Jeff Snyder's essay takes its title from Charles Dickens' "A Tale of Two Cities," wherein a French aristocrat utters the phrase to a crowd that gathers after his carriage runs over a child. Dickens notes that the aristocrat acts out of a sense of complete impunity, reinforced by the seemingly cowed state of the lower classes. What happened next, as we now know, was the French Revolution.
Mr. Snyder makes the point in his turn that the American elites are engaged in an increasingly blatant and massive expropriation of wealth from taxpayers and downstream dollar-holders.
It is not morning in America.
Within the last year, the Treasury Department has bailed out AIG, Fannie Mae and Freddie Mac and forced Bank of America to acquire Merrill Lynch while promising that Treasury would take care of Merrill’s losses on its mortgaged-backed securities. The Federal Reserve, a government-sponsored private bank, has provided hundreds of billions in credit support to faltering or insolvent banks. Details not provided. With letters from voters to Congress running hundreds to 1 against, Congress approved $700 billion in TARP funds for the Treasury Department to purchase banks’ toxic assets. It now turns out that no one can say, or is willing to say, how the first $350 billion or so of those funds were used or to whom they were paid.
To deal with the toxic assets it is purchasing in order to save the banks, the Treasury Department created a program under which companies can form public-private enterprises (PPEs) to buy pools of these assets from the Treasury and resell them. The Treasury or other government agency set up for this business will put up 7%, the private company will put up 7% and the PPE can obtain 86% government financing to purchase these toxic assets at a discounted price determined by the FDIC. The financing is nonrecourse, so if the PPE does not make enough money to repay the loan, the private company is not liable for the deficiency, and the losses are absorbed by the taxpayers. The result is that, after the taxpayers absorb the initial losses in value on the toxic assets in an amount determined by the FDIC, for 7% of the discounted value down, the private company in the PPE gets the chance to make a profit reselling the same toxic assets that it or its comrades in finance helped create in the first instance. Is this a great country or what?
The Administration forced a cram down of General Motor’s creditors and, with 67% of the American people opposing the plan, acquired a substantial ownership interest in GM and bailed it out. The federal government is now in the car as well as banking businesses.
With only about 37% of the American people supporting it and 43% opposing it, Congress passed a $787 billion spending spree bill to caffeinate the zombie economy. It’s money we don’t have. By its own estimates, the federal government is going to run a deficit this year of about 1.6 trillion dollars, and projects a ten-year estimated budget deficit in excess of $9 trillion. That’s on top of our existing national debt, and doesn’t include the interest costs the government is going to incur to pay on the bonds it issues to obtain that money.
The theft is so massive, in fact, that it is economically unsustainable. And one must wonder, as I have, how long the parasitic elite can rely on the forbearance of their hosts. The obvious answer is, "Not forever," and Mr. Snyder's clever tie-in is that in pre-Revolutionary France, the unsustainable state of affairs persisted, until the day it didn't. A tipping point is surely being approached, and upper class snickering at the illogic of Medicare beneficiaries raging against socialized medicine becomes quite irrelevant.
[A]fter a year in which the members of Congress have continually disregarded the voters’ wishes and committed them to trillions in debt to save the rich, the members of Congress, on return from the capital to the provinces this summer, have been caught unawares, completely surprised at the vitriol that has been directed at them in this summer’s town hall meetings. Some of the voters are calling them socialists or fascists, and waving the swastika at them! Some of the voters are spluttering with rage, are incoherent, or saying contradictory and stupid things, like telling their representatives that they don’t want government involved in health care, but don’t take away our Medicare! The folks at Comedy Central are having some fun with that. Look at these morons rage! Ah oui, c’est très amusante, cela!
Not everyone sees this as a source of hilarity or, like some pundits, a reason to bemoan the sad, infantile state of political "discourse" in this country. Trends forecaster Gerald Celente, citing the anger at this summer’s town hall meetings, says that we are in the early stages of "The Second American Revolution." Whether it is true remains to be seen, but the prediction certainly echoes a vibrant chord of dissension running through the tenor of the times.
Celente’s name for the developing conflict is potentially misleading, in that it suggests, by implicit reference to the mythology of our first revolution, that the eventual outcome may be more freedom, not less. But as Bertrand de Jouvenel pointed out in his examination of the growth of power, historically, revolutions have always resulted in greater centralization of power, greater control over society’s resources by the state and greater tyranny, as some strong man or group found a way to harness and ride the rage to a new position of command.
