"There's somethin' happenin' here.
What it is ain't exactly clear.
There's a man with a gun over there
A-tellin' me I've got to beware.
I think it's time we stop.
Children, what's that sound?
Everybody look what's goin' down."
Buffalo Springfield
"For What It's Worth"
New and more unpleasant dimensions of the financial crisis seem to be revealed with each passing day.
As the average Americans try to absorb it all, they are left having to accept that:
- Our leaders — who are supposed to possess the economic wisdom that most of us ordinary working stiffs do not — have let us down. Big time.
(Lately, I've been remembering a skit from an early "Saturday Night Live" that lampooned Gerald Ford and Jimmy Carter in their 1976 debates. The questioner, Jane Curtin, was shown asking an increasingly complex economic question. When Ford, played by Chevy Chase, was given the chance to answer, he replied, "It was my understanding that there would be no math ..."
(Well, it may have been George W. Bush's understanding that there would "be no math" with which to deal in the final months of his administration. Nevertheless, he speaks about it daily, in his televised morning pep talks before the stock market registers another triple-digit drop.
(And it may have been John McCain's understanding that he could run for president and win on the issues of security and terrorism — and get away with not knowing much about economic policy — but fate has conspired to make the economy the focal point of the general election.
(The only way that attention could be diverted to national security at this point in the campaign would be if the terrorists choose to launch another attack on American soil in the next three weeks.) - The wrong people have been in charge of everything.
The history books and the people of my parents' generation tell me there was a time when Americans and their leaders faced the nation's problems — from economic hardship to foreign aggression — with clear eyes and determination.
They told each other that the road might be long and it might be filled with potholes and we might have to go uphill and against the wind at times — and some of us would fall along the way, but most of us would make it because we were going to pull together.
That "pull together" attitude seems to have pulled apart in the last half century.
As long as I can remember, when Americans have been given a choice between confronting a harsh reality and believing a comforting fantasy, they choose the latter.
Whoever spins the prettiest sales pitch about getting the most while investing the least has been virtually assured of victory in an election:
- In 1968, when America was mired in an increasingly dismal war in Vietnam, Richard Nixon told the country he had a "secret plan" to end the war.
The country believed the fantasy, conveniently overlooking how the Nixon campaign played on racial fear with its "Southern strategy" and truly pioneered the concept of the "wedge" issue.
And, while the children of the nation's rich and powerful took advantage of the loopholes that kept them in this hemisphere, American draftees (many of whom were black and/or poor) continued to die in Vietnam for seven more years. - In the 1970s, the first warning shots about the limitations of fossil fuels were fired as the Middle Eastern nations that were discovering the riches buried beneath them started to flex their newfound economic muscles.
But Americans were too angry with Nixon over his domestic crimes to notice — even though the price of a gallon of gas went up nearly 50% between the time he was re-elected in 1972 and the time he resigned in 1974, thanks in part to the first Arab oil embargo.
When Americans elected Jimmy Carter in 1976, gas prices had gone up another 13% since Nixon resigned, indicating a clear pattern in oil prices was being established — but Americans didn't notice until the second oil embargo in the late 1970s doubled the price of a gallon of gas by Election Day 1980.
That year, the economy was staggering with high inflation and unemployment, and the country was humiliated on a daily basis by the Iranians who held 52 Americans hostage for more than a year.
Voters chose to believe the stories they were told about deficit spending and trickle-down prosperity and how all their problems could be solved with little or no sacrifice.
They chose not to think about the need to develop alternative energy sources — because that could mean pain and hardship, interruption of the comfortable lives that many Americans had built for themselves.
And they chose to ignore the racial implications of Ronald Reagan starting his general election campaign in Philadelphia, Miss., where three civil rights workers were murdered 16 years earlier, by declaring his support for "state's rights." - By 2000, the Clinton administration, after coming into office eight years earlier with a mandate to fix a broken economy, turned over a budget surplus to George W. Bush. In spite of some concerns that were expressed at the time, much of the surplus was given away before the terrorist attacks of Sept. 11, 2001.
Thus, that money was never available to help satisfy the desire to retaliate for those attacks or to pay for much-needed security improvements. Nor was any of it available for domestic crises — like when New Orleans needed assistance after Hurricane Katrina.
A majority of Americans bought into the idea that a war could be fought and won in Iraq on the cheap — while we virtually ignored Osama bin Laden and left him alone to plot more evil deeds in Afghanistan.
A majority of them believed Dick Cheney when he insisted the war would be paid for by the profits from the oil reserves in Iraq — and that controlling those oil reserves would help keep prices down in the United States.
Invading Iraq in 2003 was often compared favorably to the Gulf War of the early 1990s — in which the United Nations' international coalition quickly and efficiently overwhelmed the Iraqis and drove them from Kuwait.
Until you pick up the morning paper or switch on the evening news. Then it seems frighteningly real.
Americans are paying more than $1 billion a month to support the troops in Iraq, more than five years after the invasion. At home, everything that people believed they could depend on — their 401ks, their investments, their homes, their jobs — are being taken from them, through no fault of their own.
What can you believe?
- Investor's Business Daily says, "[W]e might be in for a brief, yet brutal, recession. But talk of a depression and other apocalyptic possibilities are way overdone. ... [T]his crisis won't last."
- The New York Times says it was "welcome news on Friday night that the United States was working with other nations to stem the financial crisis and also moving ahead with plans to take equity stakes in struggling banks instead of just buying up their bad assets."
The Times acknowledges there are many things that need to be done, but, at this point, "the task is to stop the panic that is unraveling the world’s financial system. This weekend is the time to do it" for the U.S. and the other nations of the world.
Is that the kind of thing that can be done in a single weekend? - The Daily Telegraph doesn't say.
What it does say is this:
"Time is running out for the politicians to put the brakes on what could become a runaway crisis as in 1929 when events moved beyond the ability of governments to control them. The most important lessons from that calamity are that early, effective and, above all, co-ordinated action is required. We have already missed out on the early; and the effectiveness of what has been done so far is yet to become clear. Beyond an agreed cut in interest rates, however, it is a co-ordinated international response that has been absent. It is now desperately needed."
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