Obama's New Peer Populism

The senator's Internet strategy has tapped the citizenry's desire to help create new prospects for economic opportunity and social mobility

by Shoshana Zuboff

Barack Obama unleashed the power of a new populism in U.S. politics. The old populism was bottom-up and top-down. The masses demanded leaders who promised to solve their problems. But the new populism is bottom-out. The leader is first among equals, mobilizing peers to solve problems together. I call it "The New American Populism"—a movement for our times.

As Senator Obama's campaign enters the prime time of the Democratic Convention and the sixty-odd days to follow, his challenge is to leverage this new peer politics while bringing the rest of the country along with him. The Greek philosopher Philostratos wrote, "The gods know the future, people know the present, the wise sense what is to come." Conventional wisdom is not wise, and real wisdom is by nature unconventional. That paradox neatly sums up the challenge facing Obama: how to master the conventional unconventionally.

Obama's unconventional insights are at play just as traditional populist sentiment is on the rise. Americans distrust large organizations and are pessimistic about economic opportunity and social mobility. A majority of Americans trust the "ordinary man or woman," but few trust the President, Congress, business leaders, or journalists. Only 8% of Americans had a great deal of trust in Congress, 11% in Wall Street, 14% in major companies, and 15% in the White House, according to the Harris poll of Feb. 28, 2008. Large majorities believe that big companies, PACs, lobbyists, and the media have too much power and influence in Washington.

the home of the demoralized

Most Americans are alarmed over the growing income gap and disgusted by the supersized pay packages of corporative executives. A majority no longer believes that all citizens have the same opportunities to fulfill their potential, according to a Harris Poll from July 25, 2007. A heartbreaking 56% of Americans say they are either stagnating (BusinessWeek.com, 7/14/08) or "falling backward in their standard of living"), more than at any time in the last half century, according to the Apr. 9 study, Inside the Middle Class, by the Pew Research Center.

The anxiety and gloom reflected in these surveys is well-founded, as top-line indicators of our globalized economy no longer reflect on-the-ground realities of old and new populists alike. Any recent growth in GDP reflects a weak dollar and strong exports—which now account for more than a third of corporate earnings. The GDP tells a story of far-flung multinationals but omits Main Street businesses and their customers.

During the last 25 years, policies that built and protected the middle class were dismantled, leaving the financial sector—and many others—as free from regulatory oversight as they were before World War I. As Martin Wolf wrote in the Financial Times ("The New Capitalism", 6/19/2007), "The new financial capitalism represents the triumph of the trader in assets over the long-term producer." Today the economy is ruled by hedge-fund traders, speculators, arbitrageurs, and the private equity guys who break up, buy, and sell companies for immediate financial gain.

Anyone who has read J.K. Galbraith's classic study of the 1929 Great Crash can't help but ponder the parallels. Just after the Crash, he wrote, the Harvard Economic Society assured the nation there was no threat of depression. It insisted that "Business in most lines has been conducted with prudence and conservatism." In fact, as Galbraith put it, American enterprise had opened its arms "to an exceptional number of promoters, grafters, swindlers, impostors, and frauds…a flood tide of corporate larceny." Subprime mortgage, anyone?

sobering statistics

Unfettered financial capitalism, combined with tax policies favoring the rich, has produced concentrations of wealth and income even more extreme than in the laissez-faire era of the 1920s. The U.S. has become a third world country for too many of its citizens.