September 22, 2008
From Liberty Street

The Outrage

John Turner

More and more frequently over the past few days I've come across commentary which acknowledges that the government bailout of the financial sector is necessary, even though it will impose huge burdens on taxpayers. But along with the acceptance of the deal goes intense anger that the bailout will rescue and reward those who engineered the whole mess to their own advantage.

Last week I read through a long thread following an explanatory article about the financial collapse which contained some of the most astounding demands for vengeance I've ever seen. This crisis is arousing barbaric passions. Public anger is surging beyond any levels we've experienced since the Vietnam War, and it actually seems to be more widespread now than it was in the 1960s and 70s.

I'm generally opposed to anger except for the most carefully controlled sort. But revelations about what has been going on in the financial markets and the consequences to which it has led may well be an occasion for a spate of running wild. I don't want anybody to do anything crazy but, on the other hand, this is surely a time for a heated rejection of many attitudes and practices that heretofore have been promoted as healthy American financial exuberance.

The first thing that needs to be tossed into the cesspool where it has always belonged is the idea that unregulated financial markets provide a path to development and wealth. What they provide are riches for a tiny minority and hardship for almost everybody else. There has never been a more stupid, or dishonest, idea than the trickle down theory of prosperity. Ordinary people are not benefitted by supporting a class of billionaires.

Milton Friedman's arguments and the entire Chicago school of economics need to be revealed for what they are: schemes of vicious economic oppression which cannot flourish unless they are supported by political oppression.

Another idea which deserves universal contempt is that engorged wealth is usually the product of surpassing intelligence. There will be a handful of instances in each generation when creativity leads to riches. But most huge fortunes come, as they have always come, from thuggery. The average CEO who walks away from a disintegrating corporation with hundreds of millions in his pocket doesn't do it because he is clever but rather because he is astoundingly ruthless and greedy.

If you don't believe it, take a look at a series of articles by Dean Starkman of the Columbia Journalism Review, in which he shows beyond doubt that the wreckage in the secondary mortgage market, and the swollen fortunes extracted from that collapse, are consequences of "extravagant crookedness" (his term, not mine).

The mountain of money piled up by Angelo Mozillo of Countrywide, for example, didn't come from creative intelligence but from filthy schemes to lure and cheat ordinary borrowers, who were saddled with crippling provisions in their mortgages so that those debts could be sold for higher prices in the secondary market.

America needs more than anything else to adopt a healthy concept of intelligence, to equate it with habits of mind leading to medical breakthroughs, effective teaching, sophisticated science, sustaining and enriching literature, thoughtful analysis of the past, careful examination of our moral assumptions, and anything else that helps us to see the world accurately. Intelligence is not crafty criminality. The pseudo-clever signs you can see posted in scores of greasy restaurants across the country -- "If you're so smart why aren't you rich? -- are ample evidence of how degraded our concept of intelligence has become.

A third development I hope the current anger will nourish is growing recognition of the relationship between certain political stances and rapacious financial practices. All Americans should now grasp that the Republican Party and virtually all the policies it has pushed for the past several decades are tools in the hands of people who believe, with a kind of religious faith, that human life is nothing more than a process of controlling and oppressing others in order to empower the self. The only reason to vote for a Republican candidate is a desire to  join a small group who are working to oppress others.

I recognize that there are many voters who support Republicans because they think the Republican Party is something other than what it is. But the time has long since passed when they should have waked up. Our anger now needs to proclaim, so loudly that no one can fail to hear it, that the Republican Party is unhealthy for most people in this country and is an insult to the values that are supposedly at the heart of the American experiment.

We are now going to see how cleansing anger can be for a season. Maybe it has the force to sweep some garbage out of our path and give a greater chance for the positive elements of American life to think their way through to a promising future.


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