05/23/2009 05:12 am ET Updated May 25, 2011

Money, Banking and Torture: It's Just Shocking!

Official Washington seems shocked that torture has been the rule above the law during the Bush administration. Reaction to the release of the Justice Department memos on the subject seems almost naive--and certainly with no sense of history (in this case, very recent history).

I remember former defense secretary Robert McNamara saying in a documentary about the Vietnam War that he wished he had known more about the country before conducting a war there. Didn't anyone in the Pentagon or White House bother to tell him about French expert Bernard Fall and his books on the Indochinese war such as Hell In A Very Small Place? At Yale in the mid-60s, I met Fall when he came to lecture, read his books and followed his articles in the New Republic. I also took courses on the history and economy of Southeast Asia. Knowledge of the place was neither Top Secret nor hidden.

Similarly with the story of the Bush administration, the CIA and torture, information has not been secret nor unreported. Wisconsin history professor Alfred McCoy's book, A Question of Torture: CIA Interrogation from the Cold War to the War on Terror, explains the origins of many of the techniques described in the Justice Department memos. The film Taxi to the Dark Side reports on the torture methods used by US officials in Afghanistan and at Guantanamo; it won the Academy Award for best documentary in 2007. New Yorker writer and former Wall Street Journal reporter Jane Mayer's book The Dark Side: The Inside Story of How the War on Terror Turned into a War on American Ideals is a model of investigative reporting on the legal machinations behind the Bush administration's approach to fighting terrorism. The New Yorker is not a difficult publication to locate.

Fortunately, a few members of Congress such as Senators Carl Levin, Diane Feinstein, and Patrick Leahy know this current history and understand that the nation cannot and should not sweep it under the rug. Only a thorough airing of the issue will allow the US to rebuild its reputation among civilized nations and to undertake the institutional reforms needed to prevent this unAmerican behavior from being repeated in the future.

The best way to do this, as President Obama has recognized and endorsed, is a bipartisan Congressional commission or Select committee which will hold comprehensive hearings, subpoena witnesses, examine documents, and report to the American people on how and why torture became a seemingly acceptable part of US international behavior. The country has done this before with the Church Committee investigations of CIA excesses during the Cold War. The Republic did not fall, nor did American national security suffer. We still prevailed in the Cold War--and we can certainly triumph against rag tag jihadists without resorting to torture (see Reza Aslan's new book, How To Win A Cosmic War: God, Globalization and the End of the War on Terror, for a nuanced rethinking of US anti-terrorism strategy).

As with the torture issue, so with money and banking; we need more sunlight, not less.

Already there seems to be moves afoot by Washington pundits, some politicians, and lots of Wall Streeters to put the financial crisis behind us, to move on to economic recovery (when it comes), and not bother ourselves with why the financial crisis happened or how to assure that the US economy and global markets are not put in dire jeopardy again.

As with the CIA and torture, we need to rely on Congress and key Senators to lead the way.

The Obama administration has its hands full simply dealing with the economic recovery, from restructuring the auto industry to keeping the big banks afloat, to passing a Federal Budget; they cannot be expected to explore root causes or even propose long term structural reform.

One of the few national politicians who saw the economic storm coming is Senator Byron Dorgan, the populist Democrat from North Dakota. Ten years ago, in the debate over the Financial Services Modernization Act which repealed Glass-Steagal and lifted FDR era regulations on banks, Senator Dorgan prophetically warned: "This bill will ...raise the likelihood of future massive taxpayer bailouts....I also think we will in ten years time, look back and say: We should not have done that because we forgot the lessons of the past; those lessons represent timeless truths that were as true in the year 2000 or 2010 as they were in year 1930 or 1935." Dorgan warned against financial institutions investing in derivatives, and about banks that would become "too big to fail" and require bailouts with taxpayer money.

Dorgan has written a book, Reckless! How Debt, Deregulation and Dark Money Nearly Bankrupted America to be published next month. He has also proposed legislation to establish a Senate Select Committee to hold hearings on the financial crisis---on its root causes, and on the structural reforms needed to prevent future meltdowns. Senator John McCain is a leading co-sponsor of the initiative.

Such a Select Committee would hold extensive hearings, hear from a variety of experts, and examine the workings of the Federal Reserve, the private banking system, and hybrid organizations such as Fannie Mae and Freddie Mac, consider them as a whole, and ask how they can work better to provide the credit needed by a modern, globalized economy without unleashing and rewarding unbridled greed, fraud and speculative abuse.

Money--how it is created and how it functions in the economy often seems mysterious and opaque to most Americans. Few understand how central banks regulate the money supply or how private banks create money and provide credit. Money is a social construct, no longer backed by gold or other precious metals. Readers looking for a primer should start with the late economist John Kenneth Galbraith's clear-eyed volume, Money: Whence It Came, Where It Went, and then move on to the political history recounted in Lords of Finance--The Bankers Who Broke the World, by Liaquat Ahamed, a splendid biographical rendering of the Central Bankers of the 1920s and 1930s who led us to the Great Depression. If you have energy left, pick up William Greider's award winning reportage in his book, Secrets of the Temple: How the Federal Reserve Runs The Country.

Most of our fellow citizens won't have time for such self-education. That's why the country needs a public discussion of money and banking--an economics tutorial for the nation. Congressional leaders and the White House should endorse and pass Senator Dorgan's initiative.

It's time to stop being shocked by events. Let's learn from them. Let the hearings begin--on money and on torture.