When Steven Pearlstein Writes, We Are Obliged to Pay Attention

Pearlsteinsteven 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.

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.

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.

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

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

  • 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

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

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.


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