The phrase of the moment seems to be “populist backlash.” Obama is worried about it, and wants to control it and curtail it, largely, it seems, by closing the barn doors after the horses, or cows, or some barnyard animals, have already made their way to the egress. (Pigs, perhaps.) Obama’s administration and his administrators, viz., Messers Geitner and Summers, are worried that populist backlash—revanchist hordes, dancing the carmagnole, wanting only to fill their tumbrels to the brim with derivatives traders—will complicate their delicate recalibrations of the relation between government and the tottering financial industry.
“Populist backlash” combines two of the most loaded terms in the American political vocabulary, reinforcing one another, to convey a sense of emotionalism and irrationality, of people who are acting without thinking, leaping without looking. Populism entered the American political vocabulary in the 1880s and it has been subsequently been debased to refer to almost any sort of demotic muttering , and in recent years it has almost had uniformly conservative connotations; the so-called Reagan Democrats and their predecessors and descendants, upset about crime, cultural laxness, immigrants, etc have been our latter day populists, doing battle against the so-called “elites,” a conveniently flexible target of anathemazation. And “backlash” entered the political language in the 1960s, referring to more or less the same debased populists, in this case, people who thought that somehow civil rights had advanced blacks too far too fast, and that whites were now a disfavored and governmentally oppressed majority.
But Populism got its start not protesting against “elites” but against the big businesses of the era, and this is again what is being demanded now, that government take effective control of something they already own. And there has been no “backlash” against the TARP and AIG bailouts. There was, from the beginning, a vast uneasiness about the arrangements, which were sold to the American people as a choice between this or complete financial catastrophe, and that if a bailout is necessary, it was also necessary that its recipients do not further enrich themselves unfairly at the government’s dime, and that the government, at a minimum, keep strict tract of who was getting what and why. This the government has failed to do, and the problem is less the money going to the utterly undeserving capitalists who have destroyed capitalism, but the evidence that the government does not seem to be clear of its goals and its intentions. The real problem with the so-called “populist backlash” is that it has exposed the grave difficulties with the half-measures that both the Bush and Obama administrations have taken with the faltering economy, and the need for a comprehensive nationalization or its equivalent. To label this “populist backlash” is to utterly fail to understand the nature of the crisis. If I may return to the French Revolution analogy above; the ancient regime is over, the king is dead, and its attempted restoration mere folly. The sooner the Obama administration realizes this, the sooner they can get over their post-Thermidorian caution.