Wednesday, October 19, 2011

A Historical Narrative for OWS

One of the most nefariously effective strategies of the radical Right in this country has been identifying themselves with the heroism of the American past, and portraying any progressive policy as a kind of alien, anti-American imposition. (Notice the upsurge in references to "European socialized medicine" recently.) Today I happened to be in lower Manhattan, and within minutes I gazed on Alexander Hamilton's grave at the Trinity Church graveyard, and then walked a block north and saw the protesters at Zuccotti Park. This got me thinking about the long history in America of opposition to the capricious and undemocratic power of concentrated wealth. Occupy Wall Street and its allies need an antidote to the tricorn-hatted, Founder rim jobbing of the Tea Party set, and need to start reminding Americans of their traditional historical aversion to the financial industry's chicanery.

Hamilton's financial policies, which greatly benefited the rich creditors who held Revolutionary War debt, raised plenty of protest already in the 1790s, at the birth of the new republic. To pay off those creditors, the government instituted taxes on the whiskey stilled by farmers, many of whom protested during the so-called Whiskey Rebellion. The issue wasn't just taxes, but the fact that the government was sticking it to the lower orders in order to make sure that the wealthiest made themselves even richer. That state of affairs sounds awfully familiar today, doesn't it? Bankers wreck the economy, they get bailed out, and the rest of us are told there's no money left for Social Security, public education, or infrastructure.

Calls to break up big banks met with great popular approval in America's early days. Jefferson helped nix the First Bank of the United States, and Andrew Jackson's destruction of the Second Bank of the United States was met with popular adulation. Although I don't think it was a good decision, it nevertheless shows that resentment of concentrated wealth is not some kind of "Marxist" alien imposition, but as American as it gets. That popular disgust with banks, especially strong with farmers and rural folk who were turned out of their homes with little recourse, has been a mainstay of American culture. My grandfather despised banks, not because he was a socialist, but because as s farmer he was well aware of who was on his side and who wasn't. As Woody Guthrie sang back in the 1930s about bank robber Pretty Boy Floyd, "Some rob you with a six-gun, some with a fountain pen."

For a time, the popular disapproval of reckless, unaccountable banks actually led to some real reform. From the Panic of 1819 to the Great Depression, unfettered banks kept ginning up the same boom and bust cycle of speculation whose many convulsions fell hardest on the ordinary people who lost their jobs, farms, and livelihoods whenever speculative bubbles burst. Finally, during the New Deal the Glass-Steagall Act put greater regulations on banks. This law was not perfect, but it kept financial institutions from staking their depositors' money on speculative chicanery that risked blowing up the economy. It also reflected the desire of leaders to listen to the people rather than the bankers. FDR won re-election by a landslide telling crowds that the banks were "unanimous in their hate for me, and I welcome their hatred" and that "government by organized money is just as dangerous as government by organized mobs."

In the era of financial regulation, from Glass-Steagall in 1933 to the Reagan years, we did not have one single financial crisis. Then came deregulation. First it was the Savings and Loans who were set free to enjoy the wonders of the market, which promptly allowed them to wipe out the entire system and force a bailout of hundreds of billions of dollars. In the 1990s Clinton and the GOP Congress repealed Glass-Steagall in the name of "innovation" in the same decade when hedge funds were basically left completely unleashed. Lo and behold, ten years later the "innovative" mortgage financed securities and credit default swaps inflated to a massive bubble whose bursting has still left the economy in shambles. We have been returned to the cruel roller coaster of the 19th century economy, with its wrenching disparities of wealth and chronic instability. It's high time that the 99% in this revive an old and venerable tradition of telling the banks that we, not them, are in charge in a democracy. After all, it's the American thing to do.

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