What do these events have in common? Jon Stewart's entertaining, meatless takedown of Jim Cramer....Rick Santelli's Chicago tea party....White House and Congressional anger over AIG bonuses....Republican distress over the 98%-earmark free omnibus budget?
These are all examples of the performance of populist outrage in the theatres of the elite. Their targets aren't exactly straw men, but you could be forgiven for wondering why CNBC, employment contracts, earmarks and mortgage assistance for non-delinquent homeowners come in for so much approbation. To paraphrase Megan McArdle, earmarks didn't persuade China to invest its savings glut in U.S. Treasuries; Jim Cramer didn't invent leverage (or greed, or the desire to make money in the stock market) and AIG's derivative traders profited from the government's desire to secure homesteads for as many Americans as possible.
Anyway, these performances make for good television and for better politics. But if this populist backlash extends beyond the circle of the elite, then it is probably grounded in more fundamental causes. Income inequality has (basically) been growing for thirty years; Republicans paid no need to it, believing it to be an artifact of the miscarriage between statistics and modern standards of living, and Democrats failed to figure out how to stop it. The American political class failed to anticipate the negative effects of globalization and failed miserably to educate its citizenry about the tradeoff between low prices and wage stagnation. Government conflated the idea of growth in the financial services industry with the health of the economy. Add to that anxiety over health care, infrastructure, education, and the rest.
Have we reached a truly populist tipping point? One the one hand, Americans favor some redistribution of wealth. On the other, they fervently believe in the power of the individual to determine the course of his or her life; despite reams of social science proving the contrary, most Americans remain convinced that, through their sheer grit, they can change their stations in life. At the same time, Americans concur with the conclusion that political and economic elites try to rig the apparatus of government to benefit a narrow minority. The balance is key. Perception-wise, the gut/will/internal drive of the American ethic continues to outmaneuver, outrun, or outlast the efforts of the elites to thwart it.
Maybe the weight is finally beginning to shift. In the past, elites have used shame spectacles to satiate the public's desire for revenge. New York Attorney General Andrew Cuomo wants all the names of the derivative traders and wants to figure out for himself whether they each deserved their bonuses. The usually staid Sen. Chuck Grassley kicked it up a notch, (facetiously, one presumes) suggesting that the traders, who themselves were really just following orders, committ seppuku. The White House -- the executive branch -- is looking for a way to break private business contracts they knew about. There will be (gasp) Congressional hearings.
I don't know whether these gestures will mollify the public. If they do, then there wasn't really a populist backlash to begin with. If they don't, and the well of anger is deep, then I think President Obama will be granted collective permission to change the economic structure of this country in ways that we can't yet comprehend.