A Rescue Plan for the Middle Class

The 2008 financial crisis shook America’s attitude and generated widespread anxiety. When Obama took the podium on October 13th, 2008, he was already in a favorable position in the presidential race. Capitalizing on the financial chaos resulting from the failure of the venerable Lehman Bros financial firm, Obama had built a healthy lead in the polls over John McCain on the basis of two factors: a calming political demeanor cautioning resolve and deliberation in the face of economic disaster, and a persistent recourse to effective scapegoating through by juxtaposing the American “people” (represented through the figure of Main Street) against irresponsible and selfish capitalists (figured metonymically as Wall Street). Speaking in Toledo, Ohio, Obama delivered an address entitled “A Rescue Plan for the Middle Class”.  My contention today is that this speech embraced a hybrid populism which came close to encouraging meaningful collective responsibility for the September financial crisis, but ultimately created an opening for the conservative economic populism that emerged in early 2009 by advocating for a democratic fantasy capable of remedying economic strain.

Obama opens the speech with a flurry of collective pronouns that alternate between establishing his consubstantiality with the audience but also the occasional reminder that the demands and insecurities present are those of the “people” not of the government. “We meet at a moment of great uncertainty for America. The economic crisis we face is the worst since the Great Depression.”  Obama then moves to the second person. “You’ve got auto plants here in Ohio…closing their doors…You’ve lost one of every four manufacturing jobs…the question isn’t just ‘are you better off than you were four years ago’, it’s ‘are you better off than you were four weeks ago?’” referencing the famous Ronald Reagan slogan even as he made clear the issues Americans were facing. Immediately after setting the table for disaster, Obama presents the election as part of a moment for a transformation in American politics. “We still have the most talented, most productive workers of any country on earth…It won’t be easy, but there’s no reason we can’t make this century another American century.” These workers and their existential economic concerns are then juxtaposed with the comments of a McCain campaign staffer who had been quoted as saying “if we keep talking about the economy, we’re going to lose.” “Senator McCain may be worried about losing an election, but I’m worried about Americans who are losing their jobs, and their homes, and their life savings…they can’t afford four more years of the economic theory that says we should give more and more to millionaires and billionaires and hope that prosperity trickles down to everyone else.” By tapping into the still-circulating “Wall St./Main St.” trope, Obama establishes a unity between governmental elitism and private sector elitism.

            By then offering a five point plan for recovery that includes tax relief and mortgage support, the contrast between existing Washington ways and Obama is made clear: his rescue plan for the middle class is a bailout for the “people” not for economic elites benefiting from the cronyism of their partners in Washington. The repeated emphasis on first person language solidifies this effect. “We should also change the unfair bankruptcy laws,” “We just need to act quickly and decisively” “We should also extend and expand unemployment benefits” “We should fast track the loan guarantees.”  Such measures will be paid for by “scouring the federal budget, line-by-line, ending programs that we don’t need and making the ones we do work more efficiently and cost less.”  The explanation for the how of payment makes easier a transition into the second part of the proposal: a call for Americans to become more financially responsible in their own private lives. “We’ve lived through an era of easy money, in which we were allowed and even encouraged to spend without limits; to borrow instead of save.” “Allowed” and “encouraged” are verb choices which imply that the decision to spend beyond one’s means was not one taken with a full knowledge of the risks involved: such spending is the effect of a previously undetectable cultural malaise. Obama goes further to trade on a rhetoric of individual responsibility while also undermining it, framing more spending as “not a choice but a necessity. People have been forced to turn to credit cards and home equity loans to keep up, just like our government has borrowed for China.” Again Obama strikes with a parallelism between “the people” and the government creating an equivalence that makes it easier to admit to one’s own failings as the enthymeme “if the government can do it, so can I” remains implied. However for both “people” and government, this turn to debt is dangerous, and our reliance on such measures is temporary, for “Once we get past the present emergency…we have to break that cycle of debt. Our long-term future requires that we do what’s necessary to scale down our deficits, grow wages and encourage personal savings again.”  Note again the use of collective pronouns establishing the government and “the people” as one.

            Rather than delivering a fiery class sensitive polemic about the wrong done to America, Obama’s speech indexes a moderate view less beholden to scapegoating urges and more invested in a positive sense of futurity. Obama only mentions restrictions on CEO pay in passing, but generally passes over populist demagoguing in favor of his rescue plan for the middle class. The government can work for the people but not against Wall Street. Michael Lee observes in his study on populist argument four major characteristics of such speeches: construction of a virtuous people, construction of a nefarious enemy, articulation of the enemy to a systemic logic, and the production of an apocalyptic confrontation. By these standards, Obama’s speech is a tepid, perhaps even non-populist speech, which continues to advance the virtues of “the people” and locating the minimization of their agency in culture and circumstances not in a malevolent enemy figure.

