Market Overview

New American Revolution or New American Civil War?

Marketwatch's Paul B. Farrell wrote a very interesting story Tuesday entitled "Super Rich vs. 99%: Class war will explode" regarding Occupy Wall Street, the evolution of class warfare, and the conservative response to the Occupy Wall Street movement. Farrell: "Forget politics. The 99%, the Occupy Wall Street movement, is not about politics. But politicians don't get it yet."

I.  

Farrell contends that the Occupy Wall Street movement is "class warfare, a revolution about economic inequality, not about political parties, political policies and political solutions ... and it's not going away any time soon." Where conservatives like Frank Luntz, conservative pollster and consultant, may want to manipulate political dialogue to subtly address Occupy Wall Street issues, Farrell suggests that perhaps such efforts may backfire.

Recently, Luntz spoke at last week's Republican Governors Association meeting suggesting ways to shift the political debate in light of Occupy Wall Street. From Yahoo News columnist Chris Moody's notes, Farrell proceeded to critique 10 pieces of Luntz's advice on how to "fight back by changing the way they discuss the movement". In removing words like "rich", "capitalism", "tax", "jobs", "government spending", and "compromise" from the political discussion, Luntz suggested that the debate would shift from an issue of inequality to that of freedom and liberty. It appears that Luntz believes that by modifying popular phrases & political targets and by removing key words from one's political vocabulary, governors could shake up the political battlefield in their favor against Occupy Wall Street.

In considering Luntz's advice, Farrell concluded that "Luntz remains one of the greatest behavioral economists ever. He could rewire, debug and reprogram individual and collective brains with just a few verbal flip-flops." Nevertheless, Farrell argued that a "new battlefield" has emerged owing to Wall Street's 2007 meltdown. And Luntz is still "fighting his old 'War of Words' on familiar turf. Except now it's class warfare. And Luntz is losing."

Farrell's analysis of Luntz's advice is intriguing, but at first glance, Luntz's advice appears to be advocating a contemporary form of Orwellian "Newspeak" to address America's political problems. To say the least, such advocation of Newspeak should concern the American public, both old and young. For Republican governors to undertake such linguistic modifications now that reporters have brought this advice to light may very well backfire for the simple fact that the American public doesn't want to be brainwashed by their state governors. And if you want 1984, by all means, please move to North Korea; don't bring it here to the US.

A key portion of Farrell's article that stuck out to me was where Farrell addressed Luntz's suggestion for governors to tell occupiers, "I get it, you're angry, we'll fix it" and to sound sincere. Farrell: "Warning: America's problem is not about politics. Not Republican political solutions. Nor Democrat... No, this is not about politics. This is a class war, a new American Revolution."

Where the label "new American Revolution" has been somewhat diluted over the years from various individuals' and factions' use of the phrase ranging from Sean Hannity to Ron Paul supporters to Occupy Wall Street, one has to ask, "Are we talking about a new American revolution here or a new American civil war?"

II.  

It is not news to say that the nation is divided politically. Even back in 2000, our electoral system came face-to-face with the stark ideological divide in the US and the matter had to eventually be addressed in the courts. That being the case, political polarization has been increasing since the global financial crisis began -- and as we all know, rough financial times make fertile ground for arguments, fighting, and conflict.

I think people are getting tired of the common rhetoric used by American politicians; sure, some are still eating it up, but many are getting tired of it. In some respects, from my perspective it appears that the American public is becoming numb to the everyday political rhetoric. In a time period where political polarization between the right and the left is leading to a situation where both sides are unwilling to cooperate or even sit at the same table or be in the same venue, the current state of affairs is indeed precarious. But could this situation be leading up to civil conflict? In light of Occupy Wall Street, has this civil conflict already begun?

If there is to be another American civil war, it will most likely not look anything like the first one. No blue and gray uniforms, no muskets, no pitched battles by the farmhouse and chicken coop. We have to keep in mind that many of our ancestors came to America to escape other war-torn lands far, far away that were rooted in feudalism, aristocratic inequality, and overt exploitation. Many of our ancestors came with the hope of finding peace and prosperity, and as such, Americans tend to desire peace; it is what has made our society so prosperous. Without a peaceful society with the rule of law, the free market does not work.

The free market is key here because I believe that the free market is the solution to many of our economic problems. Farrell addressed the free market in his article as Luntz recommended that the word "capitalism" be replaced with the phrase "free market". But lo, just because you call an economic system a "free market", that doesn't make the system a free market in truth. And likewise, just because you call an economic system "communist", that doesn't mean it's so.

