The groundswell isn't so (s)well

In Groundswell, Forrester analysts Charlene Li and Josh Bernoff argue that the great shift of the digital age is from the institution to the individual. It's the idea that "people have always rebelled against institutional power, in social movements like labor unions and political revolutions". Implicit in this assumption, of course, is that the rebellion of the people is a good thing -- that the people know what they are doing, that institutions don't serve individuals properly, that we can collectively right institutional wrongs.

But we are about to learn that the groundswell isn't so (s)well. Frank Rich -- who still seems to believe in the core principles of groundswell, writes about the people in "Slumdogs Unite":

The tsunami of populist rage coursing through America is bigger than Daschle’s overdue tax bill, bigger than John Thain’s trash can, bigger than any bailed-out C.E.O.’s bonus.It’s even bigger than the Obama phenomenon itself. It could maim the president’s best-laid plans and what remains of our economy if he doesn’t get in front of the mounting public anger.

Rich is describing the groundswell of "populist rage" against the political institutions of Washington DC. It's not so much the American slumdogs as the suburbandogs who are uniting against the government in their revulsion for American elites.  This could be a text book case of people's power from Li and Bernoff's Groundswell. Except, of course -- unlike examples in their book (like Jeff Jarvis' popular rebellion against Dell over a broken laptop)  --this "tsunami of populist rage" isn't going to end with a replacement laptop.

The problem is that the crisis in American is being treated -- by media, politicians and above all by the people -- as a crisis of morality when it is actually an economic crisis. Peggy Noonan correctly points out that "the national conversation on the economy is frozen." That's because nobody is really talking about the economy. Instead, they all see the problems in terms of blame -- blaming CEOs, Uncle Bernie, Wall Street, left-wing Democrats, bankers or mortgage brokers. But actually, as Niall Ferguson so brilliantly explains, it's a general crisis of indebtedness. We are all in this together, both in terms of our guilt and our innocence:

They need to grow up and face the harsh reality: The Western world is suffering a crisis of excessive indebtedness. Governments, corporations and households are groaning under unprecedented debt burdens. Average household debt has reached 141% of disposable income in the United States and 177% in Britain. Worst of all are the banks. Some of the best-known names in American and European finance have liabilities 40, 60 or even 100 times the amount of their capital.

Frank Rich is right to say that Obama needs to get "in front" of the tsunami of populist rage. But he needs to do it in the context of his belief in the principle of "responsibility". We all -- government, households, corporations, individuals -- have a responsibility to reduce debt. Otherwise, as Ferguson argues and the Economist warns, the world is going to disintegrate into a globalized version of Argentina.

Noonen tells us that we should "brace ourselves" for a very bumpy landing. Unlike the miracle on the Hudson, however, this may not be a perfect landing. Then what? Then the current morality show is going to get very very nasty. Alan Brinkley cheerfully tells us that railing against the rich is a great American tradition going back to Huey P. Long, Father Charles Coughlin and John Steinbeck. The difference, however, between the Great Depression and now is Li and Bernoff's groundswell, a populist tsunami empowered by the digital revolution. It's the mistaken assumption today -- peddled throughout the media, both old and new -- that the "people" can effectively rebel against institutional power. This is a dangerous lie and I'm afraid that it will cost us dearly. I'm bracing myself for a splash landing. Captain Sully in '12?