Panic of the Plutocrats
By PAUL KRUGMAN
The New York Times October 9, 2011
It remains to be seen whether the Occupy Wall Street
protests will change America's direction. Yet the
protests have already elicited a remarkably hysterical
reaction from Wall Street, the super-rich in general,
and politicians and pundits who reliably serve the
interests of the wealthiest hundredth of a percent.
And this reaction tells you something important -
namely, that the extremists threatening American values
are what F.D.R. called "economic royalists," not the
people camping in Zuccotti Park.
Consider first how Republican politicians have
portrayed the modest-sized if growing demonstrations,
which have involved some confrontations with the police
- confrontations that seem to have involved a lot of
police overreaction - but nothing one could call a
riot. And there has in fact been nothing so far to
match the behavior of Tea Party crowds in the summer of
Nonetheless, Eric Cantor, the House majority leader,
has denounced "mobs" and "the pitting of Americans
against Americans." The G.O.P. presidential candidates
have weighed in, with Mitt Romney accusing the
protesters of waging "class warfare," while Herman Cain
calls them "anti-American." My favorite, however, is
Senator Rand Paul, who for some reason worries that the
protesters will start seizing iPads, because they
believe rich people don't deserve to have them.
Michael Bloomberg, New York's mayor and a
financial-industry titan in his own right, was a bit
more moderate, but still accused the protesters of
trying to "take the jobs away from people working in
this city," a statement that bears no resemblance to
the movement's actual goals.
And if you were listening to talking heads on CNBC, you
learned that the protesters "let their freak flags
fly," and are "aligned with Lenin."
The way to understand all of this is to realize that
it's part of a broader syndrome, in which wealthy
Americans who benefit hugely from a system rigged in
their favor react with hysteria to anyone who points
out just how rigged the system is.
Last year, you may recall, a number of
financial-industry barons went wild over very mild
criticism from President Obama. They denounced Mr.
Obama as being almost a socialist for endorsing the
so-called Volcker rule, which would simply prohibit
banks backed by federal guarantees from engaging in
risky speculation. And as for their reaction to
proposals to close a loophole that lets some of them
pay remarkably low taxes - well, Stephen Schwarzman,
chairman of the Blackstone Group, compared it to
Hitler's invasion of Poland.
And then there's the campaign of character
assassination against Elizabeth Warren, the financial
reformer now running for the Senate in Massachusetts.
Not long ago a YouTube video of Ms. Warren making an
eloquent, down-to-earth case for taxes on the rich went
viral. Nothing about what she said was radical - it was
no more than a modern riff on Oliver Wendell Holmes's
famous dictum that "Taxes are what we pay for civilized
But listening to the reliable defenders of the wealthy,
you'd think that Ms. Warren was the second coming of
Leon Trotsky. George Will declared that she has a
"collectivist agenda," that she believes that
"individualism is a chimera." And Rush Limbaugh called
her "a parasite who hates her host. Willing to destroy
the host while she sucks the life out of it."
What's going on here? The answer, surely, is that Wall
Street's Masters of the Universe realize, deep down,
how morally indefensible their position is. They're not
John Galt; they're not even Steve Jobs. They're people
who got rich by peddling complex financial schemes
that, far from delivering clear benefits to the
American people, helped push us into a crisis whose
aftereffects continue to blight the lives of tens of
millions of their fellow citizens.
Yet they have paid no price. Their institutions were
bailed out by taxpayers, with few strings attached.
They continue to benefit from explicit and implicit
federal guarantees - basically, they're still in a game
of heads they win, tails taxpayers lose. And they
benefit from tax loopholes that in many cases have
people with multimillion-dollar incomes paying lower
rates than middle-class families.
This special treatment can't bear close scrutiny - and
therefore, as they see it, there must be no close
scrutiny. Anyone who points out the obvious, no matter
how calmly and moderately, must be demonized and driven
from the stage. In fact, the more reasonable and
moderate a critic sounds, the more urgently he or she
must be demonized, hence the frantic sliming of
So who's really being un-American here? Not the
protesters, who are simply trying to get their voices
heard. No, the real extremists here are America's
oligarchs, who want to suppress any criticism of the
sources of their wealth.
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