. Yet there was genuine achievement in this driven, yet restrained behavior, and it indeed must seem like it represents a culture from another planet for the America of 2009, which doesn’t save enough and is vexed by all the vast formal economic machinery designed to lead us into further personal debt. It’s a reminder of some of the deeper ills which plague contemporary capitalism, especially the American version.

Weber’s eye also was also sharp enough to see that Calvinism’s theology and the Protestant Ethic derived from it played out in some other not-so-beneficial directions, although one’s perception of them might depend on whether one lives in Twinbrook (Rockville) or Potomac, Maryland. And that would be the tendency of all this channeled work-directed discipline to form the emotional basis of a hard-working, but docile labor force, focused as it would be on the otherworldly basis of the earthly calling, and not challenges to the employer. And Calvinism’s division into the elect and non-elect would also tend to push in the direction of supporting earthly inequality as the natural expression of various states of divine favor. And Calvinism as expressed in the Protestant sects would also frown upon various types of royal/state directed interventions into the economy, leftovers from medieval corporatism, and Catholic theology on matters such as usury, a “just price,” and, can you believe how crude that Catholic theology could be towards entrepreneurs (!), against the sometimes high price of bread. These traces of medieval interventions into the workings of the economy were powerful enough in their long traditions to carry over even into the first decades of the Massachusetts settlements, into the early 17th century, that is, as we will later see. We should not be too harsh towards these barbaric relics of Catholicism’s sometimes solicitude towards the poor, reflected in governmental policies; after all, it would be many centuries still before humankind would receive the ultimate enlightenment from Friedrich von Hayek, Ayn Rand and Milton Friedman.

Yet we shouldn’t become carried away with the similarities between Wall Street’s contemporary work ethic and its self-generated job insecurities compared to the old theology driven ones from distant centuries. The contemporary ones seem to me, certainly as Karen Ho describes them, to be very secular in design and motivation, even as they may have a functional equivalence in propelling people to relentless action in the world. Weber stresses the patient, long term approach to capital accumulation from the Protestant ethic; Ho sees Wall Street practices today as a “bulimic culture of expediency.” And the point of the activities would not be the clarification of one’s eternal standing in the eyes of the Deity, but rather the size of the bonus awarded at the end of the year, despite the religious spin Goldman Sach’s chief Lloyd Blankstein has recently given in The Times article “ ‘I’m Doing God’s Work..’ Meet Mr. Goldman Sachs,” by John Arlidge, November 8, 2009 at (http://www.timesonline.co.uk/tol/news/world/us_and_americas/article69076...), an ironic echo of Weber’s famous work., and which hasn’t seemed to convince many contemporaries.

Of Iron Cages and Golden Straightjackets
And we mustn’t forget the poignant and even painful conclusion of Max Weber’s essay, which offers us some tantalizing clues as to just where we are in the current curve of capitalism. Let’s take a closer look at what he had to say about his own times, thoughts written down near the end of the first great age of “globalization,” an age whose economic foundations were built upon a belief in “a self-regulating market” and “the international gold standard,” (Polanyi, Page 3), and a world which fell apart in 1914, tried to put itself back together in the 1920’s, only to come to a shattering end with The Great Depression and the onset of World War II.

The Weber of 1905 laments that the work ethic and the sense of calling, which began as something voluntary in the 16th century, had shed that voluntarism as well as its religious origins and had now become something “we are forced to do” by the “technical and economic conditions of machine production, which to-day determine the lives of all the individuals who are born into this mechanism, not only those directly concerned with economic acquisition, with irresistible force. Perhaps it will so determine them until the last ton of fossilized coal is burnt.” (Page 181.) He declares that “care for external goods” no longer lies lightly on human shoulders, like the cloak cited by an English minister in the time of Cromwell, but rather, “…fate decreed that the cloak should become an iron cage,” (Ibid.) a term which is mentioned by Ms. Ho (Page 292) in speaking of how common it is today to give The Market a wide-range of “autonomous features.” We should note, as well, the striking similarity of this “iron cage” from the first era of globalization to Thomas Friedman’s “Golden Straightjacket,” from the second, a century later, which is not only binding individuals, but also governments and heads of state, turning them all into mere “governors” bidding for The Market’s favors. Early in his collection of essays, Weber showed his readers the advice of Ben Franklin from the third and fourth decades of the 18th century – already secularized into pithy sayings about how to maintain good standing with ones creditors. Imagine then, a century-and-a-half later, how, Weber observes, “in the United States, the pursuit of wealth, stripped of its religious and ethical meaning, tends to become associated with purely mundane passions, which often actually give it the character of sport.” (Page 182). That seems to be a pretty shrewd insight into the state of American capitalism 20 years ahead of Jay Gatsby’s regular conversational greeting of “old sport” in The Great Gatsby. And a pretty good introduction to the spirit of the 1920’s on Wall Street.

Weber, the rigorous historian for the preceding 180 pages or so, then departs from his own “iron cage” of scholarly objectivity, to wonder

…who will live in this cage in the future or whether at the end of this tremendous development entirely new prophets will arise, or there will be a great rebirth of old ideas and ideals. Or, if neither, mechanized petrification, embellished with a sort of convulsive self-importance. For of the last stage of this cultural development, it might well be truly said: ‘Specialists without spirit, sensualists without heart; this nullity imagines that it has attained a level of civilization never before achieved.’ (Page 182.)

The Death of God & The Founding of Fundamentalism
It is no small irony that the rigorous scholarship of the German universities that Weber so well represented, actually helped fan the very first embers of a conservative religious revival. When that scholarship turned its meticulous attention to the authorship and authenticity of the books of the Bible, it helped set in motion all the famous frictions between religious tradition and modern “scientific” scholarship, concentrated in and summoned up by the words “evolution,” “relativism” and “secularization.” As George Marsden explains in his book Understanding Fundamentalism and Evangelicalism (1991), the term “fundamentalism” emerged in the US at a 1920 Northern Baptist Convention, to describe “those ready ‘to do battle royal for the Fundamentals,’” or, to put it in a less circular manner, it became a term “to describe all sorts of American Protestants who were willing to wage ecclesiastical and theological war against modernism in theology and the cultural changes that modernists celebrated.” (Page 57.) The ground had already been prepared in the previous decade by the publication, between 1910-1915, of The Fundamentals, a twelve-volume paperback series emerging from various strands of conservative Protestantism, with a leading role played by “dispensational premillennialism,” the theological predecessor of Hal Lindsay’s The Late Great Planet Earth, “the best-selling book in America…during the 1970’s” (Marsden, Page 77) as well as the tens of millions of copies (total sold in all media forms of 60 million, according to Kevin Phillips in American Theocracy) of Tim LaHaye’s Left Behind series in the 1990’s. The early twentieth century movement crested in 1925 with the famous Scopes trial, and seemed to disappear from mainstream American life until it re-emerged, powerfully, in the 1970’s.

Now Max Weber was a complex and sensitive writer, alert to the tensions and contradictions set in motion by the Protestant Ethic, observing that the intense self-discipline, resting on theological doubt, was bound to be eroded as worldly successes accumulated, something noticed by a famous 18th century English religious reformer, John Wesley who wrote: “‘I fear, wherever riches have increased, the essence of religion has decreased in the same proportion…for religion must necessarily produce both industry and frugality, and these cannot but produce riches. But as riches increase, so will pride, anger, and love of the world in all its branches.’” (Page 175.) By Weber’s time the “idea of duty in one’s calling prowls about in our lives like the ghost of dead religious beliefs.” Is it any wonder then, that 60 years later, the decade of the high tide of American post-war economic prosperity - the 1960’s - should also be at least be partly known as the decade of the “Death of God,” and of Harvey Cox’s book The Secular City (1965). As Mark Taylor summarizes the trend, “for theologians as well as psychologists, sociologists, and anthropologists, secularization appeared to be an inescapable by-product of modernization. Furthermore, these analysts argued that the interrelated processes of modernization and secularization are irreversible. Religion appeared to be a primitive vestige that modern people and societies inevitably would leave behind.” (Confidence Games, Page 29). Of course, he points out, they were very wrong. Religion did not die out. Indeed, the economic affluence, and the great racial, cultural and gender role turmoil of the 1960’s helped create the appeal of, and desire for, a set of clear and simple religious “fundamentals” to answer the growing confusion.

The 1970’s Reconsidered
The 1970’s were once referred to as the decade where It Seemed Like Nothing Happened, primarily, it would seem, in reference to the feel of the 1960’s, where too much happened, and far too fast. It became the title of an interesting book by historian Peter N. Carroll, first published in 1982. In it, Carroll reminds us just how wrong that perception was. In 1971, he tells us, the US ran its first trade deficit since 1893, a visible high watermark on our balance of payments troubles dating back to the late 1950’s; on August 15, 1971, President Nixon suspended the convertibility of the dollar into gold, and imposed a 10% surtax on all imports, among other economic measures making up “The New Economic Policy”; in December of 1971, new fixed international exchange rates were formalized and the dollar was devaluated by 11%, followed by a further 10% devaluation in February of 1973. In 1973, American car sales “dropped by eleven million; the next year, they slipped seven million more. The United States was becoming ‘a nation of hamburger stands,’ complained the AFL-CIO, ‘a country stripped of industrial capacity and meaningful work…a service economy…’” (Carroll, Page 129).

Mark Taylor picks up the same themes of 1970’s economic change in Confidence Games, but gives them even greater symbolic meaning, especially concerning gold in 1971-1973: “though not immediately apparent, the abandonment of the gold standard had broad cultural significance. It is no exaggeration to insist that going off the gold standard was the economic equivalent of the death of God…” who is then “…reborn as the market.” (Page 6). By March of 1973, Taylor explains

…the effort to salvage the postwar economic order established at Bretton Woods completely broke down. The United States’ gold convertibility guarantee ended, fixed exchange rates were abandoned, and currencies were allowed to float freely. For the first time in history, all the currencies in the world were fiat money. While everyone realized that this marked the end of an era, for some devoted believers in gold the collapse of Bretton Woods was symptomatic of a broader religious crisis that grew out of the social turmoil of the 1960s. Bill Dannemeyer, a conservative Republican congressman from southern California, wrote to his constituents: ‘It is not an accident that the American experiment with a paper dollar standard, a variable standard, has been going on at the same time that our culture has been questioning whether American civilization is based on the Judeo-Christian ethic or Secular Humanism. The former involves formal rules from God through the vehicle of the Bible. The latter involves variable rules adopted by man and adjusted as deemed appropriate.’ (Page 128.)

Despite the sleepy gloss that the national memory has thrown over the 1970’s, they were instead a time of growing turmoil, especially in, but not limited to, the economic realm. Indeed, Richard Parker, John Kenneth Galbraith’s biographer, brands the decade with a Chapter entitled “The Great Unraveling” (John Kenneth Galbraith: His Life, His Politics, His Economics, 2005).) The liberal Keynesian tradition was having great trouble in explaining the simultaneous rise in unemployment and inflation, which was already underway before the shattering OPEC oil embargo and price jolt which quadrupled the price of a barrel of oil from $3 dollars to $12 by March of 1974, which Henry Kissinger called “‘one of the pivotal events in the history of this century’” (Parker, Page 556.). Coupled with the dollar devaluations and abandonment of the gold standard, world economies were subjected to uncertainties in prices and currency valuations that they hadn’t seen since the 1930’s, and this at a time when large corporations were intensifying their international wanderlust, and business “…profit margins in 1975…were the worst in seventeen years.” (Ibid, Page 544). Mark Taylor stresses how the international economic turmoil drove financial “innovations” such as Reuters introducing the first electronic system for international currency trading and also stimulated the rise of derivatives, like currency swaps, that started as hedges against the great fluctuations, but in later decades took on more and more of a speculative nature. Those international currency fluctuations also led to a proposal, by Nobel-prize winning economist James Tobin, for a modest tax on currency trading to try to dampen the speculative fever, as Paul Krugman has reminded us in his November 27, 2009 column in the New York Times “Taxing the Speculators” at http://www.nytimes.com/2009/11/27/opinion/27krugman.html?_r=1. (And Yalman Onaran, writing at Bloomberg.com on November 30th, reminds us that the idea for a broader tax on all financial transactions rather than just on currency trading, had it roots in John Maynard Keynes famous 1936 work, The General Theory of Employment, Interest and Money” at http://www.bloomberg.com/apps/news?pid=20602004&sid=aZxk6z7R4V5I )

The 1970’s also witnessed, with untold consequences right up to and including our own economic crisis of 2008-2009, a Promethean struggle over the concept of “full employment,” embodied in the Humphrey-Hawkins Bill of 1978. In the four years it took to become law, economist/historian Richard Parker tells us that “the bill unfortunately became a test of strength that pitted a cautious Democratic president preaching ‘hard choices’ and ‘national austerity’…against congressional liberal lions such as Humphrey and Kennedy, as well as the Congressional Black Caucus and the major trade unions…Passage replayed in slow motion the evisceration of the Full Employment Bill that occurred under Truman: the final version contained no enforcement powers and offered little more than symbolic commitment to full employment.” (Page 532.) The great stumbling block, inside the Democratic caucus as well as among professional economists, was the intellectual challenge presented by stagflation – simultaneous inflation and unemployment. This is one of the most fascinating and complex sections of Parker’s excellent biography of Galbraith – and it could as well serve as a fitting epitaph for the liberal Keynesian era’s “unraveling.” Galbraith ended up siding with conservative Milton Friedman in opposing the bill, though on different grounds. Galbraith felt that it vastly oversimplified the problems posed by the structural realities of “The New Industrial State” that he had laid out in his 1967 book of that title, with the “planning sector” of large firms (meaning they were so large they could bend and shape their markets, in contradiction of classical theory) able to pass along the price increases while the realm of market-dependent small businesses had to meet the rising prices through increased lay-offs. Friedman, representative of the rise of conservative free-market economic theories in academe as well as a relentless public proselytizer, countered with his notion of a “natural rate of unemployment” which threatened to overturn the consensus Phillips Curve trade-off between inflation and unemployment. Even though both Friedman’s monetarism and unemployment theories of the 1970’s have been discredited by subsequent attempted practice and events (the former in the late 1970’s and the later by the end of the 1990’s), at the time they inflicted heavy damage on Keynesianism. Parker writes that Friedman “…insisted that the Keynesians’ quest for ‘full employment’ was not merely a chimera, but a major cause of the nation’s economic problems. This mesmerized conservative politicians and policy-makers.” (Page 538.)

Was it Ronald Reagan who taught us to forget the cumulative calamities of the 1970’s?
It addition to what is already mentioned here, consider the sequence of what has been left out: the congressional Passage of the Equal Right Amendment (ERA) in 1972 (and a bitter and stalled ratification process), a major war in the Middle East in October of 1973, intimately intertwined with the oil price hikes; the resignation of Vice President Spiro Agnew on corruption and tax charges; the impeachment and resignation of President Nixon; the traumatic exit from a lost war in Vietnam, the Roe v. Wade abortion decision of 1973 (as well as Buckley v. Valeo on corporate campaign contributions in 1976)… and, we should not forget, during the waning days of Carter administration, the Iranian Revolution and the great American hostage crisis. Just listing these events in proximity to one another helps remind us of the sea change forces in motion - cultural, political and economic - which helped elect Ronald Reagan.

The 1970’s and the Rise of the Fundamentalists
As Progressives ponder, in late 2009, the reasons for the renewed ferocity of the political pushback by conservative forces against healthcare reform, Global Warming legislation and any amplified role for government to further revive a staggered economy, we would do well to remember that it was the 1970’s which saw a revival of powerful fundamentalisms, economic and religious, although at the time few saw the connections between them. And that is why we have given added emphasis to these sea changes surging through the 1970’s. As Mark Taylor reminds us in Confidence Games

with everything in rapid flux and becoming more complex, the desire for simplicity, which is characteristic of every version of fundamentalism, religious and otherwise, is understandable. This search for simplicity in a world of complexity is one of the primary reasons there has been a worldwide resurgence of religious fundamentalism in recent decades. While obviously differing in important ways, evangelical Christianity and Islamic fundamentalism are actually mirror images of each other…Whatever their faiths, true believers seeking redemption through a return to religious, moral, political, and economic fundamentals court the very disaster they claim to be struggling to avoid. (Page 312. My Emphasis.)

In the economic realm, as we will see in later portions of this essay, this certainly has been the case, as the “Chicago School” of free markets, de-regulation and anti-government dispositions was the ideological framework which many “liberal” Democrats bought into as well, and perhaps more than any other factor, led directly to the collapse of the worldwide financial markets in 2008-2009.

Although I’m reluctant to correct the Chairman of the Religion Department at Columbia University, Professor Taylor, I would add, for the benefit of my readers, that the term “evangelical” covers a broad spectrum of Christian belief, ranging from very fundamentalist leanings in terms of scriptural literalism/theological matters, to more liberal shadings, represented by the Rev. Jim Wallis of Sojourners and ministers such as Maryland’s own Brian McLaren. With those recognitions in mind, Taylor is generally correct to note that in matters economic, “in the most general terms, outside the U.S., religious fundamentalism often provides a way to resist the expansion of global capitalism and American power, while within the United States, religious fundamentalism tends to legitimize market fundamentalism and sanctify American power.” (Page 306. My Emphasis).

In matters economic, these observations help make deeper sense out of two of the godfathers of the revival of free-market fundamentalism in the 1970’s, the Austrian economists Friedrich von Hayek and Ludwig von Mises, who both ended up in the United States after fleeing the rise of the Nazis in the 1930’s. It is difficult to imagine their advocacy for a “fundamentalist” notion of the powers of the free market apart from their intense abhorrence of market interventions by European states during the late 19th century, driven by both the fear of and desire for socialism, culminating, in their opinion, in the rise of Nazism in 1933. (Indeed, historian Kim Phillips-Fein notes that the “political turmoil of the 1930’s drew (Hayek) into politics…in 1933 he wrote a short memo describing Nazism as a socialist movement rather than a reaction against communism,” (Invisible Hands, Page 35, My Emphasis) a very unusual, and hard to defend characterization, especially in light of what happened after the Nazis gained power, as we have noted in previous writings; but also because the actual Nazis ideological orientation ought to have been clear by the nature of the street battles prior to 1933. This writer wonders if Hayek’s take is a possible basis for Rush Limbaugh’s assertions that the Nazis and Hitler were “leftists.”)

Meet our Market Deity
Phillips-Fein also makes two fascinating observations about these Austrian economists in Invisible Hands, important for the major concerns of this essay: how The Market has assumed religious dimensions and attributes, especially here in the United States, and how it “assumes” different “moods” or attributes – projections if you would prefer - of its human inventors, recalling our wonderment at the anthropomorphic projections upon the Greek or Roman deities, or the Calvinist constructions of the 16th century. The first is Hayek’s admission, in his famous Road To Serfdom, that “at times modern man would feel subordinated to the market and would chafe against economic forces that he could not control. But he argued that submission to the marketplace was infinitely preferable to deference to a ruler. ‘Unless this complex society is to be destroyed, the only alternative to submission to the impersonal and seemingly irrational forces of the market is submission to an equally uncontrollable and therefore arbitrary power of other men.’”(Page 37.) Now that’s what I call “market fundamentalism,” with not much room left for the politics of democracy (freedom in his view, comes from The Market), much less Social Democracy with its mixed economy and deep and open involvement in a fully recognized “political economy.” The other stunning comment here, on what I will call the “brittle Prometheanism” of The Market, is the attribute that insists upon “hands off!” from government interventions. It has two features: that the market is spontaneous, “a complex system that came into existence without forethought or planning…the robust force that generated all of life and human production and a terribly fragile entity, threatened on all sides…in desperate need of protection…”(Ibid.)

Although there is a great deal else that happens to build conservative momentum inside the economics profession, especially the development of the rational expectations school and the efficient market hypothesis, readers wondering about our nation’s strange 40 years’ wanderings towards the edge of the economic cliff won’t stray far from the path if they will remember these key features bequeathed by the Austrians. Yet as important as they for our understanding, they nonetheless don’t tell the full story. For that, we must turn to the nature of the response from the religious fundamentalists to what is going on in the turbulent world of the 1970’s - economic events, certainly, but also cultural ones as well.

Building the Conservative Coalition
As Kim Phillips-Fein lays out for us in Invisible Hands, political conservatives, especially business conservatives, were lamenting their lack of a grass-roots movement to counteract the power of labor which grew out of the organizing successes of the 1930’s and the legal sanction bestowed by the New Deal. Protestant churches were the logical place to turn, but the climate in their pulpits, in the wake of the New Deal, and indeed, ever since the rise of the Social Gospel in the late nineteenth century and early twentieth century Progressive Era, was not very receptive. “The basic argument was that Christianity had too long been associated with altruism, selflessness, and a devotion to helping the poor – principles that might lead good Christians to advocate government intervention in the economy. To counter this idea, Spiritual Mobilization insisted that Christianity was rightly associated with shrinking the welfare state.” (Page 74). Spiritual Mobilization was, among other things, an attempted collaboration between J.Howard Pew’s Sun Oil-generated money and the religious organizing genius of James Fifield, a dynamic Congregational minister with a huge parish in Los Angles, who had originally founded Mobilization in the 1930’s. And one of the first outreach efforts is to mail out free copies of Hayek’s The Road to Serfdom in an attempt to gauge the mood amongst the ministers. Although it faltered in the 1950’s, Spiritual Mobilization foreshadowed the framework for the conservative alliance in the 1980’s.

