They just can't bring themselves to say the word: deregulation. Zachary Roth finds the obnoxious tip of an obscene iceberg at McGraw-Hill. Or maybe the metaphor is upside down: propaganda like this aimed at kids must be the lowest dung in the proverbial hill.
Of course deregulation is not the whole problem. A new book by William Cohan describes a "mix of arrogance, greed, recklessness, and pettiness" that Business Week seems to jump on as the easy ideological answer. A few apples full of "insider bile" brought down an 85-year-old institution that was so powerful and so centrally placed that its demise may have been the beginning of the end for a financial "house of cards" system -- and if you believe that I have some mortgage-backed securities to sell you.
A more logical, less intelligence-insulting explanation does exist in the mainstream media, but the big storytellers at the New York Times, et al, are careful to couch it in Wall Street's language that most of us rabble won't get: liquidity. What it really means is how much money you (or they) have to spend. Steve Inskeep this morning on NPR actually did a decent job of letting the cat out of the euphemistic bag:
Bear Stearns, Inskeep exclaimed, would essentially call up every morning and say, we need to borrow $75 billion - yes, that's billion with a b, as in 1,000 million - and we'll pay it back tomorrow, but we may need to borrow another $75 billion tomorrow, too... and if the answer to this request is No, then Bear Stearns is insolvent that very day!
More cats escape as Cohan replies, yes, kaput, and they had been doing it for 20 years!
This we recall is the bad habit that also led to many a colossus to stumble, including the Big Three. It's certainly how the system favors huge businesses able to trade on their names over smaller enterprises that are stuck balancing their books like a bunch of schmucks. But we're getting ahead of ourselves.
So, we have to ask two questions, a lot of questions - as many as possible - but at least two. First, if the problem is these ludicrous habits of the rich & famous - and here we don't mean knocking off work to play bridge for 30 years or taking a helicopter to play golf every week, but much crazier stuff - then how is it so systemic?
I think the only logical answer, that it's systemic because it's allowed and encouraged by policy, leads us to the second question: where did these incredibly destructive policies come from and how do we reverse this? Two questions, I know, but related by the answer. The policies come from people with financial interests in them (i.e. rich people), who have organized themselves into business associations for lobbying and research for the purpose of lobbying and PR for the same purpose. We reverse it by organizing people with the reverse interests (most of us) to accomplish the reverse policies.
But re-regulation will not be enough, given the historically close relationship of regulators and the regulated. Nationalizing the banks, and maybe the Big Three, will not even be enough if the same interests are in charge of the subsequent reorganization that oversaw (or chose not to see) the development of the current disaster (for working people, that is - who cares about a bunch of Wall Street and car company execs, except inasmuch as the crisis affects the rest of us, who suffer from the system even when it's doing well?)
No, what is needed is a fundamental realignment of the economy and in whose interests it is managed. (It has always been managed.) People's bailout, Social Monetary Fund, revolution, call it what you will, it's probably less important to debate the specifics at this point; it's past time to get organized.
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