There is a bit of gridlock in the corridor between New York and Washington, D.C. that none of Mr. Obama's proposals for highway improvements can correct. It is quite amazing that, in an age where the Internet makes real time communication from Trenton to Timbuktu a reality, that the bulk of our elite bankers still emerge from a handful of ivy-clad intellectual hatcheries, and bounce back and forth between Wall Street investment banks and the government agencies that regulate them.
Before we can fix the broken financial system, is it not about time in the 21st century that we also revisit the 19th century structure of our financial systems?
For the last 150 years we have built a massive financial and industrial machine based on the idea that you needed to concentrate people, wealth and power in major city centers to make something happen.
There was a good reason for this. With limited communication systems, having all of that economic and political power of millions of people living on top of one another allowed for a kind of productivity that you could not have with people spread out over wide stretches of the country where it might take days or weeks to just get information, people, goods and services from place to place.
The Industrial Age was built around these concentrated population centers, connected by roads and rail, then telegraph and early telephones. New York became the financial and industrial capital of the United States, a position that it has enjoyed since the founding of the nation. Wall Street has been stoked with Ivy League pedigrees who are the supposed brain trust that keep the engine of progress oiled and running smoothly.
This is 2009, not 1909, though, and the world has changed. FedEx and the Internet lead a revolution of instant information and just-in-time delivery of goods and documents that have allowed mega-businesses to sprout up all over the world. Microsoft is in Redmond, Washington, not Rego Park. Dell Computer is in Round Rock, not Flatbush, Brooklyn. The industrial grid map of top companies has more weight in California and Texas than New York City and Chicago.
Along with that change, our academic institutions have also vastly changed. While Harvard and Yale still hold their name value because of their ties to the power centers of this country, other fine institutions from UC Berkeley to Northwestern to the University of Michigan have generated some of the finest minds that have reshaped the modern world.
So why is it that when Washington is looking for the best and brightest, even the dynamic Obama Administration feels compelled to reach out to the same Wall Streeters and Harvard Club members whose lemming-like myopia took the country's financial system to the brink of ruin?
There was a certain degree of historic "validity" which, in sixty second news sound bites we rely on for public opinion, to say that John Q. Treasury Secretary is from this old boys' club or that weighty financial institution, conveyed a sort of instant comfort and credibility with the public.
The problem is that all of those Wall Street stalwarts sold this country down the river for a quick buck in a way so poorly engineered and transparently Emperor Has No Clothes that confidence in those names has turned instead to mistrust. Once untouchable CEOs at the Morgan Stanleys and Chases and Citibanks and Bank of Americas are suddenly facing pressure to step down.
- Does all of the nation's financial might have to be centered in a half-mile of the southern tip of Manhattan?
To the second question, the answer must assuredly be a resounding "no." Politically, the Obama administration has had no problem reaching out to the Leon Panettas and Bill Richardsons and other experts from different parts of the 50.
So why can't the Fed and the Treasury reach out more to a Brad DeLong at CAL, or even the different viewpoints of a David Aschauer of Bates College, just two examples out of many, many interesting and diverse voices with expertise in the field who can contribute meaningfully to the dialogue about moving our economy into a 21st century track.
Part of change, it would seem to me, would be not reproducing the same mistakes of the past by going to the same dogmatic approaches that have been used by the schools that have controlled this country since the advent of the Industrial Age.
Some of our most progressive businesses, like Apple, Oracle, Microsoft, AmGen, and the next generation of electrical power manufacturers call the West and the Southwest home. If the Obama administration is up for a new idea, how about not only bringing in some new thinkers, but bringing in the point-of-view of some of the most successful economies in America?
Instead of resurrecting its archaic and decrepit bones of an aging and incestuous financial system, we need to take the opportunity that the dismantling of its corrupt and arcane practices have opened to find a new, more dynamic way of using the Internet to connect the great thinkers, the economists, bankers and business entrepreneurs that are the dynamism that drive the new world economy, together. Obama did it in politics with his change website. He will need to work this miracle of uber-think-tank on the banks and business world.
We changed the nation with an Interstate road system, and the web. Wall Street is dead. Web Street needs to arrive, and soon.