Although most of my readers will be familiar with religious fundamentalism’s focus on personal morality – crime, sexual transgressions, gender roles and abortion - much less attention has been paid to its attitudes towards economic questions and the role of the federal government. Because they have been part of powerful national political coalition, the Republican Right, since the late 1970’s, and one where it is not clear that the leadership positions on economic questions fit comfortably with the economic needs of many in their congregations, nor where the steady green light given to rapid economic changes fits logically with the biblical and theological inflexibility, it behooves Progressives to take a closer look at how this coalition handles these tensions. All the more so during times when core portions of the national identity – the American Way of Life – Economic Abundance and Leadership, Moral Leadership, Success in War – seemed to be in decline. Indeed, as we will see, the relation of alleged moral decline linked to various forms of real or perceived national decline, is a theme that runs right back to the nation’s Puritan roots in 17th century New England, and is in turn, closely linked to the Protestant Ethic and the earliest capitalist traditions of the nation.

We have stressed the importance of the various national shocks of the 1970’s; so how did two of the most important fundamentalist religious leaders react to them, since both Pat Robertson and Jerry Falwell would play key roles in putting together the Republican Right coalition? First, we have to note, in partial answer to the seeming incongruity of fixed-theology fundamentalists advocating a permanent green light for the creative destruction of restless capitalism, that these religious leaders were businessmen as well as evangelists, familiar with the cutting edge technologies they utilized to spread their message by print, radio, and especially, television. It may have been for Falwell the nostalgia dripping title of the “Old-Time Gospel Hour,” but it was also an example of electronic savvy and a cash-cow. In 1978, he began publishing a newspaper called the Journal-Champion which went heavily political, with a surprising dose of economic issues. Of course it had the standard pleas to “cleanse America of sexual sin,” but it also took positions against federal bureaucratic interventions (OSHA), in favor of the California property tax revolt (Proposition 13), and against a federal bail-out of NY City. On the alarming national inflation of the 1970’s, Falwell wrote that “God is bringing the entire nation to its financial knees. If we want to control inflation, we should set our spiritual house in order.” (Phillips-Klein, Pages 228-230.) (Contrast that to Galbraith’s remedy, never applied, of complex wage and prices controls, structured to account for the large firm/small business dichotomies in the US economy, and biographer Parker’s call for – and the implied military threat – to force a roll-back of the OPEC oil price shocks – something he said Kissinger and Nixon wouldn’t countenance for fear of roiling the tinderbox of the Middle-East).

And 30 years ago, in 1979, Pat Robertson issued his “Christian Action Plan to Heal Our Land in the 1980’s.” In one respect, it seems like it was a reversal of Falwell’s diagnosis of cause-and-effect: “Robertson indicated that the moral illness threatening the United States in the late 1970’s had its roots in the nation’s political economy.” It’s timing was 50 years after the onset of the Great Depression, and it’s pretty clear that Robertson blamed the liberal tools set in motion by the New Deal for the ills of the 1970’s: “‘a powerful central government…an anti-business bias in the country…powerful unions’ and most important of all, ‘the belief in the economic policy of British scholar John Maynard Keynes...’” He conceded some positive good to them in curing the Great Depression, but “fifty years later they were responsible for the ‘sickness of the ‘70’s – the devaluation of the dollar, inflation, the decline in productivity.” The remedy? A “‘profound moral revival’” and the election of those who would “‘reduce the size of government, eliminate federal deficits, free our productive capacity, ensure sound currency.’” (Phillips-Fein, Page 225).

As noted, the cause and effect between economic decline and moral failings may get switched with less than airtight rigor within the worldview of even these two major fundamentalist leaders, but if we recall that in the 1970’s and 1980’s the charge was often made by conservatives that the liberal welfare state, especially its Aid to Families with Dependent Children Program (AFDC), aka as “welfare,” was undermining both morals and marriage, then the seeming inconsistency here can be clarified. And who better to further shine a light on these matters of the moral economy, than the fascinating figure of George Gilder.

George Gilder and a Morality Enforced by The Market
This writer didn’t know, until reading Invisible Hands, that Mr. Gilder was raised, after the death of his father, with the help of the Rockefeller family, especially David, who was a roommate of his father’s at Harvard, nor was I aware of his two books published before the famous Wealth and Poverty of 1981. Wikipedia also notes that he attended a private school in NY City, Hamilton, then Phillips Exeter Academy and finally Harvard. I note these biographical features with interest because, as Thomas Frank tells us in One Market Under God (2000), Gilder was a proponent, among many notions, of the idea of class warfare “between righteous new money, the entrepreneurs who created wealth, and bitter frustrated old money…” The new entrepreneurs “were both society’s ‘greatest benefactors’ and yet also the ‘victims of some of society’s greatest brutalities’” at the hands of “‘the mob’” which turns out to be incited by… “…the very rich, the people of inherited but declining wealth whom, Gilder imagined, controlled ‘the media and the foundations, the universities and the government.’” (Page 35). Gilder’s background is also ironic in light of his high flights into the realm of market populism, especially with the rise of the Internet and its entrepreneurs. But that’s a digression from Invisible Hand’s reminder of his earlier works.

The language Phillips-Fein uses to describe the early Gilder is revealing for the purposes of this essay. Gilder “wrote passionate jeremiads against modern liberalism’s effect not only on the economy but on culture, sexual relationships, and morality…His first book, Sexual Suicide (1973), was a harsh critique of the women’s movement; his second, Naked Nomads (1974), catalogued the hazard that single, unattached men posed to social order.”(Page 177, My Emphasis.) In Wealth and Poverty, however, Gilder was trying “to demonstrate that capitalism was an inherently moral economic order.” These were not entrepreneurs driven by greed; “they wanted merely to have the ‘freedom to consummate their entrepreneurial ideas,’” driven by “a spirit closely akin to altruism…’” (Ibid.) But then, like a turn in Zeus’s mood, the market shows us another face, and becomes “a measuring stick for morality that meted out rewards to people who lived virtuous lives while punishing those who violated codes of decency. ‘Work, family, and faith’ were the only solutions to poverty.” And now for Gilder’s main thrust:
that “the real danger of the welfare state was that it created a mode of subsistence and survival free of the morality enforced by the market.” (Page 178. My Emphasis.)

Strict Father Christianity
These morality and economy themes are echoed in the work of George Lakoff, “the framer,” whom we talked about in our previous essay (Look Back in Anger, September 22, 2009) when he commented on the great health care debate. Lakoff’s important book Moral Politics: How Liberals and Conservatives Think (2002, 2nd edition) reminded us that “frames” activate metaphors, and that we “…commonly conceptualize morality in terms of financial transactions and accounting.” (Page 95). He also taught us that these metaphors have their roots in archetypes of parenting and child rearing. Thus we learn from his chapter entitled “Two Models of Christianity,” that under “Strict Father Christianity…conservative Christians go beyond applying Strict Father morality just to religion. They apply it to politics as well, forging a metaphorical link between (1) their
religious system of moral accounting, (2) laissez-faire free-market economics, and (3)
the Strict Father morality system of reward and punishment.” This is done by a series of connecting metaphors which Lakoff lays out but which we will not elaborate on here. And the ground we already have covered with Mark Taylor on Calvin’s “invisible hand” as well as Max Weber’s Protestant Ethic and Spirit of Capitalism” does a better job on the connection between work, discipline and capitalism than Lakoff does – at least as far as their origins. But Lakoff is in close league, and leaves us with something we will summon up later in the conclusion of this essay, the contrast between conservative Strict Father morality and liberal Nurturant Parent morality, and what each might portend for the nation’s politics – and economy. In the Strict Father model of Christianity, as well as in families, “Moral Strength, not Empathy, is as the top of its value system. Right up there are Moral Authority, the Moral Order, and Retribution (just punishment)…the highest metaphors in the system – Moral Strength, Moral Authority, and Moral Order…” mean that it “matters more in Strict Father morality that a person is morally weak (lacking in self-discipline and self-reliance) or violating moral authority (a criminal) than that he is poor, sick, physically weak, or uncared for.” (Page 382, My Emphasis).

Hellfire Nation & The Great American Moral Dialectic
As good and interesting as George Lakoff is on these themes, the missing dimension is the historical one, and how ideas change through time, under the stress from events. There is no Luther, Calvin or Jonathan Edwards in the index, and no Puritan Covenant, Great Awakening or Social Gospel movement Not so with James A. Morone’s fascinating Hellfire Nation: The Politics of Sin in American History (2003). What sent me scurrying back to reconsider Hellfire Nation were two things. First, a comment that Progressive Maryland State Senator Jamie Raskin made at a Healthcare forum back on October 24, 2009. Senator Raskin’s excellent, spirited talk pointing towards eventual universal coverage here in the US, where questions of who is and isn’t worthy of coverage – would be transcended by an inclusive outlook: healthcare as a universal human right. Second, a comment by Professor Morone himself, just two weeks later, in a New York Times article on November 7, on the plight of over-weight Americans in the health care debate, who were protesting the notion that their alleged personal shortcomings were imposing disproportionate costs upon the health care system. Here’s what Professor Morone had to say about this dynamic: “‘All national health care systems are built on the idea that we’re all part of a community, we all get sick and die, so we’re going to take care of one another…the best philosophical way to stop national health insurance is to say we’re not a community, it’s ‘us vs. them.’” (“Heavier Americans Push Back on Health Debate,” by Susan Saulny at http://www.nytimes.com/2009/11/08/health/policy/08fat.html ) {My Emphasis.}.

We learn in the Introduction to Hellfire Nation that Professor Morone had set out to write a very different book than the one he ended up sending to the publisher; indeed, he had set out to write a “jeremiad against Jeremiahs.” But along the way, he ended up leaning towards G.K. Chesterton’s 20th century summation of the United States “as a nation with the soul of a church,” and giving considerable weight to Tocqueville’s belief “‘that I can see the entire destiny of America contained in the first Puritan who came ashore.’” And properly, that’s where he starts off, with the Puritans of New England:

The Puritans bequeathed America two different answers to that moral bottom line: Who do we blame for trouble, the sinner or the society? The Puritans believed in blaming both. Salvation and perdition fell on individual souls; however, the Puritan covenants held the entire community responsible. In time, the two halves of that equation – the individual and the community – split. One moral tradition touts personal responsibility…The alternative tradition, the social gospel, shifts the emphasis from the sinner to the system…rather than redeem the individual, reform the political economy…The two have alternated, over the past century, as the dominant moral paradigm. And though each side finds the other hard to take, both run deep in the American psyche. (Pages 13-14.)

Further into the book, Morone elaborates on these themes, in a section entitled “The Great American Moral Dialectic,” noting that “winning the battle over whom to blame profoundly shapes the kind of government that emerges from bouts of moral agitation.” (Page 278.) As liberals and Progressives have found out in the years from 1970 to 2004, “the neo-Puritan focus on sinners has been the more politically robust American moral ideology.” (Page 279.) Although he doesn’t say it, perhaps the last time the two traditions were fused “effectively” in politics, uniting Protestant fundamentalists with a substantial critique of the national political economy, was in the campaigns of William Jennings Bryant, especially the 1896 campaign. For the provocative and excellent handling of Bryant’s example, see Michael Kazin’s A Godly Hero, 2006. Interestingly enough, Morone takes the notion of the Social Gospel, a term in social and religious studies usually rooted in the late 19th and early 20th century, and associated with the names of, just to mention a few of prominence, Washington Gladden and Walter Rauschenbusch (he includes Jane Addams and Frances Willard), and finds its roots in 1630 New England: The Social Gospel “reverses the usual urge: rather than blaming bad people for society’s troubles, society takes responsibility for all its people. The concept goes back to the Puritans: God made His covenant with the entire community, and divine praise or punishment would fall on everyone.”(Page 444.) Then, he extends the Social Gospel tradition forward, to a political terrain we usually don’t think of in those terms:

But no one ever pushed the collective theory – we are our neighbors’ keepers – quite like the social democrats did during the four decades following the 1932 election. A look at the most eloquent Social Gospel preachers – Franklin Roosevelt and Martin Luther King, Jr. – yields an arresting conclusion: by contemporary standards, they sound like radicals. Both blamed the social economic system for people’s troubles. Both insisted that society has an obligation to every member. Their sermons – their entire perspective – rested on an important implicit story: the poorest and weakest in our society are good, honest people. (Page 444.)

Inevitably, by drawing up a religious and social compact with tight definitions, and reciprocal obligations, the problem immediately becomes who is inside the boundaries, and who outside the community, setting up the continuing saga of “the Other.” Morone devotes a good deal of space to this ongoing problem, one not just for 17th century Puritans, but a continuing identity problem for the “Exceptionalism” of the huge, diverse and immigrant seeking (usually) American nation. Now these are the broad brush strokes applied by Morone; but he also has some subtler ones with important implications for one of our major themes: how a fundamentalist resurgence in economics and religion, growing into prominence in the 1970’s, dealt with another “fundamental” fact of life: American capitalism itself is an enormous generator of change, as anyone who cares to think even briefly upon the social effects of the auto, the pill (birth control), the credit card and exotic debt instruments have had upon fundamental moral precepts, and the social conventions built upon them. (For a splendid elaboration of this theme, please see Daniel Bell’s The Cultural Contradictions of Capitalism and note the date of publication: 1976; it’s one book that you probably won’t hear President Obama, Steny Hoyer, Martin O’Malley or Ike Leggett quoting from, even as they pay repeated homage to Max Weber’s Protestant Ethic with the combined term – “hard working” – and to the fundamentalist Right’s – “families”. And the combined term – “hard-working families - makes an unspoken, invidious comparison to those swept up in the great American “Incarceration,” see below.)

Closely related to these considerations, and judgements, about change, is the idea of decline, especially moral decline, as would seem inevitable in a nation “with the soul of a church,” and especially one undergoing the cumulative blows to self-image that the United Stated did in the 1970’s, as we have outlined. Since it was the Puritans who bequeathed our society “the essential American literary form, the jeremiad (a lament that the people have fallen into sinful ways and face ruin unless they swiftly reform)” {Morone, Page 14}, we have to be especially alert to the timing of its ritual invocation, for in many early periods, it is very clear that America was not declining in any reasonable historical sense of the term – but yet, given our listings of the shocks of the 1970’s, who could reasonably not entertain such thoughts, and on very good and solid foundations?

And this is where the subtler brushstrokes of Professor Morone are applied. “When the larger political economy grows tumultuous, some Americans try to find order by asserting control over the ‘little commonwealth,’” and by this he means the family, and over the forces which are portrayed as threatening it. In the chapter entitled “Modern Witch-Hunt,” he is dealing with the “purity wave” of the first decade of the 20th century, centered on an imagined “white slave” trade, which culminated in the Mann Act of 1910. And here Morone is venturing into psychological waters, appropriately, it would seem: “The first hint of trouble lies in the sheer intensity of the campaigns. Take the sex wars: ‘The passion aroused by commercialized sex appears so intense’…‘that one wonders whether it stood for something more in the minds of the anti-vice crusaders.’ The extraordinary American temperance movements would raise precisely the same question. The passions run too strong, the stakes seem too high, the reform promises too much.” So high in fact, that Morone insists that there is “political dynamite at the heart of the moral crusades. The struggle against sin keeps devolving into strife against the sinner: …the ‘vile practices’…that some other – Irish, Chinese, African, or Jew (Editors note: Jews were accused of dealings in the ‘white slave trade’ circa 1900-1910) – threatens to unleash…They add up to hellfire politics.” (Page 279).

Roe vs Wade, 1973: Who Deserves our Moral Sympathy?
Thus we come back to that decade of economic and cultural turmoil, the 1970’s and the Roe vs. Wade abortion decision of 1973, the ramifications and repercussions of which never seem to leave us, as we were all reminded of in the legislative struggle for health care reform in the fall of 2009. How is it that so much moral intensity comes to be focused on the fetus, or granting, for the sake of argument, the thrust of anti-abortion theorists and theologians, on a “person” who is not here yet, while the 1970’s saw so many of the “people already here,” laid off, falling in the economic order, becoming, in the words we quoted earlier, from the AFL-CIO, part of a nation “stripped of industrial capacity and meaningful work…a nation of citizens busily buying and selling cheeseburgers and root beer floats,” a trend which would only intensify in the 1980’s and 1990’s, spreading from the blue-collar worker to middle managers? These decades would also witness, in our many urban ghettos, like West Baltimore, not an urban “Marshall Plan” such as the one offered to devastated Western Europe after World War II, but the greatest mass incarceration policy seen since the Gulag of the Soviet Union, which Morone skillfully weaves into his tale of our Hellfire Nation: “The number of Americans in jail passed the 2 million mark in 2000 despite ten years of falling crime (the murder rate had plunged below its 1915 level). The incarceration rate is the highest in the world, five times the rate of most industrial democracies. Add those on probation and parole to those in prison and the total hits 6.3 million.”(Page 13).

Since about two-thirds of those caught up in this system are there for non-violent crimes, and they are not engaged, by current rules, in useful economic activity, should we not make an inquiry, directed to our political and economic leaders, as to whether or not these folks are, among many other considerations, economically “surplus, or disposable” people? Of course, in the trajectory of Morone’s book, we come to see them as being defined, sentenced to, from the late 1970’s on, the fate ordained for the most fearful of “others,” those far outside any of the often wavering American definitions of “community.” Truly, for these late 20th and early 21st century “demons,” we have constructed an enormous “iron cage,” but one Max Weber could not have easily imagined in 1905. Instead, ours has been forged with the heat of the still smoldering embers left over from the Puritan fathers, and from their Salem witch trials of the 1690’s.

Continuing down this line of reasoning, one would have thought, if one is inclined to think in traditional Judeo-Christian terms, that in 2009 the prospect of tens of thousands of those “already here,” dying prematurely and unnecessarily due to lack of health care, would be able to capture some of the moral sympathy devoted to the fetus, even if we fully understand that there is not enough sympathy to go around in the America of 2009 to extend this coverage to those who are not sick, but are merely of the tens of millions who lack medical coverage. But this writer detected no such “surge” from religious fundamentalists towards health care provision and reform, even as “the larger political economy grows tumultuous,” indeed, grew, objectively, into the most turbulent economic storm since the Great Depression. As a matter of fact, in accounts I’ve read of the trend lines in fundamentalist Christian circles, the health care debate has been a boon in membership and giving, but not a drive towards inclusive coverage.

But the continuing moral firestorm over abortion has had other ramifications for Progressives, and it behooves us to pay attention to what Professor Morone has to say about them. He sees the 1973 Roe vs. Wade decision as a high water mark for certain portions of the liberal/progressive tide which ran so strongly from the New Deal until – that decade of the 1970’s. It is clear, in the way he handles the significance of it, that we are dealing with all the ramifications for conservatives of the “fallout” from the “permissive 1960’s,” as well as a major shift in that public/ private boundary line, the one that delineates where a society decides to focuses its moral energy. And here is Morone to tell us what it meant:

The attack on abortion twists the culture of easy sexuality into a cult of mass murder. It transforms post-sixties feminism – and the whole family-planning regime – into the slaughter of the innocents…Here, in short, lies a rejoinder to the sexual revolution. Bill Kristol, the editor of the influential Weekly Standard, puts it bluntly: ‘Abortion is today the bloody crossroads of American politics. It is where judicial liberation (from the Constitution), sexual liberation (from traditional mores) and women’s liberation, (from natural distinctions) come together.’ …As Stephen Carter puts it, public religious appeals became – ‘all at once and quite thunderously’ – the sole property of conservative causes. Meanwhile, moral claims and Social Gospel drained quietly out of the political left.” (Page 488.)

In thinking about abortion, and the decade which triggered the movement against it, the word “disposable” came to mind. Without remembering quite when, or from whom, it seems that I’ve seen accounts, from working class women who strongly opposed abortion, their views shared with academic interviewers, if I recall correctly; for them it represents a handle for a protest against a society which sees them, and people like them, as “disposable.” Putting this together with the other perspectives which Morone has suggested, and the failure of Progressives to come up with a morally compelling, powerful economic narrative to repair the large cracks in society which appeared in the 1970’s, helps us better understand all the intensity poured into this one moral issue -even as we are convinced by Morone that here the “passions run too high.” This writer has a great deal of difficulty imagining that if all abortions had been stopped – pick your date, in 1973, 1983, or 1993, the broader history of the Republic would be very much different than what has unfolded with abortion rights. Indeed, given everything laid out in this essay, had the currents continued to run to the Right, and Roe were overturned, this society would now have even more citizens for whom it would be unable to find meaningful employment. And that is perhaps the most fitting commentary on the anti-abortion movement: for all its moral intensity poured out upon the truly innocent fetus, there seems to be very little left over for anyone else in society, those present here and now, no matter what the compelling economic circumstances. The great health care debate has told us that, if nothing else, very loudly and clearly.

