Monday, November 28, 2011

Managing the 99 Percent


And that,” put in the Director sententiously, “that is the secret of happiness and virtue—liking what you’ve got to do. All conditioning aims at that: making people like their un-escapable social destiny.” – Huxley, Brave New World
From: The McCourtny Consulting Group
To: The Endowment for the Preservation of the One Percent
Subject: Managing the 99 Percent
Whether or not it is put in sound-bite terms of “class warfare”, the “one percent” pitted against the “ninety-nine percent”, the fact of the matter is that the data showing a widening of income levels are undeniable, as are the push of a segment of the middle class to the near poor, the realization of lower social mobility, income levels that have broken the string of increasing standards of living from parents to children, and new doubts about education as a road to opportunity.
We are witnessing a simmering backlash in the face of the widening class distinction. It is wise to address the fundamental issues behind the backlash and consider approaches to deal with the problem, especially given that these conditions may be persistent and structural. Therefore, we have prepared a brief overview of approaches to the problem.
What to do
In the Feudal societies, class distinctions were determined by lineage, in the capitalist society by wealth, and more generally by the notion of a power elite that controls the key levers of society, be it in industry, government or the military. Whatever the source of the class distinctions, historically the ongoing concern of the dominating class has been to contain the pressures of alienation that can lead to the revolt of the masses.
What are the public relations strategies to control and manage this situation? We have considered a campaign based on the following messages to hoi polloi.
We are just like you. Hide wealth and then take a cue from the Mormon public relations campaign: washing the car, playing basketball, with the tag line “I'm a one percenter”. Some members of the Endowment are already primed for this approach, having explicitly told their highly compensated employees to cool it in terms of flaunting their wealth.
You are just like us: Create the perception of shared power and mobility, that hoi polloi influence the system and can change it if they want to. Point out that this is the connotation behind the term “hoi polloi” in ancient Greece. Maybe you haven't hit the daily double this time around, but you still have a shot. This approach already seems to be in play and working. Helped along by a long-running media campaign, many of the 99 percent who are unemployed as well as the growing number who are descending into the ranks of the nearly poor are ardent defenders of the wealthy and their historically low tax rates.
You are not like us, and you don't want to be like us. Make wealth appear unattractive. Money only causes problems, miserable lives; the upper class are a harmless bunch. England maintained class distinctions and the Crown where other countries were hit by revolution in part because the upper class wrapped itself in eccentricity and generally appeared harmless, if not even amusingly befuddled. However, although this worked for an aristocracy at leisure, it is not a good strategy to appear befuddled while running corporations.
You are not like us, but who is keeping track. This appears to be the most sustainable route for managing the situation, especially because technology is making it an ever more achievable strategy. Entertainment, keeping busy on the trivial. It worked for Rome, at least for a while. So it will be a constant theme in our proposal.
Too bad, just live with it. Given that, all else equal, people probably won't just live with it, eventually this requires the authoritarian, police state approach. As Dahl's Mr. Wormwood put it, : “I'm right and you're wrong, I'm big and you're small, and there's nothing you can do about it.” 
Proposal for the Campaign
We propose a campaign based on these multiple fronts that will leverage existing channels:
Reality TV. We have had the vicarious exploits of spectator sports for a long while, and now have created vicarious lives through Reality TV. This not only serves as a distraction. Properly employed (such as with the “Real Wives” series) it supports a “You wouldn't want to be like us” message.
Computer games and virtual lives. Add to the vicarious lives of spectator sports and reality TV the opportunity for virtual lives through computer games; everyone is building their own virtual mansions and fighting their virtual wars, in combat with their own Eastasia. This provides both distraction and empowered “You are just like us” moments.
