Where Wall and Pennsylvania Intersect: Economics in the Information Age
Wheeler, Harvey
Tourist guidebooks say that Wall Street starts at Broadway and ends at the East River. Political analysts know better: at the end Wall Street changes into Pennsylvania Avenue. Economics alone...
...His tardy and faltering rhetorical efforts were ineffective...
...The Bork defeat was the crippling blow...
...Polls are static cross sections that transform a momentary reading into a specious stability, failing to record the volatility of day-to-day reactions...
...for 1989 it is 13,600...
...Marshall McLuhan taught us that the form of rhetoric is determined by both the audience and the means of communicating with it...
...Republican Senator Arlen Spector, a brilliant interrogator, announced against Bork...
...We are sitting on a time bomb...
...A subconscious reservoir of patriotic pride inhibits expression of negative impressions...
...the warware bills were passed because of the high rhetorical art of the video professional...
...On Saturday Nancy had breast cancer tests...
...Most polling is associated with commercial advertising...
...In the period preceding the crash the Economist was preoccupied with the American crisis but focused on spiritual and political malaise rather than the economy...
...When people talk to a pollster, an inner censor intervenes and masks their inner feelings and hunches...
...At an innocuous Rose Garden photo opportunity ceremony Sam Donaldson sprang out of the bushes in a surprise attack...
...Only in "World Wide," the political affairs column...
...Uninhibited evaluations are precisely what a stock market captures, and then magnifies...
...These two politico-economic features working in tandem constitute the true "Reaganomics," not supply-side theory...
...The General Accounting Office says the administration financing of pro-contra propaganda violated congressional restrictions...
...Six propositions: (1) In today's "postideology" politics the old left/right, liberal/ conservative divisions have given way to a new individualist/humanitarian polarization...
...Larry Speakes disclosed a dotty stooge...
...Markets are notoriously mob-engendering institutions...
...Reagan revealed he had decided on his response to Iran but wouldn't say what it was...
...It was followed by the most devastating Wall Street crash since 1929...
...One shows a puzzled Statue of Liberty...
...multiple scandals...
...3) Success at video rhetoric can work wonders in Congress...
...Today the economic factor has been supplemented by a political factor...
...Britain, for example, would have had cabinet shakeups, or even falls, over such as Iran/contra, the Meese scandals, the Bork/Ginsburg defeats, and the Persian Gulf adventures...
...But the main event occurred on the weekend TV...
...While waiting for our quadrennial elections we, however, must make do with demonstrations, riots and congressional defiance...
...On Friday Washington leaks said Reagan was being urged to bomb Iran...
...On Monday the crash trajectory began early...
...decline in health...
...The rhetorical arts that previously produced equilibration instead produced a "catastrophe cusp...
...This is the dread condition known to sailors when the normal controls of a boat produce reverse conditions and lead to a capsize...
...technology in arrears...
...Our technological leadership in the world declined steadily and so did our standard of living...
...Rushmore's four sculpted presidents, but nobody (that is, not Reagan) to join them as number five...
...This does not prove that the same rhetoric factors will influence market fluctuations under future presidents...
...The "daily diary of the American dream" reports that world financial markets, like unruly colonials, are growing "tempestuous...
...2) The individualist/humanitarian reorientation has made factional shifts between congressional blocs more volatile, more sensitive to public opinion, and therefore more responsive to a president's video rhetoric...
...In fact, Business Week could still, after the crash subsided (November 30, 1987) prove to its own satisfaction that if the Fed hadn't raised interest rates in the early eighties everything would still be just fine...
...In retrospect we can assess the Carter administration as adequate in nearly every department but rhetoric...
...One upshot of this is the "spin control" specialists...
...Dialogical persuasion, in a court or council, has always carried high prestige...
...Thomas Plate Newsday, 8/17/88 q FALL • 1988 • 475 Politics and Wall Shoat effectiveness correlate with market behavior, and they do so with stunning accuracy...
...If either misfired the entire engine would fail...
...That, in turn, depends upon the opinionmanagement skills of the White House...
...The preliminary draft of the Senate Iran/contra report is strongly critical of Reagan and his chief aides...
...increasing poverty...
...Both have been much discussed but the latter requires special attention...
...Demagogues were threats to party politics and bossism...
...This shift began under Carter but was consolidated under Reagan...
...The cover story is an oblique but pointed discussion of Reagan as a failed president...
...It has always been acknowledged that "confidence" has a great deal to do with the decisions of investors and hence with the behavior of the stock market...
...Only the political indicators of the president's communications Reagan and the Cities While total federal spending under the Reagan administration has increased 100 percent, assistance to cities and towns has been cut by 72 percent...
...Right now there is no incentive to build, own or operate low-income housing...
...This was negatively apparent under Carter...
...on a political confidence index...
...The caption is: "Whatever Happened to America's Smile...
...It runs down the center of the front page...
...They are dumb to the crossstimulations that trigger the kind of mob psychology that leads to a run on a bank...
...In 1987, for the first time, Reagan's political reverses began to have a cumulative effect...