The Puritans’ Fundamentalist Experiment
In the end, we are seemingly carried back to the question Morone posed in his Introduction: “Who do we blame for trouble, the sinner or the society?” But now, dear readers, I would like to propose a refinement to that good and valid question. What if, partly by its own self-flattering (and self protective) definition, that society sees itself as “A City upon the Hill,” a moral beacon to other nations, whose very code, “The American Way of Life,” is “fundamentalist” in character, “untouchable,” as far as potential criticism goes (in 1970-2009 America, criticism comes only from those who ‘hate America,’ according to Right Radio), unchanging in religious and economic certitude? Then wouldn’t things, in the words of Perry Miller, that peerless historian of the Puritans, turn out something like this: “The code resisted change; and therefore changes became declensions; the jeremiads recognized the facts, but refused to accommodate theory to them.” (The New England Mind, From Colony to Province, 1961, page 46. It is contained in the Chapter called “The Protestant Ethic.”)

One thing I want all my readers to be armed with, as they prepare to meet, whether by chance or design, the religious fundamentalist around the corner, is a good working knowledge of the classic jeremiad, like the one delivered to the people of the covenant by the Synod of 1679, the Synod being a select body of clergy and “lay elders,” which met – where else? – in Boston, and which was headed by Increase Mather. Following in the wake of the bloody Indian conflict known as King Phillips’ War, it was, as Perry Miller tells us in his Errand in the Wilderness (1956), a “report on why the land suffered…” - the first, as he dryly puts it, “in what has proved to be a distressingly long succession of investigations into the civic health of Americans, and it is probably the most pessimistic.” And, writing in 1956, Miller could strike that note, and be entirely correct. What is remarkable about this retail catalog of sins is that something from Puritan New England, circa 1679, can take us, without missing a beat, right down to the 2004 Super Bowl’s halftime show and Janet Jackson’s famous “wardrobe malfunction” …and the constant complaints from the American Right about “tort reform”…a testimony to the constancy of human nature, ands its moral shortcomings, quite independent, seemingly, of other more realistic weathervanes for actual societal “declensions,” especially economic ones. The list is long, involving 12 categories, and I’ll quote from just those which especially resonate for our times, and with their genuine timelessness:

First, there was a great and visible decay of godliness. Second, there were several manifestations of pride – contention in the churches, insubordination of inferiors toward superiors, particularly of those inferiors who had, unaccountably, acquired more wealth than their betters, and astonishingly, a shocking extravagance in attire, especially on the part of these of the meaner sort, who persisted in dressing beyond their means…Sixth, family government had decayed, and fathers no long kept their sons and daughters from prowling at night. Seventh, instead of people being knit together as one man in mutual love, they were full of contention, so that lawsuits were on the increase and lawyers were thriving… Under the eighth head, the synod described the sins of sex and alcohol, thus producing some of the juiciest prose of the period: militia days had become orgies, taverns were crowded; women threw temptation in the way of befuddled men by wearing false locks and displaying naked necks and arms, ‘or, which is more abominable, naked Breasts’; there were ‘mixed Dancings,’ along with light behavior and ‘Company-keeping’ with vain persons, wherefore the bastardy rate was rising…Ninth, New Englanders were betraying a marked disposition to tell lies, especially when selling anything. In the tenth place, the business morality of even the most righteous left everything to be desired: the wealthy speculated in land and raised prices excessively; ‘Day-Labourers and Mechanicks are unreasonable in their demands.’ In the eleventh place, the people showed no disposition to reform, and in the twelfth, they seemed utterly destitute of civic spirit.” (“Errand into the Wilderness,” pages, 98-99, from Puritanism and the American Experience, edited by Michael McGiffert, 1969).

“At Every Point, Economic Life Set Up Conflicts with Ideology…”
As Miller points out at several places in his much noted book From Colony to Province “…as we measure facts, New England was not declining…” His close reading of the jeremiads, and their actual contexts, led him to a tougher question of the preachers themselves: “did anybody really believe in the declension?” (Page 47.) What is really going on, Miller tells us, is the unfolding of a theme we have been following in this essay from its beginning: capitalism is a fantastic engine of change, quite at odds, even in its fundamentalist market form, with the notion of the granite standards of fundamentalist religion. Ironically, in the early days of the Puritan settlement, Miller tells us, they began with an economy, capitalist in essence, but yet one still bound, in good medieval fashion, with the clerical and civil authorities able to set a “fair price” upon goods, and interest rates. But as the power of the merchants grew, they resented the intervention, and eventually the ministers shrugged their shoulders and gave up the efforts, which were generating a lot of conflict. Miller observes later: “At every point, economic life set up conflicts with ideology.” The people were only following that good “Protestant calling,” but “the more everybody labored, the more society was transformed. The more diligently the people applied themselves…the more they produced a decay of religion and a corruption of morals, a society they did not want, one that seemed less and less attractive…”(Page 51.)

The jeremiad became a ritual, a classic form, a method of dealing with inner troubles which they were helpless to correct, yet they “came from something deeper than pious fraud, more profound than cant: they were the voice of a community bespeaking its apprehensions about itself.” (Page 47.) What is it that these sermons cannot quite get at, in the nature of the changes which they see all around them? “While the ministers were excoriating the behavior of merchants, laborers, and frontiersmen, they never for a moment condemned merchandizing, laboring, or expansion of the frontier. They berated the consequences of progress, but never progress; deplored the effects of trade upon religion, but did not ask men to desist from trading; arraigned men of great estates, but not estates.” (Page 41). At the conclusion of the Protestant Ethic chapter, Miller notes that “the sins paraded in the sermons were not so much those of the notoriously scandalous, but such as were bound to increase among good men. They thus had to be all the more vigorously condemned because they were incurable: after proper obeisance to the past, the society was better prepared to march into the future.” (Page 52.). Or so they thought.

“…This Society had Become a Time-bomb, the Fuse Burning Close…”
Now I strongly suspect that no student of the 20th Century ever said the major works of historian Perry Miller were easy reading. Miller is meticulous, an intellectual Swiss watch-maker of a historian, detailed to the point of overwhelming the reader, and perhaps reflective himself of some of the arguably best traits of the leaders of early New England that he is writing about. So when the reader gets to the Epilogue of From Colony to Province, addressed to the first 30 years of the 18th Century (late Puritanism, that is), he is stunned by the words employed by Miller to describe where New England is headed. He sets the stage this way: The congregations are restless, tired by “the familiar catalogue of crimes and abuses, swelled by annual additions…rehearsed as it had been for decades. The knowledge that these things have been said a hundred thousand times is very much present.” (Page 484.). On the surface, the world of politics and economics are uneventful and don’t offer clues as to the tensions building up within the society. The old forms of religion and their means of expression are losing their power and hold. But deeper down, in the contrast and contradictions of some of the era’s most noted documents, including some by Benjamin Franklin, Miller says the “period becomes a complex of tensions and anxieties, in which, in sober fact, the die was cast.” It was “an intricate system of interacting stresses and strains which not only foretell explosions, but predict the manifold directions in which the fragments will fly. This society had become a time-bomb, packed with dynamite, the fuse burning close. It was a parched land, crying for deliverance from the hold of ideas that had served their purpose and died…For the revivification of great principles, religious or civil, an awakening was necessary.” (Pages 484-485.)

And so with this powerful language, Miller portrays a New England on the verge of the first Great Awakening, in which our previously introduced Jonathan Edwards plays a great, emotional part, and leaves us with that famous sermon from 1741, “Sinners in the Hands of an Angry God.” Now in the early 18th Century, great transitions don’t play themselves out in secular ideology, as they will from 1776 to 1789 and on into the 19th century; instead they work within theology, and even there, more with the emotional style than the theological substance. There will be, however, major implications for attitudes towards existing authorities, as the old religious denominations find out immediately, as they sunder into Old and New Lights, and new denominations, and as the British Crown also finds out - decades later.

Return of the Repressed: The Puritan Jeremiad, 2004
And the classic jeremiad, what happens to it? Well, much as with fundamentalist religion, it doesn’t die out; it may get “displaced,” in the words of Mark Taylor in Confidence Games, but it re-emerges in different forms, similar functions, in many different eras of American history. And that’s close to the heart of the story in Morone’s Hellfire Nation as well. If my readers had any doubts that the form was still with us, let me direct them to Pat Robertson’s (yes, that Pat Robertson’s) book, The Ten Offenses, published in 2004. Here again, we have a catalog of sins (offenses), although reduced a bit from the 1679 Synod’s list of 12 (modest evidence against moral declension?); but what differs here, 325 years later, is that while there’s lots of individual sinning going on against the Ten Commandments, there are named villains at work, and one of the chief ones is the Supreme Court, along with “lesser federal courts” who are conducting a “vicious vendetta against all forms of public affirmation of faith in our nation.” (Page 11.) Just in case that language isn’t clear enough, a few pages later we see how “a tiny minority of so-called elite, secular liberals decided to make a sneak attack on the source of American greatness by using the courts to destroy our spiritual heritage.” (Page 16). And to clear up any confusion Christians (at least) might have from their early religious lessons about turning the other cheek (where did they ever get that notion?), Robertson says that so much is at stake in these court appointment fights that the next three are going “to be bitter and bloody. Ultra-left-wing groups like People for the American Way, National Abortion and Reproductive Rights Action League, the National Organization of Women, the ACLU, and the Gay-Lesbian Alliance will use every dirty trick imaginable to smear the reputation of conservative nominees to the Court…There needs to be no quarter and no compromise.” (Page 55).

Remarkably, Robertson’s jeremiad has at least enough self-consciousness to give brief notice to what would seem to be an obvious theological clash – and one I’ve prepared readers for with the themes of this essay – between the traditional jealous God of the First Commandment and the fact “that for too many American businessmen, capitalism has the stature of a god.” (Page 69.) It was the outcome of the Enrons and Worldcoms that brought Robertson to this place, but it gets just nine lines.

Just as Perry Miller tells us in his Epilogue that preachers like Jonathan Edwards are wondering how long it would take for sinners to reform - “Who could say that He would lengthen out His patience forever?” - in Pat Robertson’s own Epilogue we are scolded that “a righteous God will not hold back his judgement forever. A great nation can slowly be destroyed by pervasive moral decay.” That comes just after the section that calls attention to America as “the world’s largest debtor,” borrowing from foreign lenders and being dragged down by Social Security and Medicare costs. And remember, this is debt run up under George Bush, a “born again” President, before the demon-radical Obama has piled it up even further. Then follows another listing of the same liberal groups mentioned above, although the list is bolstered by another basic category, “Marxists,” without further clarification; they are all, “knowingly or unknowingly…hastening the destruction of the Untied States of America and the freedoms and lifestyle we all enjoy.” (Pages 203-204).

Robertson is no fool here. He really covers the bases as far as the potential means for meeting out divine justice. Financial retribution? Check. Moral Decay? Check. Natural disasters, like earthquakes, hurricanes and tornadoes, massive flooding, drought, disease, “even the impact of an asteroid?” Check. “Or God can raise up fierce enemies who delight only in destruction and death.” Does he mean Al-Qaeda? Apparently not here; the fierce enemies raised up are found in the sentence before the list mentioned above, the one that includes Marxists.

For secular observers, and perhaps even religious ones, there should be no small amount of attention paid to the basic revelation here: that list of sins that the Synod of 1679 draws up – without casting any particular group as demons - (it is the community of individual sinners at fault) is remarkably similar to the one drawn up by Pat Robertson 325 years or so later. But there is a grand problem looming for the liberal-demonizing Robertson: even as the list of sins runs neck-and-neck through the two very different ages, there was no liberal ideology or “movement” behind those same sins of 1679… they managed to emerge just fine…from well, what is it exactly? Human nature? And that’s where things turn ominous for us in the first decade of the 21st Century, perhaps as ominous as they did for “selected” women of Salem, Massachusetts at the end of the 17th.

Before listing a set of conventional sounding “What You Can Do” for the Religious Right, Robertson sketches a pretty fair outline for an incipient pogrom by casting the usual liberal suspects as a great, threatening Other: “If any normal homeowner found a group of people armed with jackhammers hacking away the foundations of his beloved home, the chances are he would do whatever was in his power to stop them. Yet for one hundred years the enemies of our national homeland have been pounding away at the moral and spiritual pillars that support our house.” (Page 204, my emphasis.) I don’t know if George Lakoff has read or commented on this book, but I would bet that he would think these are some pretty ominous metaphors. They seem to invite citizens, empowered by the gun ownership rights conveyed by the Second Amendment, to employ the obvious means at their disposal to stop the “enemies of the national homeland” from destroying “the foundations of (our) beloved homes.” But then again, they don’t literally say that, do they?

At the conclusion of this essay, we’re going to return to the themes suggested here, via the powerful moral dialectics left to our Hellfire Nation by the Puritan founders, including the legacy of Salem in 1692. But we’re going to be looking at them through the lens of the economic and religious fundamentalists of today, 2009, when the American nation is facing not some long-imagined, and still invoked, moral declension, but a measurable block of economic decline, international standing and very real and personal domestic economic pain - the largest dose since the Great Depression. How likely, after reading the above from Mr. Robertson, or listening to the ongoing secular jeremiads of Right Wing Radio, are the currents set loose by their preaching likely to stay within the channels of calls for individual moral reformation? For an answer, just ask the 6.3 million Americans currently in jail, on probation, or on parole. The Right may hate a powerful federal government, but as Morone points out, only an extraordinarily powerful government apparatus could have carried off those numbers. The millions of unemployed and underemployed and “dropped out of the workforce,” “lagging indicators” all, seem unlikely to witness any comparable mobilization on their behalf. I hope that what has been written so far helps explain why that is. But the story is not complete. To fill in the missing parts, we must go back to the powers “delegated” by the religious fundamentalists to the economic fundamentalists, and the chief interpreters of the Great God of the Market, our Wall Street investor bankers.

Despite the brief glimmer of remorse emitted from Mr. Robertson over the false god of capitalism, in truth the Religious Right wrote an enormous blank moral check to The Street, putting them, unsupervised, in charge of the political economy. (Let’s be clear: Democratic centrists like Bill Clinton, Robert Rubin and now Barack Obama, and their main economic appointees - a shared Goldman Sachs tradition? - have co-signed that blank check.) That means it’s time again to pick up one of the main threads of our story, with Karen Ho’s Liquated, where these augurs of the Market tell us in their own very secular words what they have been trying to do since 1980, and what values guided them. In light of the “deep background” we’ve just supplied from our other authors and findings, we will be better able to judge just what kind of good “stewards” they have been of our national economic interest in this age of globalization, especially when it comes to the crucial value of employment (crucial to this writer, at least). Our investment bankers will be speaking in their own words, names changed but proper institutions attached, via interviews conducted by Ms. Ho from February of 1998 to June of 1999. That is, they will be speaking from the vantage point of one of the epochal periods of Wall Street power and mystique, when the whole political world, Democrats as well as Republican, and indeed all of civil society, non-profits included, genuflected before the affirmations of the secular god of The Market. Ms. Ho provides what amounts to running commentary on the interviews, performing her anthropological work, but she also enriches us with the history of economic ideas and the unfolding of institutional practices, which are crucial to measuring the claims and values of what Wall Street thinks it is doing.

The Most Important Financial Development in Our Time
Let’s start with the basic question that Ms. Ho put to her former co-workers and colleagues: “What was the most important financial development in recent times?”
She summarizes the responses this way, and in the answers, another key term for us is introduced – “shareholder value.” Here’s the essence of it: “…the majority of them pointed to Wall Street’s role in the takeover movement of the 1980’s. This, in their view, was the pivotal event that aligned corporations to shareholder value. They spun a compelling narrative of how in the postwar era an elite, complacent, and self-serving managerial class squandered corporate resources extravagantly on themselves or on ill-advised expansions, and allowed foreign competition to overtake the United States in productivity, innovation and strategy.” (Page 130. My Emphasis.)

Let’s pay attention to the judgmental terms that are applied by our investment bankers here, for they are laden with echoes of that Protestant Ethic, shorn of its religious content, but nonetheless reminding us of that “terrifying gulf…which penetrated all social relations with its sharp brutality” which Max Weber told us separated the saved from the damned in the old Calvinist theology, a drama now played out in a power struggle between old and new versions – or is it visions? – of what capitalism should be. Here’s how Ho handles the heart of it:

My informants used the takeover movement as a historical cultural device, an ideological and temporal marker that enabled them to position themselves and their articulations of shareholder value in opposition to the ‘bad old days’ of managerial decadence and incompetence. ‘If you look back to the old days,’ Stan Clarke (in the investment management dept. at Merrill Lynch) told me, ‘all the companies were basically just fat, dumb, and stupid…now…you have to change…Back in the old days, wide town employment was a big thing. They didn’t ever hardly lay off. Nowadays, they have to lay off because shareholders say… ‘you have to cut out the fat. We want a lean, mean operation.’…Andrew Wong, an M&A (mergers and acquisitions) associate at Goldman Sachs, echoed Clark’s understanding. ‘Basically you {had} fat American corporations’ that were blindsided by Japanese competition in the early 1980s, particularly in the auto industry.’…Clark, Wong, and others contrasted the ‘dumb’ habits of American business before the 1980’s with the ‘smart’ meritocracies of Wall Street bankers, suggesting an almost eugenic blueprint for a society where only ‘the smartest’ survive. (Pages 130-131. My emphasis.)

It would seem here, that at the point at which only the “smartest survive,” we have a slightly softer version of the late 19th century’s “survival of the fittest,” where the Protestant Ethic met a particular interpretation of Darwin. Pursuing the Protestant Ethic theme a bit further into the values asserted in these interviews, one might go so far as to suggest, along the lines of Martin Luther’s criticism of the stale Catholicism of the very late Middle Ages, that here indeed was an old corporate world from the liberal sixties, comfortable in the New Deal compromises between labor and management, that was rife with “indulgent” abuses, if not indulgences, and ready to be shaken up by the very sharp elbows of “shareholder value and efficiency obsessed” (and profit-skimming obsessed) corporate raiders.

Shareholder Value Triumphant
To demonstrate how wide this gulf has become, looked at from a 2009 perspective, a perspective saturated at all levels of business (and political) understanding with the triumphalism of “shareholder value” as the master justification for the business “Reformation” of the 1980’s and 1990’s, consider how strange the following assertion sounds as it runs headlong into the current assumptions of Wall Street’s smartest: “In the social reality of today…shareholders are but one of several groups of people who stand in a special relationship to the corporation. The corporation is permanent, the shareholder is transitory. It might even be said without much exaggeration that the corporation is really socially and politically a priori whereas the shareholder’s position is derivative and exists only in contemplation of law.” (Page 124, Ho’s emphasis.) That remarkable quote, happens to be from the famous management consultant Peter Drucker, and the date is 1946 from his book The Concept of the Corporation. Ho calls the takeover movement of the 1980’s (and its subsequent softer euphemisms, like “mergers and acquisitions”) “perhaps the single most important set of events to stimulate the ‘liquidation’ of corporate America.” (And, as we will see, also “liquidate” the concept of employment within that corporate world.) Ho further quotes business economist Marina Whitman, who wrote in her book New World, New Rules (1999) that “this wave of mergers, acquisitions, and downsizings ‘tore asunder…the fragile reconciliation between the property and social-entity views of the corporation and its obligations.” (Page 133).

Ho, putting her anthropological skills to good use by recognizing “origin myths” when she hears them, says that Wall Street constructed a ‘freedom restoration narrative’ of what it was doing in the great wave of takeovers, in essence freeing the corporation from the hold the decadent managers had, in favor of the shareholders. It’s not as “disinterested” as it might sound. This narrative is “grounded in entrepreneurial private property rights for the purpose of enacting a particular social mission” which has the effect of producing “a fixation on…stock price” and “dramatically narrow(ing) the community of constituents that matter…by putting corporations ‘in play,’ proponents of shareholder value created a historically unprecedented environment where all the largest corporations were up for grabs to the highest stock-price bidder, thus forcing them to be immediately responsive to the exigencies of the stock market.” (Page 129.) Again quoting Marina Whitman, Ho zeroes in on the effects of the movement: “‘These takeovers created a ‘zero-sum game’, between shareholders who stood to gain and other stakeholders, such as employees, managers, suppliers, communities and often, creditors, who were generally losers in such transactions.’” (Page 130.). The scope of the movement is astounding. “Fully one-third of the Fortune 500 in 1980 no longer existed as independent entities in 1990. One-third of the 1990 Fortune 500 had been targets of hostile takeover bids; and two-thirds, fearing such overtures, had established antitakeover defenses.’”(Page 133.)

