Feudalism With A Smiling Face

The rich and powerful live in a different world from average men. They consider themselves privileged. Entitled. Untouchable. Better than the rest of us.

Los Angeles Dodgers slugger Manny Ramirez drew a 50-game suspension for using a banned substance. He failed his drug test. Listen to the play-by-play on the Manny Ramirez suspension. Sports columnists and commentators wonder why a marquee player like Ramirez would risk taking any medication not pre-approved beforehand. They concoct explanations for Ramirez’s positive test that no one believes. Seattle radio personality “New York” Vinnie Richie on Air America radio’s The Ron Reagan Show [1] took a more jaundiced view [timestamp 3:08]:

“Athletes don’t live in the same world that we live in … They live in the world where the same rules don’t apply to them as apply to everybody else … When you grow up in that world, I think you develop a feeling that you can skirt the law, that you’re kind of immune to it, that you can go around things.”

Athletes. Vinnie was speaking of athletes.

Elsewhere, high officials in the Bush administration authorized a regime of torture for suspected terrorists in prisons spread across the globe. They and their “enhanced interrogation” defenders are circling the wagons trying to stave off investigations and criminal charges. Wall Street crashed after creating the largest Ponzi scheme the world has ever known. Now President Obama is looking to crack down on their offshore tax havens [2]. The health insurance industry is cozying up to his administration. They hope to crowd out the single-payer option preferred by six in ten Americans.

What Vinnie said of Ramirez is true of many celebrities, elected officials, and Wall Street and corporate moguls. We are dumbfounded that any of them think no one will notice their misdeeds, much less demand accountability for them. But there’s a reason they thought that: Money means power and power means impunity.

The rules don’t apply to our 21st century Gatsbys because they’re better than us. Rules are for commoners, not royals. Welcome to feudalism with a smiling face.

Money has always meant privilege and, sometimes, the kind of privileged recklessness that precipitated the crash of 1929. In response, Franklin Roosevelt's administration enacted banking regulations to keep 1929 from recurring, striking back at "privileged princes" who had "reached out for control over Government itself." In the wake of Roosevelt and WWII, the United States built the world’s largest middle class on a foundation of universal education, a thriving industrial economy, a strong labor movement and a social safety net. It was the fulfillment of the American Dream for a large swath of U.S. citizens. It narrowed the income gap between the oligarchs and the poorest Americans.

During the Reagan years, however, the oligarchs struck back, deregulating industry after industry, attacking organized labor and attempting to dismantle the social safety net put in place by the New Deal. With globalization came pressure to keep stock prices up by keeping wages low, a decline in organized labor and an explosion in health care costs. The income gap widened again into a yawning [3] gap [4], the largest since the 1920s.

The new crop of Gatsbys, from pundits to politician to power hitters, is even more entitled and otherworldly than the last. Money, celebrity and notoriety are now nearly interchangeable, and goals in and of themselves. All bring with them power, privilege and, often, a self-righteous sense of entitlement. Success has become disconnected from contribution to society, as Wall Street’s collapsed house of cards and the tantrums of its bonused princes make clear.

They are better than the rest of us.

The ideology behind this sybaritic view says the oligarchs’ success is no accident of birth, but earned solely through individual hard work and discipline. From Ken Lay to Jim Bakker, the attainment of wealth and power signify God’s approbation – a state of grace. How dare we, as lesser men, stand in their way, much less form a jury of “peers” to judge them for any malfeasance?

There is no more stunning recent example of this Randian world view than the April 30 fit of pique by Fox Business’ Stuart Varney:

How dare Cornell University economist Robert Frank state the obvious [5], that while important, “talent and hard work are neither necessary nor sufficient for economic success”? For that matter, how dare Warren Buffett – one of the wealthiest men in the world – imply that an accident of birth played any role in his [6]?

“I personally think that society is responsible for a very significant percentage of what I’ve earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you’ll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling 30 years later. I work in a market system that happens to reward what I do very well – disproportionately well.”

– Warren Buffett, Berkshire Hathaway annual meeting, Omaha, 1996.

Buffett's comments call into question the royals' entitlement to rewards without social responsibilities, rewards owing to what President Franklin Delano Roosevelt derided as "privileged enterprise, not free enterprise." In accepting his party's nomination for president at the 1936 Democratic national convention [7], Roosevelt said:

“[O]ut of this modern civilization economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks and securities, new machinery of industry and agriculture, of labor and capital—all undreamed of by the fathers—the whole structure of modern life was impressed into this royal service...

These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the Flag and the Constitution. In their blindness they forget what the Flag and the Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjection; and against a dictatorship by mob rule and the over-privileged alike.”

Roosevelt's New Deal struck back against the wreckage wrought by America's last great experiment with laissez faire capitalism. With the American middle class under assault [8] and the banking system again in crisis, we have come full circle in seven short decades. Once again, "privileged princes" have bent the government to their will with familiar results.

So far, the Obama administration has thoughtfully provided golden parachutes for this latest generation of royals. But as job losses continue to deepen, they are right to be anxious about a new New Deal. President Obama's moves against offshore tax havens is a reminder to the over-privileged that evading their “obligation of citizenship [9],” is intolerable. While the American people are a patient people, that resource is not without limits, as George III discovered.