Glenn Greenwald: The virtues of public anger and the need for more

[Demeter]

http://www.salon.com/opinion/greenwald/2009/03/21/anger/index.html

With lightning speed and lockstep unanimity, opinion-making elites jointly embraced and are now delivering the same message about the public rage triggered this week by the AIG bonus scandal: This scandal is insignificant. It's just a distraction. And, most important of all, public anger is unhelpful and must be contained or, failing that, ignored.

This anti-anger consensus among our political elites is exactly wrong. The public rage we're finally seeing is long, long overdue, and appears to be the only force with both the ability and will to impose meaningful checks on continued kleptocratic pillaging and deep-seated corruption in virtually every branch of our establishment institutions. The worst possible thing that could happen now is for this collective rage to subside and for the public to return to its long-standing state of blissful ignorance over what the establishment is actually doing.

It makes perfect sense that those who are satisfied with the prevailing order -- because it rewards them in numerous ways -- are desperate to pacify public fury. Thus we find unanimous decrees that public calm (i.e., quiet) be restored. It's a universal dynamic that elites want to keep the masses in a state of silent, disengaged submission, all the better if the masses stay convinced that the elites have their best interests at heart and their welfare is therefore advanced by allowing elites -- the Experts -- to work in peace on our pressing problems, undisrupted and "undistracted" by the need to placate primitive public sentiments.

While that framework is arguably reasonable where the establishment class is competent, honest, and restrained, what we have had -- and have -- is exactly the opposite: a political class and financial elite that is rotted to the core and running amok. We've had far too little public rage given the magnitude of this rot, not an excess of rage. What has been missing more than anything else is this: fear on the part of the political and financial class of the public which they have been systematically defrauding and destroying.

* * * * *

These endless lectures from sober, rational pundits about the relative quantitative insignificance of the AIG bonuses are condescending straw men. Nobody thinks that $165 million in bonuses for the people who destroyed AIG is what has caused the financial crisis. Nobody thinks that recouping those bonuses or having prevented them in the first place would solve or even mitigate systemic collapse. The amounts are miniscule in the context of the broader economic issues. Everyone is aware of that; nobody needs to have that pointed out. As Armando astutely observed, the attempt now to dismiss the anger over the AIG bonuses as the by-product of simple-minded ignorance and/or ideological rigidity (class warfare! crass populism!) is quite similar to how anti-war arguments were stigmatized before the attack on Iraq : ignore the screeching pacifists and let the sober Experts make the decisions, for they know best.

The AIG scandal is significant and has resonated so powerfully because it is a microscope that enables the public to see what and who has wreaked the destruction that threatens their security and future and, most important of all, to realize that these practices haven't ended and the perpetrators haven't been punished. The opposite is true: those who caused the crisis continue to exert control over what happens and continue to have huge amounts of public money transferred in order to enrich them.

Eliot Spitzer is absolutely right that, even at AIG, there are far larger scandals than the bonuses, such as the undiscounted compensation of AIG's counter-parties such as Goldman Sachs (and just by the way: it is indescribably symbolic that Spitzer has been punished and disgraced for his acts of consensual adult sex while the targets of his prescient Wall St. investigations, who basically destroyed the world economy, remain protected and empowered). But the bonus scandal is illustrative of why the crisis happened, who caused it to happen, and the ongoing political dominance of the perpetrators. It is, as Robert Reich put it, "a nightmarish metaphor for the Obama Administration's problems administering the bailout of Wall Street."

The financial crisis has merely unmasked the corruption and rot in our establishment institutions that are staggering in magnitude and reach. Just as the Iraq War was not the by-product of wrongdoing by a few stray bad political and media actors but instead was reflective of our broken institutions generally, the financial crisis is a fundamental indictment on the way the country functions and of its ruling class. What would be unhealthy is if there weren't substantial amounts of public rage in the face of these revelations.

[screembloodymurder]

1. Summation

Matt Taibbi's new Rolling Stone article perfectly summarizes what the AIG scandal reveals about our political and economic system, and should be read in full. In sum: financial elites own the Government and both political parties. Their money drowns Washington and their lobbyists control it. They used that ownership of Government to abolish decades-old legal and regulatory protections which previously constrained what they could do. In the lawless environment which they literally purchased from our political leaders, they were able to pillage and pilfer and steal without limit. And even now that everything has come crashing down, they continue to dictate what the Government's response is, to ensure that they -- the prime authors of the disaster -- are the prime beneficiaries, at the public's expense, of the "solutions," solutions which preserve their ill-gotten gains and heighten even further their power and influence. Taibbi:

[Hugin]

2. Quality summation.

Looks to be the way it is...

Sad to say.

[Miss Authoritiva]

10. And it only took about 10 years....

Amazing to think of it, but it only took about a decade following the 1995 and 1999 banking "modernization" acts to destroy the world's economy. And remember the "flaw" in his model that Alan Greenspan finally acknowledge? The flaw was that major players in the market wouldn't succumb to greed. Again, simply amazing. Total bullshit. Total insanity.

