by DOUG HENWOOD
(This is the edited text of a talk given by LBO editor Doug Henwood at the Studies in Political Economy annual meeting in Ottawa, January 29, 2010.)
Greetings from the USA, where a populist rebellion is underway. Let’s take its measure.
First, for a moment it looked like Ben Bernanke faced rough sledding in his bid for a second term as chair of the Federal Reserve. In the run-up to the confirmation vote, a swelling roster of Senators of both parties said they wouldn’t vote for him. Of course, when it was over, he won, 70–30—a squeaker as these things go, but a landslide by any reasonable standard.
One reason for Bernanke’s unpopularity: he failed to acknowledge, much less deflate, the housing bubble back in 2005. Right, up to a point, but had he raised interest rates or cracked down on the availability of mortgage credit he would have faced…a populist outcry. American populists love nothing more than easy credit and rising house prices. But another reason for his unpopularity: pumping billions—trillions, if you’re an aggressive counter—into the financial system after the bubble burst. If he hadn’t done that, we’d all be wearing barrels. He could have done it more transparently and justly, but the principle of pumping aggressively to avert deflationary collapse has been pretty well established since the Fed didn’t do that in the early 1930s. Populists used to love the idea of an elastic currency to prevent depressions, but now that the leading avatars of populism wear teabags on their heads, austerity is their favorite strategy.
Another sign of the populist insurgency is the new tone struck by the Obama administration—hostile to the banks. It’s not for real, but let’s forget that for now. The reason for the populist turn is, of course, the victory by Scott Brown in the special election to fill the Senate seat vacated by Teddy Kennedy. That victory seemed to overturn the laws of nature—the seat had been held by a Kennedy, first John then Teddy, from 1953 through 2009. (There was a two-year interregnum, filled by a placeholder, until Teddy ripened to the Senatorial minimum age of 30.) Imagine the shock when the dull, complacent Martha Coakley, who deemed campaigning on the chilly streets of Boston beneath her, lost the seat that seemed the Democrats’ birthright.
Brown—a man who once posed nude for Cosmo, whose wife appeared in a music video suggestively squirting suntan oil, and whose daughter did a stint on American Idol—isn’t your standard issue Moral Majority-style candidate. But he does appeal to that other strain of populist rebellion, the Tea Baggers (or did—until he betrayed them by voting for a weak jobs bi
Upsurge! It’s amazing that amidst our worst economic crisis since the Great Depression, most of the dissent is coming from the right. Despite watching 8.5 million jobs disappear, much of the population has been passive while the bankers got billions and the jobless got an average of $305 a week in unemployment benefits—if they were lucky. Unlike the 1930s, there’s been no….
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A touch-sensitive screen showing the Anvar-i-Suhayli (Lights of Canopus) collection of 15th century fables. PHOTO/Sean Gallup/Getty Images.