From the Comments: Populism, Big Banks and the Tyranny of Ambiguity

Andrew takes time to elaborate upon his support for Senator Elizabeth Warren, a Native American law professor from Harvard who often pines for the “little guy” in public forums. I loathe populism/fascism precisely because it is short on specifics and very, very long on generalities and emotional appeal. This ambiguity is precisely why fascist/populist movements lead societies down the road to cultural, economic and political stagnation. Andrew begins his defense of populism/fascism with this:

For example, I still have more trust in Warren than in almost anyone else in Congress to hold banks accountable to the rule of law.

Banks have been following the rule of law. This is the problem libertarians have been trying to point out for hundreds of years. See Dr Gibson on bank regulations and Dr Gibson again, along with Dr Foldvaryon alternatives. This is why you see so few bankers in jail. Libertarians point to institutional barriers that are put in place by legislators at the behest of a myriad of lobbying groups. Populists/fascists decry the results of the legislation and seek a faction to blame.

If you wanted to be thought of as an open-minded, fairly intelligent individual, which framework would you present to those who you wished to impress: the institutional one that libertarians identify as the culprit for the 2008 financial crisis or the ambiguous one that the populists wield?

And populism=fascism=nationalism is a daft oversimplification. I’ll grant that there’s often overlap between the three, but it’s far from total or inevitable overlap. Populists target their own countries’ elites all the time.

Sometimes oversimplification is a good thing, especially if it helps to clarify something (see, for example, Dr Delacroix’s work on free trade and the Law of Comparative Advantage). One of the hallmarks of fascism is its anti-elitism. Fascists tend to target elites in their own countries because they are a) easy and highly visible targets, b) usually employed in professions that require a great amount of technical know-how or traditional education and c) very open to foreign cultures and as such are often perceived as being connected to elites of foreign societies.

The anti-elitism of fascists/populists is something that libertarians don’t think about enough. Anti-elitism is by its very nature anti-individualistic, anti-education and anti-cooperative. You can tell it is all of these “antis” not because of the historical results that populism/fascism has bred, but because of its ambiguous arguments. Ambiguity, of course, is a populist’s greatest weapon. There is never any substance to be found in the arguments of the populist. No details. No clarity. Only easily identifiable problems (at best) or ad hominem attacks (at worst). Senator Warren is telling in this regard. She is known for her very public attacks on banks and the rich, but when pressed for details she never elaborates. And why should she? To do so would expose her public attacks to argument. It would create a spectacle out of the sacred. For example, Andrew writes:

Still, I’d rather have people like Warren establish a fuzzy and imperfect starting point for reform than let courtiers to the wealthy and affluent dictate policy because there’s no remotely viable counterpoint to their stances [...] These doctrinaire free-market orthodoxies are where the libertarian movement loses me. There are just too many untrustworthy characters attached to that ship for me to jump on board.

Ambiguity is a better alternative than plainly stated and publicly published goals simply because there are “untrustworthy characters” associated with the latter? Why not seek plainly stated and publicly published alternatives rather than “fuzzy and imperfect starting points for reform”?

Andrew quotes a man in the street that happens to be made entirely of straw:

“Social Security has gone into the red, but instead of increasing the contribution ceiling and thoughtfully trimming benefits, let’s privatize the whole thing and encourage people to invest in my company’s private retirement accounts.”

Does the libertarian really argue that phasing out a government program implemented in the 1930s is good because it would force people to invest in his company’s private retirement accounts? I’ve never heard of such an example, but I may just be reading all the wrong stuff. Andrew could prove me wrong with a lead or two. There is more:

This ilk of concern trolls (think Megan McArdle: somewhat different emphasis, same general worldview) is one that I find thoroughly disgusting and untrustworthy and that I want absolutely no part in engaging in civil debate. Their positions are just too corrupt and outlandish to dignify with direct responses; I consider it better to marginalize them and instead engage adversaries who aren’t pushing the Overton Window to extremes that I consider bizarre and self-serving. They’re often operating from premises that a supermajority of Americans would find absurd or unconscionable, so I see no point to inviting shills and nutters into a debate [...].

