America, the Ungovernable

 

Even if the Democrats win the White House next month not much will change. Joe Biden, even if he had the energy and determination to crush the plutocracy and resurrect democracy, won't have the means to even America's political keel. The federal government isn't just in the pocket of Big Donors. The oligarchs own it.

It's the sort of predicament that invites gallows humour only, in this situation, it might be called "guillotine humour." That's certainly the take of Josh Brown, a.k.a. "the reformed broker," in a thoughtful piece, "Whatever comes after Trump and Biden will be worse."

He focuses on today's K-shaped economy, the burning fuse of social unrest.

What has developed is more like a K. On the upper arm of the K are well-educated and well-off people, businesses tied to the digital economy or supplying domestic necessities, and regions such as tech-forward Western cities. By and large, they are prospering.

On the bottom arm are lower-wage workers with fewer credentials, old-line businesses and regions tied to tourism and public gatherings. They can expect to bear years-long scars from the crisis.

Up the Revolution. 

I spent the summer listening to podcasts and reading books about the French Revolution. In particular, I recommend Hilary Mantel’s novel A Place of Greater Safety and Mike Duncan’s epic Revolutions podcast (Season 3).

The American Revolution began as a dispute between wealthy Americans and their colonial bosses. It was catalyzed by import taxes and business interests. It’s not at all apropos of the present situation in America. The French Revolution is a much better analog.

The French had tolerated Dukes and Dutchesses and all manner of feudalism and drastic wealth inequality for centuries. And then, like now, there was a natural disaster that blew up society and accelerated the already rampant inequities of their system into an intolerable extreme. There was a mini-ice age in the mid- to late-1700’s that froze the nation’s agricultural product, which led to a grain shortage, which then affected bread prices and threw the matter of sugar prices into dispute as well. Poor King Louis XVI just happened to have been coronated at the wrong time, 1775, just as the economic situation of the monarchy was being called into question with so many people starving on the streets of Paris. Newly won press freedoms made it so that any aggrieved citizen could start and distribute a newspaper (their version of Twitter) and these newspapers published the incendiary ravings of any lawyer, poet, philosopher or other opportunist who could string a few sentences together.

To counter these writings, the King’s finance minister had the idea to “open the books” and let everyone see that the royal family was managing the nation’s wealth responsibly. This was a Pandora’s Box, out of which escaped the very dangerous idea that the king was now answerable to the rabble. It wasn’t long after that heads began to roll. Then, like now, the cities were a sort of Ground Zero for the misery and suffering, and the revolt had to emanate outward into the countryside (our modern-day suburbs) in order to engulf the entire nation.

I don’t mean to suggest that we are quite at that point, but the parallels are lining up perfectly. We cannot endure a situation where the Hamptons carries on as though nothing has changed, tax rates remain where they are and asset price inflation becomes a substitute for wage growth. There is only so far that the top arm of a K can continue higher before something revolutionary sweeps up everyone on the bottom arm.

So if you think we’re polarized politically now, if nothing changes in the next few years we’re going to be unrecognizably so for the next cycle. And with the Boomer candidates having all aged out by then, whatever movement comes next is going to be angrier, more energetic and significantly less patient with the status quo.

Unless we find a way to re-employ and re-enfranchise the millions of people who have essentially fallen out of the economy, through no fault of their own. Unless we find a way to bind ourselves together again, as one workforce, one economic reality, and one vast opportunity set where everyone has a shot to pay their bills and pursue their dreams. Right now, this ain’t it. The K doesn’t end well.

I don't think a new president, no matter how well-intentioned, can heal such a deeply divided nation.  McConnell taught that to Obama. No president can reform America's "bought and paid for" Congress. They will never turn on the oligarchs, their personal benefactors. 

Maybe the French were right. Maybe it's time to give The National Razor a try.