Don't Panic; Sit Tight and Curdle
Mr. Worldy Wise Man and Ms. Smooth-it-Away are all over the airwaves, internet, and op ed pages, cautioning us against panicking and reminding us that there are no easy solutions. Pardon me, but I'd like a little something... harsher than that.
Or course, we shouldn't panic. When did anyone on PBS or CNN or even Fox ever say we should? And, sure, there are no easy solutions. But doesn't saying so again and again, and leaving it at that, beg the question of which of the several hard, complex solutions we ought to choose; which lines we ought to draw in the sand; and who we - I mean we, the American republic -- ought to be willing to make really, really angry by choosing?
What if I suggested, from my position of almost breathtaking financial ignorance and vulnerability, that any hard, complex, effective, just, economy-boosting solution will have to make a lot of newly wealthy people really, really angry?
What if I suggested that it will have to do that because so much of the American financial system has been fleecing honest but credulous people by making other honest, credulous people -- those poor mortgage-telemarketers who ruined our dinner hours last year, or my recent Yale students who've been rowing in the galleys of big investment banks -- complicit in the cheating, because that seemed the only way they could get ahead or just get by?
Would you agree with me if I said all that? Or would you agree instead.with Lady DeRothschild, Lawrence "Cuddles' Kudlow, David Brooks, the editorial writers of The Wall Street Journal, and all the other Mr. Worldly Wise Men and Ms. Smooth-it-Aways, who would say that I have just engaged in gauche class warfare?
If you agreed with them instead of me, you'd have a lot more company than I do in the chattering classes and, truth to tell, in America itself. The problem I face is that many millions of Americans actively want to be misled by the Smooth-it Aways.They want to be told that their enemies are aliens, not fellow-Americans (and that even if some of their fellow-Americans are enemies, they, like Barack Obama, are really aliens.)
Yes, alas: The problem is not that so many pundits and the McCain/Palin ticket are deflecting the hard truth so brazenly, even though that's what they're doing. The problem is that so few people care. Those of us who do care can't just try to "set them straight" with questions and answers like mine. We'll have to dig deeper, and quickly, to find out why people actively want to be lied to.
There have been some books about this lately, as there were in the 1930s and '40s, and then in the '50s; but I can't remember them. I do know that fear and avoidance of hard solutions are obvious candidates.
Another candidate -- the one that's being peddled by the actual candidates of the Republican ticket -- is resssentiment, - a fine-spun rage borne of fitfully acknowledged feelings of inferiority and powerlessness that seek a target, the more distant the better. It's a stew of rancor, vengeful animosity, and self-doubt among people who've forgotten what it even feels like to take constructive action forthrightly. They'd rather hate than haul and hope..
I've never been a big fan of Thomas Frank's argument that people who keep boosting their oppressors by voting against the false enemies they're shown on Fox News are all being bamboozled out of recognizing their true interests. Here, too, it's more complex than that.
People I know experience and process economic setbacks and injustices morally, by doubting themselves first. Only later do they seek false targets when conditions and demagogues have really scared them into it. At that point, what they want to be shown is Evil, not Sarah Palin's bridge to nowhere or John McCain's latest flip-flop.
Mr. Worldly Wise Man and Ms. Smooth-it-Away are as worried about this danger as I am. They don't want class-warfare from the right - that is, fascism, drenched in ressentiment - any more than they want it from the left (that is, from me and a few others who sometimes sound as if it could ever happen.) They want to hold the old fleecing system together, so that they can go on swathing it in bromides, jokes and tooting celebrations of national greatness, as they always used to do, to great acclaim.
The problem is, they can't do it now. They are riding riptides of rage and despair they don't know how to navigate. They're getting as worried as John Adams, an architect of our republic, was in the 1780s, when he warned:
"When the people give way, their deceivers, betrayers, and destroyers press upon them so fast, that there is no resisting afterwards. The nature of the encroachment upon the American Constitution is such as to grow every day more and more encroaching. ... The people grow less steady, spirited, and virtuous, the seekers more numerous and more corrupt, and every day increases the circles of their dependants and expectants, until virtue, integrity, public spirit, simplicity, and frugality become the objects of ridicule and scorn, and vanity, luxury, foppery, selfishness, meanness, and downright venality swallow up the whole society."