            Obama also gestures towards the possibility of what Kenneth Burke calls mortification, the possibility that people might suffer for their sins. However, instead of cultivating such a sense (one which, if directed correctly, might lead to a perspective by incongruity and a course correction in action) Obama locates the main causes of irresponsibility in circumstances and culture. Because subjects are enmeshed in their cultural contexts, scapegoating “culture” can amount to the worst of both worlds by excusing potentially deleterious individual attitudes on the basis of their cultural production (hence depoliticizing them) while providing no discrete vessel to serve as the specific scapegoat capable of discharging the process of victimage. One result, then, of this halfhearted move to mortification, is that while there is still a crime or an exigence (financial disaster) responsibility for this disaster cannot be properly allocated. As Burke and many theorists of identity are fond of noting, identification is not a purely positive process but occurs on the basis of negative differentiation: to square one’s self with an ongoing economic catastrophe requires the dissociation of one from the conditions that contributed to that catastrophe, unless the mortification process is pursued to its fullest extent.

            Obama here explains the economic crisis as an error, something that human agents have caused rather than a systemic expression or symptom of deeper problems in our socio-political milieu. This explanation does not demand an adjustment or reassessment of the relationship between American national identity and prosperity. The American people have lost their way, but they may once again find it. Obama’s speech relies heavily on the figure of the American “people” but neither as a class victimized by elites nor as a criminal class responsible for economic problems: instead, “the people” exist (though they are victims of circumstance), the government is their agent (but not to avenge them, only to defend them), and the current crisis will abate should America return to its intrinsic values.

            As we now know, the crisis did not abate but intensified: while Obama won the election in a sweeping fashion, the economy continued to grind and stutter. And by February 2009, an organized conservative populism presented itself as the answer to an Obama administration that could not stop the bleeding (warranting an observation about the outsized expectations of the presidency, seeing as we were roughly only a month into Obama’s term when a new conservative revolt began). What to make of the rapid emergence of this opposition to Obama? It is tempting to cynically filter some of the explanation through the thesis that politics is warfare, and political opposition benefits not from compromise but opposition. This might be right and might explain part of why Republican intransigence grew so quickly into the Obama administration. But it does not explain the emergence and persistence of populist themes in the emerging mode of new post-Obama political conservatism. What this essay has suggested is that the populist themes nurtured in the wake of the collapse of Lehman Bros. and the TARP relief package were not brought out and either resolved or distributed by Obama’s rhetoric, but instead only partially acknowledged, leaving a reservoir of anxiety and public discontent as part of a public mood. By committing neither to a populist polemic nor to a fully introspective mortification-driven “perspective by incongruity”, “the people” remain a figure invested in Obama for his steady hand during the early moments of the economic crisis, but also a figure subject to later capture by conservative forces who suggested the president had not fully identified with their anger and anxiety.

Relays of Sympathy: Neoliberalism and Populism

There is a unique tradition of American thinking about economics that holds a more intense relationship to liberalism than that found in the context of continental Europe, from which much work in political theory draws. Michel Foucault’s series of lectures on economics at the College of France from 1978-1979 acknowledge the distinction between developments in economics in the European context and American. Foucault sets out to argue that the role of economic reason is not simply to regulate civil society, but instead to constitute a regime of knowledge that is ontologically inaccessible to governmental reason. As he puts it, the market, allowed to function unencumbered, produces relationships that come to represent truths as dictated by the logic of the market, coding market judgment as the legitimate expression of a collective will: “ When you allow the market to function by itself, according to its nature, according to its natural truth…it permits the formation of a certain price which will be called, metaphorically, the true price…the market must be that which reveals something like a truth.” The revealed truth then implies a corresponding set of appropriate and inappropriate actions by governments, as “The formation of a natural price…enables us to falsify and verify governmental practice when, on the basis of these elements, we examine what government does, the measures it takes, and the rules it imposes.”[i]

            The result is that prices (and, correspondingly, social locations) are read as expressions of a market’s judgment. The legitimacy of this market judgment is further established through Adam Smith’s metaphor of the “invisible hand” which functions like “the existence of something like providence which would tie together all the dispersed threads” and for Foucault the key element is the inability apprehend from where the hand acts, as “invisibility is not just a fact arising from the imperfect nature of human intelligence which prevents people from realizing that there is a hand behind them which arranges or connects everything…It is an invisibility which means that no economic agent should or can pursue the collective good.”[ii] For Foucault, even Smith, a figure which some have tried to rehabilitate by reading against some modern market fundamentalists, implies that the world of governmental regulation and economic action are incommensurable realms, where the very idea motivation government (some notion of the common good) renders the government absolutely incapable of aiding the economy, which realizes its promise only through legitimating the expressions of pure individual interest.

