Saturday, July 7, 2012

Dispatches from The Fail Decade


Penn State University. The Catholic Church. Washington, D.C. Wall Street. The Media. This rogue's gallery of institutional failure forms much of the thesis for Chris Hayes's eminently readable first book, Twilight of the Elites. In brisk prose sprinkled with enough 50 cent words you will want to keep your Oxford English Dictionary handy, Hayes persuasively argues that our current state of affairs, where middle class values and dreams are stymied, the wealthy are more distant than at any time since before the Great Depression and our faith in the institutions that form the foundation of our society is at historic lows, is so dire because those very institutions have ceased being (pick your poison) above board in their dealings, available to the masses, little "d" democratic, and/or accessible. 

It is hard to argue with Hayes's premise or the litany of examples he uses to prove his point. His view, that a true meritocracy should reward ability and not serve as a feeder system for the propagation of the rich, has been blunted by the ability of wealthy people to game the system.  As a prime example, Hayes discusses his own matriculation at the widely renowned Hunter College High School, which bases its admission on a single test administered throughout New York City.  For many years, this policy ensured Hunter's admissions were relatively diverse across racial, ethnic and socioeconomic lines, but as a cottage industry of preparatory courses sprouted up specifically to assist kids in scoring well on the test, that diversity sank, as wealthy families were able to hire tutors that would bolster their kids' chances of admission. 

While these parents didn't rig the system so much as take advantage of it, Hayes also considers the financial crisis, where lots of traders and supposedly smart people manipulated banking rules to their advantage without repercussion or a sense of anything other than their devotion to the almighty dollar.  Indeed, during the bubble years, traders had a nomenclature loosely called "you won't be here, I won't be here," which, reduced to its core, encouraged speculative behavior because neither party to the transaction would be around if (or when) the deal went sour.  When things did blow up, the government bailout affirmed, rather than punished, this bad behavior while leaving struggling homeowners and the unemployed twisting in the wind.

And if the collective punishment for blowing up the world's economy has been next to nothing, Hayes also points to the run up to the Iraq War as a turning point in our distrust of elite institutions, because it was not just the government that was cherry picking information, but complicit in their efforts were lap dogs throughout the media who acted as stenographers instead of skeptical reporters when the Bush Administration fed them misinformation.  The journalistic after action mea culpas rang particularly hollow when that war went south and those who had been proven so obviously wrong scrambled to justify their lack of scrutiny. Of course, this did not stop the Administration from churning out rosy talking points or keeping the war's cost safely insulated from either the appropriations process or taxpayer responsibility (the whole thing was put on the "credit card"). Unfortunately, between the prevarications that were ultimately uncovered and other failures, most notably, the government's pathetic response to Hurricane Katrina, Bush not only created deep division in the country, the public's trust in the Presidency was severely harmed.

But Hayes's point is not to say that people and institutions sometimes do morally wrong or criminal things - they do, regardless of the era, but rather, that absent some reckoning, some punishment, some purging of the attitudes (and people) who encourage this type of insularity, little will change. The copious letters, notes and memos Hayes shares from the now rich archive of information available about the Catholic Church shows a casual depravity mixed with dangerous group think about wanting to protect pedophile priests because exposure would reflect poorly on the institution, victims be damned.  By the time all of this information became public, little could be done to punish the perpetrators, either because they had died, statute of limitations had expired or there was simply little desire for authorities to prosecute. Victims' lives were rendered asunder, families were cleaved and faith eroded, but for the Church, these were small losses compared to the risk that attended addressing the problem when it happened. Meanwhile, current leaders can wash their hands of culpability and point to reforms without being blamed for the sins of their predecessors - another example of "you won't be here, I won't be here." 

This type of mendaciousness, which Hayes notes occurred at a micro level at Penn State, where officials and school leaders ignored clear signs of pedophilia by Jerry Sandusky, feeds into the narrative that the elite are unaccountable and merely serves to deepen skepticism in these institutions.  While Hayes notes that prior times in our nation's history, particularly the progressive era of the 1890s, the New Deal and the 1960s resulted in meaningful social change, from wage and labor laws, to Social Security and Medicare, to the abolition of de jure segregation in the South, what we have also seen is strong reaction to each of these movements - indeed, the whole Lochner Era in the Supreme Court strove to dismantle modest wage and hour reforms, the Republican party has been fighting a rear guard action against FDR and LBJ's social policy for decades (admittedly, to little effect), "white flight" from many cities in the 1960s and court-mandated busing turned many middle class and blue collar white voters away from integration and of course, in our current political environment, Voter ID laws have been passed that will disproportionately impact minority voting rights, gerrymandering has created "majority white" Congressional districts that are safely Republican and courts have pared back affirmative action to the point of a nullity. 

