Just how catastrophic is the ongoing financial crisis? In seeking to describe its seriousness, commentators have made repeated analogies to violent natural events, calling it a "financial Katrina," a tsunami, an earthquake.
Indeed these analogies are apt, and not only because of the apparent intensity of this crisis. Much as extreme natural events reveal the underlying climatic or geological dynamics of our planet, this financial shock exposes some basic truths about not only the economy but our form of government. Here I don't mean just the politics and competence of the current administration; rather, I'm referring to the fundamentals of our political system.
What does it mean to live in a democracy when our lives may be so dramatically affected by "the market," in which some of the most powerful players are people we haven't elected and financial institutions in which most of us have little say? When our present and future lives, and even those of our children, may be severely damaged by the storm created by these institutions and facilitated by many of our elected representatives? When our much celebrated freedoms have proved useless to prevent this entirely human-made disaster?
That is the question I would've asked in last night's debate: Is our democracy worth the name?
Consider the events of the last few weeks. The market meltdown that began in the housing market several months ago reached a watershed moment on the weekend of September 12. The heads of some of the country's largest financial institutions converged at the New York Federal Reserve to try to salvage Lehman Brothers, itself a major investment bank; they failed.
The following Tuesday, Bob Lenzner, national editor of Forbes magazine, referred to these best and brightest executives as "masters of the universe." (See Note 1.) This was a somewhat mocking reference to the seemingly all powerful leaders of the institutions which had been ignorant or heedless of the subprime volcano that had been simmering in their balance sheets for years.
Lenzner's description of these individuals as "masters," though a bit contemptuous, is more fitting than he may have intended. This crisis lays bare just how much power they and the institutions they lead exert over our daily lives.
Their actions have brought us to the brink of an economic crisis that threatens not only their own existence but ours. They are affecting our ability to own our homes. They are affecting our ability to find and keep gainful employment, and to retire in comfort after a lifetime of labor. They are affecting our ability to save for our children's education, thereby influencing not only our lives but those of the next generation. They are affecting the ability of our communities to maintain our libraries, parks, and fire departments. (See Note 2.)
In a word, their actions are reducing the pursuit of happiness to the pursuit of economic survival.
This has always been the case more than we usually cared to recognize. The financial crisis has merely exposed this reality and generalized it across the population. It simply makes it impossible to avoid the question of what it means to live in a democracy when such basic aspects of our lives are affected by the actions of others in a manner so completely outside our reckoning. These are people we haven't elected, and institutions which our elected representatives have not only failed to control but have actively aided in their folly.
It may be one of the most positive outcomes of this crisis that it compels us to ask fundamental questions about our political system, questions we may normally be too complacent or polite to ask. What is the true nature of the relationship between the market and our democracy? Do we really have a government by the people for the people? Does the government at its heart and core truly represent our interests? Again, I'm not talking here about this or that administration. Important as this election is, these issues go beyond the outcome of Obama vs McCain.
So, is our democracy worth the name? Let us rephrase the question. If Lenzner's "masters of the universe" really are masters, what does that make the rest of us?
NOTES
1. Listen to the NPR interview with Lenzner.
2. Susan Saulny, "Financial Crisis Takes a Toll on Already-Squeezed Cities," New York Times, October 6, 2008.