One need not be a neo-Marxian or class-warfare leftist to see that the green-eyed monster of economic envy has been stirring for years and laid the foundation for many of the walls—ideological, social, and physical—that we hear so much about in this new, angst-driven era.
This new era is not defined solely by an economic and political tantrum. A significant number of Americans feel talked down to, forgotten, and disconnected. Blue-collar whites don’t feel only economically separated from white-collar whites, but socially separated, as well. Political analyst Sean Trende refers to this divide as “cultural cosmopolitanism” versus “cultural traditionalism.”2 These two camps have different perspectives on family, church, education, and country. Their cultural differences have produced a level of social angst, because the more cosmopolitan camp largely “occupies the commanding heights of American culture.”3 The result is a complete distrust of key institutions in our society. The media, big business, big finance, and higher education are now often held in contempt, not just for their ideology (though that’s part of it), but because they collectively form someone to blame for the present malaise—a composite scapegoat, if you will, on which fears can be placed and railed against at rallies.
Are the fears fair and coherent? Certainly not. But they’re not irrational and random either. As my colleague Jonah Goldberg, leading conservative pundit at the National Review Institute, says:
To the extent that Donald Trump has damaged democratic norms, his success is attributable to the fact that elites—in journalism, but also in academia and elsewhere—have corrupted those norms to the point where a lot of people see them as convenient tools for only one side in the political and cultural wars of our age.4
Thus, my objective in the pages that follow is to sort the truth from the misunderstandings about what has compromised American productivity and, indeed, American prosperity. It is not my intent to defend the forces of anti-elitism or anti-globalism, which have so much momentum in this new era. In fact, my intent is to provoke a counterintuitive conversation about what really ails us all, and offer concrete suggestions as to where substantive and generational remedies may be found—if we have the courage and candor to pursue them.
I don’t intend merely to condemn one guilty party (arrogant institutional elites), but then embrace an ignorant victim mentality that ignores the cultural tides of this era. The paradigm for returning to the possibility of prosperity for all is not one of choosing between the elites and non-elites, the strong and the weak, or the influential and the oppressed. That’s the picture that has been painted. It is not lacking some prima facie support, but it is incomplete at best, and dangerous at worst.
My counterintuitive presupposition is that the forces of elitism and statism, which are so despised by so many, stand to grow by leaps and bounds as a result of this present global angst, if we fail to understand the core cause. If the efforts to delegitimize and disempower elite forces is temporarily successful, but the weak and morally emasculated alternative falls on its face, I am quite convinced that out of the ashes of this groundswell failure will come greater bureaucracy, greater institutional arrogance, and far-reaching top-down authoritarianism that will crush the cause of freedom.
There is no wall in this new era that cleanly divides us into two sides. One may advocate for free trade and still support Brexit (as this author does). One may live in a more culturally cosmopolitan part of society and still be patriotic to the core. On the myriad of issues in our national conversation, there is room for nuance in almost every single one. A sincere investigation of these issues will not create a simple, binary choice between “establishment” and “populists.”
And yet, the one perspective that has the potential to destroy us all, and which must be unilaterally rejected if we are to stave off the coming authoritarian backlash, is embracing victimhood. To reject victimhood, we must first understand how and why so many hot-button issues are being framed as scapegoat issues, reasons for someone to blame somebody for something.
Room exists for disagreement on policy specifics on issues like immigration and trade, but there can be no doubt about these three things:
1.A new era is upon us, and the political, social, economic, and cultural effects are just beginning.
2.Our path forward must reject the institutional arrogance and elitism of top-down control.
3.Yet, we must recognize our cultural addiction to blame, properly understand the key issues, and forge a new culture of responsibility in which free people become virtuous people, and virtuous people become productive people.
Where It All Begins
There exists a tension in these present times for people of my ideological bent. That tension partly motivates my writing. On one hand, there are natural forces in society right now that demand attention. The beliefs that created a large and impotent European Union are real. A form of secular humanism has clearly metastasized in our culture, aided by the ivory tower of academia and the liberal, unchecked media. The economic landscape has helped create a frustrated group of people who feel forgotten and alienated. Those who resent the arrogance of elitists are not without basis; those who portray economic frustration are not fabricating these sensations from thin air.
These are all true; however, what is “on the other hand” is what drives my passion on these pages. There is no need to ignore the reasons for angst, but we do need to get the remedy right. Any prescription that misidentifies either the cause or the cure could prove fatal for the patient.
I am a limited-government advocate who has long believed that the size of government is in direct, inverse correlation to the responsibility of the people. My concern is that behind much of the cultural angst today is a narrative that blames great and powerful forces, not unlike the mysterious, unknowable wizard behind the screen in Oz. These forces become the scapegoats, almost always with some level of legitimacy, while individual people are indemnified.
I contend that the key stakeholders in our societies—individuals, families, and communities—must not be permitted to play victim and avoid careful scrutiny. Where policies and prevailing attitudes have served to disenfranchise some, we must note it as such and fight for change. Yet where irresponsibility abounds and culpability lies, we must say so and prescribe solutions that honor the dignity of every stakeholder while calling them to greater moral accountability and individual responsibility.
