When Steven Pearlstein Writes, We Are Obliged to Pay Attention
Steven Pearlstein is, at least for me, one of the few reasons left to bother reading the Washington Post. Others who quickly come to mind are the two Danas, Milbank and Priest, but altogether they whole lot number less than the fingers on one hand.
Political writers with equal skepticism for both sides are hard to come by, investigative reporters too far and in-between and top-notch writers on the economy almost non-existent. Pearlstein must have somehow missed the opportunity of a Harvard MBA. He is not of that ilk and a man of rare insight in a profession that has lost it along the way.
(Washington Post-A Delicate Balance, By Steven Pearlstein)
You know something's up when both the secretary of the Treasury and the chairman of the Federal Reserve give speeches calling for a new mechanism to allow them to manage the orderly liquidation of a major financial institution.
You have a sense that things are getting desperate when General Motors has to offer six-year loans at zero-percent interest to unload its gas-guzzling trucks and SUVs, and people openly speculate about how long it will be before the automaker runs out of cash.
And you can feel the foundation shaking under Wall Street when Fannie Mae and Freddie Mac have to pay three-quarters of a percentage point more to borrow money than the U.S. Treasury, which implicitly guarantees their debt, and top government officials feel compelled to reaffirm their support.
We're nearing that delicate point in the cycle when even the usual cheerleaders have hung up their pompoms, consumer and business confidence has disappeared and investors are driven mostly by fear rather than greed.
Well, we have been a long time wandering down this road. It’s not something we can boast of having come to honestly, because there’s been dishonesty aplenty and it feels more like the snake-oil days of the late twenties than it does the beginning of a new millennium. Distracted by the threat of computer meltdown as the millennium turned, we failed to see the true culprit—our native fascination with something for nothing.
Disaster takes its toll on credulity and the ten years after the ’29 crash dropped the nation to its knees, adding desperation after desperation, as Ford cars cost $500 a copy and no one had the five hundred. Hell, no one had five bucks, at least not to spare. There were three cures to this misery.
1. Franklin Roosevelt’s massive public works programs, a Democratic effort to pull the country back to a reasonable level of employment, that would not be matched until a Republican president Dwight Eisenhower launched the Interstate Highway program just after WWII.
2. World War Two itself, a struggle so intense that all hands were at work churning out the material of war.
3. The G.I. Bill, which educated beyond all precedent an entire generation of homeward bound military personnel from the war. Partly, the bill prevented the wholesale dumping of soldiery on a delicate jobs market, but the unintended consequence was to ultimately provide the best-educated workforce the nation had seen to date.
Sobering and useful circumstances all, yet they are beyond the living memory of only a diminishing few. Returning heroes begat the Boomers, the Boomers begat the exuberance of the fifties, the social upheaval of the sixties, the Vietnam seventies, Madonna eighties and Monica nineties. Unsure of what they had wrought and nervously peering into the new century, the World Trade Center fell and all the cats were let out of the box at one time.
My old daddy once said of an aunt of mine near the end of her days, “she spent her whole life worried she wouldn’t get what was coming to her—and now she’s afraid she will.” Spoken, dear old daddy, for a generation you didn’t live to see—from Wall Street to K Street to Congress, the Pentagon, the halls of Congress and deep into the heart of every man who ever drew to a straight-flush.
. . . A financial crisis is not a morality play. What matters most isn't the precedents that are set, the amount of taxpayer money that's implicated or whether people are made to suffer fully for their financial misjudgments. In the end, what matters most is that we get through it as quickly as possible with an economy and a financial system intact.
I have a problem with Pearstein's last paragraph. I absolutely agree that the financial crisis is not a morality play, but Band-Aiding our way through the present turmoil is not a goal he and I share. I don't so much care that the top investment bankers rake in major dough from throwing monkey-wrenches in the gears. I'm not even all that outraged by $5 million birthday parties or $50 million severance packages.
What I am scandalized by is the money that has been made available from Wall Street and the business community to pay off the most corrupt Congress in memory (and my memory extends through eight decades). Those who worried they wouldn’t get what was coming to them. If they finally do get what they have coming, it will be because
Hedge funds are totally unregulated, lobbying and bribing their way past regulation.
Military contractors (icons like Boeing and Lockheed-Martin) regularly commit fraud against paid-off Pentagon administrators, protected in turn by paid-off Congressmen and Senators.
Earmarks are such a source of mutual profit between crooked representatives and their equally crooked constituents, that they threaten the basic terms of self-government.
Healthcare has been made hostage to the profiteering of pharmaceutical companies, doctors, insurance companies and third-party providers.
Congress is so swamped by bribery that the likes of Blackwater and Halliburton have burst the dam of public intervention.
Money, in quantities unknown to prior generations has served to buy every special interest, confound every legal recourse and overwhelm every civic responsibility. Each day a dozen major thefts and frauds are exposed against the common people by their industries, their institutions and their representatives. If we ignore what Pearlstein calls 'an economic morality play,' we will have lost perhaps the last chance to regain control of a basic ability to self-govern.
America is losing on all fronts as our small town merchants are destroyed, industrialized agriculture wrecks the safety and balance of our food supply, we declare the undeclared, spend the unearned, torture and bomb and lie our way through foreign policy as if we are telling truths.
A financial crash of epic proportion--a '29 style meltdown--would cause absolute havoc over the lives of the nation's mostly innocent populace. But what has been raised as tribute to our 'consumer economy' over the past thirty or forty years is a death-by-a-thousand-cuts to traditional American progress and prosperity. We are bleeding and helpless as Wal-Mart destroys our Main Streets, the insurance industry destroys our healthcare and off-shoring destroys our job base.
Welcome (you Boomers and the offspring you now find back in their upstairs bedrooms) to the 'service society.' If your life seems less productive, your family needs two (or three) jobs to survive, your kids got a crappy education, you worry about retirement and reach for Valium and Viagra to get through the week . . .
. . . dial 9 and remain on hold for 40 minutes while you are assured your business, or problem (or potential suicide) is very important to us.
Compared to where we find ourselves, Mr. Pearlstein, at the end of a forty-year pornographic consumerized massage, a morality-play might be a snap. If not exactly a snap, perhaps better medicine than Viagra or Valium.
But beware the side-effects.
In the substitute for morals that we have eagerly accepted and welcomed into the lexicon of what it means to be an American consumer, an economic meltdown might be the best medicine.