“Corporate Disciplining Through Debt”: The Safeway Lesson, 1986
It is difficult to convey the richness, and subtlety, of the flow between events and ideas that Ho covers in her Chapter called “Wall Street Historiographies and the Shareholder Value Revolution,” the third chapter in her book. Her account of the leveraged buyout “takeover” of the supermarket chain Safeway, in 1986, and which is still operating in the Maryland-DC area, is eye-opening and can serve as benchmark for what more broadly unfolded under the mergers and acquisitions movement and its shareholder value justification. In her telling, she is in turn relying on a Pulitzer-Prize-winning investigation by Susan Faludi. In this cautionary tale from the mid-1980’s we have a case of a corporate CEO, Safeway’s Peter Magowan, working with the famous/infamous firm of KKR (Kolhberg, Kravis and Roberts). Here are some of the gory details – gory for workers and their employment; glory for the inside players who reaped the highest rewards; and gory again for general taxpayers when they see the size of those rewards and the fact that it was done with so little capital put up by the folks at KKR themselves. Here is Ho relaying the story told by Faludi:

Although Magowan had assured his employees ‘no one would get hurt’ or lose their job, Safeway downsized sixty-three thousand workers and managers, ‘put whole divisions in Kansas, Oklahoma, Arkansas and Utah…on the auction block,’ severely reduced wages and benefits while increasing hours and performance standards, and slashed capital improvements by more than 50 percent…The investment banks who advised the takeover received $65 million in fees; the lawyers and accountants $25 million. Peter Magowan and other top Safeway executives ‘received $28 million for their shares’ as well as ‘options to buy a total of 10 percent of the new Safeway at only $2 a share. These shares at the time of resale ‘to the public’ four years later were valued at $12.125 a share and totaled more than $100 million. The five KKR partners, who invested only $2 million of their own capital, ‘received a 20 percent share of the eventual profits from any sale of Safeway’ estimated to be over $200 million. Finally, KKR and its investor group, on top of its deal fees of $60 million, took the rest, estimated around $700 million… (Pages 143-144.)

You can’t help but noticing, along with the blue-collar and mid-level manager bloodletting here, where the pain falls in terms of geography – and theology. Those are “heartland” states, a term this writer doesn’t like to use, and when he does, he usually stresses the irony of it. But at least three, and arguably all four (Utah), are Reaganland, and fundamentalist territory in terms of the conservative religious revival. And you can see then, just who gets stuck holding the bounced check after that blank check was issued to Wall Street. And as for the inside executives at Safeway and the KKR principals, they certainly would appreciate that early and shrewd eye for prosperity displayed by the successful Puritans of New England, and nod knowingly over the succinct phrase used to describe it in the jeremiads, where it was noted that “merchants, farmers, and shipbuilders increased ‘cent per cent.’” (Miller, From Colony to Province, Page 41), although, in truth, the benefits sound a bit more widely distributed in the 17th century than the fruits of the LBO Safeway “deal.”

Keeping in mind the choice adjectives employed by the investment bankers in their interviews with Ho about the signs of “corporate fat,” then we are startled to learn that just one year before the takeover, “Safeway posted record profits of $235 million” and she makes it clear that they were not standing still in terms of their own productivity and “efficiency,” a key term that we will talk about in more detail below. Ho makes sure we know that in the Safeway case, “as in many others, there was no evidence of global uncompetitiveness, technological distress, or lack of profitability.” And, for a crowning irony in terms of the arguments of this essay, we learn at the end of the Safeway saga, that it was a company “whose ‘first store had been opened by a clergyman who wanted to help his parishioners save money’ and whose longtime corporate motto had been ‘Safeway Offers Security…’ That has now evolved, if that is the right term, into “a plaque in the lobby at corporate headquarters,” which “reads in part: ‘Targeted Returns on Current Investment.’” (Page 144.)

As is made explicit in the Safeway example by the huge amounts of borrowed money KKR needed to pull off the acquisition, Ho eases us into the concept of corporate “disciplining through debt” which “was popularized and widely accepted by the business community in the 1980’s.” And readers attentive to the themes and title of this essay will appreciate the application of the sterner attributes of that divinity called “The Market” when applied to techniques to pay off that corporate debt. (And the political corollary of which will be “sacrificing” by slicing Social Security and Medicare “entitlements” to pay off the governmental deficits and debt so recently run-up by bailing out various failed private entities.) Ho isn’t quite buying the concept at face value though. In good post-modern terminology style, she tells us “what was rendered invisible by this discourse was that this debt was a mechanism through which corporate wealth was transferred from the multiple stakeholders of a corporation to a small number of owners.” (Page 146). And how. We’ve just learned from Tony Judt’s fascinating article in the December 17, 2009 edition of The New York Review of Books (“What is Living and What is Dead in Social Democracy?”) that the United States’ “Gini co-efficient – a measure of the distance separating rich and poor – is comparable to that of China.” My personal thanks, and that of a grateful nation, I’m certain, to Bill Clinton and Bob Rubin for this notable achievement – achievement for the Chinese, that is.

Judgements Are In on Corporate Takeovers
It so happens that these sacrifices “we’ve” been making to get to this Gini Equivalency moment through the “disciplining of debt” have been justified (rationalized?), in nearly the same breath as “shareholder value’ has been uttered, by the accompanying goal of greater “efficiency.” Sure, it might have made a few CEO’s and dealmakers on Wall Street extra comfortable, but they were all doing it for the greater efficiency of the US economy. This is what Ho hears constantly from her interviews on The Street, although there is mounting evidence that a lot of these mergers run into big problems after the deals are done – wrecking havoc with even the holy grail of the whole effort – the stock prices of the “shareholder value” theory. Ho acknowledges that these changes occurring in Wall Street and then American business practices are not happening in a vacuum; they are happening simultaneously with changes in economic ideas in academe. So my readers should know about one of the important publications from the middle of those tumultuous 1970’s – the appearance of Arthur Okun’s Equality and Efficiency: The Big Trade-Off, published by none other than Brookings Institution Press, in 1975. As Richard Parker tells us in that seminal chapter of his – “The Great Unraveling,” in his biography of Galbraith, Okun’s book speaks for “chastened mainstream Keynesians” warning “Americans to face up to the ‘big trade-off,’” with most of these economists coming down hard “on the side of ‘efficiency.’” (Parker, Page 553.) Parker observes dryly in a footnote that “Okun later insisted that the dichotomy was a false one.”

The high theory of this “disciplining through debt” hopes that after all the paperwork of the merging and acquiring, raiding and trading is done, the surplus squeezed out from the alleged “fat” turns into good, solid capital that can be employed where it will generate a higher return for “shareholders,” but also hopefully for the entire nation (assuming those shareholders are still located in the home nation, an assumption increasingly at odds with the world these trends are constructing.) So now let’s get to the rendering of some judgements here on the executioners themselves, who have been so mightily involved in rendering judgements upon all those minor corporate players – the employees, middle managers, R &D departments…and so forth.

Proponents of the economic benefits of shareholder value constantly face not only declining stock prices in the long term but also declining corporate performance on multiple other fronts. As for the aftermath of the 1980’s, the discipline of debt turned into the punishment of default, as many companies not only failed to keep up their junk bond payments, but also the debt that financed these buyouts did not fund investments in new productive assets nor improve ‘efficiency,’ but were merely ‘transfers of value away from other claimants on enterprises’ existing cash flows…(Mary) O’Sullivan reaches stark conclusions about the consequences of the takeover movement of the 1980’s: there is a ‘striking dearth of unambiguous evidence to support the shareholder value theory; shareholder value is not beneficial for corporate efficiency or employee productivity; and the central assumption that shareholder wealth is an adequate measure or ‘proxy for corporate performance’ is wrong…The conclusion in the aftermath of the M&A boom and bust in the 1990’s is the same. (Page 156. Editors note: Mary Sullivan is the author of Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany, Oxford Univ. Press, 2000).
When Goldman Sachs Advised Daimler-Benz, 1998
After reading the above from Ms. Ho it is then strikingly incongruent to come across accounts in the business press, and business pages of respected papers about contemporary M&A deals. The deals themselves, the big numbers, the advisors, the synergies are all the word, the not-so-great historical record recited above seems to just disappear down that great hole of American memory. But we shouldn’t be surprised. Ho reminds us of another “marriage in heaven” from the hottest of M&A years, 1998, which she said had all of her contacts abuzz with the transatlantic difficulties and wonderful synergies looming. She is referring to that now infamous merger of Daimler-Benz with Chrysler, which turned out, “less than two years later” to be called “a nightmare.” The truly delicious edge to the recollection of it, however, comes from the additional sharpening provided by a key player of the events of 2008-2009, none other than Goldman Sachs itself, who was the advisor to Daimler-Benz back in 1998. We should know by now better than to weep premature tears for Goldman, as Matt Taibbi has taught us, for even though this deal turned rancid, Goldman did very well in fees in putting it together, and then…you can probably guess where this is going by now if you know your Goldman aura - here’s how Ho says it turned out: “For the first six years of the millennium, DaimlerChrysler experienced losses. Volatility, downsizings, spin-offs, plant closings, and continual crises, and by 2007, its largest shareholders urged the company to eliminate ‘Chrysler’ from its name…and to sell off Chrysler, which it did with the assistance of J.P. Morgan…Ironically, in 2007, Goldman Sachs…advised Cerberus Capital Management, a private equity firm, in its buying of Chrysler from Daimler-Chrysler for $7.4 billion.” (Ho, Pages 154-155). So maybe, in light of this, Matt Taibbi wasn’t exaggerating so much this past summer in Rolling Stone with his metaphor of Goldman as a giant vampire squid with its funnel thrust next to, if not humanity’s heart, then at both ends - the merging and de-merging - of a deal gone very sour…making ample fees, disaster or not.

Entrepreneurs Now: “How Will I Cash Out?”
And so Karen Ho asks: “How did we get to the point where corporations have shifted from complex, bureaucratic, social firms into liquid networks of share holders? What are the implications for ‘traditional constituents’ of the corporations such as ‘the worker’ if corporations are now conceptualized as components of individual and institutional stock portfolios governed by an ideology of instant liquidity and convertibility into cash?” (Page 125.) Our concern is to try to understand the economic values which have brought us as a nation to this inegalitarian moment, and the massive trade imbalance, and what surely looks like a classic “declining empire” period for our nation. If what we were talking about was limited to just reforming Wall Street, that would be tough enough, as we are finding out in the saga of its continuing hold on Washington in centrist President Obama’s first year. But Wall Street had taken on an importance it didn’t have for corporate America in the 1960’s, when there was also a major “conglomeration” movement which peaked in activity in 1969. While Wall Street was cheerleading this phenomenon and profiting from it, that movement did not result in the infamous downsizings that came with similar ones in the 1980’s and 1990’s, when stock price effects via “shareholder value” became a much more dominant driver. (Ho, Pages 134-135.) What is of broader concern for us now though, is the spread of the Wall Street ethos of short-termism, of having no plans beyond being eager to ride the next new wave, and the acceptance, if not eager embrace, of rampant employee insecurity.
Two glimpses into these spreading habits caught my attention from this insightful third chapter of Ho’s, “Wall Street Historiographies.” One comes from Randy Komisar, “a former ‘virtual CEO’” active in Silicon Valley. “Describing how entrepreneurs ‘pitch ideas’ to venture capitalists (the Silicon Valley parallels of New York City investment bankers and private equity firms), Komisar states ‘People walk into a VC (venture capitalist) presentation and their first line is about exit strategy. They’re not talking about the investors – they’re talking about themselves. How will they cash out? These founders don’t think of themselves as CEOs of operating companies. They think of themselves as investors.’” (Page 124.) Fortune writer Jerry Useem is cited as picking up a similar theme: “modern entrepreneurs eschew ‘building sustainable companies with long-term economic value,’ instead ‘pumping a concept,’flipping’ it to an acquirer, then hopping to the next hot opportunity like a day trader riding momentum stocks.’” (Page 125). That almost sounds like a series of synonyms for “instant gratification,” but it couldn’t be, could it? The religious partners in this fundamentalist alliance surely would have raised some type of alarm over the past 30 years, wouldn’t they?

Is it any wonder that employment is not high on the list of pressing concerns of the Wall Street that emerged since the mid-1970’s? Ho observes that “what is clearly unique about Wall Street’s shareholder value perspective is that employment is thought to be outside the concern of public corporations. Job loss was certainly a sad event, but beyond the responsibility of corporate America.” (Page 128). Richard Sennett, whose work Ho refers to several times, puts the cumulative “downsizings” “from 1980 to 1995 from a low count of 13 million to as high as 39 million.” (The Corrosion of Character: The Personal Consequences of Work in the New Capitalism, 1998, Page 49.) Those figures include the carnage resulting from a wide range of business euphemisms, from the raiding, takeovers and M & A’s of Ho’s work to the “delayering,” “vertical disaggregation” and “reengineering” that Sennett ably delves into, where the focus is more on the structural changes inside the corporation rather than the values and practices at investment banks that have driven the broader trends.

Mergers and Acquisitions Today
So how are we doing in 2009 with takeovers, and M&A’s? Usually when I read about them in the major dailies or business press, the coverage is like a traffic report: that’s what happens to companies, they get meshed (and mashed), and the story is no more out- of-the-ordinary than hearing that there are delays on the Beltway due to another crash. What happens to the workers is usually not mentioned in the brief initial coverage, but by now, it’s almost a given that there will be significant job losses. If anyone comes across an announcement that claims new jobs will be created from the act of merger, of whatever particular variant, please send it along to me. But without looking for anything special, I came across two recent New York Times accounts that are not so matter-of-fact, and tend to support Karen Ho’s ominous findings.

Simmons Bedding: All Cashed Out
The first is a classic “disciplining through debt” story, which appeared on October 5, 2009, by Julie Creswell, about the fate of the well known Simmons Bedding Company, maker of the famous mattresses. Since this is a tale of how private equity firms climb the profit curve by burying their acquired companies under mountains of new debt, we can only hope some reporters file it for future reference in anticipation of Mitt Romney’s next run for the Presidency, he being a private equity star himself. But here it is in a nutshell: poor Simmons has been bought and sold seven times in the past 20 years, and is headed for bankruptcy. Creswell writes that at “every step along the way, the various buyers put Simmons deeper into debt. The financiers borrowed more and more money to pay ever higher prices for the company, enabling each previous owner to cash out profitably.” But the Great Recession has revenue plunging, and Simmons has $1.3 billion in debt, “compared with just $164 million in 1991, when it began to become a Wall Street version of ‘Flip this House.’” Although we don’t get a comprehensive picture of how many people worked at Simmons prior to its self-destructive dance with the private equity firms, we do learn that they laid off 1,000 in 2008, 25% of the workforce, so that there were around 4,000 employees heading into this nosedive. But we do learn that the private equity firms “have made around $750 million in profits from Simmons over the years,” and that “Wall Street Investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible.” We also hear, from a former Simmons President, Robert Hellyer, that “‘From my experience, none of the private equity firms were building a brand for the future…’” Cumulative statistics on jobs shed by the private equity firms in “the greatest burst of corporate takeovers the world has ever seen” are missing in this article, but not the picture of how the great debt load has worked out for the companies themselves, a picture which supports the findings we have highlighted from Karen Ho: “A disproportionate number of the companies that were acquired during that frenzy are now struggling with the enormous debts. More than half of the roughly 220 companies that have defaulted on their debt in some form this year were either owned at one time or are still controlled by private equity firms, according to analysts at Standard & Poor’s.” At http://www.nytimes.com/2009/10/05/business/economy/05simmons.html

Hewlett-Packard Squeezes E.D.S.
Another article, this one by Ashlee Vance in the September 23, 2009 Business Section of The New York Times about the acquisition of Electronic Data Systems (E.D.S.) by Hewlett-Packard (H.P.) in August of 2008, doesn’t mince any words as far as the casualty list for workers, both the body count and the psychic costs. (“Consuming E.D.S.” at http://www.nytimes.com/2009/09/23/technology/business-computing/23hewlet...); {Editors Note: the print edition title of the article is the one I’ve cited: the one given the online story is the much softer: “H.P.’s Bet in Buying E.D.S Seems Like A Winner.”} So how bad was it for the newly acquired workers at E.D.S? “Led by a master cost-cutter, Mark V. Hurd, H.P. laid off 25,000 E.D.S. workers and cut the salaries of some by more than 20 percent. Mr. Hurd even stripped the E.D.S. brass of their plush offices and corralled them into 6-by-6 foot cubicles.”

Now where in the world would the nice cost-cutters at Hewlett-Packer get an idea for a prison-cell size office like that? Somehow, that 6’ x 6’ figure rang a bell with me – but from where? Sure enough, it was swimming in the ocean of Wall Street details that came with Karen Ho’s Liquidated. I spotted it, bobbing appropriately enough, in a section in Chapter Two entitled “The White-Collar Sweatshop,” where Ho is reminding us of the “austere white-collar factory” physical settings for most of the line employees at the investment banks. Certainly, that’s not the office setting for the senior people, nor where business deals are “nurtured,” but it’s a reminder of the old traces of the worldly denial from the early days of the Protestant Ethic, with those daily physical settings in stark contradiction to the scale of the bonuses and the share of national income devoured by these banks. Here’s Ho’s take on the outlook from a “spatial planner” at an investment bank:

Louise Walters, a white vice president of Facilities and Building Services at Salomon Smith Barney, vividly describes these work environments…about five years or so ago, we densified the operation. We went from every employee had nothing less than a six-by-eight position, which was our work module; then we went to a six-by-six to get more people in less space – part of the cost-control thing. I remember walking down this long row of seats that we had crammed together. Six-by-six is not a lot of room…basically, there was this long row of low gray work positions. I saw this Princeton mug, class of whatever. And, I was thinking about the sort of psychological process of going through what it takes to get into Princeton today…the sense of accomplishment…the best of the best…and here he wound up with a six-by-six module…(Ho, Pages 83-84).

Now I don’t know how it will strike my readers, but for me, if I were such an Ivy league grad, which I’m not, spending my days in such a physical setting, I would be pretty tough, even if only at the edge of deliberations, on any signs of “fat,” or luxuriousness
displayed by the objects of take-over and M & A desire, precisely what pops out at us in this “Consuming E.D.S” account. Let’s go back to that article to pick up this line of thought. The reporter tells us that “H.P. executives concede that the company’s aggressive pruning comes with costs, as workers fret about their futures and the overall business endures some disruption.” But here’s the connection to Ho’s finding and my take on the underlying “punishing Protestantism” carried into the business realm: “When H.P. announced its intent to buy E.D.S. in May 2008, H.P.’s share price sank. E.D.S. had developed a reputation as a bloated has-been that had burned investors in the past through bad deals, accounting issues and an overreliance on services contracts with the government and automakers.” Talk about bloating and corporate decadence – what could be worse than reliance on government and auto-makers contracts? – maybe the only thing worse would have been a contract with the UAW itself. But the deal is described as working out well for H.P., if not the E.D.S. employees, because H.P. now has an electronic service sector buffer against hard times in the market for computers and printers. So in the search for greater synergy and efficiency, what are the careers of 25,000 workers and the hurt feelings of executives sardined into 6’ x 6’ cubicles? They shouldn’t take it personally, after all. It’s just the wrath of a righteous “Market” when it discovers a company like E.D.S. looking like it fits the profile of a bloated bureaucracy from the pre-shareholder value days of the 1960’s and 1970’s. Trim that fat; mend thy ways, so that the shareholders may be “born again.”

“Consolidations” Are No Consolation: Stanley Works and Black & Decker
In early November, 2009, there was a flurry of press accounts about the sale of Black & Decker, a Towson, Maryland-based power-tool company, to the smaller, but wealthier Stanley Works of New Britain, Connecticut, also a famous tool-maker, for $4.5 billion dollars in what was described as “an ‘all-stock transaction.’” That was the take in the Hartford, Connecticut paper The Courant, which was pleased that for once jobs were headed north instead of south. There was an admission of “consolidations” (a euphemism for layoffs), but no details on what that meant. (“Stanley Works Merger is New Britain’s Gain,” November 8, 2009). Meanwhile, to the “south,” the Baltimore Business Journal was writing a “classic” article of the “mergers & acquisitions” genre: “‘It had nothing to do with the current economic condition,’ Nolan D. Archibald, Black & Decker’s…chairman and chief executive told analysts. ‘Both companies had a very bright future on a stand alone basis.’” (“Black & Decker, Stanley Works CEOs say deal driven by synergy, not recession,” by Gary Haber, November, 2009.) So what’s the real driver, then, given that significant observation? How do such stories continue, most of the time, to be reported in this vein, rather than ringed with skepticism, as in the two we just covered, and given Ho’s powerful summaries that this usually Wall Street driven corporate compulsion often fails to deliver, even on Wall’s Street’s own terms?