Social networks. Talk about keeping people distracted on trivia. And we can have people feel socially connected with us by being our friends by creating carefully managed Facebook accounts. We can hire a staff to maintain these Facebook pages in a way that the joint messages of “We aren't having a lot of fun” and “We are just like you” are both kept at the fore.
Those on Facebook already blur the real with the fantasy; many create alternative lives on Facebook just as they do in their virtual games, and it turns out that the Facebook fantasy helps get our messages across. The Facebook personae are not exactly “Just like us”, but are more like us than is the reality. The average Facebook self depicts someone more wealthy and happy than the actual person. So it is not quite cohorting with the one percent, but on the other hand there is rarely any evidence of the economic struggles that seem to occupy the pages of the New York Times.
Open media. Just as there can be the sense of power in various combat games, for the disenfranchised there can be the sense of power, a sense that “You are just like us”, through their access to blogging, twittering, and other channels of open media. These can be manipulated to give the impression that their voices are being heard, that they matter. In this regard, we recommend that a team be hired to comment on various posts – perhaps outsourced to India or Sri Lanka – in order to give the appearance that people are listening, that the trivia is substance. 
And these are channels to burrow into so that the realities of the world and their place within it are obscured. Just as Facebook gives us the impression of a large community of friends and colleagues, Twitter allows the 99 percent to feel connected to the world at large, to believe that people out there somewhere hear their voices.
Viral hits buttress the “You are just like us, but just haven't hit your daily double yet” message. It doesn't matter that the viral hits have nothing more than fleeting entertainment value. The simple fact that a 99 percenter can draw the attention of millions is the exception that proves the rule.
Education-lite. Education poses a dilemma because it is essential to have a skilled workforce while at the same time preventing the side effect of heightened awareness of alienation. So the ideal educational system is one that provides the requisite work skills while inhibiting thought.
Adam Smith writes that such a path is possible, indeed that the working man “has no occasion to exert his understanding. . . . Of the great and extensive interests of his country he is altogether incapable of judging; His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues". Smith proposed that the way out of this is for the government to provide public schooling for the working class. But what is a bane for Smith is a blessing for us: his working man is the man we want. 
Those in the upper-class in his era did not share Smith's interest in universal education. Rather, they saw the world as we do: education diminishes deference and fuels disobedience. And this same sentiment is echoed a century and a half later by no more ardent a defender of capitalism than Schumpeter, who argues that education in the face of manual labor and underemployment sows discontent, and “discontent breeds resentment”. The solution to this is to give the impression of education while in fact providing little more than the essentials of vocational training. Focus on accounting, computer science and the like while eschewing the impractical liberal arts. Have college be party time, the soma, sex and endless recreation that Huxley envisioned for the populace at large. If the majority of the ninety-nine percent can be herded down this path, then "sex, drugs and rock and roll" serves its purpose.
Open personal information. While we strenuously object to any of the “Too bad, just live with it” Orwellian tactics (and therefore also stress that any discussion along these lines be by phone and not by e-mail), there happen to be technologies that allow the requisite monitoring. Indeed, hoi polloi already provide this information voluntarily, often to the public at large. Between tweets, blogs, and our Facebook friends, not to mention those who write comments where registration with real names and e-mails is required, we have a treasure trove of data for any future efforts to manage the situation more directly. 