The smooth-it-aways are becoming as uneasy as those of us who were trained and committed all our lives to make liberal/rational arguments that are persuasive empirically and logically. In this crisis and campaign, our work has no traction with what a growing proportion of Americans have become under the corporate-consumer juggernaut that has been uprooting, subverting, and dissolving the civic-republican culture.
The more intelligent of the apologists for that juggernaut are beginning to feel just a little like the social critics of Frankfurt School in the Weimar Republic of 1932. And they don't know where to turn, besides warning against "easy solutions" that would actually be hard because they'd involve choosing the "wrong" side, at least for awhile, to put the greedy encroachers back in their place.















They are riding riptides of rage and despair they [don't] know how to navigate.
There are no "riptides of rage and despair"!
I repeat. There are no "riptides of rage and despair"!
The media and our Democratic leadership has seen to it.
September 19, 2008 6:31 PM | Reply | Permalink
Despite all my commits to you Ellen, I haven't forgot who controls the democratic party either. At least some of the big donors of the party are frightened a little that Obama might raise taxes on the wealthy. If Obama gets elected, he will compromise with these interest. That's not necessarily good for the rest of us. If McCain is elected he'll what's best for them. Not appealing choices I know but that's the board as it lays.
September 19, 2008 7:34 PM | Reply | Permalink
Look; I'm going to vote for the lesser evil, myself.
Still, we all should be yelling at him and at Dodd and at Frank (Shumer's a lost cause) to be straight with us.
To tell us why you -- "our" Democrats -- are sure we should mortgage our country's future based on factually unsupported, self-interested conclusions megaphoned at us by dyed-in-the-wool Republicans.
Increase unemployment insurance, reduce FICA taxes, increase the EITC, build some infrastructure, but goddamn -- your supposed to be Democrats -- don't go spending our money bailing out "Wall Street"!
September 19, 2008 7:56 PM | Reply | Permalink
Ellen, don't you think the situation is quite beyond "bailing out Wall Street?" The bailing out, and that is for sure the right thing to call it, is, however, a last ditch attempt to keep the props that hold the economy of the country up from collapsing totally.
I think we will only learn in time how close were this week, and probably still are, to a rerun of 1929. Or, in other words, the alternative to bailing out the criminals would be even worse.
One hopes that there will, eventually, be real relief programs for struggling families. But the potential of the situation is arguably the equivalent of a runaway train that has yet to be stopped, and one can only hope someone will rise to the occasion à la FDR, who also had greatness thrust upon him.
And on that score, I'll take Obama and his slew of advisors any day over McCain and his crew. Not to mention president in waiting Sarah Palin and her first dude.
September 19, 2008 9:05 PM | Reply | Permalink
We can't wait for Obama.
By the time he takes the oath it'll all have been decided -- for better or worse.
And yet, he doesn't seem to see that he must get involved, now, if he wants to save his Presidency.
September 19, 2008 9:30 PM | Reply | Permalink
That may be true.....
September 20, 2008 1:27 AM | Reply | Permalink
By 1938 the Weimar Republic was a fading memory.
September 19, 2008 9:18 PM | Reply | Permalink
The bailing out . . . is a last ditch attempt to keep the props that hold the economy of the country up from collapsing totally.
Yep; that's what Da Boyz say, but they haven't provided evidence in support of that assertion. Bernanke, first, and then, Paulson have kept their cards close to the vest, have obfuscated, and have designed a number of ineffective and downright bad plans. As John Bogle said, they're "punch drunk."
I say this "crisis" has been going on for over a year and it has yet to prove harmful to the "economy."
Yes, none of us knows enough about the condition of the financial system to be sure of what the best solution would be -- but whose fault is that?
This is still supposed to be a democracy.
September 19, 2008 9:26 PM | Reply | Permalink
You are obsessed with the concept of wall street vs main street. If the entire financial system collapses, you and everyone else will lose also. Your job, your pension/401, your home, everything. Imagine a world where your credit cards don't work, where you can't get cash out of your bank. Think great depression, only worse. If AIG had failed, and the gov't (Bush and Paulson actually) not unveiled this mortgage plan, that is where we would be right now. You are such a class warfare oriented leftist you can't understand that if their end of the boat sinks, so does yours. The evil rich are paying 95% of the taxes in this country, the bottom 40% of earners pay nothing. Bankrupt them and who will pay your EITC, AFDC, and other social spending?