Farrell peppered his article with how this person or that person or those people need to "get it". As in, "they don't get it" or "he doesn't get it" or "they need to get it". And what is the operative "it"? From my reading of Farrell's analysis, the "it" appears to be the emergence of class warfare. But even further from the politicians, it seems that the principal group in the US that isn't "getting it" is the mainstream media. The American mainstream media could be taking a substantial step in being a helping hand to quell the ideological conflict in the US, but instead, the media appear to be fostering and nearly encouraging the ongoing conflict between right and left. The mainstream media in some ways are feeding the ideological conflict via shoddy, biased reporting and incoherent commentary while trying to appeal to a diverse, incohesive audience.

Far from being a source of middle ground as a sort of ideologically-neutral "Switzerland" in American society, the mainstream media are taking sides and may be adding to the political polarization in society. Rather than providing a neutral forum for political discussion, the media are busy reporting on the Kardashians or Lady Gaga. One following CNN may very well develop a hunger for real news if he knew better. Even on CNN.com this morning, among the "featured" headlines: "Nation pauses to recall Pearl Harbor", "Sugar on the menu for kids' breakfast", "Rock Hall takes Chili Peppers, Beasties", and "2011's top tweets may surprise you" with a picture of Mila Kunis. Are you serious?! "Sugar on the menu for kids' breakfast"? This is what news in America has been reduced down to?

I think it is time that Americans begin to reconsider the proper place and role of the media with respect to news reporting. Where news outlets like the Drudge Report seem to get it, many others do not. In addition to the media, I think the nation would do well to take a look at the legal profession and academia in higher education. Congress is and has been dominated by attorneys for quite a while, and this may be part of the problem in American government today. Given the higher education bubble and the incompetence of many government advisors, academia is also long overdue for serious reform.

I hope to address these issues in a future article in more depth with respect to the legal profession, academia, and the media, but for lawyers oftentimes the "truth" is in how the facts are framed. And like politicians, lawyers need the truth to be on their side in order to win their case -- or in the case of politicians, to win re-election. Lawyers are trained to frame the facts so that their side is cast in the best light. Thus, as the American public is presented with this fuzzy, nebulous form of truth all packaged up in red, white, and blue, ideological divides deepen and become more heated as financial worries increase. The American public would do well in taking a closer look at the legal profession and considering possible legal reforms.

Arguably, with the prospects of arbitration and mediation in commercial transactions, pragmatic legal reform is already present; far from merely preventing the courts from being clogged with a flood of litigation, I would argue that the phenomena of arbitration and mediation may reflect the fact that the standard court system is inherently inefficient and not able to provide for the populace. The reality of mediation and arbitration as used by individuals and firms reflects the fact that maybe something in the American justice system is not working and needs to be revised.

We are seeing today what happens when you have ivory-tower academics and attorneys making economic decisions. Of course, some knowledgeable attorneys and politicians have been trained in economics, but it should be clear to all that some politicians are not aware of simple, basic economic realities, e.g. more taxation leads to less revenue (Laffer curve), inflation works as a tax against those who can least afford it (Henry Hazlitt), or the fact that growing technology and more people generally do not increase long-term unemployment (Henry Hazlitt). There are no required courses in economics or finance in law schools, and apparently there should be. This political/legal conundrum of politicians' lack of awareness on basic economic realities appears to be working against business and commerce as entrepreneurs and innovators seek to prosper while trying to deal with the overhanging cloud of government, bureaucracy, and arcane taxation.

III.

Going back to the issue of civil war, the political divide seems to be getting closer to coming to a head the longer the financial crisis goes on. Where commentators like Farrell may contend that this is class warfare, to use a popular adage, "You ain't seen nothin' yet." Many today see a few people holding signs and exchanging political zings as being class warfare, but the situation is devolving as people become more desperate. As such, I think a few people holding signs up in the street chanting slogans is not necessarily class warfare -- but the situation could evolve into a more counter-productive scenario. As I explored previously, for now Occupy Wall Street protesters are blocking up streets and bridges with their bodies, but given enough time, protesters could use new tactics that could seriously allow them to wield more power.