Well, there is the promised cost savings of $350 million per year, including $95 million from eliminating one of the headquarters (unfortunately for Maryland, Black & Decker’s in Towson). And then there is, in the words of Black & Decker’s Archibald, the grand fact that “‘the more we talked, the more we realized the significant shareholder value that could be created.’” (My emphasis.) However, it is not until the very curious reader gets to the Wall Street Journal version of the deal that we learn what usually goes right along with that increment to the shareholders. Reporters Jeffrey McCracken and Keith Johnson tells us that “Mr. Lundgren (John F. Lundgren, Stanley’s Chairman and CEO) acknowledged the merger would likely mean thousands of job cuts, especially in the corporate staffs and areas like purchasing and warehouses that serve the same region. He said he hoped the job cuts would total fewer than 4,000” in a combined entity with 40,000 total employees. (“Stanley, Black & Decker in Deal,” November 3, 2009.) Now that certainly was good news heading into the holiday season: just 10% of the total workforce gone. And who was doing the advising and collecting the fees for it in this deal? According to accounts in both the Wall Street Journal and the New York Times, Deutsche Bank and Goldman Sachs were the advisors for Stanley, and J.P. Morgan for Black & Decker. And the scale of it? According to Michel Corkerry of the WSJ, Morgan Stanley is the leader in total value for M & A in 2009, with $523 billion, with Goldman Sachs placing second. (“Goldman Gains on Morgan Stanley in M & A Rankings,” November 3, 2009).

The New Capitalism and The Old Values
Karen Ho’s Liquidated has described in detail the work practices and values of Wall Street, and has shown how its power has grown as the chief interpreter of “The Market,”and as a major supplier of capital – and values - to corporations in a way that wasn’t true during the reign of corporate liberalism, 1945-1973. She has stressed the no planning, short-termism and radical job insecurity which characterize the contemporary Wall Street era with its grand justification of increasing “shareholder value.” On pages 246-247, Ho pays recognition to the work of Richard Sennett in his books The Corrosion of Character: The Personal Consequences of Work in the New Capitalism (1998) and The Culture of the New Capitalism (2006) which share some of her main themes. Their focus is directed, however, to how changes in the form of corporate organization and its values, driven by Wall Street’s “impatient capital,” impact the employees in the middle and at the bottom of today’s leading businesses. (Editors Note: Sennett expanded the materials of The Corrosion of Character into the Castle Lectures in Ethics, Politics and Economics at Yale in 2004, and published them in 2006 as The Culture of the New Capitalism.)

Sennett’s work is important because he compiles, through many personal interviews, the cumulative evidence of the damage the new corporate values wreak upon what’s left of the best part of the Protestant Ethic. That ethic once gave stability and guidance to individuals patiently constructing careers through the more bureaucratic structures of the older corporate forms, and their accompanying unions. He points out that the old ethic of hard-work and delayed gratification could exact a substantial price – the driven worker – who could not relax, let go and enjoy life even after obvious achievements. And he fills in, from Weber’s extensive work beyond the bounds of The Protestant Ethic and the Spirit of Capitalism from which we drew, the price paid for the ethos of rationality and all its bureaucratic manifestations in the military, the government and the large corporate forms which emerged towards the end of the 19th century. Sennett acknowledges Weber’s cry against the “iron cage” which emerges so suddenly at the end of his The Protestant Ethic, but points out that what was, in many senses, a vast prison of large bureaucratic organizations, was also a “psychological” home. And that secure home allowed individuals, such as working class folks from Boston in the 1945-1980 period, to save and work within career “narratives” that offered predictability and long term rewards, and steady, modest upward mobility. A long interview with the son of one of these working class families, job hopping and moving constantly as a consultant, with a great deal of insecurity and strain for himself and his family, despite his good education, offers a pointed contrast in the trade-offs between the two economic eras. Sennett, whose writing has improved greatly since my last encounter with his daunting The Fall of Public Man (and which was criticized in Russell Jacoby’s The Last Intellectuals, 1987) has a broad vista on these great changes, and the mixed blessings and curses that each era has visited upon those caught up in them, but he seems to side emotionally with the era that has passed, even while acknowledging the great productive forces unleashed by the “new capitalism.”

The Old Capitalism: Security and Predictability
He recognizes that the slower, more bureaucratic organization style still is the one that encompasses most of the American work force, but his focus is on the leading wedge of those corporate models that now dominate in business schools, the popular press, and perhaps most importantly, inside the heads of public policy making officials, elected and otherwise. “Bureaucracy” has become, in the age of Market Utopianism, the great whipping boy, the pejorative “other,” nearly synonymous with the contempt felt for “government,” and therefore the target of entrepreneurs, the Republican Right, and business Democrats. Sennett reminds us that in late 19th century Germany bureaucracy emerged, public and private, as the means to add systemic stability to the boom and bust cycles of the capitalism of its era. He points out that in that context, Bismarck also smiled upon it “for the sake of peace and the prevention of revolution. No matter how poor he may be, the worker who knows he has an established position is less likely to revolt than the worker who can’t make any sense of his or her position in society. This was the founding politics of what can be called social capitalism.” (The Culture, Page 21.)

The new model capitalism is one where “de-layering” is the goal, which means keeping as few employees as possible between top management (and its scary, all-seeing software tools, like SIMS) and the teams which actually are working on intellectual or physical products, with as much of that work as possible being done by contingent employees: short term contracts, temps, and outside contracts. There is tremendous emphasis placed on being a team player, being able to get along with anyone, and being able to shift focus quickly to a new problem or product. This turns out to be to the great detriment, Sennett feels, of the concept of craftsmanship, which he defines as “doing something well for its own sake. Self-discipline and self-criticism adhere in all domains of craftsmanship; standards matter, and the pursuit of quality ideally becomes an end in itself.” (The Culture, Page 104.) Obviously craftsmanship in this sense isn’t built up quickly, it does dependent on long experience, so it runs head-on into the dominant attitude being cultivated inside these new model firms: “the head of a dynamic company recently asserted that no one owns their place in her organization, that past service in particular earns no employee a guaranteed place.” (Ibid, Page 4.)

It would seem that we have now reached the full extension of the economic work spectrum, taking as our starting point the craft guilds of the Middle Ages, those that the new capitalism of the early Protestant era worked to free itself from, guilds built upon something close to Sennett’s definition of “craftsmanship,” and proceeding to “now,” where if there is any sense of craftsmanship in physical products, it is being supplied by quality control robots and Japanese applications of the spirit, and the methods of W. Edwards Deming (not quite the same thing, but it will have to do.)

The “New Market Man”
And that brings us to Sennett’s scorching take on the search “for this ideal man or woman” of the New Capitalism: “A self oriented to the short term, focused on potential ability, willing to abandon past experience is – to put a kindly face on the matter – an unusual sort of human being. Most people are not like this; they need a sustaining life narrative, they take pride in being good at something specific, and they value the experiences they’ve lived through. The cultural ideal required in new institutions thus damages many of the people who inhabit them.” (Ibid, Page 5.) Sennett has taken these trends to their powerful and logical conclusion, the same one I’ve reached after reading far too much of Thomas Friedman’s delineations of what the nature of work, and workers, ought to be under the New Capitalism. I’ve written, and stated in some public forums, that what Friedman (it leaps up at the reader, especially from the pages of The Lexus and The Olive Tree and The World is Flat), is really calling for in his demands made upon workers for a lifetime of learning, flexibility and job insecurity – is really an equally mythical late capitalist version of the old “New Soviet Man” from the first decades of the Russian Revolution; let us now call him or her the “New Market Man.”

Fragmented Institutions, Fragmented Lives
Some are doing well in these new corporate forms, at least financially, although after reading Karen Ho, one has to wonder at the psychological costs even for those at the very top. It is those at the summit of firms, and those with special technical skills (which also obsolete faster and faster), who Sennett says are coping the best. For the middle, and lower rungs, though, it’s exacting an enormous toll. Although he pays close attention to the negative impacts on the work ethic, and notes the turning inward of displaced IBM programmers after the great downsizings of the 1990’s, to fundamentalist and evangelical churches, he does seem to overlook the great incongruity between the march of these short term, “instant gratification” business strategies and the long-standing personal ethical values at the heart of fundamentalist religions - and therefore, one would think, at the heart of the increasingly “miraculous” coalition between fundamentalist religion and fundamentalist economics. Or perhaps it just strikes this writer as glaringly incongruous: “The fragmenting of big institutions has left many people’s lives in a fragmented state: the places they work more resembling train stations than villages, as family life is disoriented by the demands of work. Migration is the icon of the global age, moving on rather than settling in. Taking institutions apart has not produced more community.” (The Culture, Page 2.)

One of the most powerful chapters on the implications of these changes occurs about mid-way into The Culture of the New Capitalism. It’s called “Talent and the Specter of Uselessness,” and it’s the “uselessness” that looms the largest for a reader in 2009. Sennett says that three forces “shape the specter of uselessness as a modern threat: the global labor supply, automation, and the management of ageing.” (Culture, Page 86.) On automation, I’m glad to see the open recognition of the horror that the “economic machine may be able to run profitably and efficiently by drawing on an ever-smaller elite.” And I’m glad that he gives Jeremy Rifkin’s 1994 book The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era a good plug: it was more clear-eyed about the power of automation to evaporate jobs at an increasing rate – through nearly all facets of economic life – than many economists could face up to – in either its earlier or later (2004) versions. And the automation section in The Culture of the New Capitalism offers us some of Sennett’s best insights and best writing.

Automation…has affected the bureaucratic pyramid in one profound way: the base of an institution no longer needs to be big…savings can be effected by management aiming to cut out the functional layers at the bottom – an institutional army in which the privates are circuits. Such technological capacity means that inclusion of the masses – the social element of social capitalism – can wither. Just the most vulnerable members of society, those with the desire to work but without specialized human skills, are likely to be left out…As Bismarck was the first to recognize, however, business growth generates social dislocation and unrest, threats which can be addressed by spreading out the employment base. To create jobs for all in this old way now is to defy or ignore modern technological power. (Ibid, Pages 43-44).

The Specter of “Uselessness”
Sennett’s passages on ageing are, similarly, too painfully true to be accepted by mainstream political culture: those middle-aged, experienced workers, are more and more costly, since everyone now must update their obsolete skills more frequently due to the nature and pace of technological change – so it is frankly just a better “shareholder value” move for management to hire younger workers who have gotten those skills “free” through recent schooling. And the younger workers will have none of the hang-ups of craftsmanship-inclined older workers, or the growing, almost generic inflexibility of those burdensome realities known as “family obligations.” Both of Sennett’s books have their most powerful passages written around this theme of “Uselessness.” But it is more sharply burned into the pages, and reader’s mind, from the first one – The Corrosion of Character. Here’s the passion from the last chapter, and pay close attention to the concluding sentence, which is one of the most powerful challenges to the economic system I’ve encountered in any of my readings – to the system which led the world to the edge of the abyss in the fall of 2008:

‘Who needs me”’ is a question of character which suffers a radical challenge in modern capitalism. The system radiates indifference. It does so in terms of the outcomes of human striving, as in winner-take-all markets, where there is little connection between risk and reward. It radiates indifference in the organization of the absence of trust, where there is no reason to be needed. And it does so through reengineering of institutions in which people are treated as disposable. Such practices obviously and brutally diminish the sense of mattering as a person, of being necessary to others…I do know a regime which provides human beings no deep reasons to care about one another cannot long preserve its legitimacy. (The Corrosion of Character, Pages 146, 148.)

If Only…We Could All Become Entrepreneurs…
It is hard to read these two works by Richard Sennett and not conclude that the American societal response to the social dislocations and unemployment problems generated by the new capitalism has been vastly inadequate. And pay attention to the date of Sennett’s Corrosion of Character: published in 1998, at the height of the 1990’s Clinton economic “heyday,” which was as good as it got (and gets?) under those arrangements. We are now a society built around the worship of the entrepreneur, and how to entice their co-operation on reducing unemployment, rather than designing job programs that meet the needs of our citizens at least “half-way.” By that I mean that public policy and the political response to the economic turmoil since 1973 has been centered on shifting the responsibility nearly entirely upon the shoulders of the displaced: they must re-locate and retrain, and bring to the job market the skills they hope are still in need by the time they finish re-inventing themselves. The entrepreneurs, lavished with the benefits of all forms of deregulation and tax breaks (personal, corporate, estate, and for “urban enterprise zones,” the New Capitalism’s version of a skeleton-like “Marshall Program for urban America), have had any reasonable definition of fair-share burdens for the “useless” lifted from their sense of obligation. And that would be not only for the middle class mid-level managers that have been “delayered,” and the blue collar workers at the bottom of the pyramid, but also for the fate of those isolated in the urban ghettos from the mid-sixties on. Sometimes it seems as if the goal of public policy from both parties is to have everyone become an entrepreneur – that would solve many of our problems very nicely, and do away with further substantial government expenses, it would seem. Sennett is a very cruel man, however, towards these hopes. He reminds us that even in “the modern labor market, most people work for someone else. The new order has not erased that brute fact of dependence; the rate of full-time self-employment in the United States…has held steady at about 8.5 percent for the last forty years.” One never would have guessed that by listening to what passes for social policy and economic debate in Congress. Or, I might add, with the O’Malley administration here in Maryland. (The Corrosion of Character…Page 141. My emphasis.)

The Banishment of Van Jones
The mythology of the entrepreneurs, and the homage paid to them is so great that it leads to homilies like this one, from someone hoping for a “Green New Deal,” one that seems further and further away from the actual curve of events in December, 2009: “…we are entering an era during which our very survival will demand invention and innovation on a scale never before seen in the history of human civilization. Only the business community has the requisite skills, experience, and capital to meet that need. On that score, neither government nor the nonprofit and voluntary sectors can compete, not even remotely. So in the end, our success and survival as a species are largely and directly tied to the new eco-entrepreneurs…” So who is being quoted here - George Gilder, Jack Kemp, or Thomas Friedman, you might reasonably ask? Well, if they were your choices you would be quite wrong. The quote is from none other than banished bad-boy Van Jones himself, from page 92 of his 2008 book The Green Collar Economy. Yes, that’s right, despite the praise pouring out upon the green entrepreneurs from his section “The New Coalition” (Pages 89-94), and the accolades on the back cover from Al Gore, Leonardo DiCaprio (can it get any loftier?) , The Washington Post and Thomas Friedman himself, none of it, nor the rest of the fairly tame ideological material within the book was enough to placate the snarling bloodhounds of the American Right, who, from everything I’ve read or heard from them in the summer of 2009, never mentioned this aspect of his book. According to Doug Henwood in his September 25, 2009 issue of Left Business Observer, poor Mr. Jones couldn’t be saved from the “baying mob led by Glenn Beck” even though “his friend and former employer, Eva Paterson, director of the Equal Justice Society” saw Van Jones as someone “who had left behind his Maoist Past” (with a group in San Diego called STORM) and who had turned into “‘the Green’ Jack Kemp – urging business-based solutions to attack poverty.” (Pages 1&3.) Readers will recall that in previous essays we cited the radical red background of an American conservative movement lion - Irving Kristol - a former Trotskyite - according to Kim Phillips-Fein. Such a past was forgiven him, and for quite a number of others who did an ideological 180 degree turn from their 1930’s views as years went by. But no such luck for Van Jones, despite all the contrary evidence in his book and the life he had apparently led since his STORM days, according to Henwood and others. This writer thinks that Van’s problem may have been that he executed only a 90 degree turn, which would not be enough to please the Right. (He was accused also of mocking public comments about conservative Republicans, and signing petitions on behalf of allegedly wild 9/11 conspiracy theories…and for freeing a long-controversial black prison inmate.)

The Ghetto Comes to the “Heartland”
So the American urban poor, rather than being greeted by a conservative Bismarckian policy, or an urban “Marshall Plan,” (or, most recently, as Van Jones put it, “a Green New Deal”) were instead subject to the “Great Incarceration” so provocatively outlined by James Morone in his Hellfire Nation. Instead of being part of a broad social and economic problem caused by too few jobs in a rapidly changing economic system, the urban poor were subsumed under crime, welfare and family pathology headings, becoming inseparably intertwined with the worst ghosts of America’s racial past, and ending up in the punishment corner as the thoroughly demonized “others.” For example, if one were to come across the following passage: “Players for Medora High School have taken the court wearing work boots because their families cannot afford basketball shoes. Most smoke cigarettes. Some talk openly of drug use. All but a few come from broken homes,” the 2009 American reader might reasonably assume that Medora is a school in one of the more obscure urban ghettoes – maybe in Camden, NJ, say, or West Baltimore, or maybe part of the south-side of Chicago. But in fact, that is the opening passage of a November, 2009 article from the New York Times sports page about a basketball coach in the rural “heartland” of Indiana. Medora, struggling with the same tales of personal and social collapse as could be found in any urban ghetto, circa 1970-2000, might just possibly suggest a broader, “shared origin of great economic dislocation,” rather than the alleged “bad character” causations pinned on the poor by the forces behind the Great Incarceration. But now, however, the American middle class, not just the blue collar workers, and aging workers from all shades of our diverse society are finding that they have become as disposable as those Others, the urban poor. It’s a reminder of not only where we are in 2009, but also how we’ve so badly mangled such economic problems before, decade by decade, 1970’s, 1980’s, 1990’s, all decade sized steps on the down escalator to 2008-2009. (See John Branch’s full eye-opening article, “In Rural Indiana Town, Even Basketball Suffers,” at http://www.nytimes.com/2009/11/28/sports/28medora.html )

What is “Conservative” About the Right’s “Universal Project?”
It is into the vast social and economic chasm that exists between today’s world, ushered in by 40 years of growth under the “The New Capitalism,” and the old world of Social Capitalism, to use Richard Sennett’s term, that we now venture. We go forth from the vantage point of December, 2009: that is, from the state of the health care debate and the shape of the looming bill, the faux outcome from the Copenhagen climate disaster, the unsolved foreclosure crisis and the disappointing and wholly inadequate jobs response conveyed to the nation by President Obama in his speech at Brookings on December 8th, 2009, where it became very clear that the President is ideologically opposed to the creation of public jobs to meet the great private employment deficit. From this vantage point it is very clear that “here in the United States we have such difficulty even imagining a different sort of society from the one whose dysfunctions and inequalities trouble us so…” Those are the words of Tony Judt, writing in the December 17, 2009 print edition of The New York Review of Books, in an article which asks the very timely question: “What is Living and What is Dead in Social Democracy?” which in turn was “adapted” from a lecture he gave at New York University on October 19, 2009. Tony Judt is a good one to ask, and answer, that question, being one of the foremost scholars of the history of Europe in the 20th century, and of the many forms of social democracy that continent has nurtured, especially in the wake of World War II. Judt was educated at King’s College, Cambridge, and the Ecole Normale Superieure in Paris, and currently heads the Remarque Institute at NYU. As I hope my readers will immediately grasp, he thus has exactly the type of biography which will trigger instant mockery and outrage from the American Right. So be it. He gets, in this article, right at the heart of the observation which Progressive Maryland State Senator Jamie Raskin made at a political picnic this summer (2009): that there is no comprehensive alternative vision to our current state of political economy, nowhere near close to one on the left.

The reality we are getting from President Obama increasingly looks like the same one brought to us by Robert Rubin and Larry Summers under Bill Clinton, with the additionally toxic burden (in timing, scope, and blurred objectives) of an impossible foreign intervention in Afghanistan/Pakistan (and before even knowing the fate of Iraq). AF-PAK has been delivered from the worst of the American foreign policy establishment’s empire illusions, buttressed now by the Pan-Optican-like technological fantasies of the Predator & Reaper Drones and expensive private contractors who far outnumber actual US troops. AF-PAK is being done in the name of protecting us from fundamentalist others, and the impulse is understandable. But the scope of the interventions and their duration are going to deliver more blowback, not security. And, after the tours provided by Ms. Ho and Mr. Sennett, it is clear we need greater security at home too, because our economy still seems to be also under the sway of “fundamentalists” of the “market utopian type.” Domestic violence and homicides are up dramatically in Philadelphia since the economic crisis; 35 homicides in 2009, up 67%; around the nation domestic violence had been falling for fifteen years prior to the recession: see the NY Times article at http://www.nytimes.com/2009/12/31/us/31philadelphia.html?_r=1&scp=1&sq=d...)

Mr. Judt says we on the Progressive or Social Democratic left have “something to conserve: It is the right that has inherited the ambitious modernist urge to destroy and innovate in the name of a universal project. Social democrats, characteristically modest in style and ambition, need to speak more assertively of past gains.” (My Emphasis.)