            Crucially, Foucault recognizes there is a tendency to temporally narrativize the work of the market. For example one imagines the production of a good, (say, a widget), that the good is sold (or not sold) at a certain price, and eventually reaches a point where it has achieved its “natural” or “true” price in the economy, which reflects the optimal point of its sale for both its producers and consumers. In practice, however, the process of production and sale is considerably messier. At the center of liberal economic theory lies a self-interest human, what Foucault calls homo economicus, the “person who must be let alone” to pursue “his own interest.”[iii] Their own interest is not the same as the collective interest, but, theoretically, the exercise of self-interest will end up coincident with the common good or common interest. Foucault implies that there is more than a little magical thinking in this account, as he says of their interest that it “is such that is converges spontaneously with the interests of others.”[iv] The notion is that the economy works without any kind of outside intervention, with no external signals or signs as to what the “right” action would, as those would constitute market distortions.

            The result suggests a kind of crisis for economic theory. Or, at least, it suggests a theoretical problem that arises if individual choice fails to produce conditions of public stability. This proposition is what drives work like that of David Harvey who, in A Brief History of Neoliberalism, suggests an inability for us to draw a line between what he calls neoliberalism’s promise to better society “by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade” and its actually existing products of instability, poverty, and violence. [v] On Harvey’s view, the “theoretical utopian of neoliberal argument has…primarily worked as a system of justification and legitimation” for the rollback of state regulation and the upwards accumulation of wealth for elites.[vi]

            Foucault’s canny mention of the magic of “spontaneous convergence” of interests suggests how the promise of individual freedom naturalizes political conditions as expressions of (legitimate) market judgments. Because homo economicus does not and cannot aim at producing a public good, what he really is an entrepreneur of himself, “being for himself his own capital” and with that production comes the capacity to consume.[vii] By engaging in processes of consumerism, homo economicus “produces his own satisfaction” which suggests that the classical division between production and consumption as two elements of a subject has instead been conflated in the proliferation of a more intense vision of economic liberalism, where labor directly produces satisfaction.[viii]

This analysis is especially trenchant in the case of America, where the function of the market comes to encompass much more than in other contexts:

neo-liberalism evidently appears much more radical or much more complete and exhaustive. American neo-liberalism still involves, in fact, the generalization of the economic form of the market. It involves generalizing it throughout the social body and including the whole of the social system not usually conducted through or sanctioned by monetary exchanges.[ix]

Where in, say, the European context, the failure of the market to provide certain goods and services might be more readily read as expressing a gap between the needs of the nation and the needs of the market, in American the liberal/individual element in the political grammar can be taken to imply that the failure to provide for a common good is a result of the refusal to commit more fully to market orthodoxy. This suggestion works in concert with the appeal of a regime of liberal individualism itself, which preys on romantic conceptualizations of heroic individuals agency.

            Moreover, the health of the consumer economy itself has become conflated with the national interest. Lizbeth Cohen suggests that this conflation was particularly notable in America following World War Two, when this fantasy of national consumption was tied to existing political winds:

As Americans lived better and on a more equal footing with their neighbors, it was expected, the dream of a more egalitarian America would finally be achieved. Politicians never tired of tying America’s political and economic superiority over the Soviet Union to its more democratic distribution of goods.[x]

The capacity to exercise one’s own consumerist agency, to participate in directing the gestures of the invisible hand, can be taken as an index of one’s membership of the polity. The importance of these practices increased as a kind of compensatory mechanism for a decline in the intensity of attachments to other sources of authority, like religion, family, and social homogeneity. The market comes to reflect not just the judgments of consumers, but also reflects the capacity of citizens to participate in the production of values and reality. The channeling of imagination of agency to these highly individualized and consumerist visions also dovetailed nicely with the state-phobia referenced earlier in this chapter: twixt and tween the recent threat of German fascism and the current Soviet menace, consumerism was not only an expression of one’s capacity to own their entrepreneurship of the self, but also a method of suggesting that there were some mechanisms of expression that could not come under state control.