Trade, immigration, capital markets, big media, and other global realities are key issues to be addressed. However, the key to American prosperity is not to feed our cultural addiction to blame, but to begin—right here, with both you and me—to make responsibility matter again.
2
NAME YOUR BOGEYMAN
Wall Street, Washington, NAFTA, China,
Mexico, and the Media
The fault, dear Brutus, is not in our stars, but in ourselves.
–CASSIUS
Whose fault is it? Who is to blame for today’s plight of the alleged common man? Have institutions, countries, policies, and traditions suffocated the middle class, or have these dastardly bogeymen been exaggerated, or even fabricated, to provide cover for the sins of the middle class?
In the chapters that follow, I’ll dive deeper into an examination of the most popular bogeymen offered of late, but are more nuances needed to correctly assign blame? Furthermore, do each of these forces need to be evaluated individually, or are they all part of a monolithic driver that is deteriorating quality of life and opportunity for middle America while promoting the interests of the global elite?
My research and commitment to basic integrity suggests that only an individual analysis of each bogeyman will provide the appropriate optics and ability to form cogent conclusions. Are there overlaps and collusions (for example, between corporate America and the “K Street” lobbyists of Washington, DC)? Sure! But will it be fairer and more appropriate to look at each bogeym
an candidate on a case-by-case basis? I believe so.
Why does it matter—the “one” versus the “many” approach? Why is it critical that we consider the issue—the collective bogeymen versus the choice of an individual? For one thing, the rise of the single, collective bogeyman—a composite of popular societal demons—is a reasonably new phenomenon. Angst against Wall Street is most definitely nothing new; however, a shared distrust of both Wall Street and free trade is new. In the 1980s, we heard whispered concerns about a Japan-centric global economic movement, so we aspired to greater integration with Mexico. Today, Mexican immigration is considered a blight for American workers. Cheaper goods entering the American economy from China is considered to be another. In fact, cheap labor from the south and cheap products from the east are both said to be damaging American jobs.
One of the amazing things about the Trump campaign was how it tapped into a new and reasonably undefined angst that lumped nearly every major institution into one aggregate bogeyman (big business, big finance, big government, big media, big trade, big global growth, etc.). His campaign resonated with a society ready to blame this composite bogeyman for the problems they faced and felt.
How did these entities come to be viewed collectively rather than individually? It was inevitable. When one seeks to cast blame, it is only a matter of time until a multitude of candidates surface, each with some level of plausible culpability. To make an open-and-shut case against any one candidate is difficult, but making a rhetorically loose case against all the candidates together can seem weighty and quite compelling. And it certainly can be emotionally gratifying. The frustration only needed to build to critical mass.
It was probably the 2008 financial crisis that first offered this collective bogeyman by offering a hodgepodge of culprits as the objects of middle-class frustration. The Right was all too happy to blame either the Federal Reserve for reckless monetary policy or Washington, DC, housing policy for irresponsible lending. The Left didn’t have to stray far from long-held conventions to fault Wall Street’s cavalier greed and leverage. The consequences from the financial crisis of 2008—the deepest recession since the Great Depression, a 50 percent drop in the overinflated prices of residential real estate, a stock market collapse, and double-digit unemployment—were so severe and unavoidable that any postcrisis download was bound to forge strange alliances.
I’ll attempt to sort the fair from the preposterous in chapter 4 as to what exactly did happen in the financial crisis, but my point here is that those events accelerated the formation of this new, composite bogeyman. Factor in several postcrisis years of muted economic growth, the immigration side effects plaguing much of Europe, and then the popularity and media-savvy style of a long-time economic nationalist in Donald Trump,5 and it’s easy to see how Wall Street, free trade, big business, the press, and China all ended up inside the bull’s-eye. Each of these may have taken decades to develop as a viable target, but they all aligned in recent years to create such a perception of a united effect that those who feel aggrieved now see little distinction between them.
The challenge in the chapters ahead is to recognize the sometimes troubling social, economic, and cultural consequences of these various forces, while avoiding superficially simple conclusions—if and when simple explanations are inadequate. Each of the bogeymen du jour has problems, and each has contributed to the plight of working-class America; nevertheless, neither none nor all, taken individually or collectively, can tell the whole story of where we are and why.
Most importantly, they cannot reveal what it will take to make America great again. Consequently, in the pages that follow, I will offer neither vindication nor immunity to any of them, nor will I try to craft or endorse a single, consensus view about them. I believe the true culprit we must fear lies deeper, closer to our cultural heart and soul.
Wall Street: Case in Point
Our discussion of Wall Street, for example, will focus on the financial crisis and provide a framework for evaluating so many of these bogeymen. Wall Street is a creature of, not the cause of, what plagues the culture. The mere existence of sophisticated capital markets in America is not a negative; it is actually a sine qua non in the American economy. Furthermore, hating Wall Street is nothing new. It has invited public scorn since the beginning of modern finance, because class envy sells, because arrogance and indifference has often emanated from the pillars of finance, and because it is so easy for press and politician alike to tap into class frustrations.