The Greatest Speech of the 20th Century
Indeed, the economic events of the past two years have created an opening to re-argue the merits of social democracy, or a re-invented New Deal, which was the American version, based on the newly furnished fears citizens have after nearly seeing their economic world collapse. And millions in the U.S. have seen it collapse, from foreclosures, job losses and bankruptcy due to catastrophic medical bills. Judt writes that “a social democracy of fear is something to fight for.” That strikes this writer as sounding very much off key…and very far indeed from what FDR called “The Second Bill of Rights” from his final State of the Union address delivered on January 11, 1944, even if it did have its genesis in the great “fear” aroused by the Great Depression. Author and current Obama administration employee Cass Sunstein has said that it was delivered by radio that night, “the only time a State of the Union address was also a Fireside Chat…it was the opposite of Lincoln’s tight poetic Gettysburg Address. But because of what it said, it has a strong claim to being the greatest speech of the twentieth century.” The first right listed, was, significantly enough, “The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.” (The Second Bill of Rights: FDR’s Unfinished Revolution and Why We Need It More Than Ever, 2004).

So, while I don’t like Judt’s title – “a social democracy of fear” – there is something to be said for his argument that very legitimate fears are what created post-depression, post-World War II Social Democracy, and that citizens throughout Europe and the US have stared into a similar abyss in 2008-2009, without actually having plunged all the way in. We have too much 20th century history behind us, however, to “restore a language of optimistic progress,” so that “the first task of radical dissenters today is to remind their audience of the achievements of the twentieth century, along with the likely consequences of our heedless rush to dismantle them.” That dismantlement remains the overt program of the American Right which any reader can remind themselves of merely by tuning in to WMAL 630 (AM) on the radio dial in the Washington, DC area (Limbaugh, Hannity, Levin, 12:00 pm to 8:00 pm every weekday.)

Unfortunately, some of that program of dismantlement is not restricted to the Right. Robert Kuttner, writing on the Huffington Post on December 21, 2009 (“Learning from Lieberman”) tells us that the White House was missing in action when the House barely passed a $154 billion jobs bill by just 217-212 the previous week. Where was the White House? “…playing footsie with the fear-mongers and signaling support for a budget commission that would almost certainly lead to a gutting of Social Security and Medicare.” It would seem that Mr. Judt’s “social democracy of fear” is in a fright race of sorts with economic fundamentalists to whom budget deficits, now, as in the 1930’s, were the most frightening of economic outcomes. And President Obama, far from being the closet socialist (and worse) of talk radio demonization, may surprisingly share some of their key financial objectives.

Social Democracy Was Built on Compromise
And now to the core of Judt’s piece, where it really crosses paths with the purposes of my essay. He stresses that there was always something less than full throttle about the moral claims and demands of Social Democracy (and paralleled by FDR’s New Deal here.) Social Democracy (I prefer to capitalize the term, to pay tribute to its achievements) was a democratic version of the much more threatening forces further to the left, full blown socialist and communist demands from the last quarter of the 19th century and the first three decades of the 20th: “…it was constantly glancing nervously over its left shoulder. We…are for freedom, not repression. We are democrats who also believe in social justice, regulated markets…” And today, those on the left are stuck very much in the place where Keynes was in the 1930’s, at considerable odds with those Vienna economists that we have previously talked about: Keynes arguing for a complex intervention by government to supply what panicked and demoralized private markets could not - spending; Von Mises and Hayek arguing that “the best defense of an open society and its attendant freedoms, was to keep government far away from economic life.” Keynes won the argument in the 1930’s and through the 1960’s; since then, especially starting in the 1970’s, the Austrians have forced the debate into pure “economism” says Judt. The left can’t summon the deep moral leverage that would ask whether a proposal “is good or bad”; instead “we inquire: Is it efficient? Is it productive? Would it benefit gross domestic product? Will it contribute to growth?” This “propensity to avoid moral considerations,” Judt asserts, “is not an instinctive human condition. It is an acquired taste.” It is time for this type of thinking to stop. The greatest success of the Social Democracies in Europe as well as the US, was in curbing inequality. Now we have that “Gini coefficient” that measures inequality, and ours is “comparable to that of China.” And many other startling, horrible, facts on the ground for unemployment, underemployment, food stamp usage, nearly 25% of home mortgages under water, foreclosures with no end in sight, which are implied, but not stated in Judt’s work. He wants us to ask ourselves to re-imagine and re-state what it is that we find so “abhorrent in financial capitalism…What do we find unfair?” – especially in that lobbying by the wealthy “at the expense of everyone else.” (I certainly hope the tour that Ms. Ho and Mr. Bennett have given us has helped along exactly the path that Mr.Judt is calling for: supplying the details, and instances of how the Right’s “universal project” is proceeding.

“The answers,” Judt states, “should take the form of a moral critique of the inadequacies of the unrestricted market or the feckless state…We need to, in short, return to the kingdom of ends.” And on that “feckless state,” he had earlier reminded his U.S. audience that “we have a discredited state and inadequate public resources…the problem we have created for ourselves is essentially comparable to that which faced the ancien regime.” (For those out of practice in European history, the shorthand is that when you say “ancien regime” you are talking about the French state and monarchy from about 1750 until that resonant date of 1789… a French state which could not solve its fiscal problems, so aggravated by its many war debts, including its intervention on our side during the American Revolutionary War. Thus there is a subtle but very sharp cutting edge to that analogy for the U.S. in 2009.)

So there we have one of the finest contemporary European historical minds noting that the shortcoming of Social Democracy - there and here – is the loss of its moral compass, its moral intensity, exactly the grounds being covered by James E. Morone in Hellfire Nation, who reminded us that the left’s moral courage, and its public voice, seemed to leave it, at around the time of the Roe vs. Wade abortion decision in 1973. But Mr. Judt has left something out that Professor Morone hasn’t – and that is the role of the fundamentalist religious revival in the US since the 1970’s. And at the same time that Professor Judt is calling for greater moral intensity and scrutiny of what the Right has wrought and what we don’t like about it, he also reminds us, so characteristic of the Social Democrats’ past history, that “imperfect improvements upon unsatisfactory circumstances are the best that we can hope for, and probably all we should seek,” sounding very much like the Bill Clinton whose welfare reforms he has just blasted. But Judt is surely right in this sense: what we are witnessing on the Right is a utopian, universal project – Market Utopianism is my term – backed by the moral intensity of the religious Right. Next, we going to follow that project down its potentially very dangerous path, right now in 2009, and beyond, with the help of Professors Taylor and Morone, Lakoff and Miller. Please come along for the hike, but be forewarned: the trail is along the edge of a very deep chasm, and at times, the view down will be a glimpse of a potential wreck. Not a forecast, but a possibility.

The Bounds of Reform in Fundamentalist Systems
It seems to this writer that the lesson to be drawn from our situation here in early 2010, from the nature of the failed attempted reforms of the financial system, the health care system, the Copenhagen “moment,” and the ominous transition from Iraq to AF-PAK, is that the reform of American society is very much caught within the tight bounds of its own ideological system, bounds now wound far too tight to allow imagining, much less enacting , anything on the scope of the New Deal reforms of the 1930’s. Our dilemmas remind me again of those sketched out for us by Perry Miller for the Puritan’s “system” of the last quarter of the 17th century, the quarter which gave us both The Synod-jeremiad of 1679 – and the Salem witch trials of 1692. Readers will recall that Miller has said that the Puritans were caught in the premises and promises of their great charter, or compact, drawn up by the founders; in exchange for the virtuous behavior of the people, God would see that they would be a beacon to old England, and by inference, since England failed to be interested in the least, to the rest of the Protestant world. (Cromwell’s surprising tolerance to religious dissenters within his army, as long as they could fight, later extended beyond the military logic, came as quite a shock to not-so-tolerant Massachusetts Bay.) But at the heart of their religious (and civil) code was also the demand that they labor very diligently in their particular capitalist callings - contained within what we now call “The Protestant Ethic.” Their ideology, or “code resisted change, and therefore change became declensions; the jeremiads recognized the facts, but refused to accommodate theory to them” as Miller tells us in From Colony to Province. Long before Joseph Schumpeter’s 20th century portrayal of capitalism’s “creative destruction,” the Puritan’s utopian religious project was being twisted every which way but the straight and narrow by the contradictions and results of those strenuous strivings in the callings. Miller is blunt about it, blunter than we can apparently be with ourselves in 2010: “Pious Industry wrecked the city on a hill, in which it had been assumed men would remain forever in the stations to which they were born, and inferiors would eternally bow to gentlemen and scholars.” Today, as we look out upon our unemployed “lagging indicators,” the millions upon millions of “disposables” from the 1970’s through the 1990’s, and the tens of millions who are thought of today as perhaps, at best, only temporarily disposable at the convenience of “shareholder value” bound companies, to be called back when conditions improve (so we like to think), we are reminded of the ritual ruts that the great Puritan sermons fell into, and could not escape from: “They berated the consequences of progress, but never progress; deplored the effects of trade upon religion, but did not ask men to desist from trading; arraigned men of great estates, but not estates.”

Senator Ben Nelson’s Genuflection Before The Market
I was thinking of these two passages, in particular, after I came across an article in the New York Times featuring a telling quote from Democratic Senator Ben Nelson, of Nebraska, just five days before the passage of the health care bill on Christmas Eve morning. Senator Nelson put it this way: “‘I believe in the free market system as the foundation of our economy and as the primary focus that should drive our health care system and our debate. That’s why I opposed the public option and yet supported the market exchanges.’” (“No Change in Coverage Numbers, No Fight for Public Option,” by David M. Herszenhorn, December 20, 2009).

Now one has to swallow in disbelief, in the terms of the performance of the health care system alone over the past thirty years, to buy into this representation of “reform.” But this statement comes in the wake of, and while the nation is still in the deep throes of, the greatest failure of the free-market financial system since the Great Depression. One wouldn’t expect, even in this context, a complete repudiation of the market system. After all, even under the greater strains of the Great Depression, Roosevelt is correctly portrayed as having saved capitalism, not destroyed it, despite the subsequent characterizations of his programs by the American Right. But to leave Nelson’s free market formulation as it stands based on where we are now only goes to show the deep bindings the ideology of “The New Capitalism” still has on the American political mind – and good portions of the electorate. If it were simply a matter of political rhetoric, that would be one thing. But in all the policy areas of the attempted reforms of 2009 we have listed, it is very clear that these bounds are still major functional ideological and policy restraints. The system, as Kevin Phillips has pointed out, cannot seem to reform itself based on its current ideology, its allowable parameters for policy changes cannot cope with the scope of the deep troubles. The great interventions of the Federal Reserve, amazing in both scope and technical complexity, which might be objectively seen by an anthropologist, for example, as marking the complete breakdown of the ideological system as well as the financial one, instead are seen as clinical economic “emergency room” procedures, and not a systemic breakdown of the market “patient.” The irony, that they have to be carried out by a true believer in that system, the current Fed Chairman, whose ultimate beliefs are proved by his deep complicity in the run-up to the crisis, and who is very anxious to return to something very close to the old system, is testimony to the power, and inflexibility of this free-market “covenant” that we all live under. While economists on the left have no difficulty in understanding just what is going on, these events – and their explication induce huge strains in the ideological system of the Right, and those places where it overlaps with the Democratic center.

Consider what I’ve been hearing on Right wing radio: for the entire fall Presidential election season, there seemed to be complete denial about the meaning of events on Wall Street; there was, well into September and October, no recession in sight. Come passage of the Stimulus bill in early 2009, and all the subsequent bad news on unemployment is proof not of the terrible damage brought about by the free-market stampede of Wall Street’s animal spirits, but the failure of President Obama’s remedies. The financial crisis was due to those compassionate liberals and their attempt to get everyone an affordable house, and those near government hybrids, Fannie and Freddie blowing the housing bubble. Despite the mountains of evidence that it was the affordable housing activists closest to the poor who first saw the criminality unfolding as the mortgages were marketed and written, it is conservative gospel that misplaced compassion is at the core of our troubles. Government regulators failed us time and time again, proof that more regulations will only cause more trouble; the ideas those regulators actually held about the jobs they were supposed to carry out – ideas which are the coin of the realm in conservative think-tank land – go entirely unremarked upon. And the Right’s characterization of modest centrist President Obama – well, we’ll cover that a bit later on down this trail we’re following.

Not that Democrats are so great at reconstructing the events of the past 30-40 years. After passage of the House’s financial “reform” bill in late 2009, Majority Leader Steny Hoyer remarked how it addressed the mess Republicans made under Bush over the past 8 years. Could someone possibly arrange a dinner between Rep. Hoyer and Brooksley Born so that she can correct the record; maybe Michael Greenberger from the University of Maryland can come along to help out with the chronology – and the facts. What do Democrats like Hoyer think was going on under Bill Clinton and Bob Rubin, when Phil and Wendy Graham were their partners in reform?

Can A Fundamentalist Right Face the Facts?
We should also remember that historian Perry Miller has painted a picture of that tight religious system in New England as coming under great intellectual strain as the economic changes of early capitalist dynamism tossed up facts that conflicted with Puritan theory. He is very clear: the economic system was thriving by any measure we now commonly use, even as it, like today, brought greater inequality. New England was hardly in decline; but its intellectual system couldn’t even handle the notion of change, so what Miller and we might see in retrospect as the normal range of human moral behavior was, at least in the jeremiad sermons, highlighted and presented as “declension” in what became a highly ritualized form. Now to America in 2009, even more so than in 1979, the economic strains are enormous, no matter how we measure them. The dollar is falling, must fall in response to our great trade imbalance, and our indebtedness to Asia and Middle East financial powers. Americans are personally indebted, almost 25% of those great American Dream symbols, the family home, now have market values less than the mortgages on them – they are, in other words, under-water. There are deep structural worries beneath these surface manifestations that point to even greater difficulties ahead, even with a successful easing of the current crisis. So in Miller’s terms, signs of economic declension, in the very material bases of the American Dream, are there for all to see. But can a fundamentalist system of unbending premises and assumptions face the facts? If not, how will it react? We have some very strong clues in the way the Religious Right has reacted to the great health care crisis.

If there was any flexibility in the basic attitudes of the fundamentalist religious outlook in America, one would have expected it to register in the great health care debate of 2009. Yet by all the accounts I’ve been able to muster, and we have noted some of them, it has led to increasing ideological opposition to federal government intervention and an intensification of the abortion factor for most the players on the religious Right (the Catholic Church’s position presents a more complex reality, on paper, if not in lobbying hallways.) How could that be, with the notion of extending basic medical care and coverage to all seemingly such a natural extension of the wellsprings of traditional Christian compassion for the poor and needy? Well, we know that fixing the private medical system failures in the US will require deep interventions in the market system, and as we have seen from the work of George Lakoff, that implies a deep intervention in the market’s functioning for religious fundamentalists as the reward system for good and bad character. The fact that taxes will have to be raised on those higher earners, the successful self-discipline types, to pay for coverage of the alleged failures, only rubs political salt into these theological wounds. The deep fear here is, for both religious fundamentalists as well as market fundamentalists, that these proposed changes are steps along the way to a more universal “entitlement” system, where health care becomes a fundamental human right, regardless of where the receiving individual might stand in the moral accounting system of the Right. These perceived threats, no matter how much they have been purged from the likely health bill, coupled with the deep threats to American “Exceptionalism” posed by the harder and harder to conceal national economic decline, have to set in motion tremendous strain for the American fundamentalist system. As Mark Taylor, the author of Confidence Games has noted, “religious fundamentalism tends to legitimize market fundamentalism and sanctify American power. In other words, religious neofundamentalism, political neoconservatism, and economic neoliberalism are closely related.” (Page 13.)

I’m sure by now, especially my Progressive readers, are aware of how prickly and defensive American conservative fundamentalists become with any substantial criticism of what comes down to the “American Way of Life,” no matter how soberly and respectfully it is delivered. Criticisms of overseas military adventures, no matter how risky or complex the ventures might be, turn into charges of hatred for America and cries of “weakness,” even as a strong case can be made that the adventures are bound to weaken the American economy, as was the case in Vietnam. Similarly, attempts at greater regulation of the economy are not seen as a practical matter to correct market failures, no matter how large or glaring the failures are; they become, for example, in the words of Right-wing radio host Mark Levin, attempts to limit individual “Liberty.” This is an astounding simplicity in the wake of what our Wall Street geniuses did with all the grants of liberty they received from the regulatory agencies and the Fed. Levin, along with host Sean Hannity, often invoke a magical kingdom of legal boundaries to federal economic interventions by way of fidelity to our Constitution, worship of which, along with the founder’s intent, has become a vigorous sub-species of conservative thought. In the wake of the constant change and innovation of capitalism, it is a not-too-comforting retreat, that original intent brand of Constitutionalism, as one ponders what the founders’ thoughts might have been on credit default swaps, mortgage-backed securities, synthetic derivatives and very high leverage in a banking system that did not exist in 1787. Early founder thinking on foreign entanglements might also be problematic for this original intent line, especially President Washington’s, as we consider our 700 or so overseas bases, bound to grow now from the Obama adventure in AF-PAK – and beyond. Seven hundred plus: that’s a lot of foreign entanglement. Compare that figure to the 99 or so communities built under various programs during the New Deal, including Red House Farms, later Eleanor, West Virginia, so movingly portrayed on the front page of the New York Times on Christmas Day, 2009, at http://www.nytimes.com/2009/12/25/us/25eleanor.html?_r=1&em .

The greater the role of unruly events in introducing strain into this fundamentalist way of thinking, the shriller the tone of reaction and retribution towards those advocating changes, even modest ones, like those of President Obama. As the events of 2008-2009 have unfolded, I’m amazed at the level of anger and bile that host Levin directs towards the symbols of the changes he dislikes. It leads to the question of what the deeper processes are that are taking place here in the fundamentalist mind. In that vein, author Mark Taylor had this to say about the earlier, and milder economic troubles at the end of the 1990’s:

The financial meltdown in the late 1990’s should alert us to the economic, social, and political problems created when people in positions of power remain ideologically committed to outdated models. As everything becomes more interconnected and therefore more complex, certainty, security, and stability disappear. This loss is so disruptive and disturbing that it drives many people to try to find refuge in the simplicities of a bygone era. Armed with the certainty that clarity – moral and otherwise – supposedly brings true believers of every stripe set out on missions to redeem the world and thus save people from the powers of chaos, confusion and darkness. This struggle is a dangerous as it is futile; the inevitable result of such misguided ventures eventually will be the very disaster true believers claim they are trying to avoid. (Page 330.)

The Self-Destructive Nature of Closed Dualistic Systems
Taylor, the Chairman of the Religion Department at Columbia University, has sketched a broad overview of the types of religious “systems” operating in our contemporary world. They are breathtaking in their scope and imaginative reach, and although the outline is simple, the thinking that went into it, as is clear from the preceding 300 or so pages, is anything but that. As can be gleamed from the “…In A World Without Redemption” portion of the book’s title, Dualistic systems such as Christianity and Islam don’t gleam in his schema, outlined in a Chart named the “Three types of theology of culture.” Since this essay is not primarily a theological one beyond the necessities of the task at hand, we’ll keep it brief here, but you’ll get the idea easily enough. In the schema for the Dualistic theologies, the “Source of Order” is “External, Imposed from without”; “The Status of Time and History” is a “Struggle between closed systems”; “The Relation of Self to World” is “Primordially divided, Estranged from the world as it is”; and the “Possibility of Redemption” is conveyed by its “Apocalyptic eschatology” where “Redemption” is “Certain, but in the future.” Just try imagining a sermon based on this being preached from a pulpit in Lynchburg, Virginia…

Professor Taylor is thus very clear about the inherent dangers in the fundamentalist faiths here, with views that are certain to send American religious conservatives, as well as Islamic fundamentalists, into high orbit: “Neofundamentalists East and West remain committed to closed dualistic ideologies, which are in the final analysis, self-destructive.” (Page 13). Taylor stresses the “either-or” logic behind these systems, which for many of the Christian forms, as well as the Muslim, have their worst dynamics set in motion by the question of who is saved or redeemed, or not, who is a genuine believer, and how to determine that. Put into the categories of James Morone’s handling of our Puritan tradition, these are boundary questions about who is a member of the “covenanted community,” and who is outside the gate, the proverbial “Other.” Here’s how Taylor puts it, with the language and categories eerily suggestive of the health care debate we’ve just gone through, and the ones that are already in motion on Global Warming: “The logic of either-or leads to closed systems in which negotiation and compromise are unacceptable. The situation can become perilous when equally self-certain uncompromising closed systems encounter each other. Faced with this dilemma, there are four possible alternatives: conversion of one side to the other, a standoff between opponents, domination of one system by the other, or finally, the destruction of one of the systems.” (Page 321.) That’s about as close a description of the tone and the emotional feel of the Mark Levin radio show as I could wish for. All that’s missing is a recording of his shrill, whip-like voice as he paints the liberal threat for his audience.