[blueworld]

3. They'd better pay attention

GG is excellent as always. And Frank Rich has a terrific Sunday column in a similar vein. Obama's administration had better pay attention. Short of marching in the streets, what will it take for real change? Letting all these institutions fail & die painfully? It seems as if they won't budge unless they're suffering too. I know I've had more than enough, and I know I'm not alone.

[tomreedtoon]

8. What will it take? Men with sniper rifles.

And crowds with pitchforks and torches walking down Wall Street, killing anyone in a suit and tie.

Too much for you? Too bad. That's what it will require. These creatures don't learn. They think they can wait it out and go back to business when the public is lulled back to sleep. They are sad creatures with no hope. Death is their only release.

And before you ask, no, I'm not rich like you and I can't afford a "sarcasm" icon, so I can't be sarcastic.

[BeFree]

4. Exactly

The AIG is just the tip of the spear stuck in the people's craw.

That tip has awakened the sleeple like none other.

It may be a turning point, or they may just turn over and go back to sleep. We shall see.

[EPIC1934]

5. Greenwald lives in the Bullseye

Increasingly I find Greenwald and Hudson the people most worth reading. Sometimes Sirota. I am almost to the point where I recommend anything he writes, but Will impose restraining order.

[BeFree]

6. He is impressive to me

Mainly because he and I think alike. I just can't write like him. Heh.

It is great to have DU share this with us, eh?

[TacticalPeek]

7. AIG and Inequality - Jonah Lehrer

AIG and Inequality

Posted on: March 18, 2009 1:51 PM, by Jonah Lehrer

...

Consider the ultimatum game, that simple economic task where one person (the proposer) is given ten dollars and told to share it with another person (the responder). The proposer can divide the money however they like, but if the responder rejects the offer then both players end up with nothing.

Classical economic theory makes two predictions about the outcome of the ultimatum game: the offers will always be unfair, and the unfair offers will always be accepted. Since both players are rational, they understand that a small amount of money is still better than no money at all. Reason and greed should trump ethical notions of fairness.

But that isn't what happens. Experiment after experiment has demonstrated that most proposers offer about $4, which is rather fair and utterly irrational. Why do proposers engage in such generosity? Because they are able to imagine how the responder will feel if they make an unfair offer. Proposers know that a lowball proposal will make the responder angry, which will lead them to reject the offer, which will leave everybody with nothing. So the proposers suppress their greed, and equitably split the ten dollars. They understand that maintaining the appearance of fairness is better for everybody.

However, there's one easy way to change the behavior of people during the ultimatum game. When people are given a test before the money is distributed - and it doesn't matter what the test is - and then the "high scorers" are given the $10 to distribute, responders are willing to accept unfair offers. In other words, people are willing to tolerate inequality when they think it's deserved. This is why people weren't outraged when Wall Street handed out obscene bonuses last year - they assumed the executives deserved the payout. But now we know better.

When this sense of fairness breaks down, bad things start to happen. One of the more powerful examples of this behavior comes from Franz de Waals and Sarah Brosnan, who trained brown capuchin monkeys to give them pebbles in exchange for cucumbers. Almost overnight, a capuchin economy developed, with hungry monkeys harvesting small stones. But the marketplace was disrupted when the scientists got mischievous: instead of giving every monkey a cucumber in exchange for pebbles, they started giving some monkeys a tasty grape instead. (Monkeys prefer grapes to cucumbers.) After witnessing this injustice, the monkeys earning cucumbers went on strike. Some started throwing their cucumbers at the scientists; the vast majority just stopped collecting pebbles. The capuchin economy ground to a halt. The monkeys were willing to forfeit cheap food simply to register their anger at the arbitrary pay scale.

This labor unrest among monkeys illuminates our innate sense of fairness. It's not that the primates demanded equality - some capuchins collected many more pebbles than others, and that never created a problem - it's that they couldn't stand when the inequality was a result of injustice. Humans act the same way. When proposers do something to deserve their riches, nobody complains. But when they get rewarded for no reason and then refuse to fairly distribute their reward, people get furious. They begin doubting the integrity of the system, and become more sensitive to perceived inequalities. They reject the very premise of the game.

http://scienceblogs.com/cortex/2009/03/aig_and_inequality.php

Jonah Lehrer will be on c-span2/BookTV in a few minutes discussing his book How We Decide.


How We Decide

Author: Jonah Lehrer

Sunday, March 22, at 4:30 PM

About the Program

Jonah Lehrer describes how the brain makes decisions that combine reason and feeling and can change depending on the situation. Mr. Lehrer studies several subjects, including a professional football quarterback, a hedge fund manager, and an airline pilot to determine how decisions are made in certain environments and how they can be made better. Jonah Lehrer discusses his book with Robert Krulwich of NPR's “Radio Lab” at the Strand Bookstore in New York City.

About the Author

Jonah Lehrer is editor at large for Seed magazine and edits the "Mind Matters" blog for Scientific American. He is the author of "Proust was a Neuroscientist." For more information, visit his blog "The Frontal Cortex," at scienceblogs.com/cortex.

[MasonJar]

9. My sentiments exactly. You nailed it again, Glenn!