I wrote previously: "The potential to disrupt traffic on roads and highways may evolve into a serious issue for law enforcement across the nation if the Occupy movement continues to grow. For now, the protesters are occupying the streets with their bodies. What would happen if Occupy protesters began to clog up roads, highways, and major high-volume thoroughfares with cars and/or tents? One could only imagine the mess that would be created were a hundred protesters (acting in civil disobedience) to drive fifty or so cars on highways leading into Washington or Manhattan -- only to park their cars in the highway lanes and stop there indefinitely -- thereby clogging up traffic and commerce."

If there is to be anything that could be called a civil war in the US coming in the future, it will most likely not look like the first American Civil War. Given Americans' appreciation for civil peace and prosperity, I think such a "civil war" would be better termed a "great refusal" akin to Herbert Marcuse's philosophical concept. In such a "great refusal", Americans would begin to reject the establishment not through violence or even protest...but by ignoring the establishment altogether. Just like your mother told you to do with bullies on the playground: Just ignore them. Given Americans' keen sense of reasonability (I can thank the legal profession for that), social welfare (at the end of the day), and commercial wisdom, I think a "great refusal" by the American public would be make for an interesting phenomenon.

For example, I recall hearing that Occupy Wall Street protesters were requesting that worker-councils be set up to effectively replace local governments and unions. Though those not familiar with political economy may not recognize it, this idea is effectively that of "soviets". The word "soviet" in Russian can mean "council"; a soviet could be used to refer to a local workers' council. And thus, "Soviet Union" etymologically connotes a union or congress of these local workers' councils. Given our civil rights, there is really nothing stopping Americans from setting up peaceful local workers' councils, but the crux does come back to supply and demand. Is there a demand for local workers' councils in the US?

Other pertinent examples of a possible Marcusian great refusal include Americans' rejecting things like the mainstream media, fast food, bureaucratic norms, and cultural norms. Could you imagine if mass amounts of Americans began to stop getting fast food or watching shoddy news media outlets? These industries would be forced to change their ways; arguably, this is already happening as fast food restaurants feel the need to offer apples and carrots in children's meals; the same is applicable for governance.

In effect, Americans could simply ignore these facets of our society. I would go so far as to argue that a "great refusal" of these things is already taking place owing to socio-economic imperatives. Again, we have the example of arbitration and mediation in legal affairs; are individuals and firms embracing alternative dispute resolution or are they rejecting the courts and justice system altogether? Of course, you can only ignore something so much before it gets in your face, but still. Though Marcuse discussed the concept of a great refusal in neo-Marxist verbiage, the concept is akin to Ayn Rand's "Galt's Gulch" where entrepreneurs and innovators fled the greater American society that had become weighed down by government and overtaxed. Those who fled to Galt's Gulch were effectively refusing to participate in the broken establishment.

Conclusion

The market can speak in waves. There is nothing stopping Americans from refusing to participate in a broken establishment. Whether that be a local government, a church council, or a parent-teacher association, citizens can use this "great refusal" concept to effectively reject the system and/or force the system to change its ways. I think the prospects of any sort of future American revolution or civil war have to be framed with this in mind. Americans have to and are starting to think outside the box politically and socio-economically. And when you think about it, given the gravity of heated political topics like abortion, capital punishment, illegal immigration, taxation, and unemployment, it makes perfect sense that we have the political polarization that we do. And you know what? I'll tell you something that the mainstream media aren't telling you regarding political division in the US: It's okay. It's okay that people disagree on political issues. Disagreement on socio-economic issues does not have to result in class warfare or civil war if an individual's living space, rights, and freedom are protected by law.

The ideological divide in America is okay insofar as government can ensure the rights of citizens and commerce remains able to function. Unfortunately, the rub comes as commerce and entrepreneurship are stunted owing to bureaucratic regulations and inefficient, dysfunctional government. Maybe politicians today do not get it; the problem is intensifying as the current situation suggests that our political issues cannot be worked out in political system. But then again, divisive political issues (have been in the past and) can be worked out in the free market...if the free market is allowed to function properly. When the rubber meets the road, owing to market dynamics, the market (seen and unseen) will at some point force politicians to start getting it or the house of cards will simply fall. Politicians will need to start getting the fact that solutions to political and economic problems go beyond changing verbiage. Yes, the political rhetoric to which we have all become accustomed in America may need to change, but our political dilemmas and ideological divisions go beyond mere words.

Posted-In: Austrian School Ayn Rand higher education higher education bubble legal reform Marketwatch Occupy Wall StreetPolitics Psychology Topics Economics Movers Media General Reviews Best of Benzinga

 

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