Strict Father Morality: Unhealthy for Any Society
Taylor’s portrayal of where fundamentalism leads is remarkably close to that of George Lakoff in his book Moral Politics. That’s very interesting, because they are working from completely different fields; Taylor’s being the history of religion and philosophy and architecture (with a heavy dose of economics and system modeling), while Lakoff’s is cognitive science, “the interdisciplinary study of the mind,” with his “subfield” being cognitive linguistics, or how people use “everyday conceptualization, reasoning and language” to put together a worldview. So read carefully, and compare what Taylor has just said about fundamentalist religion, to what Lakoff says about “Strict Father Morality” (his shorthand for Christian fundamentalist thinking) in his chapter called “Basic Humanity”:

Strict Father morality is not just unhealthy for children. It is unhealthy for any society. It sets up good vs. evil, us vs. them dichotomies and recommends aggressive punitive action against ‘them.’ It divides society into groups that ‘deserve’ reward and punishment, where the grounds on which ‘they’ ‘deserve’ to have pain inflicted on them are essentially subjective and ultimately untenable…Strict Father morality thereby breeds a divisive culture of exclusion and blame. It appeals to the worst of human instincts, leading people to stereotype, demonize, and punish the Other – just for being the Other. (Page 383.)

That last line captures very well the essence of Right wing talk radio, especially Levin’s show. There is, naturally, a range of emotional pitch throughout this Right Radio spectrum (and one can toss in TV’s Glenn Beck as well), with Rush Limbaugh somewhere between the much softer tone of Sean Hannity and the brutality of Levin, but they all have constructed a demon “other,” The Liberal, as the root cause of the nation’s domestic problems, and now have a great symbolic figurehead in President Obama to crystallize the message. Interestingly enough, none are overtly, much less predominantly, religious in tone, certainly not fundamentalist in any apparent way, with Hannity making the more frequent generically religious comments, and Levin second, but these are really just background notes. Yet they have assumed, in many ways, the most punishing features of the Puritan jeremiad, closer in their almost fully secularized way, to the spirit of Jonathan Edwards “Sinners in the Hands of an Angry God,” than many full time fundamentalist preachers at work in the last quarter of the 20th century, even the most politicized ones who are also targeting liberals, like Pat Robertson. Unlike the old forms, however, the broadcast jeremiads don’t have individual sins, and sinners, sorted out into the categories of the famous 1679 Synod, which covered a very broad swath of existing society; our more secular radio preachers’ wrath is instead focused like a laser on a political type and its policies – the devil Liberal Other. The callers insist that they no longer recognize their country, which has been warped out of shape under the liberal tyrant, and the hosts chant that the governmental debt being run up will rob our children of their future, as they build a case to choke off Keynesian deficit spending and push towards a trans-political Commission to cut Social Security and Medicare spending. But more on this push later.

And yet, we have to place these ministers of the Right’s “universal project” in an even broader context, in a postmodern culture, the one that has been so ably and comprehensively portrayed in Mark Taylor’s Confidence Games, Money and Markets in a World without Redemption. We have just seen Taylor’s worries on where fundamentalism’s stubborn simplicities – economic and religious - can lead in a world which grows more complex every year. But Taylor also reminds us that old cultural forms, religious and economic systems, don’t disappear entirely, as the “Death of God” school in the 1960’s had thought. In fact, these older forms get “displaced,” only to return, often with the heavy psychological implications contained in the phrase “return of the repressed,” which is the heading he gives to the first section of his last chapter, “Rustling Religion.” When the displaced traditions re-emerge, they can be very disruptive. Earlier in the book, when Taylor was writing about the return of the repressed “real economy” after being displaced by the virtual financial one, he illustrated the phenomenon by noting the damage at the end of the 1990’s from the Dot-Com collapse. And we are now living through the catastrophic damage caused by the failure of the mortgage-backed securities, and again, the “collateral damage is difficult to contain,” manifesting itself in the real economy with millions upon millions of foreclosures and a ten percent unemployment rate. Yet for all his complexity, Taylor never mentions America’s Puritan inheritance directly, nor the possible forms that the jeremiad might take in modern culture. The closest we get is the return of religious fundamentalism, and the warnings about its overly-simplistic dualities, and the disasters they will bring amidst the post-modern complexities. It’s left in high generalities which point it in the correct direction; the closest we get to specifics are how these fundamentalist principles operated in the realm of foreign policy, with Reagan’s evil empire speech in 1983, given to “The National Association of Evangelicals” and Bush’s war on terror via demonization of Islamic fundamentalists. Yet, as good as Mark Taylor is – and no one has woven together as much on religion, economics, art and philosophy as he has to give us a nearly complete picture of modern culture at the turn of the century - there is something missing.

Ronald Reagan’s Misdirection Play
What’s missing is another curve of complexity having to do with religion, psychology and economics, which also has a large impact on American day-to-day culture, and which has a strong tendency to confuse us about what is really taking place. In one sense we might call it a grand psychological (and political) misdirection play, a smiling and re-assuring demeanor, or gesture, to the center while the handoff is headed for a full sweep around the right tackle. Ronald Reagan was no doubt sincere and committed to his conservative vision. Yet his entire style and presentation worked to obscure its harsh implications for workers and middle class Americans. To my ears, Reagan always sounded like he was reading from a script, one who’s content he may have believed in, but one where the coolness of the delivery didn’t match the explosive implications of the message being read. Perhaps that’s why he doesn’t get a starring role in Morone’s Hellfire Nation. Despite the wonderful chapter on “Modern Morals,” the opening one in Part V of the book – “The Puritans Roar Again” – Reagan’s style is that of a genial toastmaster, not a late phase Puritan minister roasting reluctant sinners over those open flames. Even as Morone covers his address to the National Association of Evangelicals in February of 1981, and does so under the subheading of “The Old Jeremiads Ring Out Again,” listing Reagan’s attacks on Communism, secularism, “the Social Gospel and its political progeny – the New Deal and the Great Society” and scolding “Don’t blame society…blame the sinner” – he does it all with “genial self-confidence.” (Hellfire Nation, Pages 453-454.) But to see how this Reagan magic worked, we are going to turn to one of his finest biographers, Gary Wills and his Reagan’s America, first published in 1987.

Wills’ is a good person to be the guide, having started out on the American Right, working for Bill Buckley, and enriched with a strong background in the classics (Yale PhD), and, for better or worse, with some time spent in the Jesuit order, and he brings all his background gifts to focus in his stunning last chapter, “Original Sinlessness.” It is a brilliant effort where the psychology of religion meets the American “mission” to the world, and the Puritan gloom of original sin and “the fall” evolve into positive thinking and the magic of the market, where all sins, but especially greed, work for our collective economic improvement. We have to visit with Wills in this chapter precisely because our post-modern world, as Mark Taylor has presented it to us, is composed of fragments of earlier religious and cultural movements, and we have to consider how American Protestantism, and American culture, moved away from the heavy theological burden given us by our New England founders. And, we have to remember that it was Jonathan Edwards himself, presented in our schools as the preacher of that terrifying sermon of 1741, who, in truth, by the injection of this intense emotionalism into the forms of the jeremiad, was himself opening the floodgates to the new currents of the Great Awakening, moving society away from the tight grip of New England’s theocracy. The truth was, as the 18th century wore on, that American Christians couldn’t live with the terrible burdens of “original sin,” and the psychological uncertainties of who was saved and who wasn’t. They lived, as Perry Miller reminded us, in a thriving commercial society where, even then, in the late 17th and first half of the 18th century, economic change was challenging the whole notion of a permanently “fallen” human nature. And of course, the European Enlightenment, which was working its influence even on someone like Edwards, was heading in a philosophical direction which, if not at odds at nearly every major point with the spirit of Calvinism, at least worked to drastically temper its gloomy theological burdens. Here is Wills explaining this human reflex away from the pain of being roasted over Edward’s open flames, and how conservatism in the 20th century was going to find its leader in Ronald Reagan’s sunny optimism:

Original sin, the belief in shared human corruption, treats religion in what William James called the ‘sick soul’ manner. But America’s contribution to the history of Christian practice has been an institutional effort to cure the sick soul, here and now. It has a therapeutic character, moving readily from fundamentalists’ faith healing to the more sophisticated mind-cure of positive thinking…The American ethos, as shaped by our history, resists the concept of original sin, which describes not only the Fall of Man but the ruin of Eden…At one time, a woman of unsavory enough experience was delicately but cruelly referred to as ‘having a past.’ The doctrine of original sin states that humankind, in exactly that sense, ‘has a past.’ And much of American theorizing has been intended to exempt this country from that stigma…Modern capitalism lives by a counter-myth to the Fall of Man – one where benign nature makes everything go, miraculously, right…the Market thus produces a happy outcome from endless miseries, a sinless product of countless sins and inadvertencies….The earlier myth called for a repenting awareness of sin. The later one calls for a dutiful innocence and optimism. As James noted, mind-cure prohibits sad thoughts. It is the psychic concomitant of laissez-faire economics…James is describing, in religious terms, the free lunch. (Reagan’s America, Pages 454-456. My Emphasis.)

Indeed, if Mark Taylor, James Morone and George Lakoff have stressed, in varying degrees, our present dangers from the inheritance of fundamentalist theologies, and Morone and Taylor have noted Reagan’s often subtle encouragement of these tendencies, their good overall work needs to be clarified by how Reagan’s style and temperament rode the currents that Wills outlines here. Make no mistake about it: Reagan was carrying out the Utopian project of the fundamentalist Right in religion and economics, but no one could lull the American middle better, with what I have called “the misdirection play,” with his sunny optimism and corporate marketing soft-sell, which he polished to a high gloss while working for General Electric. And no one could better obscure the widespread destructive side of capitalism’s “creative destruction” than Reagan. Reagan’s power of “positive thinking” was a potent psychological weapon to deploy against the Democrats, especially when their leader from 1976-1980 was Jimmy Carter, who Wills states “lacked the higher confidence in man, man’s products, and America,” and whom, perhaps most telling of all, “believed in original sin.” Thus, “in Reagan’s campaigns and presidency, the principal accusation against Democratic predecessors and rivals has been that they were guilty of pessimism…The alternative Reagan offers is a discipline of cheer.” (Pages 456-457.)

Under Reagan’s Smile, Tom DeLay’s Hammer
So we need to keep in mind that even with the tremendously important revival of fundamentalist and evangelical Protestant religion in the 1970’s and their continuing power today (which liberals and progressives continually underestimate), the tone of day-to-day religious services and sermons follows the direction away from Jonathan Edwards and the jeremiad formula and towards the “prosperity gospel” and the positive thinking that Barbara Ehrenreich portrays for us in her new book, Bright-sided: How the Relentless Promotion of Positive Thinking Has Undermined America (2009). And, in very strange and troubling ways, going back to Tom Frank’s One Market Under God, and Ehrenreich’s Bait and Switch, this trend in theology is echoed and mirrored and subtly intertwined with all the secular variations which dominate in the private corporate world, and the world of career counseling and coaching. No one better captured the latent cruelty of these than Tom Frank in his brief review of the management theory book by Spencer Johnson, Who Moved my Cheese?

As the title implies, we have a tale of regimentation and change, and worker/management personality types - two mice and two “littlepeople” who find one day that their cheese reward isn’t in the same place anymore. Now Tom Frank usually writes at a pretty high prose temperature, but in his description of this “asinine and chronic bestseller,” and its “infantile story,” his words approach Fahrenheit 451. Johnson’s book “is able to pull off a work of breathtaking obscenity to both call for childlike innocence before the gods of the market and openly advance a scheme for gulling, silencing and firing workers who are critical of management …” The two “blue-collar” mice don’t question what’s happened and begin their new search for cheese, but those middle-layer management types “‘ranted and raved at the injustice of it all,’ believing that they were ‘entitled’ to their cheese. One of the middlers keeps complaining, but the other sets off “running the rat race, but finding along the way that job insecurity is good for his soul and composing a number of pithy observations about adapting to ‘change’ that he writes on the walls of the maze…” (One Market Under God, Pages 248-249. My emphasis.) It is very interesting to see how closely Frank’s language resembles that of Garry Wills’ nearly a decade earlier, and how the American cultural pressure pushes towards “dutiful innocence and optimism” which emerged from the theological efforts to escape from Calvinism’s grim grip, and is reflected not only in the Reagan personality, but also throughout the management theory which emerges at the end of the roaring 90’s.

It is a truly shocking fact to note the continuing best-seller status of Who Moved my Cheese, but it’s perhaps more understandable when we realize the book is promoting (demanding?) Reagan’s psychology as the required employee attitude. And that is why this essay is bringing you the more detailed story of what the practices of Wall Street have meant as they got transmitted to the rest of corporate America, and how Richard Sennett has gone about calculating the psychological casualty rate. Has there ever been a softer light shed on a harsh Utopian project, this time from the Right, than the glow cast by Ronald Reagan over the ascendancy of The Market? Is the persona and spirit of Reagan really consistent with what has befallen the American workforce since 1980? Or did he represent a desperate religious and psychological attempt to fend off the implications for the American psyche of the events of the 1970’s? Wouldn’t the more accurate representation of the Right be the persona of Tom DeLay, the former House Speaker, known as the “The Hammer,” someone on whom the thin cloak of an evangelical preacher barely conceals the body language of a National Hockey League “enforcer?”

In truth, a complex truth, both the Deity of the fundamentalist religious Right and the secular Market Deity of economic fundamentalists have dual aspects. Even as the flames threatened sinners in the hands of Jonathan Edwards’ God, those who chose to repent had a chance to taste the sweetness of the honey that was always offered to them, a sweetness almost as alluring as the “free lunch” later provided by the Market, which brings wealth out of all our sinful strivings, and, as we have just seen from Wills, Reagan was the best messenger for selling the sweetness side of things. But that is theory, and we have been bringing you the facts, the harsh harvests from The Market, the bee stings, as documented by Karen Ho and Richard Sennett; not the soothing sounds of Reagan, but the harsh judgements rendered on earlier forms of capitalism that lay behind Wall Street’s “shareholder value” theory. Fundamentalists have led this nation not to the promised economic land but to a level of inequality on a par with China, and a precarious international balance of payments situation that has to be remedied by a tough new period of saving and investment - of sacrifice that no recent elected leader has adequately expounded upon but which both William Greider and James Galbraith have, and which I have shared with my readers.

The Citizen and the Entrepreneur Under the New Capitalism
And perhaps most importantly of all, the “standing” of the average citizen, blue-collar worker, the Wall-Mart sales rep, the laid off former mid-level manager, the ex-newspaper reporter, has been diminished by the elevation, under the Utopian market project of the Right, of the Entrepreneur to the highest podium not just in the realm of economics, but in the civil and political realm as well. With all due respect to the creativity of our entrepreneurs, which we should respect and encourage, this disproportionate elevation has obscured the contributions made to every aspect of our lives by many other categories and types of citizens. All the incentives of our society have been bent to genuflect towards, and to bestow financial reward upon this social type, and the results have gone too far in one direction. As we have tried to show, many ordinary citizens, the 92% who are not entrepreneurs, have become disposable, and stare now, due to the current unemployment situation, at an even more aggravated sense of their marginality. But this is the logical culmination of fundamentalist economics of 40 years direction, and, for those who have had the eyes to see, ordinary citizens have been staring at the “specter of their uselessness” for much of those four decades.

As for the fundamentalist religious Right, it seems that for much of these same years, all possible human sympathy has been directed not along the lines we have just suggested, towards the relief of the economic plight of ordinary Americans, with all the psychological and social ramifications that they also ignore (family strains, domestic violence, health problems, addictions to drugs and alcohol…debt dependency) but towards the innocent symbol of the fetus and thus their symbol of “disposability.” Professor Morone is right, therefore, in his aptly named Hellfire Nation, to call our attention not only to the ongoing heritage from the best and worst of the Puritans in our contemporary politics, but to the great moral dialectic that we are now staring directly at, and that great watershed of Roe vs. Wade from 1973, which he says represents the flood tide of moral passion on the Right, and the ebb tide of it on the left. The great dialectic facing us is whether we continue the personal moral emphasis and the role of an alleged moral “decline” as the root cause of our nation’s problems, as the religious Right would have it, or whether we can fashion a new path for our society by focusing on the calamitous economic outcomes from the fundamentalist school of Austrian economics, the world brought to us by von Hayek, by Milton Friedman, by Alan Greenspan and Ben Bernanke, and ratified surprisingly enough, with only slightly greater flexibility, by the likes of Bill Clinton, Robert Rubin, and Larry Summers.

Liberals: You Are the Demonic “Other”
Let me set the stage for our political times now heading into the second year of the Obama Administration, in light of the ground we have covered, and the forces we have stressed in this essay. We have seen the diagnosis of where fundamentalism leads from Mark Taylor, and George Lakoff. Lakoff’s metaphor of the Strict Father (morality) reminds us in perhaps the bluntest of terms of what we have to keep in mind in 2010, that this type of fundamentalist mindset “breeds a divisive culture of exclusion and blame” and “appeals to the worst of human instincts, leading people to stereotype, demonize and punish the Other – just for being the Other.” My liberal and progressive readers should have no illusions at this late date as to who that “Other” is: It is you, whether you watch Glenn Beck, listen to Rush Limbaugh or Sean Hannity or Mark Levin or others that I haven’t mentioned, or understand the dynamics of Pat Robertson’s The Ten Offenses.

The religious Right has had their opportunity to substantially broaden the focus of their moral sympathies in the great health care debate, to show that they could apply those sympathies more broadly to “those already here,” and their response has come down with clarity on the side of those who will not intervene into the sanctuary of the divine Market to help those glaringly in need. What we have to keep in front of us is the real nature and origin of the meaning of “fundamentalist.” It is a clinging to basic texts – religious and economic – with virtually no intellectually flexibility, because by definition and origin, it grew in reaction to the complexities, uncertainties, and relativism of modern times and its rapid pace of change – and its genuine traumas.

But what happens then when fundamentalism confronts the fact, in religion and economics, that it has been in the driver’s seat for more than 30 years, preaching its relevant gospels, and it has led to disaster, objective disaster delivered by its own theories, the veritable collapse of the economic order from September 2008 until March, 2009? Rescued only by the impressive technical (and massive in scale) emergency room skills built around federal intervention in the marketplace – sheer heresy to true fundamentalists – and now left staring at the prospect that the nature and scope of those interventions may not have been enough to restore the economy, especially since those interventions have not corrected the deep structural problems that helped lead to the disaster – what happens next? If the authors I have chosen as guides are correct, what happens is big trouble, and for all of us.

What happened in that earlier fundamentalist age, that of the New England Puritans, trapped in a ritual code, exemplified by the Jeremiad, when the neither the form nor the substance of the code could adequately explain the changes they were seeing all around them? Remember, as Perry Miller has taught us, they could deplore the effects “of trade upon religion, but did not ask men to desist from trading…” Their code “resisted change, and therefore change became declension; the jeremiads recognized the facts, but refused to accommodate theory to them.” As Miller has shown us, the rituals of the jeremiad became so stale, so removed from the emotional needs of the people that a great explosion was building. In the early decades of the 18th century, great turmoil could not happen, as it did in the American Revolution of 1775-1787, within new political dynamics; it happened by an rupture of the forms and feel of religious institutions, leading to the turmoil called the Great Awakening.

In 2010, it does not appear as if we are looking at either a Great Awakening, or a new American political revolution. Working under the maximum strain of a failed economic theory, and system, the fundamentalists of the airwaves at first had to deny it was happening, all through the fall of 2009, then quickly shift the burden of the “too obvious to deny” distress – millions of foreclosures, ten percent plus unemployment rates – to the great conciliator himself, someone not trying to overturn the system in any radical way – but merely trying to pull out of the emergency room economic toolkit whatever was necessary to keep the Market system breathing. What was necessary was breathtaking; but as the Treasury Department’s Christmas Eve announcement about Fannie and Freddie showed, it has not ended yet, not by a long-shot (to remove their government aid ceilings without going to Congress). But does President Obama know that emergency room skills are one thing, and very different from constructing an improved lifestyle to prevent the patient’s re-admission? At times, in the realm of his large metaphors from the campaign, he seems to know. But since then, it is not clear at all that the President, nor Ben Bernanke, can envision, much less enact, the structural changes that would go to make up an effective new lifestyle, because they too, in a way Progressives are going to slowly find out about, if they haven’t already, are bound by much the same Market fundamentalist theology as those formally much further to the Right, even as they display a greater flexibility in interventions then the purest of true-believers. Close observers will note, in the great health care debate, as in the fumbling economic reform proposals, and the looming global warming remedies, market mechanisms are still at the core of the remedies, applied to situations where they probably don’t belong and will not deliver what is hoped for, as if there are no more profound conclusions to be drawn from the collapse of markets in 2008-2009. (This is not offered as a grand anti-market theory, but delivered in much the same sense that James Galbraith presents it in The Predator State with its subtitle “How Conservatives Abandoned the Free Market and Why Liberals Should Too;” that is to say, by distinguishing when and where markets can work, and where other remedies are needed.)