The Securities and Exchange Commission disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This post expresses the author's views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff. Similarly, this post expresses the author's views and does not necessarily reflect those of the Department of Treasury or its staff.

7 comments:

  1. I believe many people have this wrong.

    We, the 99%, are not AGAINST the 99%. I congratulate them on their achievements.

    However, I loathe the fact that many accumulated their wealth by cheating and gaming the system.

    Bankers who take big risk, get bailed out and live to ply again are at the top of my list.

    But hedge fund managers who get to claim earned income as capital gains? These people, and the Congressmen who support them, are despicable.

    Those who made millions by earning fat fees for talking the ignorant masses into buying more home than they can afford? They have no conscience and deserve to be be subjected to RICO and thrown into poverty.

    Madoff? There are no words.

    Failed CEOs who get golden parachutes for wrecking a company (think Hewlett Packard) and the boards of directors who pay those exit packages.

    That's why the 99% is angry. This is not class warfare, and anyone who suggests that it is - that person is not telling the truth.

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  2. Well, this might disturb the "you are just like us" meme for a minute.

    Hedge Fund Managers Win $254M Powerball Lottery
    http://www.finalternatives.com/node/18839

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  3. McCourtney seems to have pulled some punches. Their founding partner would have disapproved, but since consultants clearly belong in the one percent, why risk losing an important revenue stream? While the Endowment tries to represent the interests of 100% of the one percent, it must cater to its most influential members. These tend to make high-profile charitable contributions: typically in the major financial and media centers, sometimes with all the modesty of the Medicis, but always in a way that stiffens the social glue that binds them together. Avoiding displays of wealth is like motherhood and fact-based analysis, but the weirdos in flyover country--with their quiet tithing and distaste for flashiness--are unlikely to attract a significant followership. This highlights one of the shortcomings of culling examples from previous engagements.

    The consultants seem to have drawn too heavily on Endowment white papers which predict media consumption will beome The Great Leveler: once the hoi polloi realize their human needs are largely met by their iPhone and an unlimited data plan, the distinctions between mansion and tenement, fractional jet ownership and hitchhiking, will surely melt away (or so the research suggests). Only laziness on the part of the team can explain their failure to explain how to finesse the difficulties much of the 99% will face in obtaining decent food, shelter, and medical care as demographics overwhelm society's promises.

    McCourtney is known for serving competitors, so the Foundation's board should be aware they may appear in a disguised client example, perhaps labeled 'Bob de Medici,' 'Jane de Medici,' and so forth. They may also wish to consider the possibility the firm is preparing pitches not only for the 99%, but also the 95% and even the 90%, in an attempt to find the sweet spot where the ROI on guild membership exceeds the cost of student debt, for example. The role of debt seems largely absent from the Endowments recent publications, although in fairness busy consultants seldom read books these days.

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  4. Astonishing writing about the reality that was built for centuries and we're living today...and will finally be gone in the very near future!

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  5. This is very well written and hits the right spots. Rick never fails to amaze (and, he's a government worker? - kidding).

    May I add one little thing that needs a little more attention to break this mode? That is, the autodidact.

    And, I'm thinking of those to whom the buck doesn't mean much (partly, in jest, but the concept of simple living applies). In other words, those who would walk around a pot of gold to find the next rainbow. As you would guess, this would not be the current set of politicos and lobbyists who would run off with the pot if given the chance.

    Now, just what do I mean 'autodidact' (loosely self-learning, mentor-less)? To boot, it's being outside of institutional mindsets (tell me, which university -- higher-learning system -- has not prostituted itself to the buck or equivalent?).

    Basically, it boils down to seeing for oneself with one own eyes (without appearing to be a Missourian -- apologies offered, of course) and knowing with one's own mind (hopefully, unimpaired by the recreationals).

    Guess what? The web, at its core, is going to be the thing that helps us to bring this to the fore if we can keep the social media'd nitwitting in check or, at least, can minimize its influence on us.

    Oh yes, those of the 1% fear that to which I refer. The 99% (disenfranchised), who are trying to organize, have a sense of this and its power.

    If it was not apparent, my quest is just that: knowing how to be truly autodidactic and how to sustain effective interactions between these types (yes, that does not an oxymoron imply -- nor is it inconsistent).

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  6. I am curious whether the author has reformed from his "evil" hedge fund ways, or believes that his brand of finance was not "evil" and that the hoi polloi will see the distinction?

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  7. A finely crafted modest proposal, Rick. Your subtle contempt for those who take such cynical advice seriously is like a sprinkling of salt on a freshly cut slab of flesh that could soon find itself roasting on a slow-turning spit. Let's hope that those who would take such advice seriously have the good sense to keep this baby as far from the fire as possible, for the sake of everything we hold dear, especially our children.

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