While Hayes is quite effective at diagnosing the problem, I am not so certain of his solutions. His first, to reduce inequality through higher taxation on the rich is one that garners an enormous amount of popular support, but Republican tax orthodoxy, when it even flirts with tax increases, does so in the guise of "reform," which they define as reducing deductions or loopholes that can easily be reinserted at some future date (as happened after the 1986 tax "reform" passed by Congress and signed by President Reagan) in exchange for lowering marginal rates.  A tax structure that was progressive, with escalating rates of taxation at high end thresholds ($1 million, $5 million, $10 million, etc.) along with treating things like carried interest as ordinary income instead of dividend income, would be welcome, but the likelihood of that happening is remote.  If anything, Democrats are likely to bite on the "reform" idea, signing off on reduced rates (which are almost impossible to raise in the future) for closing loopholes that will reappear months after the ink dries on the agreement.

I am also skeptical of Hayes's definition of "direct organization," as the reshuffling of the social order in response to a crisis. Here, Hayes uses Occupy Wall Street as an example of such an opportunity. While OWS had its moment, it passed, and quickly, when officials shut down camping sites and the media lost interest. Further, nothing that OWS was protesting against was affected - JP Morgan recently announced a $2 billion loss (later revised to $6 billion) on just the type of dodgy trade that helped cripple the system in 2008, but their CEO, Jamie Dimon, was given a king's welcome when he was called to testify before the U.S. Senate.  Tea Party favorite Jim DeMint went so far as to ask Dimon for his recommendations on how the financial industry should be regulated - might as well have asked the fox how to set up the security at the hen house. Moreover, as Matt Taibbi and others have chronicled, even the modest regulatory changes that were created under Dodd/Frank are being eroded by a steady drumbeat of pressure by banks and their army of D.C. lobbyists.

Hayes also sees parallels between OWS and the Tea Party movement, both of which, he asserts, were reactions to institutional failure.  In this, I agree; however, what the Tea Party movement has done far more effectively than OWS (or any "left" movement of the day) is achieve political relevance through the ballot box, not just at the federal level, but at the state and local level as well.  I think there is a key take away (and something I blogged about many months ago: http://scarylawyerguy.blogspot.com/2011/10/first-blood-occupy-wall-street-and.html) - while the visual of OWS was powerful, running (and electing) candidates who will advocate for policies that will reduce inequality is the necessary long-term strategy.  

Of course, the larger question that is unanswerable is whether institutional or insurrectionist change can help us achieve the meritocratic society Hayes advocates for. He pins his hopes on upper middle class outrage, of people who play by the rules, but are not only a few rungs below the top, but are denied the ability to share in the spoils of society while being treated no differently by the elite than are the poor and middle class. I question whether, if invited into this inner sanctum of success, much will change. New Journalism and the "Boys on the Bus" of the late 1960s and 1970s were iconoclastic in their time, but the leaders of that movement slowly morphed into the very establishment they upended. Bob Woodward helped break Watergate wide open but flash forward 30 years and he was (rightly) lambasted for writing a largely hagiographic portrait of George W. Bush as a steel-spined commander in chief while Bush and his underlings were (at best) deeply shading the truth of what threat Iraq posed to the United States. This may also be true of Hayes and the new breed of journalists covering American politics. Today, they flirt at the fringe of outrage, but they are already compromised in their employment by corporations like Comcast, which owns MSNBC and airs Hayes's show twice a week.  This is not to take a dig at him, or others, like Rachel Maddow, both of whom I have enormous respect for, but rather, to suggest that "the system" tends to subsume the people who attempt to uproot it, instead of the other way around. Bobby Rush may have been a Black Panther, but now he's just another liberal Democrat representing a safely 'blue' Congressional district from Illinois. The Who once sang about hoping to die before they got old, but their music is now used to sell retirement accounts and introduce television programs. 

In reading Twilight of the Elites I was reminded of Animal Farm because we cannot assume the folks pressing their noses against the window of the confluence of money, power and networking will end up any differently than the pigs who espoused equality to overthrow the evil farmer only to declare that all animals are equal, but that some are more equal than others. Meet the new boss, same as the old boss. 

3 comments:

  1. Outstanding. Longer comment on Twitlonger.

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  2. Considering that most of the prep classes for the Hunter test are taken by first generation immigrants in Queens, it makes you sound incredibly clueless to cite this as an example of rich parents taking advantage of the system. No rich family in NYC aspires for their child to go to a selective public school and work like a dog to get into college.

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  3. If you had read my review (or the book), you would know it was Mr. Hayes, not me, who raised the example of Hunter College H.S. Your complaint is with him, not me. Thanks for reading my blog!

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