...This reciprocating engine worked well during the first term...
...If at any time a Wall Street crash had occurred it would have been easy to show it was warranted on economic grounds...
...To make matters worse, the Tax Reform Act of 1986 slashed the amount of interest investors can deduct...
...In 1979 federal funds for 255,000 new housing units were appropriated...
...Iran follows with missile strike against a US-owned tanker...
...he will fight on to the end...
...The market no longer fluctuated in classical accord with underlying economic conditions but rose steadily like Bel Air real estate...
...Their mutual reinforcement forestalled both political and economic crises...
...Reagan also eliminated General Revenue Sharing—a program set up by Richard Nixon to make sure every city had a minimum revenue base to meet public needs...
...However, we are in the Information Era...
...This is the Reagan legacy to the cities...
...But not in "Business at a Glance," the economics column...
...FALL • 1988 473 Politics and Wail Street peace in Nicaragua...
...The market is an interactive opinion polling mechanism whose instantaneous transaction readouts stimulate people on three levels...
...His defenses of Bork turned perversely against himself...
...UDAG will not receive any new funding in 1989...
...We are a crisis-prone nation with no constitutional mode of crisis resolution...
...The White House is constantly taking the public pulse...
...By October his invincibility was in doubt...
...Nothing is going well for Reagan...
...Salvador begins cease-fire talks with the rebels...
...the environment degraded...
...6) This two-hundreth anniversary of the writing of the constitution is a particularly good time to study the rhetorical aspects of the Wall Street crash...
...Iranlcontra...
...The administration in fact has requested more for foreign aid than it has requested for aid to U.S...
...In early October a crisis of confidence began to develop—not in Wall Street but in the Reagan mystique...
...We have no between-elections way to resolve a political crisis...
...4) In our new "information age," the measure of a president's rhetorical effectiveness has become one of the most important economic indicators...
...Correspondents reported in from every sector of the Bork war...
...A new coup attempt forces Aquino to close three radio stations...
...cities...
...The nation's fallen confidence index was transmitted immediately to Wall Street...
...During the past six years the objective economic situation has steadily worsened...
...welfare in default...
...sinks three Iranian patrol boats...
...Reagan's rhetoric now functioned in a reversing environment that converted each evasive tactic into a self-accelerating defeat...
...There was little objective change in the economy just prior to the crash...
...It picked up momentum after 2 pm EDT when Iran's offshore platforms were bombed...
...If our economy has been crash-prone for so many years, why didn't one occur...
...5) Our society's politics and its economics have both become functionally dependent upon the sustained effectiveness of presidential demagoguery...
...Some kind of preventive equilibration was operating but it was not the result of selfadjusting market forces...
...Persian Gulf recklessness...
...And it is also about people's opinions about people's opinions about money trends...
...Four of the five issues preceding the crash had cover stories about America's decline...
...It was accompanied by a shift from party bossism to video vote leveraging...
...Today, constitutional safeguards and party buffers are no longer effective against the master rhetors of television...
...Economics alone can no longer explain the ups and downs of the stock market...
...And when it happened, why did it come just at that time...
...The Executive Office of the President is primarily a public relations firm...
...Polls are not interactive...
...q 476 • DISSENT...
...Such crude crisis-resolving devices have led to a series of failed presidencies...
...Both Pennsylvania Avenue and Wall Street are hostages to a constitutional lacuna...
...This wellcrafted political software became the essential complement to deficit-financed Warware Keynesianism...
...Reagan, the video professional, reinvented for television a structure of persuasion that the ancient rhetors had first invented for assemblies...
...President Reagan is the acknowledged master of video rhetoric...
...The U.S...
...Says Frank Shafroth, director of federal relations for the National League of Cities, "The housing crisis now pales compared to what's coming...
...in 1988 the appropriation was for 18,000...
...Hitler, Churchill, and FDR were master demagogues...
...But polling is a flawed science...
...Our underlying economic deterioration is well known: rising deficits...
...Ortega's UN speech is well received...
...Each followed further blows to the Reagan mystique...
...Something similar holds on Wall Street...
...It has been rising steadily since Reagan took office, as the cumulative effects of the housing cutbacks kick in...
...It was a complete rout...
...October begins with Bork losing ground steadily...
...Both faltered as the second term opened...
...Reykjavik failure...
...The first Reagan administration provides positive, and the second negative, confirmations of the primacy of video rhetoric...
...It came primarily from the interaction of two factors: Warware Keynesianism and Reagan's professional mastery of TV politics—deficit and opinion management...
...If people continue to have confidence in the administration, Wall Street may reflect that political euphoria rather than assessments of securities markets on economic terms...
...The cover story the week before the crash shows Mt...
...The caption is "The Perfect President...
...Homelessness increased 25 percent in 1987, and just about that much in 1986...
...The Meese charades, replayed again and again, made a personal attachment into a national scandal...
...The hearings showed concretely, case by case, that Reagan's brand of individualism was antihumanitarian...
...The parties responded by developing buffers against demagogues...