The fact of the matter is that for all their illogic and incoherence, the protesters are more right than wrong.
Is the anger we see in town hall meetings limited to Congress’ attempt to reform our health care system? Are some of these people mad just because Rush Limbaugh and Sean Hannity have whipped them into a frenzy about socialism? Yeah, it’s possible, but then again, why were they able to do that? Some commentators have noted that the anger is being fueled by people’s anxiety and uncertainty over their jobs and what’s going to happen to them. No doubt that there’s something to that, but I suspect that it has a lot more to do with something they are not uncertain of at all, some fundamental truth that’s just been really rammed home, namely, that whatever happens, they’re the ones who pay. They’re the ones who must not only bear their own losses but recompense the losses of the architects of the disaster. They’re the ones who must adjust and whose income and lives must diminish, so that those who are too big to fail continue to receive their due, and can continue to live in the style to which they’ve become accustomed. They’re the ones who are supposed to be consoled by President Obama’s assurances that "our best days are ahead," apparently coming right after they’ve finished paying a few trillion dollars to assure that our financiers’ best days continue to be right now.
And if you think these people are mad now, just wait until it becomes clear that tax-deferred 401(k)'s and defined-benefit pensions are a sucker's bet, on top of the already bankrupt Social Security and Medicare funds.
The final aspect of Dickens’ portrait that I wish to highlight is the blindness of the upper classes to the coming bloodbath, and the apparent unshakable security of their position almost right up to the day it breaks. They have no sense that they are pushing people closer and closer to the brink, and never have the slightest doubt but that they are secure in the power that their position and wealth confers, and their insulation from the conditions of the rest of their society. As Dickens portrays it, even at the edge of the precipice, there is still no sign of their danger or impending doom, and it seems that things will just go on the same way forever.
We see this in the second part of the chapter, where a Marquis’ carriage runs over a small child in the streets of Paris, and the carriage stops to secure the horses. A crowd forms around the Marquis’s carriage, but Dickens notes that "[t]here was nothing revealed by the many eyes that looked at him but watchfulness and eagerness; there was no visible menacing or anger." The Marquis is imperial and speaks to people in the crowd, but does not doubt for one instant the security of his position. Nor would he have any cause to do so for, as Dickens notes, "[s]o cowed was their condition, and so long and hard their experience of what such a man could do to them, within the law and beyond it, that not a voice, or a hand, or even an eye was raised." It seems such people could never rise up to overthrow anything. The people have been brought so low, so reined in that they have no option but to continue paying, carrying and kowtowing to this predatory and useless class. But the reader knows, as the Marquis does not, that this is an illusion, that the pressure is growing, that the tighter the controls, the worse they are treated, the harder they are squeezed, the greater the coming explosion will be. The reader knows, as the Marquis does not, the dam will soon break and these people, silent and cowed today, will be part of a bloodthirsty mob tomorrow.
The facts that there are no rumblings of revolt, no outbreaks of hostility, no displays of anger, that the people are as subdued and tractable, as fully under thumb as ever, are absolutely no indication that all is well, that matters are not coming to a head. This, of course, is what makes the disconnectedness and self-absorbed, self-regard of the upper classes all the more dangerous and, ultimately, fatal.
Dickens sees that, for those living at that time, the French Revolution was not a gradual, unfolding series of events, each more clearly foretelling the horror to come, but a sudden, complete rupture of the social order, cataclysmic, like an earthquake. The ground is solid, permanent, fixed and unmoving; nothing is more stable or certain. Yet underneath the pressure is building until one day it reaches a point where the plates suddenly slip. The earth moves, a chasm may open beneath one’s feet, and the landscape is forever altered.
It is because Dickens shows life shortly before the Revolution proceeding the same as ever, that the concluding words of his chapter are so powerful: "all things ran their course." The aristocrats are attending their Fancy Ball and "the rats," meaning the people, "are sleeping in their dark holes." Nothing has changed. There are no new developments that give cause for concern. Life is proceeding in the same way, everything is as it should be, all’s right with the world and it’s bright and wonderful and marvelous. Yet, as readers with the hindsight of history, we know where this course leads, and how it ends.
In November 1989, I along with everybody else watched the newscasts of Germans tearing down the Berlin Wall. I remarked to my roommate at the time that the Soviet Union would be gone in five years. He said ten. It took less than two.