However, the job growth made possible by sophisticated capital markets is undeniable. A financed and capitalized post–Industrial Revolution America brought tens of millions of people into a decent wage and quality of life. It is a historical fact. Life in America would be unimaginably worse if we banned deal making, trading, advising, structuring, and synergizing the capital structure of American business. Must capital markets in our country be accompanied by systemic risk, brute arrogance, and excessive greed? Certainly not! But we do need capital markets, even though cultural and moral deficiencies in society, a permeation of poor business ethics, may be magnified in the world of finance. Such is the nature of things—the power and material prosperity involved in directing capital markets is highly susceptible to excess.
When I entered my career in financial services, I was certainly affected by the Hollywood characterization of Wall Street as a place of hedonistic greed and excess. Whether I liked it or believed it, I had a vision of Manhattan skyscrapers filled with Gordon Gekko–like characters from the 1987 movie Wall Street. I pictured buildings full of wealthy men who cut deals all day and partied all night—people who lied, cheated, and stole from one another, then attended $1,000/plate black-tie galas alongside accomplices and victims. It didn’t take me long to realize that a movie made about what really happens on Wall Street would disappoint ticket buyers immensely.
As in any business, there are, of course, bad apples. Certainly, some folks live on the edge of hedonistic pleasure (an indictment hardly unique to Wall Street, and far more prevalent on college campuses than in the corridors of American finance). I found very few Gordon Gekkos and quite a few soccer dads. There are men and women with tremendous career aspirations (hardly a sin), but the vast majority of people I’ve worked with on Wall Street, from senior leadership positions at behemoth investment banks, to top hedge fund managers, to bond and equity traders across Wall Street trading desks, are, well—family people. The top levels of Wall Street, the middle management of American banks, and the exciting throes of traders and asset managers are all people who put pants on one leg at a time. Like so many in middle-class America, they’re often hopeful about their annual bonus, stressed about their kids’ grades, and almost always patriotic. In other words, they are generally normal people.
Wall Street is truly a challenging force to either attack or defend. For one thing, it’s hard to define. It is not a physical place anymore. Wall Street’s geographical diversification accelerated since 9/11, but it was in motion prior to that day for a number of reasons. First, finance had become globalized (Deutsche Bank, UBS, Barclays, and others are all “Wall Street” firms—meaning global financial superpowers—but they’re all based in Europe). Second, even within Manhattan, New York–based firms have diversified all over the metropolitan area (from midtown to Lower Manhattan to Hudson Yards). Third, with the advent of Silicon Valley forty years ago, venture capital firms became an increasingly potent part of capital markets, making the west coast (San Francisco, Menlo Park, Palo Alto) every bit as relevant of a cultural finance center as New York.
Consequently, when we use the term “Wall Street” now, we don’t refer to the iconic street that runs from the East River to Broadway in Lower Manhattan, off of which the New York Stock Exchange sits, mere blocks from where the Twin Towers once stood tall. Rather, Wall Street is a catchall phrase for modern financial institutions, from the behemoth private equity name Blackstone in midtown Manhattan,
to the often vilified Goldman Sachs in Lower Manhattan, to the British behemoth Barclays across the pond, to the venture capital genius of Kleiner Perkins in Menlo Park. Why does it matter? The lack of specificity about what Wall Street is, and what or who one is referring to when decrying “Wall Street,” has greatly helped the cause of her critics.
Not coincidentally, the same is true regarding criticisms of free trade and Washington, DC. The tighter and more specific the enemy becomes, the greater the burden to justify accusations, connect dots, and present the case for real, definable iniquity from very specific actors. That is not to say it can’t be done. There is plenty of opportunity to find real malfeasance from real people when discussing Wall Street or Washington. However, we are talking about a broader cultural narrative that has taken hold, and narratives do not like specifics. A broader lambasting of an entire institution is easier, as it plays into the human tendency for scapegoating. Plus, it provides psychological comfort for people to believe some (or all) woes are the by-product of a massive, undefeatable force.
If one were to say, Bill stole from me, evidence would be required. There would need to be specific scrutiny of Bill, a real and narrow fact pattern, and, at the end of the day, a conclusion about what exactly Bill did or did not do. But if one says, Wall Street is ripping us off—then all such specifics get bypassed. Us is usually a consortium of middle-class, working people who don’t take car services to work or vacation in the Hamptons. The imagery alone promotes an “us versus them” binary scenario where generalizations can be accepted without much discrimination whatsoever. Accepting as fact that large, undefined entities are working against you is the mother of fatalism. Several beliefs and conclusions slide down the slippery slope from that fatalistic presupposition and serve a dual purpose. They muddy the waters of self-evaluation and numb the responsibility sensors of the people who choose to see themselves as victims.
Crisis of Responsibility Page 3