...those communi472 • DISSENT Politics and Wall Street cations alchemists who specialize in turning gaffes into gold...
...There had been no press conference for months...
...slippage in science...
...No economic indicators predicted any of the three Wall Street crises...
...The main events are well known: election defeats...
...Donald Regan revealed a henpecked dupe...
...People who lose confidence in a bank can destroy it even though it may be technically solvent...
...By the middle of his film and tv career Ronald Reagan had developed a low key pseudo-dialogical rhetoric of commonsense individualism...
...Our constitution contains several safeguards against demagoguery...
...The story documents the decline in American power and wealth as contributing to her spiritual depression: "the new mood owes much to a new, and more sombre, assessment of the Reagan presidency...
...The Reagan video software, instead of complementing the warware, now undermined it and produced political, not economic crisis...
...His attempt to translate the secret presidential war into homespun warware individualism came across as patent chicanery...
...That is the true "Reagan Revolution...
...failure can produce crises, including a Wall Street crash...
...By Thursday the market had fallen on a broad front, down 235.48 points...
...Purely economic indicators no longer "predicted" the future state of the economy...
...The last week before the crash was ominous...
...The fact that no recession occurred left economists perplexed, constantly revising their forecasts and furiously seeking magical new market indicators...
...In former times confidence in the economy was what mattered...
...The Wall Street Journal has a famous twin-columned box entitled "What's News...
...Daily press talleys show Bork sinking fast...
...not all of it because that is what market insiders feast upon...
...His style changed from suave persuasion to plaintive self-vindication...
...When the art of rhetorical persuasion is addressed unilaterally at the masses it is called demagoguery...
...However, this secular crisis was reflected in few of the financial indicators...
...Iran!contra got to him...
...The economic indicators failed to predict the market collapse but the political indicators had all been negative for more than a month...
...On Sunday, October 18, several things come to a head...
...and the trigger: the Bork/Ginsburg rejections...
...failure in education...
...Nancy had surgery...
...At this writing, some eight months after the big crash, two minor tremors have occurred...
...The rhetoric worked because of the public euphoria purchased with the warware...
...However, much of its work is devoted to measuring political attitudes...
...Every major candidate has a court pollster...
...Their regulatory devices are designed to curb some mob behavior...
...The October 19 Wall Street quake can be traced in the seismic foreshakes recorded daily in that box...
...There is a large industry devoted to communications and a sizable segment of it engages in public opinion measurement...
...Perhaps—except for the underlying political deterioration...
...When people address their pocketbooks they are not nearly as inhibited as they are in addressing pollsters...
...The New York Times published a front page picture spread of finance authorities with reassuring quotes...
...Information substitutes for capital even in conventional economic analysis...
...Now it is just Bork, Reagan and the far right...
...On October 19 the crisis that had been building to a head on Pennsylvania Avenue found issue on Wall Street...
...adverse trade...
...Last October computer-driven trading programs provided an additional multiplier effect...
...As the political environment became increasingly hostile, Reagan's rhetoric turned petulant and he retreated behind a bunker psychology...
...Then, however, the confidence factor shifts from people's attitudes about the economy to their attitudes about the administration...
...The Republicans killed the Urban Development Action Grant program created in 1977 for inner-city economic development and revitalization...
...Informal biases distort the results, especially when asking about the President of the United States...
...This is shown by a study of two influential economics journals: the Economist and the Wall Street Journal...
...This situation was exacerbated by a constitutional problem...
...The week that began on October 12 was arguably the most devastating of Ronald Reagan's entire career...
...The president's once fearsome political clout had vanished...
...To video watchers, atomized in their homes, his plain-spoke reasoning carried calm, head-nodding persuasion...
...Nuclear tests were scheduled despite the summit...
...As a practical matter, this means that Wall Street is heavily dependent upon the confidence people bestow upon the president...
...Noriega's defiance, reminiscent in small of the Iran/contra debacle, made the Reagan administration appear congenitally incompetent...
...Reagan's own rhetoric weakened Reaganism and elicited the outbreak of a new humanitarian consciousness in both Congress and the nation...
...474 • DISSENT Politics and Wall Street Reagan pleads doggedly on TV for Bork but the networks ignore him...
...The recent Wall Street crash was more accurately telegraphed by political than by economic indicators...
...Just prior to the most recent tumble in May, four embarrassments peaked, leaving Reagan looking indecisive, inept and foolish...
...An economy may be technically insolvent but kept going politically by ever larger deficits...
...Arias gets the Nobel Peace Prize...
...As Keynes pointed out, market trading is not only about money trends, it is about people's opinions of money trends...
...The magic of the great video rhetor is gone...
...Republicans urge his withdrawal...
...A day-to-day survey of these staccato items indexes Reaganreversing events on a broad front...
...Reagan signals, "keep going...
...Today its polling is highly sensitive to people's opinions about the president's continued ability to use the media to dominate Congress and maintain deficit support...
...Reagan's "rhetoric" is to be understood in the technical sense of Cicero's art of rhetoric, not as a synonym for verbiage...
Vol. 35 • September 1988 • No. 4
