Thursday, October 30, 2008

Notes From an Op-Ed Piece

Don't get mad, get even.


Thursday, October 30, 2008

October 29, 2008, 10:00 pm — Updated: 2:42 am -->
Hang ‘em High
MISSOULA, Mont. — Under the Big Sky on election’s eve, the cold gold cottonwood leaves catching the late October light, Lolo Peak holding its first dusting of snow, the season feels ritualistically right.
But a free-floating edginess clings to the air, a sense of possibility over the prospect of a new president, and righteous anger that things are going to be very bad for a long time.
I can’t shake this line from Jon Tester, the freshman senator from Montana. Since the $700 billion bailout was first introduced, his office has been flooded with calls and letters — uniformly unforgiving toward the Masters of the Universe who destroyed the American economy. Tester said people “want to see the executives that drove Wall Street into the ground in orange suits picking up cans along the side of the road.”
It’s a comforting image, in a comeuppance sort of way. Imagine all those hedge fund managers and soft-skinned bonus brats stooped over litter through the long night of a Montana winter.
For now, the villains have been identified, though they have yet to be paraded through the village square. Polls show banks and Wall Street are blamed for the most staggering blow to the economy since the onset of the Great Depression. By two-to-one margins, people blame Republicans over Democrats. But they also blame their neighbors — you and me — for taking on too much debt.
If Americans are walking without a skip in their step, and maybe with a pitchfork in one hand, you can’t fault them. Gallup found that one in five people say their finances have already been hurt “a great deal.” On Tuesday, consumer confidence fell to the lowest level since the Conference Board started tracking popular sentiment 41 years ago. A bare 11 percent say the country is headed in the right direction.
We are not a nation of whiners, despite what Phil Gramm has said. (And he’s a prime candidate for road crew.) But where does this jet stream of anxiety go after the election?
During the Great Depression, it found its violent outlets. In Iowa, farmers stormed a courtroom in mid-session, demanding that a judge not sign any more foreclosure notices. The judge was dragged from the courthouse and taken to a nearby hanging tree. His life was spared only when the mob’s cooler heads (an oxymoron?) prevailed.
In Congress, at the time, taxes were raised on the wealthy, with a whiff of genuine class warfare in the air and cries of “Soak the rich!”
And the wise men of finance offered few nuggets of hope, only a clunker or two of infinite despair during an age the poet W.H. Auden called “the low, dishonest decade.” The economist John Maynard Keynes was asked if there was ever a worse time.
“It was called the Dark Ages,” he said. “And it lasted 400 years.”
Our battery-life of pessimism is not that long, and never will be. As dark as the End of Days-Bush Era has become, most of us see some sunshine in the forecast. The Pew Research Center Poll this week found that 64 percent still believe in this sentence: “As Americans we can always find ways to solve our problems and get what we want.”
But there will be blood, from Main Street to the mall. You see it every hour: businesses closing, folding, cutting back, projects delayed and canceled, young entrepreneurs putting their dreams back in the attic, people walking away from houses with nothing but bad memories.
And yet, Wall Street has not answered for its misdeeds, its reckless gambles, having set aside nearly $20 billion to pay in bonuses for 2008. You’ve just destroyed the economy — here’s your reward! Even the bankrupt Lehman Brothers managed to sock away $2.5 billion in future bonuses before filing for Chapter 11, according to Bloomberg.
We want shelter from the storm and a pound of flesh. But how much time will a new president have? A year? A hundred days? A month? The expectations cycle, like our culture, moves at the speed of a text message.
Franklin Roosevelt, the high standard for changes by a new president, got out of the gate like Seabiscuit on a sugar-cube high. In his first week in office, he was urged to nationalize the banks, as Bush has done in large measure. Instead, Roosevelt closed the banks for most of a week, and when they opened again, he assured all Americans, they were safe — now backed, for the first time, by the faith and credit of the United States.
It’s debatable whether he saved capitalism, as many historians have said. But Will Rogers certainly got it right: “If Roosevelt burned down the Capital, we should cheer and say, ‘Well, we at least got a fire started, anyhow.’”
Somebody has to start a fire. That’s what Americans will be looking for after next Tuesday. And quick. Otherwise, expect people to begin fitting executives in fluorescent orange vests for penance work on the side of the road — or worse.
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From 1 to 25 of 33 Comments
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1. October 30, 2008 1:39 am Link
I hate to denigrate an entire industry, but there’s something wrong with basic accounting these days. Wall Street fat cats were able to sock away billions for their own bonuses prior to filling for bankruptcy because we have made up, out of whole cloth, rules for accounting that defy the laws of nature, math, and physics. Let’s start at the beginning: the use of the word “characterize” to describe a transaction. One does not “characterize” a financial transaction; it is what it is, regardless of what one calls it.
