Steve Fraser, The Two Gilded Ages

Read the whole post (the beginning has details on the billions pulled in by hedge fund managers betting against subprime mortgages and collateralized debt obligations). Tomgram: Steve Fraser, The Two Gilded Ages.

Beginning in the 1970s, our age's business elite became acutely politically-minded and impressively well-organized, penetrating deeply all the pores of party and electoral democracy. They've gone so far as to craft strategic alliances with elements of what their nineteenth century predecessors -- who might have blanched at the prospect -- would have termed the hoi polloi. Calls to dismantle the federal bureaucracy now carry a certain populist panache, while huffing and puffing about family values has -- so far -- proven a cheap date for a gilded elite that otherwise generally couldn't care less.

Moreover, the ascendancy of our faux revolutionaries has been accompanied by media hosannas to the stock market as an everyman's Oz. America's long infatuation with its own democratic-egalitarian ethos lent traction to this illusion.

Horace Greely's inspirational admonition to "go West young man" echoed through all the channels of popular culture in the 1990s -- from cable TV shows and mass circulation magazines to baseball stadium scoreboards and Internet chat rooms. Only now Greeley's frontier of limitless opportunity had migrated back East to the stock exchange and into the ether of virtual or dot.com reality. The culture of money released from all ancient inhibitions enveloped the commons.

"Shareholder democracy" and the "ownership society" are admittedly more public relations slogans than anything tangible. Nonetheless, you can't ignore the fact that, during the second Gilded Age, half of all American families became investors in the stock market. Dentists and engineers, mid-level bureaucrats and college professors, storekeepers and medical technicians -- people, that is, from the broad spectrum of middle class life who once would have viewed the New York Stock Exchange with a mixture of awe, trepidation, and genuine distaste, and warily kept their distance -- now jumped head first into the marketplace carrying with them all their febrile hopes for social elevation.

Comments

[IndieFaith]

Sorry for my ignorance but I am no economist. Just to be clear, "betting against subprime mortgages and collateralized debt obligations" means that institutions lent money with the expectation that people will default on their mortgage and then in be in the institutions pocket as it were.