The Haussmannization of Wall Street into Main Street.

October 3, 2008

Paris is a very difficult place to navigate for North Americans. Not only are the streets small, numerous, crooked and winding – a product of an era before central urban planning – but the main boulevards many of which were driven through the city during the Haussman renovations (1852-1870), have a baffling tendency to change their names: the east-west passage Bd Montparnasse, becomes Bd de Port-Royal, becomes Bd Saint-Marcel before it hits the Seine; the passage Bd Ornano, is Bd. Magenta, Bd du Temple, and Bd Beaumarchais as it makes its way from north to south.

But come on, really, even though it changes names… they’re the same street right?

* * *

The southern most tip of Manhattan (5681 km away) has the same pre-Cartesian charm as Paris. It is there that you can find Wall Street, a very tiny strip of roadway, home to America’s Fat Cats, who are in desperate need of a bailout as the credit crisis closes in around them.

The congressional vote of 228-205 against the bailout measure was stopped by a flood of calls to Washington from constituents, the inhabitants of the fabled Main Street. At a rate of some 6-1, the residents of Main Street expressed profound disagreement with any plan that seems to give golden parachutes to far away Fat Cats. Fat Cats need to take responsibility for their actions, just like private homeowners all over the country have been made to take responsibility for theirs. The logic of Main Street’s opinion is clear and with every member in the house up for re-election in five weeks, this message had clout.

As an especially thorough NYTimes article detailing the play by play of recent events points out: “This is what a credit crisis looks like. It’s not like a stock market crisis, where the scary plunge of stocks is obvious to all. The credit crisis has played out in places most people can’t see.”

What most people can see, however, are the shifting figures of the stock markets and their indices. The house vote was followed by a backlash as the stock market plunged. It would seem as though ‘the markets’ also have their way of participating in politics and of commanding a ‘vote’ of sorts. The phone trend evened out as some of Main Street’s residents, responding to the markets, expressed a second thought.  No surprise that the markets rallied to show their approval today as the bill passed 263-171, on the second try, just over an hour ago.

To understand why stock market movement can sway constituents Joe Nocera’s book A Piece of the Action: How the Middle Class Joined the Money Class,” (Touchstone, 1995) is probably a good place to start. An detailed article in The Economist, also released today, tries to explain the material underbelly of interbank relationships that have blocked up, those invisible places that connect financial institutions to ‘the rest of us’.

This crisis began with the end of the housing bubble and the decline of subprime securities. It was during this period that new an inextricable links between Main Street and Wall Street became painfully obvious. Yet this convergence of homeowners and speculators in a single system is only the latest installment in the shrinking distance between Main Street and Wall Street. As it happens, constituents and financialized consumers have become the same people.  This is the era of the constituent-consumer hybrid.

The contemporary political question is that is being faced in this election is: How is this haussmannian hybridity going to be dealt with?  What form of politics will make it possible for Fat Cats and Country Mice to live so close together?  The answer will lie in political innovation. The recent confusion on The Hill is a sign of this necessity…


4 Responses to “The Haussmannization of Wall Street into Main Street.”

  1. danielbeunza Says:

    Very interesting. An interviewee of mine –high high ranking in the financial sector– made the following remark: our current situation is that the government, the media and big business are saying one thing… and the internet and “the people” another one quite different. It reminded him, he said, of the time when some European countries rejected the European Constitution. The illustrated tut-tuing the great unwashed.

    And yet — and this is the key part of my interviewee´s story — the paradox is that it is actually not clear that the market voted in favor of the plan. It was, in fact, down on Friday. But go further… what did it really happen on Monday?

  2. marthapoon Says:

    Yes you are right, that was a miss-speak on my part and a good reminder that there is tremendous difference between a) knowing the meaning of an action and b) pointing to a mechanisms through which meaning will be expressed (through market movement, up, down, still…).

    What I should have written was that *no matter happened* the response of the markets would be scrutinized by financialized voters as part of their electoral choice making. Market movements influence how constituents want their government to act.

    The point of the post was not to comment on who was having what position, but rather to make the point that to position Main Street and Wall Street in stark opposition is perhaps too simplistic a framing of the situation that does not capture their complex interrelation.

    Secondly, I wanted to suggest that market movements are an example of a medium through which the financial world can impact on the electoral world; these movements are a place to ‘see’ the interconnection of Wall Street and Main Street.

    This is not to say that there is a direct causal relationship (it’s not that up = approval). Market movements have complex electoral effects, but it is a point of transmission between the two worlds. It is an apparatus through which we can observe hybridization (or Haussmannization) occurring…

  3. danielbeunza Says:

    I agree.

    My point, I guess, follows the hybridization. Because market movements affect voters, it is crucial for them what they mean. But, so far, only one side of the debate — the pro-bailout — has engaged in translating market movements into a public policy conclusion (“the market needs a bailout”). No-one else seems to publicly contest this translation… but on closer looks… it is more murky than it seems.

  4. marthapoon Says:

    Thanks for engaging on this Daniel. For the sake of conversation, let me try to re-clarify. There are two aspects of this situation that I was trying to enunciate:

    The first is a systemic reconfiguration of Wall Street and Main Street, such that they have an increasing connection that the real estate triggered credit crisis is indicative of. The appeal to Haussmannization, a very physical metaphor, was designed to capture this movement towards consumer financialization through concrete infrastructural changes in the financial system.

    Secondly, what I thought was interesting is the ways in which so many groups are able to express themselves in multiple ways and through various apparatuses: electoral votes, opinion polls, comments on blogs, phone calls to congressional representatives, moves in the stock market… are all mechanisms that make ‘the public’ visible.

    The problem of what the public wants is complicated. The problem of what the markets want is complicated. But the fact that these groups are not completely separate anymore adds, as you say, just another dimension of murkiness and confusion.

    Participants are acting in multiple roles through multiple apparatuses – this seems to upset the whole notion of a clean connection of individual-identity-interest. Both positions and group formation, as well as technologies to sustain and stabilize new formations, are in motion.

    How will this murkiness be resolved? This is what I was trying to get by drawing attention to the notion of political innovation…

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