Every once in a while the New York Times manages to do something to justify its continued existence. Aside from giving Paul Krugman and Bob Herbert a place to be heard on a regular basis, they sometimes put up real news stories like this one: For McCain and Team, a Host of Ties to Gambling. It's a nice article that all by itself demonstrates how McCain's public image as a maverick and a reformer is nothing but a sham. It's well worth reading, though the banking bailout story has already pushed it off the front page of the web edition.
More to the point are four pieces in the opinion section of the Times today. The Times editors, Frank Rich, Tom Friedman, and Nicholas Kristof each help fill out the Bigger Picture by bringing up and emphasizing things that need to be brought to the attention of the public.
As a bonus, I'll point you to a recent Swiftian novel of financial collapse in a place beyond the headlines of today.
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The Four Must-Reads are: Don’t Blame the New Deal, McCain’s Suspension Bridge to Nowhere, Green the Bailout, and Impulsive, Impetuous, Impatient. These are ones you will want to bookmark, save to your hard drive, and email to other people.
Don't Blame the New Deal, an editorial from the Times, names names and lays out exactly how our financial system has been undermined by decades of toxic ideology. Even Alan Greenspan - once treated as the Master of Money - comes in for his share of blame. It's a nice summary of how the anti-government, anti-regulatory crowd has 'screwed the pooch' big time. It's also something important to remember while all the principals trying to cobble together a bailout are avoiding talking about how we got where we are today.
This year’s serial bailouts are proof of a colossal regulatory failure. But it is not “the system” that failed, as President Bush, Treasury Secretary Henry Paulson and others who are complicit in the calamity would like Americans to believe. People failed.
For decades now, antiregulation disciples of the Reagan Revolution have eliminated vital laws, blocked the enactment of much-needed new regulations, or simply refused to exercise their legal authority.
The regulatory system for banks, securities, commodities and insurance is unwieldy and in need of modernization. The system has gaps, like the absence of regulation for “innovations” such as credit default swaps, the insurance-like contracts now valued at $62 trillion whose destructive potential prompted the bailouts of Bear Stearns and the American International Group.
But the failures that have landed us in the mess we are in today are not mainly structural. To assert that they are masks deeper failings and sets false terms for the upcoming debate on regulatory reform.
emphasis added
Thomas Friedman makes an excellent point with Green the Bailout. The goal of the rescue plan seems to be for many not much more than an effort to patch things together so the system can stagger along much as before. Friedman argues that this is an opportunity to get the country something a bit more substantial in exchange for the vast transfer of wealth being contemplated.
Many things make me weep about the current economic crisis, but none more than this brief economic history: In the 19th century, America had a railroad boom, bubble and bust. Some people made money; many lost money. But even when that bubble burst, it left America with an infrastructure of railroads that made transcontinental travel and shipping dramatically easier and cheaper.
The late 20th century saw an Internet boom, bubble and bust. Some people made money; many people lost money, but that dot-com bubble left us with an Internet highway system that helped Microsoft, I.B.M. and Google to spearhead the I.T. revolution.
The early 21st century saw a boom, bubble and now a bust around financial services. But I fear all it will leave behind are a bunch of empty Florida condos that never should have been built, used private jets that the wealthy can no longer afford and dead derivative contracts that no one can understand.
SNIP
But that is not the point of this column. The point is, we don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering. We need to get back to a world where people are able to realize the American Dream — a house with a yard — because they have built something with their hands, not because they got a “liar loan” from an underregulated bank with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement.
emphasis added
In a recent radio story on the collapse of AIG, I heard some expert saying the company had two components: a classic insurance business which was basically sound, and a Financial Engineering business which was where all the rot was. All you need to know about the current collapse can begin by pondering the kind of mind that can couple "Engineering" with "Financial" and treat it as a serious concept. Friedman's piece reinforces a conviction I've had for some time that our economy has been increasingly based on playing games with money, as though there was no linkage between the world of numbers on paper, and the real world. It's an old, old addiction where people try to get something for nothing. There's always a price to be paid; Friedman is suggesting we should insist on getting something concrete for that price.
Frank Rich has a brilliant take down of the Maverick's 'Leadership' in the financial crisis, with a day by day timeline of McCain’s Suspension Bridge to Nowhere. The opening sentence says it all - then Rich details exactly how cynical and morally bankrupt McCain's posturing is.
WHAT we learned last week is that the man who always puts his “country first” will take the country down with him if that’s what it takes to get to the White House.
Rich ends by noting how much of this can be laid at the doorstep of Bush - and how McCain is seizing the opportunity no matter what it might do to the country.
That’s no joke. Bush has so little credibility he can govern only through surrogates (Paulson is the new Petraeus). When he spoke about the economic crisis in prime time earlier that same night, he registered as no more than an irritating speed bump en route to “David Blaine: Dive of Death.”
It’s that utter power vacuum that gave McCain the opening to pull his potentially catastrophic display of economic “leadership” last week. He may be the first presidential candidate in our history to risk wrecking the country even before being voted into the Oval Office.
emphasis added
Read all of Rich's piece; the parts between the beginning and ending quoted here may well turn your stomach. McCain could well be Bush's third term - but on steroids, based on what Rich reveals.
Nicholas Kristof fills out the picture with Impulsive, Impetuous, Impatient. Kristof looks at McCain's performance in the debate Friday night, and starts ringing alarm bells.
Suppose John McCain had been in the White House in October 1962, facing one of the great tests of the modern presidency. If so, we might remember that period not as “the Cuban missile crisis” but as “World War III.”
Together, the four pieces above constitute a damning indictment of the politics that have run America into the ditch - and a warning about those who would continue them regardless. If you haven't read them yet, do so. Now.
Finally, I promised one more thing, a lagniappe as it were. Jonathan Swift is renowned for his satirical writings that oft employed fantasy to expose and illuminate the follies of society. A modern heir to this tradition is Terry Pratchett. His Discworld series of novels are full of rich characters, wildly entertaining stories, and explorations of the recurring issues of morality and philosophy neatly packaged up as fantasies. (It's a commentary on our times that Truths have to dress themselves up as Fantasies to get a foot in the door. It's due to so much Fantasy being gussied up as Truth I expect.)
The most recent Pratchett novel from the Discworld is Making Money. It's an engaging story of what happens when a con-man who's been forced into using his talents to benefit his society finds himself taking on banking reform, a crisis of confidence, a huge change in the international balance of power, and a fiancée with a little too much indifference to the lethal implications of her avocation. It will give you some insights into how much of financial stability is based on confidence rather than physical assets, throw up some interesting mind sets for examination, and leave you thoroughly entertained - and possibly a bit more thoughtful.
Warning: some explicit clown content.
By all means, pick up a copy. It will help place our current situation into perspective - and that's no mean feat when everyone is trying to play mind games this election year.