In not Of?

from Peter Radford

Today’s New York Times has a reminder of the damage the crisis has done to the economy, and, more importantly, to enduring attitudes towards opportunity. The article summarizes the results of a survey conducted by Rutgers University.

The main thrust of the article is that this crisis was both deep and broad enough to involve almost eighty percent of the population in one way or another. Unemployment and its awful effects were that widely felt. People’s lives were often ruined permanently. The entire trajectory of some people’s lives will be changed forever. The damage is incredible. The downdraft from Wall Street’s extraordinary greed driven stupidity caught almost all Americans and has left enormous psychological as well as material scars.

Yet we still have not dealt with the causes and have not undertaken strong remedial action.

Why not?

Our elite, those people who make the key policy decisions in both the public and private sectors, and those who shape the discussion in the media and academia, are divorced from the reality that the Rutgers survey exposes.

Our elite may live in America, but it is not of America.

This leads to a profound separation.

The elite lives a life and inhabits a network that excludes the rest of us. It faces a different set of facts and so resolves its perceived difficulties in ways that are often perverse from our point of view. It was largely protected from the crisis and thus could see it more as an academic exercise rather than a raw everyday experience. It still fails to understand the erosion of opportunity that most Americans feel because its opportunities exist elsewhere. The elite shares a world with other elites. Its problems extend across borders. It sees and tackles problems with a shared set of values and ideas, not shared with us, but shared with those other elites. It cares little about the cost of education because it can afford that cost. It cares little about the cost of health care because it is well provided for. It cares little about a rotting infrastructure because it lives beyond it. It cares little about the loss of competitiveness because it is mobile and can move to the opportunity. Besides it has little national allegiance and can argue, without remorse, that adding jobs in China is still adding jobs. So what that they aren’t in the US? If only American workers were competitive. Meaning that cheap.

When American workers are that cheap the elite will, no doubt with much patriotic fanfare, repatriate those jobs. Until then it is the duty of our government to use taxpayer resources to subsidize the retention of jobs here at home.

To the elite the very word ‘home’ is an oddity. Which ‘home’?

This state of affairs is not unusual in history. It is quite usual to read the historical record and discover a nation ruled by an elite that shares little in common with the common populace. Just this week there was much fanfare over the discovery of the remains of Richard III of England. He was the last of the Plantagenet dynasty. They were a French family, most of whom spoke only French. They ruled England.

We have an an analogous elite.

Our’s speaks finance. It understands investment. It is highly bureaucratic. It is well educated and protective of its skills which are usually walled off by expensive professional requirements. It occupies the credit side of the balance sheet. Which is why it is pre-occupied with debt levels, interest rates, fears of inflation, protecting the banks, and increasing profits. It doesn’t perceive itself as being part of the ‘wage’ economy, so wages are unimportant. Nor are jobs. After all, it imagines, there are always jobs if the wages are low enough to justify hiring someone. If only workers didn’t want so much, there would always be jobs.

This isn’t the classic capitalist elite imagined by Marx. It is a newer and more diverse group created by the complexity of modern bureaucratic management and economic process. It lives in the network that links the diversity of our economy and makes its money by moving the parts around, or by providing ‘advice’ and ‘opinion’ to those that do. It is self-sustaining, self-reproducing, and almost immune to the reality it thinks it controls. It fills our leading universities with its offspring, securing that education with generous donations to the endowments that are then invested in the companies the elite manages. It directs the research agendas of those universities. It benefits from the learning produced. It buys what it can, and what it cannot buy is deemed insignificant. It sates its charitable instinct by donating heavily to the ‘arts’ that it wants to consume. And it mitigates its fear of being seen as rapacious by making bigger donations to those same arts – only this time as a tax deductible gift to the ‘public’.

All in all the elite socializes with itself in an incestuous ignorance of what lies yonder.

Until, of course, what lies yonder whacks it on the side of the head and demands attention. At which point the elite has no response or use because it has no explanation of, nor care for, what lies yonder.

And this is our problem.

No amount of whacking on the side of the head is getting us anywhere. The elite is still spewing out policy solutions that seem fine within its bubble but have no relevance outside.

It worries about debt when there is no reason to.

It worries about inflation even when there isn’t any.

It worries about profits even when they are historically high.

It protects the banks even when they mess the economy up.

It cares about immigration only to the extent it provides skilled workers.

It cares about health care only because it is an expensive benefit to provide to workers.

And it cares about workers only if they are cheap, and, well, do work that the elite needs done.

This is what we get for having an elite that lives in America, but is not of America.

Rotten policy and irrelevant policy debates about artificial crises.

We need jobs. And we need growth. Our elite is failing to deliver either.

  1. BFWR
    February 7, 2013 at 9:50 pm

    So true.

  2. Bruce E. Woych
    February 8, 2013 at 3:12 am

    “Our elite may live in America, but it is not of America.

    This leads to a profound separation.”


    Revolt of the Rich
    Our financial elites are the new secessionists.
    By Mike Lofgren • August 27, 2012

    “The super-rich have seceded from America even as their grip on its control mechanisms has tightened. But how did this evolve historically, what does it mean for the rest of us, and where is it likely to be going?”

    “It is no coincidence that as the Supreme Court has been removing the last constraints on the legalized corruption of politicians, the American standard of living has been falling at the fastest rate in decades.”

    “The objective of the predatory super-rich and their political handmaidens is to discredit and destroy the traditional nation state and auction its resources to themselves. Those super-rich, in turn, aim to create a “tollbooth” economy, whereby more and more of our highways, bridges, libraries, parks, and beaches are possessed by private oligarchs who will extract a toll from the rest of us. Was this the vision of the Founders? Was this why they believed governments were instituted among men—that the very sinews of the state should be possessed by the wealthy in the same manner that kingdoms of the Old World were the personal property of the monarch?”

    Revolt of the Rich
    Our financial elites are the new secessionists.
    By Mike Lofgren • August 27, 2012

  3. William Neil
    February 8, 2013 at 8:41 pm

    As a resident of Montgomery County Maryland, one of the high income-education counties which make up the greater DC region, and the home to many of the elite written about here, I can only nod my head in assent to the content and tone of the description. For most of the Democratic Party elite I’ve interacted with, Bill Clinton’s Presidency, and his economic thought represent the beginning and end of thinking about the poltical economy. And I don’t here too much dissent from them about the brutal labor policies and implications of Thomas Friedman’s thought…despite my attempt to take him head on in my essay of criticism: “When Market Man Consigns the Common Man to the Dustbin of History.”

    And let’s give fair tribute to the late Christopher Lasch and his 1996 book “The Revolt of the Elites and the Betrayal of Democracy,” a shorter version of his more magisterial “The True and Only Heaven,” which was certainly not the “heaven” delivered to us by globalization.

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