Exceptional times call for exceptional comment; this blog is a rapid gallop through political policy, fiscal policy and how select politicians and media personalities are driving us towards violence on the streets.

This weekend’s tour by the Connecticut Working Families Party of the homes of AIG officials is a potent sign of the larger discontent with AIG.  This discontent is being actively stirred by select members of Congress.  I understand their outrage, I truly do; a fundamental risk management tenet is designing a system that enables the risk manager to assess the potential for loss or disaster, and to put in place anticipation measures (controls) and mitigation measures (reserves) to deal with the loss.  Unsurprisingly, the money makers – the alpha males – created the conditions to run amok in certain institutions.  Unsatisfactory risk management measures are like seatbelts; they don’t reduce the risk, they just encourage greater risk taking behavior until the perceived risk returns to where it was before the “seatbelt” were put in place.  Right now everyone from Board Members to traders now embrace the greater risk taking in the erroneous belief that the risk management systems will protect them.

I haven’t been able to work out yet whether these rabble rousing members of Congress are playing dumb or are have actively avoided thinking through the implications of limiting the pay and compensation at institutions judged too critical to fail.  In times of stress, professionals must put aside short-termism and emotion and examine the situation.  It is important for people to realize, if you limit the pay of people who have the potential to earn significantly more elsewhere, then they will leave those “critical”: firms and go elsewhere.  In that case, all that will remain is expensive shells manned by second grade staff, who are likely to be taken advantage of by the former company members that have left.  We entrust the livelihood of the United States of America to these politicians who are just actively stirring the pot with the connivance of the media.  Many of them appear to be so blind with disgust that they are livid about $165m in bonuses (less than the cost of the top ten NBA players), when such blindness may ruin any chance there was to save those institutions considered to important to lose.  This will cause the very result that recent attempts at mitigation have attempted to prevent.  It would appear that being a professional politician, and being a politician who is professional, are two distinctly different concepts, and the recent pressures are proving who on Capitol Hill is whom; it’s not a very pretty process.

Rabble rousing is taking actions, normally in a speech, intended to incentivise and propel a crowd to do something.  Emotion is normally the key to driving action, and disgust and anger are both a great way to propelling action.  The disgust over AIG that has prompted the CWFP to do a bus tour of AIG officials’ homes is an early symptom.  Things are certainly going to get worse before they get better, as perceptions of the economic status of the country, particularly at the local level, become increasingly negative.  Just as people have a threshold of violence level, they have a threshold of action level – at some point, sitting in the local bar or coffee shop (for those of us still lucky enough to have incomes) – just isn’t enough, and people begin to exercise their rights to free speech and assembly.

Protests about financial conditions may be the most potent of all.  Not only are the protestors upset about their loss of support and the threat to their lifestyles and the welfare of their families, but these protests are the siren call for agitators, those who are committed to violence with local law enforcement.  The agitators must be denied the ability to stir up the police to violence, dragging in innocent members of the crowd.  Demonstrations like these tend to be attended by those who have never demonstrated before; the ”protest tea parties”, such as the recent one in Orlando, demonstrate this growing readiness to protest in some form the financial situation. Crowd control must focus on those who commit illegal acts, and enable the remainder to exercise their rights.  I’m truly bemused that there hasn’t been a more significant court case in the US around the rights of protestors who are not posing a threat to law and order, but are simply caught up at the wrong place at the wrong time.  The picture of both the “flower girl” and the “I love you girl” being pepper sprayed at the RNC is simply the most recent example of egregious assault by a police officer on an innocent civilian.  There is absolutely a time for confrontation and for the use of force during crowd control situations, but these must be proportionate, measured and decisive activities against actual wrongdoers who are or who clearly pose a threat.

Crowd control has never been a prevalent issue in the US.  Crowd control in a number of major cities has been dealt with by force of numbers (for example by NYPD), and the use of force against protestors has often been effectively written off as “what hippies deserve”.  When there have been investigations, they have often taken the form of a nod and a wink, such as the recent investigation into the actions at the Republican National Convention in what looked like a piece of wonderful cronyism and lack of informed or educated, let alone professional input. By contrast, LAPD have taken the MacArthur Park incident last year very seriously, and are actively re-examining their Crowd Control and Public Order capabilities from top to bottom.  One of the enduring lessons from the MacArthur Park incident and other confrontations, such as Seattle, is the victory that they hand to professional protestors (LAPD recently settled out of court with MacArthur Park litigant protestors for $14m).

Demanding times call for demanding measures.  A low risk of public order and crowd issues may have been the norm in the past, but that risk profile is changing.  Under the current Administration, and given the context of who will be protesting, writing off protestors as ”hippies who deserve what they get’” isn’t going to get much traction either.  People have a right to protest, and must be given the outlet to make their voices heard.  It is the responsibility of law enforcement to provide them with a safe environment within which to protest.  It is most important that the environment must be safe for both innocent protestors and the police themselves.  Those who would push a crowd towards violence must be singled out and dealt with rapidly and decisively, and be guaranteed a successful punishment.  The current success rate for crowd control prosecutions is woeful, because of the broad brush approach which is to arrest everyone and then sort it out later (often through court settlements).  Instead, the spotlight, and resulting arrest, should be clearly on the wrongdoer, who is successfully punished for his actions; that threat alone can deter aggressive behaviour.  The problem right now is that the threat of arrest and prosecution is simply not seen.

Quite frankly, I don’t believe that there are many US police forces that are truly ready to police crowds in a manner that is constitutionally, morally, and even legally compliant.  By failing on any of these a department faces litigation and worse.  I hope that I am wrong, but I am convinced that I am not.  In the UK they are predicting a summer of violence stemming from protests by long-retired subversive workers’ groups that are linking up with more moderate organizations and this can only further inspire those on this side of the Atlantic.  At the moment the first planned events in Europe will coincide with the G20 meetings on 1st and 2nd Apr, but with the way the AIG bonuses are being whipped up, it may not even be that long.