American Conservative Theory: No Room For Disraeli, Bismarckian Reforms
Given these strains within fundamentalist thought, our guides in this essay cannot be surprised at all to see the moderate President Obama grotesquely ballooned into the most threatening radical “Demon” American politics has ever witnessed. Carry out even modest market interventionism, in the shape of a shaky Obama supported health care remedy, and there must be monstrous demonization, and closing of ranks amongst Republicans, for so great is the rigidity built up in conservative theory over 40 years that even this modest and very problematic bill promises, in their fearful imaginations, to topple the now shaky free-market edifice. In market fundamentalism, American style, there is no room on the Right for Disraeli or Bismarck type reforms, or even Nixonian ideological gymnastics somersaulting somewhere between liberalism and conservatism, only more of what has already led us to the abyss: tax cuts, government dismantlement, and yes, the only form of interventionism truly approved of – the foreign military kind. And, we must not forget to list it: the tried and true constant of the status quo and “reaction,” whether in the 19th century, the 1920’s or the Clintonian 1990’s: the balanced budget imperative.

What Bill Clinton Gave the Right
But like Bill Clinton before him, what The Great Conciliator Obama is finding out is that there is no olive branch so ripe that it can satisfy the intense, destructive dynamics driven by the leaders of the rabid Right, and their Strict Father glare. Bill Clinton gave the Right what it wanted on trade and globalization, gave in to its harshest cries of “law and order,” and “lock them up and throw away the key” in the Great (ghetto) Incarceration, and, in Tony Judt’s judgement, he gave them the equivalent of England’s infamous New Poor Law of 1834 when he signed the 1996 “Personal Responsibility and Work Opportunity Act,” the one where “a more Orwellian title would be hard to conceive.” No, Bill Clinton gave so much to the Right in the realm of economic ideology, including his declaration that the era of big government, if not big problems, was over, that we can only shake our heads at his evolution from that 1992 campaign and his alleged “populism.” But all of this wasn’t enough; unable to destroy Clinton on economic grounds despite his heretical tax increase, the Right turned to the purely personal in an attempt to impeach him. Now, President Obama will have to carry the burdens for the Right as if he were Lenin resurrected, rather than a “mere” Woodrow Wilson or FDR – which Obama so far shows no signs of being. As one commentator has pointed out – Drew Weston, in his “Leadership, Obama Style and the Looming Losses of 2010” - Obama has managed the remarkable feat of alienating not only his base, but simultaneously, the political center. (At http://www.huffingtonpost.com/drew-westen/leadership-obama-style-an_b_39... - which had drawn an eye-opening 4300 comments as of Dec. 28th.)

As we enter 2010, the political and economic situation in the US is fluid and precarious. We don’t know if we are going to see the unemployment rate come down through the delayed effects of the earlier stimulus, and a lot of anxious cheerleading, to the range of 8% or so by the time of the November 2010 elections, or whether we are going to plunge again, 1937 like, into a double-dip recession – or worse. Readers may recall that we quoted, some time ago, from James Galbraith’s “No Return to Normal” which told us that lending and credit from private banking was the last sector to recover during the Great Depression: it was the replenishment of household savings and income from the full employment jobs growth of World War II which really laid the ground work for the
financial recovery and the prosperity of 1945-1973. It is the fondest hope of Democratic economic centrists that a mere change in the job barometer’s direction will be enough to fend off disaster in 2010 – and the conventional wisdom of those pollsters is always saying that it’s not how awful it may have been just a year ago, it’s the change in direction that sets the mood. Good luck with that mood; it may be possible, but it won’t come in time to alter the foreclosure avalanche for millions of citizens. We’re going to hear a lot more about job creation in the coming months from the Obama administration, and we will see every variety of policy inducement to try to get the private sector to move more quickly, but it will not work in time, and it may not work even well beyond 2010, given the structural situation and the millions of jobs that have been lost, and the long term change in corporate attitudes towards employment that have been stressed in this essay.

The only real remedy is creative and substantial public jobs, as in the best of WPA and CCC tradition from the New Deal, injected into those areas like energy conservation and infrastructure restoration where the need is real and the payback soon and tangible for homeowners and businesses. The great nation which tipped the balance in World War I by its rapid mobilization, involving the construction of numerous training bases, converted from cars to tanks quickly between 1941-1942, that put a man on the moon and obtained years of service (not the projected months) from the Mars Rover vehicles, certainly can pull this off; heaven knows that there are millions of former private sector managers, tails between their legs, looking for genuine work where their old skills might be of real service and offer the distrustful public some re-assurance. The obstacles are not monetary, nor physical, but intellectual and ideological. I’ve seen no signs that President Obama or Larry Summers are willing to cross this Rubicon, no matter how many disposables drown while they wait for the private sector’s riverboat “Gambler” to sail again. And they haven’t laid the groundwork, the “transformative” educational work that would have made it possible. And the polls register that by showing how fixated the public is with addressing the growing deficits. The reason they haven’t laid this groundwork is ideological. Like Bill Clinton before him, President Obama and his Wall Street-oriented economic advisors practice “The Third Way.” James Galbraith summarizes it quite well in his Predator State:

if the presumption of modern conservatives is simple – that markets work best when left alone – this new breed of domesticated liberals puts a simple gloss on it: government can help…but…grand schemes for employment, distribution, infrastructure, or the environment are off the table; nothing is possible or permitted that would undermine the authority of the market in a fundamental way. ..Having ceded this much ground, reputable liberals in modern America thus operate on a narrow ledge, differentiated from the conservatives by one basic premise. Both groups accept that policy must work through markets. They differ only on what it takes to make markets work. (Pages 151-152.)

What Obama has found out is that financial markets (and as he will find out, health care “markets) have failed so monumentally that even the technical rescue interventions have aroused the conservative sharks. His longer term structural economic changes for Global Warming prevention and other investments, no matter how much they rely upon and continue to enshrine the role of markets, stimulate similar alarm mechanisms. So what we are looking at, if the economy improves somewhat, but then stagnates, is a political stalemate, with the Right aggressive and vigilant, energized by the blood in the water and the increasingly fearful signals sent by a wounded, drowning Obama who would not confront the essence of conservative ideology head on. If President Obama, instead of pushing for full employment, moves for full budget balancing via Social Security and Medicare “sacrifices,” then all hell will break lose from the left, such as it is, which probably doesn’t worry him as much as a mere frown from the Right.

But there are other more ominous scenarios which are not at all difficult to summon up.
Another domestic terrorism incident or military action against Iran, either by the US or Israel, would tip the whole balance of politics against, once again, a domestic economic focus, and work to further energize the Right along one of its strongest axis. A worsening economy will have the full blame pinned on Obama by the Right, and intensify its calls for a completely pro-cyclical policy disaster of tax cuts, entitlement cuts and budget balancing, even as the moderate Democrats refuse to put even a toe into the Rubicon waters of public job creation.

Our Country: Ungovernable?
Paul Krugman has seen these looming dangers, even though he may assess their origins differently than I have. In his November 9, 2009 column, “Paranoia Strikes Deep,” he sees a GOP bereft of new ideas to confront the nation’s crisis, and one where “real power in the party rests… with the likes of Rush Limbaugh, Glenn Beck and Sarah Palin.” He writes that because “the Obama administration’s job-creation efforts have fallen short, so that unemployment is likely to stay disastrously high throughout next year and beyond…the party of Limbaugh and Beck could well make major gains in the midterm elections.” And if it does, then

…what has already happened in California could happen at the national level. In California, the G.O.P. has essentially shrunk down to a rump party with no interest in actually governing – but that rump remains big enough to prevent anyone else from dealing with the state’s fiscal crisis. If this happens to America as a whole, as it all too easily could, the country could become effectively ungovernable in the midst of an ongoing economic disaster. The point is that the takeover of the Republican Party by the irrational right is no laughing matter. Something unprecedented is happening here – and it’s very bad for America. (At http://www.nytimes.com/2009/11/09/opinion/09krugman.html).

A Whiff of Weimar in the Air?
Yours truly does not always pay as much attention to Letters-to-the-Editor as he should, but he was lucky enough to see a very important one which followed in the wake of this Krugman column. Readers know that I have been reluctant to address the increasingly ominous mood of the fundamentalist Right in this country by Weimar analogies, even as I confess to having brushed up on my Weimar history this past summer, as well as my Ancien Regime knowledge of France in the 18th Century. My inclination has been to see the growing ungovernability of the US more in terms of the American decade of the 1850’s, as I indicated in my September 22, 2009 essay Look Back in Anger. But we’ve seen Krugman’s take, and on November 14, just five days later, a letter was published in the NY Times under the heading “The Rise of the Far Right.” It came from none other than Fritz Stern, university professor emeritus at Columbia University. He wrote that Krugman’s column should serve as “an important warning.” After noting similar movements in Europe from nearly all the countries, “from Britain to Latvia and beyond,” he spelled it out. There were different grievances in the countries but “the underlying mood of anger, of implicit violence, ominous bloody-mindedness couched in nationalistic rhetoric – is everywhere the same, and is very bad for the West.” Now what the letter or the brief bio citation didn’t tell the readers is that Fritz Stern is arguably the greatest living American scholar of German 19th and 20th Century history - and the origins and rise of National Socialism. When someone of Fritz Stern’s eminence writes a letter of warning like this one, it begins to move the unthinkable into the realm of the conceivable. The accounts of increased weapons and ammunition purchases in the wake of Obama’s election (that certainly is not the left doing the buying) - and the shamefully large numbers of private contractor-mercenaries engaged in AF-PAK, leaves me wondering about their future role in domestic society.

Thanks to the theme provided by Paul Krugman and Fritz Stern, we are going to conclude this essay with a return to a question broached in the last one, from September, 2009: where is the passion on the left? as compared to the Right, and, more specifically, because of the emphasis given by James Morone in his book Hellfire Nation and Tony Judt in his essay “What is Living and What is Dead in Social Democracy,” where is the missing moral intensity? (Editors note: as this essay was being finished in late December, he learned of Tony Judt’s grave illness, with Lou Gehrig’s disease, conveyed to readers of the January 14, 2010 print edition of The New York Review of Books in a startling article entitled “Night.” So what follows is in tribute to the probing article about the fate of Social Democracy.)

As we have previously suggested, Judt partly answers his own question in the essay by recalling the origins of Social Democracy, true both for Europe and the US of the New Deal: it was a measured and temperate reaction to the totalitarian alternatives on the left and while its driving force also drew upon, in the broadest possible moral sense, a passion for social and economic justice, that passion was always reigned in by a powerful focus on the means used to achieve it, which were through democratic elections, not coups, and rational campaigns of persuasion, not street fighting, as in the waning phases of the Weimar Republic. In the United States, that passion saw its ultimate expression, and limits, in the sit-down strikes led by the CIO in the 1930’s, in the mass production industries, and the boycotts, sit-ins and marches of the Civil Rights campaign and the anti-war movement of the 1960’s. Since Judt raised the issue of moral considerations, it is interesting that he does not spend any time on the connection to organized religion and the issue of the secularization of the left. Judt himself, if Wikipedia can be trusted, was raised by secular Jewish parents but sent to Hebrew School in London; his father was descended from a long line of Lithuanian rabbis. Judt’s involvement in the nature and future of the Israeli state got him into plenty of trouble at the NYRB and apparently got him kicked off the board of The New Republic. My interpretation of this biographical curve is straightforward: another instance, on the left, of strong moral judgements retained, but detached from formal theological entanglements.

Judt also deplored the dominance of “economism,” that tendency to view all propositions affecting public affairs through the lens of the economic profession itself: will it be efficient, will it contribute to GDP, and so on, and divorced now from the type of moral intensity that the religious Right brings to the abortion issue, and the secular Right brings to policing the boundaries of their version of the laissez-faire state. (If you think there isn’t moral intensity on the secular economic Right, spend some time following Stephen Moore of the Club for Growth, the political enforcement wing of conservative economics for Republican candidates. I am unaware of anyone on the respectable economic left that can match his type of ferocity, for better or worse.)

Liberalism’s Limited Dreams
These are just the questions that James Morone raises in his tracing of “the politics of sin” and our Puritan legacy throughout US history in Hellfire Nation. We’ve already written about his view of the Roe vs. Wade decision – and the reaction to it – that it served as a “moral intensity” watershed for politics – for both the left and Right. His hope is for a revival of the Social Gospel, the name originally given to the shift within the mainstream Protestant traditions from their traditional emphasis on personal morality to the social and economic failures in urban industrial life in the late 19th Century. That’s the tradition and spirit that infused both FDR and Martin Luther King and it’s “the historic way to mobilize support for big changes,” one that “was discarded and has lain largely dormant for a generation – in fact, since right around the time of the Roe decision in 1973.” (Page 491.) And here, Morone is perhaps more correctly self-conscious than Judt, for he notes that “after all, the Social Gospel always had a strong secular streak.” (Pages 491-492.) Morone is blunt that something is missing from the left, and he makes a distinction between liberalism and variations that would go beyond it: “What progressives have lost is the moral fervor that fights to rally the country. Liberalism protects our country from dangerous impulses, from discrimination and hate crimes. But it does not rouse people to win new rights, wider justice, and greater social equity. It does not dream big dreams about a better society.” (Page 492.) And then he steers right over the ground covered by Tony Judt on the economic question, with perhaps greater insight into the nature of the political economy in American discourse: “Boom or bust, we cram moral lessons into our economics. It’s not only about money, but about good and bad people. Vice and virtue sneak into most of the big questions. Morals constantly leak into the secular sphere – they define our problems and imply solutions.” (Pages 493-494.)

And what would it take for a new Social Gospel movement? Morone says it starts “with a generation of leaders committed to deep changes in the tone and meaning of our politics. The Victorian revival has plenty of preachers. The social gospel may be stirring – but it still faces the first political test: champions who are willing to stand up for a new social justice rooted in moral conviction.”

Well now, what we are finding out about “change” in 2009-2010 is that our purported champions – and I certainly would not put the current President nor his chief challenger into the Social Gospel category (Market Gospel, yes, in a minor key), is that they are far more willing to risk “interventions” into remote and dangerous foreign lands than they are into the key danger zones of the free-enterprise world, especially those most touching upon the achievement of full employment. And as for the memory of the original Social Gospel? On that topic, I can offer my own personal cruise upon what seemed like the “Dead Sea.” And I agree with Morone that the Social Gospel represents the left side of the axis upon which moral mobilization turns, whether it is focused inward and on the individual, or upon the morality of economic and social policies.

The (Banished) Social Gospel Today
I had the chance back in 2005 to ask someone who was studying for the ministry in one of the mainstream Protestant denominations about how the Social Gospel was treated in theological school, wondering why the tradition seems to have lost any influence today. The answer, and the tone, left me wide-eyed in disbelief. The answer, which fairly shot back loaded with incredulity, said the Social Gospel was now seen as the equivalent of communism or socialism, and simply had no traction, and received no attention. When I protested that my understanding was that it was a mild version of socialism based on long-standing Christian currents of egalitarianism, and its main practitioners in the US very much stood apart from militant Marxist movements, I was told that wasn’t the way it was viewed at all. (And I note that Tony Judt strikes very much this same theme in his comments about European social democracy, which “unquestionably concerned itself with issues of right and wrong: all the more so because it inherited a pre-Marxist ethical vocabulary infused with Christian distaste for extremes of wealth and the worship of materialism.” Judt does admit, however that “such considerations” did get caught up with secular ideology, and questions like “Was capitalism doomed...”) Looking back on this, my question and response, I can only wonder in amazement that the answer I received, from someone who had just been in theological school, echoed the same conflation by Right radio of liberalism, social democracy, socialism and communism (and now Obama-ism!) into one radical doctrine, history and distinctions - that many died for - be damned. But then again, that’s why George Lakoff has a chapter (# 14) in Moral Politics entitled “Two Models of Christianity.” And is there any question about which one is the dominant model today in 2010?

Well, Professor Morone has issued his call, his hope for a revival of the Social Gospel, and I join him in that, despite the pitcher of cold water I had thrown on it from someone closer to the religious side of things than me – and in truth, I’m not counting on much help in the project from the organized religious side, despite the effort of folks like the Rev. Jim Wallis and his Sojourners, who has a new book out. No, something that Richard Sennett wrote, in a far more secular voice, has resonated more, especially in the light of our current economic predicament. We’ve already cited part of it, his powerful spear thrown at the nature of the New Capitalism - at the end of his 1998 book The Corrosion of Character – that “a regime which provides human beings no deep reasons to care about one another cannot long preserve its legitimacy.” Consider the date, and the meaning of it: 1998 was close to the apex of the best of Clinton-Rubin economics, balanced budgets in homage to the divinity of the Bond Market, de-regulation of breathless scope, and the achievement, however briefly, of the closest we’ve come to full employment since World War II and the peak of the 1960’s boom in 1965-69. But in retrospect, the Clinton “achievement” owed a great deal to the dot.com bubble and Greenspan’s easy money policies and as my readers well know by now, helped lay the groundwork for the disasters in 2008-2009. (And economist L. Randall Wray (New America Foundation and Univ. of Missouri at K.C.) has called into question those employment numbers from the Clinton years, claiming that the number of “potential workers” who remained jobless then came close to the 30 million lacking full employment today.)

Full Employment: Policy, Goal, Right
Yet despite this, Sennett is toting up the costs, especially the psychic ones, from all those downsizings, delayerings and liquidations, especially among middle- class middle managers in the great lay-offs of the 1990’s. Despite the relatively good times, he sees the impacts on the discarded IBM programmers he’s met, and raises the question openly: in this New Capitalism, “Who Needs Me?” He has a revelation about those “left behind,” in, of all places, Davos, Switzerland, the gathering place for the “rulers of the flexible regime,” and also the place, he informs us, that served as the setting, in a grand hotel, for Thomas Mann’s novel The Magic Mountain. Sennett sees the discomfort in the economic elite as they are asked about those left behind, and he realizes that “‘We’ is also a dangerous pronoun to them…they know that the great majority of those who toil in the flexible regime are left behind, and of course they regret it.” Now flash forward from 1998 and these thoughts of Sennett to 2009-2010. As we have seen in this essay, we now have an acute unemployment crisis that is built on top of the already existing layers of “disposables,” those facing the “specter of uselessness”; the unemployment rate, including those who are underemployed, or have dropped out of the workforce entirely is put at between 17%- 20% - given the unreliability of the data, especially for those who have stopped looking entirely. They are simply not viewed as part of the official unemployment rate of 10% or so (as of December, 2009). We have seen in Karen Ho’s findings that the entire focus of Wall Street, which sends the dominant economic signals to the rest of corporate America, that “employment” is not even a conscious consideration in its vast merger and acquisition activities – if anything, the more disposables, the higher the stock price might go, as costs are cut. In the now famous Times online interview with Goldman Sachs CEO Lloyd Blankfein, from November 8, 2009, reporter John Arlidge begins the article with the following thoughts, which reveal, in a very subtle way, far more than I’m sure Blankstein intended about we, the “disposable ones”:

‘I know I could slit my wrists and people would cheer,’ he says. But then, he slowly begins to argue the case for modern banking. ‘We’re very important,’ he says, abandoning self-flagellation. ‘We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle.’ (“‘I’m Doing God’s Work.’ Meet Mr. Goldman Sachs.” My emphasis.)

Please carefully note the language here: We in investment banking do well, companies grow, and “it allows” people to be granted jobs. “At your pleasure, my lord”: just let us know when the job temperature is right so we can pay the bills – the ones that come due regardless of your moods. This is about as far as you can get, and confirmation of Ho’s and Sennett’s findings, in “real time” as the technological age would say, from FDR’s “Second Bill of Rights” and its notion of the very first right, the right to a job.

So now I’m ready to answer Sennett’s own question which comes just before his powerful conclusion - that “spear” at the end of the Corrosion of Character. He has been thinking about the possibility that those folks at Davos, and the “regime” they represent, that it just “might at least lose its current hold over the imaginations and sentiments of those down below.” How would that happen, he wonders? He’s learned “from my family’s bitter radical past; if change occurs, it happens on the ground, between persons speaking out of inner need, rather than through mass uprisings. What political programs follow from those inner needs, I simply don’t know.” (Pages 147-148.)

And this is my answer to that 1998 question: the most direct route for Americans to a better economic life, and an easing of some of the most acute social and psychological pains they are suffering from today, and from over these past decades of the Great Market Utopian project, is to call for Full Employment, and to make a decent paying job a human right, the very first one in a Second Bill of Rights. Whether we can give this call and this right the traction they deserve, I don’t know. But I do know this: the response to it from most professional economists, and elected officials, from the county to the state to the federal level, from the President to Larry Summers - will tell you a lot about how far we are from the Social Gospel moment, secular or religious. The answers, and the excuses, I can assure you, will be very revealing. And, you can count on, during this same time period, a response from the other side of the political spectrum and from the “Angry God of the Market,” which, instead of calling for full employment measures, will be calling for a “Full Commission” to undertake the gutting of Social Security and Medicare, well out of your political reach, just to remind the Disposable Ones and the Useless Ones where they actually stand in the great cornucopia that the pure free-market has brought us. It should make for quite a contrast.

The best to all my readers,

Bill Neil
Rockville, MD

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future