It shouldn’t take a special degree to balance the books. You sell something, and it costs something, and it happened on a certain date, and those are the facts. It is simple tautology to make up rules and definitions and then believe that these rules and definitions control the system.— Opsimath44
2. October 30, 2008 2:11 am Link
It is not the cottonwoods that turn yellow in Missoula. There is a row of sugar maples that stretches up the avenue to the college. They are lovely, my favorite memory from when I went to college there.Missoula is a foggy town in the fall, due to an air inversion that gets caught in the narrow canyons there. Some days you can see the Big Sky, some days it is possible to get lost in the fog just a block or two from your house, and you can spend hours trying to get back home.Your description is lovely, too, just applies more to other Montana towns.Edginess? My son lost half of his savings, and my daughter’s teacher reports her son is coming home from Wall Street. One of the 200,000 laid off this year, he was given no severance pay, so he is coming home to stay with her while he applies for jobs.A local resort has laid off everybody because their funding came from Lehman Brothers.My husband’s guitar group is all planning to vote for Obama… they’ve all lost their retirement funds.The economy of Montana doesn’t correlate with the national events very well. We were last in per capita income, but now our income is second to the last.The wealthy began to move here in droves this last few years, but this year the summer folk did not come. The streets were suspiciously empty of $100,000 sports cars.I think the damage to the economy occurred a year ago, but they kept silent.I think it was exactly like Nero fiddling while Rome burned. Yes, they need to be held accountable, because they knew it was coming, as long as a year ago.As for Montanans, they wrote the book on “broke.” and much of what happens elsewhere just seems like more of the same here.All these years of watching Bush spend 50 billion a month in Iraq, I kept thinking, what it would be like if we got even one month of that money spent in Montana.To tell you the truth, the relief being felt at the gas pump here has been good for a few laughs. The good that can come from poverty stricken money guys, bereft of their playdough, is going to be a light at the end of a long, dark tunnel, believe it or not.Deb— Deb
3. October 30, 2008 2:31 am Link
Karl Marx is laughing in his grave; again. What dupes we have all been, and the saddest thing seems to be that somewhere just short of half the voting population of America wants their ignorance and folly to continue. Even if; and I hope so sincerely; Barack Obama is elected to lead, and the world breathes a huge sigh of relief; the fact remains that an enormous number of people still believe the republican party message. Lies, innuendo and so little regard for the ordinary American it is hard to comprehend. Dupes. What can the world make of us when even after the supposed liberation of the sixties we still fall for such nonsense? What can it say about our education system when we produce crowds of people at political rallies who cry for the death of a candidate, and that candidate does not really disavow such behavior? We have a lot of work to do. May next Tuesday signal a real dawn in our country, and not just the usual blip in interest and commitment.— Bob Sterry
4. October 30, 2008 3:12 am Link
Lehman pencils in $2.5 billion for bonuses and then files Chapter 11. How do they get away with it? Well, they’re rich, so it’s okay to be crooked.
Another NYTimes columnist writes, thanks to his unauthorized listening in (sound familiar?) of a conference call, discovers that JPMorgan took $50 billion in bailout money, but will be using it for acquisitions rather than extending credit.
And to learn that the contracts — government contracts using our money! — for the accounting firms administering the bailout have been redacted so no one may know what they’re being paid.
So far this is working out very well for the American people, NOT! If someone can explain to me how this so-called bailout is not The Greatest Heist in the History of Mankind, I’d love to hear it. Indeed, I’m all ears.— tiowally
5. October 30, 2008 3:22 am Link
The first time that unregulated capitalism drove the US economy into a ditch, in 1929, FDR managed, with the help of heavy state spending on the military during WWll, to put the US economy back on the road.
This time, I believe that the ditch is much deeper, and far more drastic means may be required to get the economy out of the ditch this time. Key financial functions, such as banking and insurance, may have to be nationalized.
Perhaps if an enterprise or institution is too big to fail, or too important to the economy to fail, then it should not be privately held. After all, somewhere there must always be accountability.— Jack the Canuck
6. October 30, 2008 3:27 am Link
The concept that the financial crisis has been caused by individuals taking on too much debt seems to burke the fact that debt is far from universal. About a quarter of all credit card holders pay their balances down to zero at the end of every month. Mortgages in default comprise 1%-2% of mortgages–and many homes are owned outright, and have no mortgage.
Compare this with the rot at the top–the percentage of financial institutions in trouble.— Anne W.