September 19, 2008 9:53 PM | Reply | Permalink
If the entire financial system collapses . . . .
A very big unexplained "if".
Time for you to stop drinking the kool-aid being served by all those self-interested, bail-me-out Chicken Littles out there and try some independent thinking.
September 19, 2008 10:15 PM | Reply | Permalink
bulldog, the total tax receipts for all income taxes is within a few percent of the federal receipts for Social Security tax - which is spent immediately of course. They are both around 35-38% of the total federal income. Social security taxes of course max out below 100K and are paid for working wages.
You are totally full of shit on your '95%'.
September 20, 2008 1:58 AM | Reply | Permalink
Ellen's asking the right questions. Certainly, the collapse of major financial institutions will have an effect on the economy--but just how big an effect is very uncertain. Unfortunately, none of our representatives seem to know a whit about the economy, so they're easily led around by Paulson (or by Schumer's Wall Street constituency). Paulson is asking the taxpayer to take on a huge and highly risky financial obligation. Before we proceed, we need to be sure of two things:
1. The problem we are solving by taking on all this expense and risk is really big enough to justify the cost.
2. There is a real mechanism in place for the taxpayers to share in any future gains created by the bail out.
I guess I'm willing to retroactively insure the financial industry against losses (that's what the bailout essentially does), but only if there's some way we get paid in the future the insurance premiums that weren't paid in the past. And if we are going to make this system of insuring the financial industry against losses permanent (by creating some kind of RTC-like institution), then I want to make sure that the financial industry fully funds that government-run insurance corporation and that the regulators who control it have the authority to require insured investment companies to maintain sufficient secure reserves and/or limit the amount of risk they take on.
September 20, 2008 8:54 AM | Reply | Permalink
I know! Let's give those 95% a big tax cut. Doesn't that solve all problems? If not, we can always give them another tax cut.
Personally I'm torn between wanting to be sure the stockholders, the boards of directors and especially the executive officers of those crooked corporations all lose their shirts, and being afraid that the end result will be that there will be nothing whatever behind the curtain and 1929 will seem like it was a picnic.
So, if this new "hundreds of $billions" plan goes into effect in a way that salvages nothing of value for the stockholders I will probably be satisfied. And, it looks a little like that is what is going to happen.
I wonder how republicans will argue that our country can't afford universal health care after this is over.
September 19, 2008 10:19 PM | Reply | Permalink
Ask any knowledgeable economist, Hoppy. There is really nothing of value behind the curtain.
Check this out. A little long but well worth it.
Money as debt
Why aren't they teaching this to schoolkids? I'll give you one guess.
September 20, 2008 1:22 AM | Reply | Permalink
"If the entire financial system collapses, you and everyone else will lose also. Your job, your pension/401, your home, everything."
Anyone want to talk about Bush's great idea of replacing the current Social Security system with private accounts now?
September 20, 2008 8:40 AM | Reply | Permalink
This is an interesting line of thinking to me. I'm skeptical myself about this crisis. I think they are stealing public money and this was all a setup years ago to bankrupt the government, so the could axe all those hated government regulations and programs. Combine this with the Iraq adventure, and a sinister plan emerges. I say they are thieves.
September 20, 2008 1:34 AM | Reply | Permalink
The was meant to reply to Ellen "Yep..."
September 20, 2008 1:41 AM | Reply | Permalink
I keep thinking the plan to recover from all of these financial disruptions will involve devaluing the dollar, allowing an inflation to do the devaluing or just doing it. If that happens I will be a pauper, along with a huge majority of other retirees. I suppose it will be possible to rent a woodshed in Alabama to live in then, but that won't be so bad will it?
September 19, 2008 10:22 PM | Reply | Permalink
Does anyone think that the Republicans would rush a $500 billion check to a Democratic President one month before a presidential election? Economy 'imploding' or not?
The Bush request is a political move to save McCain's ass by putting a lid on bad financial news at least until after the election.
Don't do it Ms. Pelosi!
September 20, 2008 1:52 AM | Reply | Permalink
To Squeaky Rat -- Right you are, the Weimar Republic was gone early in 1933. Thanks for the catch.
September 20, 2008 7:57 AM | Reply | Permalink
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September 21, 2008 12:39 AM | Reply | Permalink