So much in our America rests on the celebration of success and the harsh judgment of failure. In the best of times, this drives astonishing striving and victory. In turbulent times of national emergency, our elevation of "winners" and castigation of "losers" can be become maniacal and counter-productive. In many ways, this proclivity encourages, extends and deepens bubbles. Winning is correct. Losing is wrong, backward and evil. In asset markets this breeds momentum investing and creates huge distorting bubbles. Only experts with platinum pedigrees are worth listening to. Only industry insiders know what needs to be done. If our false confidence and inflated star worship is misplaced, we veer terribly and arrogantly off course. Sound familiar? It should. We have celebrated and then cast down industries, individuals and ideas. Our boom to bust, love to hate cycles have cultural, economic and political manifestations. It is high time for new, more measured and introspective approaches.
As the TARP "bank bailout" fury is supplanted by the auto rescue loan debate, I have the sense of being trapped in a re-run. Bank assistance requests were very unpopular and produced wave after wave of denunciation. Majority opinion rejected the TARP and now rejects aid to GM and Chrysler. Public anger is, no doubt, well deserved. Just like the banks, our auto firms are variously triumphed as marvels -- admittedly it has been a while -- or pilloried as failed basket cases. Some heap praise upon them while others decry their sloth and inability to do what Americans expect/demand/must. They must win, be winners, or be damned. Help is weakness and is to be punished and denied for the greater Darwinian good. This ideological bend demands fast results and forestalls essential debates. If we follow this path, it will lead to terrible national economic meltdown. We are already years down this garden path.
We are interdependent. That is the cardinal fact of modern and integrated economies. Vast networks of family, town, city, tax and trade ties bind various industries and firms to one another. Economies are not modular. There is no distant them and local us in an age of global production, finance, marketing, sales, and trade. This means there is no casual, let them eat cake response to major issues. If those issues be trade, autos, finance, health insurance, wage stagnation, poverty... Rapid transfer of pain and gain are the order of the day. We need functioning manufacturing and functioning banks. We don't need firm A, or firm B. Our stability and prosperity requires employment, research and development and viability in the world economy.
The public is very angry. There is every good reason to be. For decades wages have been stagnant and pressures have been rising. It has been a long, long time since 40 hours of work would pay for anything like a secure middle class existence. For years we have been told that national health care, vacations, world class public education, first world infrastructure, public transit, environmental sustainability, and worker retraining are silly and best left to our champion firms to solve following the profit motive. There have been some great successes. There have been many, many painful failures. Thus, the public is very angry and in no mood to assist firms in dire straights. These firms did not deliver all that folks wanted, yearned, hope and trusted that they would. Thus, public opinion casts down and rages against yesteryear's stars.
The challenge for any progressive, thinker, activist, policy maker is to redirect the pooling anger into meaningful change that elevates and equalizes. That requires movement beyond angry venting and destructive impulse. This is the difference between a riot and movement. We need banks. We need banks that allocate capital in responsible ways toward those projects and communities that will employ vital capital in ways consistent with economic growth and repayment. We need manufacturing. We need auto firms that employ resources efficiently, innovate consistently and help move people and goods in the safest, most sustainable and cost effective manner.
We face a future poorer than our recent past. We are in the very beginning of a long and deep recession. Millions have already or will soon face losing employment, health insurance, safety and shelter. Every structural change is pregnant with twins. One is opportunity the other is suffering. Beyond venting rage and casting down false prophets, good policy and analysis act as midwife and help deliver broad opportunity, fragile, kicking and screaming.