"How camest thou in this pickle?" That's the question surrounding the financial reform debate in the Senate this week. If it ever gets settled what sent us into this pickle, we'd know how to avoid it again.
But in our political system, and even among top economists, that never gets settled.
Republicans smear Democrats for massive government spending, rightly claiming as Shakespeare foresaw, "They are spending again what is already spent!" (Sonnet LXXVI).
Yet that was also true under big-spender George W. Bush and his Congresses. Even with Republicans running the government back then, taxpayers felt that "they can get no remedy against the consumption of the purse!" (Henry IV, Part I).
Major financial institutions, and big companies like AIG and General Motors & Chrysler, were deemed "too big to fail." Though staunch free-market proponents, they sure loved the bailout bucks.
They initially felt, "For this relief, much thanks" (Hamlet). Some went around telling Treasury and White House officials, "I can no other answer make but thanks, and thanks, and ever thanks!" (Twelfth Night). Begrudging executives were told to mouth gratitude, even if they didn't feel it: "Assume a virtue, if you have it not" (Hamlet). Their lobbyists and political advisors made them think, "O, Lord, that lends me life, lend me a heart replete with thankfulness" (Henry VI, Part II).
Meanwhile, some star actors on the economic scene were knocked off center stage. As they faced bad reviews, former icons like Bob Rubin for the Democrats and Alan Greenspan of the GOP must have felt as the much-maligned but good-hearted King Richard II, when his reputation too plummeted:
"For God's sake, let us sit upon the ground
And tell sad stories of the death of Kings.
How some have been deposed, some slain in war,
Some haunted by the ghosts they have deposed,
Some poisoned by their wives, some sleeping killed...
Farewell, King! Cover your heads,
And mock not flesh and blood with solemn reverence.
Throw away respect, tradition, form, and ceremonious duty."
That's the stuff of personal tragedy. To avoid another national tragedy, we need "sterner stuff," in the Bard's phrase. We need legislation which assures proper government rule-making and -enforcing, without sapping the private sector of its verve and risk-taking.
That's the stuff of judgment, and it's tough. With our financial institutions so far-flung and complex, with the American economy so massive, the actual operations differ markedly from the economic models, the practices far from those prescribed in regulations.
Again, the Bard nailed the notion, as when Hamlet tells his scholarly buddy, "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."