7. October 30, 2008 4:05 am Link
I don’t get it. There are folks on Wall Street getting a BONUS for helping eviscerate our economy? I now have to work harder, longer, to stay where I am and someone on Wall Street is being rewarded for it? The way I see it…this was one screwup after another. If I screwed up at my job with consequences like this as a result . . . I would be looking for another job - and I am pretty sure I would not get a bonus out of it.
I’m either in the wrong line of work
or the right one.— Deon
8. October 30, 2008 5:02 am Link
I’m one of those people this has hurt. I’m just another worker ant who used to have a retirement nest egg. It’s gone. We didn’t spend wildly. We saved our money, invested as prudently as we could. We didn’t get the house. We always drove ten (or more) year old cars. We worked hard.
For what?
AH— Anna Harding
9. October 30, 2008 5:16 am Link
The $20 billion in socked away bonuses by bankrupt Wall Street firms–especially the $2.5 billion hidden by Lehman Brothers–is especially galling. How do they have the temerity to get away with that?
In the movie “Trading Places” Eddie Murphy’s character said that the way you hurt the rich is to take away their money. I think the time has come to do exactly that, and seize these huge bonus stockpiles.
It’s time that we–the taxpayers and the feds–had all their slick corporate tax and securities lawyers working for us, to try and take that money away from them. We should draft the attorneys into some form of selective service if we must! It’s time to add considerably more muscle to the regulatory agency forces, like sending out ten thousand more modern day Elliot Ness style accountants to go after these modern day bootleggers.
There are going to be a lot more unemployed, talented professionals looking for work in the months ahead; why not employ them to try to recover this money? Maybe they could even earn their money like bounty hunters do, or personal injury attorneys, by promising them a share of the take.
The bankers and Wall Street fat cats have destroyed the promise of a better future for us for at least another two years, possibly longer. Why should they be allowed to keep that largesse? Tax it, confiscate it, expropriate it by any means necessary. Give it back to the taxpayers or spend it on public works and infrastructure, but don’t let them keep it.— Donald Johnson
10. October 30, 2008 5:22 am Link
Unlikely that the guilty will receive their due.— P Miller
11. October 30, 2008 5:28 am Link
I don’t believe it was malfeasance or fraud that led to financial meltdown, rather a combination of greed, recklesness and incomprehension of the complex financial schemes invented to feed that greed. The masters of the universe do not belong in jail but people do expect that the money they accumulated inthe last decade be taken back in some way and put to constructive use. High taxes on unwarranted bonuses seems a good way to accomplish that.— serban
12. October 30, 2008 5:31 am Link
“expect people to begin fitting executives in fluorescent orange vests for penance work on the side of the road — or worse”
I vote for worse.— kamachanda
13. October 30, 2008 5:40 am Link
Great article, thank you.
Millions of people all over the world will suffer more and more because of the greed of the financial world. The Bush Administration as well as the US Congress has to take responsibility for this crisis as they have been asleep at the wheel for too long. The cosy relationship between Wall Street and the Treasury must end, namely, a former executive of an investment bank taking over the US Treasury. Stringent laws must be in place to prevent this.
The incoming Administration has to take immediate action to investigate and prosecute the white collar criminals . All the bonuses must be returned to the tax payers. This crisis is adding trillions to the US deficit, the bills to be paid by future generations. The US is yet to learn from the Savings and Loan losses or the Milliken debacle of the recent past. Any political system that allows obscene greed is a blot on our beautiful planet.— JAZZ
14. October 30, 2008 5:58 am Link
Is it impossible legally, and otherwise, to get back the 2.5 billion USD put away as bonuses from the tricksters in Lehman Bros.
Who will actually be receiving this money, now that Lehman Bros is not there.— ashok sen
15. October 30, 2008 6:00 am Link
We, the American people, elected the public officials who deregulated to the point of ruin. We, the American people, have to accept the blame. It looks like Montana is voting for more of the same in 2008.— Linda 42
16. October 30, 2008 6:28 am Link
What has us REALLY angry is that those same executives and high rollers who caused the conflagration are being rewarded with OUR dollars by an administration that hasn’t done anything right so far! How could Congress just acquiesce to Bush’s bailout without an investigation into how much was needed, who was going to get it and what would be done with so much money? How do you trust crooks to take $700 billion and not have it stick to their fingers? In the meantime, no one in government seems to be worried about making the victims of the scheme whole: those people whose credit is gone and whose retirement accounts have lost at least 30% of their value.