Megan McArdle is so “disgusting and untrustworthy” that her arguments are not even worth discussing? Her name is worth bringing up, of course, but her arguments are not? Ambiguity is the weapon of the majority’s tyranny, and our readers deserve better. They are not idiots (our readership is still too small!), and I think they deserve an explanation for why McArdle is not worthy of their time (aside from being a shill for the rich, of course).

I think populism/fascism is often attractive to dissatisfied and otherwise intelligent individuals largely because its ambiguous nature seems to provide people with answers to tough questions that they cannot (or will not) answer themselves. Elizabeth Warren’s own tough questions, on the Senate Banking Committee, revolve around pestering banks for supposedly (supposedly) laundering money to drug lords and terrorists:

“What does it take, how many billions of dollars do you have to launder from drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution?” Warren asked at a Banking Committee hearing on money laundering.

Notice how the populist/fascist simply takes the laws in place for granted (so long as they serve her desires)? The libertarian would ask not if the banks were doing something illegally, but why there are laws in place that prohibit individuals and organizations from making monetary transactions in the first place.

Senator Warren’s assumptions highlight well the difference between the ideologies of populism/fascism and libertarianism: One ideology thinks bludgeoning unpopular factions is perfectly acceptable. The other would defend an unpopular faction as if it were its own; indeed, as if its own freedom were tied up to the freedom of the faction under attack.

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7 thoughts on “From the Comments: Populism, Big Banks and the Tyranny of Ambiguity”

  1. Well said. My thought on the banks is this. How about we repeal all of the special legislation, enforce the bribery, bankruptcy, and fraud laws.

    I have always found that anyone opposing elitism to be special pleader for the incompetent. We have far to many (true) rags to riches stories in the US for this politics of envy to make any sense except for those too lazy to make the effort. Although that is not as true anymore, when the government actively works against the small business owner to the advantage of the connected corporatist.

    It has been said that Christianity has never been tried because it is too hard, the same can be said for capitalism. But you know, very few have ever starved in the streets in America, if they had been, people would have quit coming.

    1. Thanks NEO,

      My only squabble is with your thoughts on enforcing the bribery, bankruptcy and fraud laws associated with the financial sector of the US economy.

      Are you suggesting that, currently, these laws are not being enforced?

      1. Yep, sure am, Brandon. I see nothing else to explain the bubble’s outcome in 2009. I’m inclined to think that we might have had a real recovery if we had allowed the market to clear these, rather than interfering. Not to mention the fraud of the GM bankruptcy.

        Although selectively enforced might be a more accurate phrase.

      2. Thanks NEO, and I think you hit the nail on the head with this:

        Although selectively enforced might be a more accurate phrase.

        I didn’t think about the laws this way, but it definitely makes more sense now. Just to be clear: You are arguing that the reason those banks got bailed out is because the bankruptcy/bribery/fraud laws were not being enforced, correct?

    2. To the point about market solutions to the financial crisis: In July-August 2008 there were some actual purchases of toxic assets for 22 cents on the dollar. At that price, some buyers concluded they could eventually make a profit. When in Sept 2008. the Government with bipartisan approval offered 100 cents on the dollar for toxic assets, the market solution of course instantly disappeared. The housing market still hasn’t recovered from this ill-advised intervention.

      1. I agree and that was my point, this garbage is still around clogging up the system.

        I always like to compare and contrast to the 1920-21 recession, which cleared itself in what a year or a bit more and gave us the roaring 20s.

        There’s actually nothing partisan about that, both parties were in there screwing things up, not that I thought you were implying it, but a lot of people do.

        There is nothing even close to as efficient as the market, when we are smart enough to leave it alone and let it work.

Please keep it civil (unless it relates to Jacques)

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