After the Wall St Bailout: More Plutocracy, or the Rise of Net-Powered Politics?

Monday afternoon, I happened to turn the TV on just as the House of Representatives was voting on the $700 billion Bush-Paulson-Pelosi bailout bill. Watching the split-screen coverage of traders on the floor of the U.S. Stock Exchange as they stared, transfixed, waiting to see if the public, through its representatives in Washington, was going to save their skins, was exhilarating. And then, when the bill went down to defeat, and the market went back to plunging, I was thrilled.

Here's why: I'm tired of living in a de facto plutocracy. I also believe we are on the verge of a revolution in participation in government, powered by new technology that is making it possible for many more of us to connect together and have a meaningful voice in the process. The bailout bill, and the process by which it is being jammed through Congress, is an affront to those democratic values. We can do better. And the vote Monday showed, in nascent form, how the same forces that are eating away at the underpinnings of "broadcast politics," the capital-intensive way of electing a President whose demise we've been chronicling here at techPresident, are also starting to unsettle "business as usual" on Capitol Hill.

Several years ago, when I was at Public Campaign, a non-profit, non-partisan group dedicated to establishing voluntary full public financing of election campaigns, I worked on a variety of projects aiming to illustrate all the ways that Big Money had commandeered democracy. One of them was a poster that we called, "State of the Union: Congress Meets Wall Street/How Big Corporate Campaign Contributors are Buying America…And What the Rest of Us Pay." The halls of Congress had become synonymous with the trading floor of Wall Street, we argued, and to drive the point home, here's the image we developed, working with a wonderful designer named Chris Foss.

To be honest, it's not an uplifting picture. The floor of the "people's House" shouldn't be equated with the trading floor of the Stock Exchange. But to many Americans, of all political stripes, that is what Congress has become: a place where votes are for sale to the highest bidder, where access is openly bought and sold, where Members are measured not by the substance of their ideas but by the size of their campaign war-chest, and where the biggest winners have been the best-connected, biggest-bankrolled interests of the financial sector.

This chart below, which I posted about last week, shows just how much money from the financial sector has come to dominate the financing of campaigns in the last ten years. (Press the play button and follow the biggest ball, which represents finance, as it balloons in size and shifts its giving to follow the party in power in Congress.)

So here's what in my view is the most important fact about Monday's vote in Congress: for one day, at least, democracy beat plutocracy. Or, as David Cay Johnston, the Pulitzer Prize-winning former New York Times reporter and author of Free Lunch: How The Wealthiest Americans Enrich Themselves at Government Expenses (and Stick You with the Bill), put it, the vote "shows that Washington is not entirely in the service of the political donor class, by which I mean Wall Street and the corporations who rely on it for their financing. These campaign donors, a narrow slice of America, have lobbied and donated their way into a system that stacks the economic rules in their favor."

I can't prove this, but I think that the same rise in voter participation that we're seeing in the explosion of small donors to the presidential campaigns and in the explosion of networked bloggers watch-dogging the media may also be starting to hit Congress. Ordinary people want more of a say in the process, so they're starting to pool their money and their voices, and they've learned--thanks to the Internet--that they can have an impact, certainly on the presidential campaign of the last 18 months. (Zephyr Teachout credits the Howard Dean and Ron Paul decentralized campaigns as having taught many citizen activists that they had the power to influence the process, and I agree, though I would widen that circle to include supporters of many candidates, including Obama, Clinton, Edwards, and Huckabee.)

When the White House and Congress, two highly unpopular institutions at the moment, come along with a top-down, no-debate, no-transparency, save-the-fatcats bill and ask for its immediate passage, we shouldn't be surprised to see those same forces reflexively hit back. Or, as Markos Moulitsas, one of the exemplars of the new people-powered networked politics, just put it, "Back in my day, we didn't hand off 5% of our entire GDP to an unelected political appointee on the whims of the stock market."

What happens next? Well, we're in the interregnum now. An old way of doing things is dying, and the new one being born isn't quite in place yet. In all likelihood, Congress is going to solve the crisis of the moment by putting lipstick on its pig of a bill--that is, by adding an alluring set of "sweeteners" (our tax money directed to particular interests of particular Members, little of which will be related to the actual problems of the economy, but all of which is geared to these Members' actual fears of facing the voters). And the bill will pass.

But the process has been a huge shock to the networked public sphere, which is rapidly adapting to all the new realities exposed over the course of the last week. And, as Scott Heiferman of Meetup once said, "the genie of self-organization is out of the bottle." Critical masses of citizens are coming together around this bailout fight. They've swamped Congress's servers, not only with incoming email messages protesting the vote, but also in searching to get the actual text of the proposed legislation. They've swarmed all over metastasizing text of the draft bill (which now contains sections on wool modifications and wooden arrows) and are creating a new expectation, that Members actually read the full bill they are voting on, before they vote. They're networking together to draft better ideas into life (see Jon Pincus's effort on MixedInk here and David Sirota's efforts on OpenLeft here and here. And they're finding and elevatin a new array of economist-bloggers, who are filling an information vacuum left by the mainstream media's embrace of the basic assumptions of the Bush-Paulson-Pelosi approach to the crisis.

As these new social connections are made and spread, they will gain salience. Not enough to stop whatever bill is about to pass the Senate and presumably the House on Friday, but eventually, enough to alter the way business is done on Capitol Hill. We are watching and we are learning, and in the last few weeks of financial crisis many of us have discovered that the powers-that-be are just making it up as they go along and Emperor really doesn't have much to wear. I don't think we're going to return to the old status quo, where moneyed interests and well-connected lobbyists comfortably call the shots, any more than we're going back to the days when Big Donors, Big-Foot Journalists and Big Name Consultants decided who could be a serious candidate for President and what they would talk about and the rest of us just watched and waited until our moment to vote.

The stakes are too high, too many of us are watching and joining in, and we've learned that when we get connected, we can make a difference.