Don’t tell me I have to wait until the market comes surging back. It is folly to further enrich the rich and pay no attention to the middle class, who only suffer from the actions of crooks and cronies of the administration.— stheil
17. October 30, 2008 6:39 am Link
WE don’t have as much roadside trash on Michigan. As they said with Richard Nixon “I want him to say I”m Sorry on license plates a million times.”— Roger Marz
18. October 30, 2008 6:42 am Link
Nobody’s going to start a fire until after the new president takes office in late January…an eternity from now. And then we will see what we will see. It is ample time, however, for Bush to cause considerable harm and more future problemsfor an incoming president. That’s the fire I expect to see. My advise: Hunker down and brace yourself for a very bad timein November,December and January. Bush and his croniesaren’t going to go quietly.— Barry Moyer
19. October 30, 2008 6:48 am Link
Nothing would please me more than to see them in those orange jumpsuits picking up trash in Michigan, the place I live and which they helped ruin. But it will never happen. Instead, ordinary people like me — teachers, firefighters, and mechanics — will send ourselves and our children into debt to pay for their hubris and greed. It is sickening and inexcusable. If there is a mob, I just might attend.— adrienne
20. October 30, 2008 7:07 am Link
You left out treason and war crimes.— par4
21. October 30, 2008 7:07 am Link
Blah,blah,blah. A little posturing by the politicians,a few photos of a senate hearing and then the filthy rich go about their business .It’s the job of the middle class and the poor to be fodder.The rich are indeed different than you and me.— martin
22. October 30, 2008 7:09 am Link
It is amazing that the operators in Wall Street and financial districts all over the States were allowed to pocket huge bonuses just before the institution itself declared bankruptcy.Elsewhere in the world this is called fraud of the worst kind and thievery of the middle class families funds.What a pity, the only superpower in the world today has no means to guillotine the rogues on the fiancial scene.— s.divakaran
23. October 30, 2008 7:09 am Link
AIG is already spent 123 billion and seeking more.
America wants to explanation , Greenspan’s thought ; “I found a flaw in the system” is so insufficient for this cataclysm.
We do not want only regulation, we want justice who robbed us.— hadarmen
24. October 30, 2008 7:21 am Link
Populist rubbish and dishonest, to boot: you acknowledge that gullible and/or unscrupulous borrowers share culpability, but single out banks and bankers for retribution.And what about mortgage originators, mortgage brokers, accommodating property appraisers and, most of all, the rating agencies — Moodys and S&P — who were the enablers of this crisis?Wall Street is an easy target (ask Guliani, Sptizer and Cuomo); the people who really made it all possible are, so far, flying happily below the radar.— DB Smith
25. October 30, 2008 7:23 am Link
We wish.
The people most responsible for this, in which I include the entire Bush administration, as well as the Moguls of Wall Street, Big Pharma, and the National Association of Manufacturers, among others, have colluded for the past eight years to free themselves from all regulations, even reasonable and prudent ones.
So, the Moguls of Wall Street, having bilked the country and the investers to the tune of God alone knows how much money, and having captured huge rewards while the market was going up (as might ahve been appropriate) now continue to do so as things go bust, instead of going bust with us.
The manufacturers of America have their collective hands out for “bail outs” which aren’t rescues from anything except their incompetence.
Big Pharma and its associates have their collective hands in our pockets and are busily bankrupting every day Americans.
At least, George and Co failed to privatize Social Security, but the “let’s not negotiate drug costs” drug benefits are so expensive we can’t afford them and even WITH them, one out of eight Americans can’t afford their cancer drugs, and by some estimates more than one out of ten have no health insurance at all.
The GOP has its collective hand out thinking somehow it can continue to dupe Main Street into financing its folly, meanwhile keeping the GOP in power so it can continue to gut the Constitution while picking our pockets clean.
Think again, past Masters of the Universe: your shell game has been exposed and your time in control is now over. Unfortunately for those of us who will have to clean up this moral, fiscal, economic, and government mess, there don’t appear to be any laws which actually will put you in the orange jail jump suits you deserve, and I’m sure that even as I type, goons in the Bush White House are busily drafting presidential pardons for themselves that will guarantee that none of them ever have to face their day in court.
Well, the rest of us will have the last laugh. It will be one long time before any of the current crew will be able to show its face in public anywhere except on Fox News, and a lot longer than that before you’ll be back in power.
Don’t let the door hit you on the way back to whatever rock you plan on hiding behind.— Judy G from Fairfax VA
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Previous Post:The Party of Yesterday
About Timothy Egan
Timothy Egan worked for 18 years as a writer for The New York Times, first as the Pacific Northwest correspondent, then as a national enterprise reporter. In 2006, Mr. Egan won the National Book Award for his history of people who lived through the Dust Bowl, The Worst Hard Time. In 2001, he won the Pulitzer Prize as part of a team of reporters who wrote the series How Race Is Lived in America. Mr. Egan is the author of five books, including "The Good Rain: Across Time and Terrain in the Pacific Northwest," and "Lasso the Wind, Away to the New West." He lives in Seattle.
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