            The health of the economy, then, does not just reflect a string of numbers on the Dow Jones, an index of consumer confidence, or the amount by which the gross domestic product has increased or decreased in a given year. Instead, the health of the economy corresponds with the imagined health of the American “people,” whose capacity to act as their own entrepreneurs is taken as a key marker of their fitness and health as a “people.” A bad economy may not only reflect poorly on political actors or economic elites, but also suggests an inability of consumers to properly judge their own self-interest and contribute appropriately to the economy. The special kind of market fundamentalism that developed as a response to the fifties consensus about Keynesian spending and government intervention into the market was itself a populism, one that constituted itself against the government’s separation from not only the subject position of actors who existed “within” the market but also with a basic incommensurability thesis at work about the capacity of the government to pass judgment on the legitimacy of popular reason. Economic crises do not, then, only suggest crises for capitalism, but they threaten liberalism by indicting the judgment of individual actors themselves.

            So far work in rhetoric has competently advanced the study of modern economics, either by suggesting the intrinsically rhetorical elements of economics as in the case of Deirdre McCloskey’s The Rhetoric of Economics and its familial relations to the Project on the Rhetoric of Inquiry, or in various studies that generate sophisticated understandings of the relationship between neoliberalism, citizenship, and economic rationality. Joshua S. Hanan, for example, connects the democratization of economic rationality to the housing bubble that was partly responsible for the 2008 collapse, suggesting that neoliberalism’s paradoxical relation to its utopian promises and its actually existing exclusions means that “neoliberalism materially uproots the very materiality needed to view the economy as a representation of reason.”[xi] Catherine Chaput concludes that the most nefarious danger posed by neoliberalism is its capacity to interpret any situation (and thus exert a perverse presumptive capacity to frame each situation) by moving “from situation to situation, disregarding spatial boundaries between the political, economic, and cultural realms as well as their attendant modes of persuasion, wearing away at the rhetorical linkages between appropriate discursive choices and agentive power.”[xii] Bradford Vivian connects neoliberalism’s capacity to generate intense relationships to malleable political terms like liberty and freedom to its actually depoliticizing effects, namely to restrict the scope, character, and subject of political speech to only safe and apolitical topics.[xiii] Finally, Megan Foley’s astute examination of the federal mortgage crisis involving Fannie Mae and Freddie Mac accurately assesses how the “economic” has come to crowd out the “political” by positioning citizens as the figures who have the capacity to make market judgments with a government rendered into incompetent architects of an  “infantile politico-economic apparatus” made helpless in the face of market judgment.[xiv]

            Taking for granted this set of observations about the capacity of the “economic” to both colonize and confabulate politics, I hope to outline how the conflation of economic agency and political agency configured the public response to the 2008 financial crisis and the ongoing production of the American “people” both through the 2008-2010 electoral cycle and the ongoing economic recession. Considering public discourse both as attempting to perform a triage operation on the American dream while at the same time disclosing anxieties and fears related to the state of the economy enables me to suggest that the development of a rather unique form of individual populism coincident with rather than antagonistic to market fundamentalism was no accident but instead reveals how America imagines itself collectively in moments of crisis. Foucault concludes in The Birth of Biopolitics that one of the key insights of liberalism is the motto that one must “’Live Dangerously’” as subjects are constantly experiencing their lives, presents, and futures as dangerous.[xv] The turn to collective political vocabularies, I hope to show later, can be read as a means of managing this condition of permanent danger, these anxieties associated with appearance during times of economic and social crisis.

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[i] Foucault, The Birth of Biopolitics, 31-32.

[ii] The Birth of Biopolitics, 279.

[iii] The Birth of Biopolitics, 270.

[iv] Ibid.

[v] David Harvey, A Brief History of Neoliberalism  (New York: Oxford University Press, 2005), 2.

[vi] A Brief History of Neoliberalism  (New York: Oxford University Press, 2005), 19.

[vii] Foucault, The Birth of Biopolitics, 226.

[viii] Ibid.

[ix] The Birth of Biopolitics, 243.

[x] Lizbeth Cohen, "A Consumers' Republic: The Politics of Mass Consumption in Postwar America," Journal of Consumer Research 31, no. 1 (2004): 237.

[xi] Joshua S. Hanan, "Home Is Where the Capital Is: The Culture of Real Estate in an Era of Control Societies," Communication and Critical/Cultural Studies 7, no. 2 (2010): 194.

[xii] Catherine Chaput, "Rhetorical Circulation in Late Capitalism: Neoliberalism and the Overdetermination of Affective Energy," Philosophy and Rhetoric 43, no. 1 (2010): 2-3.

[xiii] Bardford Vivian, "Neoliberal Epideictic: Rhetorical Form and Commemorative Politics on September 11, 2002," Quarterly Journal of Speech 92, no. 1 (2006): 3-4.

[xiv] Megan Foley, "From Infantile Citizens to Infantile Institutions: The Metaphoric Transformation of Political Economy in the 2008 Housing Market Crisis," ibid.98, no. 4 (2012): 387.

[xv] Foucault, The Birth of Biopolitics, 66.