William Kristol, editor of the conservative Weekly Standard and New York Times columnist (a reflection of the Times' desire to balance its editorial page, but Bill Safire he is not), wrote recently about the economy for the Times. Apparently he now believes no one knows what's really going on in the world of finance.
Wow! I didn't see that coming.
Forgive me, but some of us have known for a few years what Mr. Kristol belatedly discovered, the economy is in free fall and no one knows when it will end, how it will end, if it will end - a fact more dramatically evident each passing day.
This past summer I read a long article in the Financial Times. It was a profile of the three most important bankers in the world - Ben Bernanke of the U.S. Federal Reserve, Mervyn King of the Bank of England, and Jean-Claude Trichet of the European Central Bank. When I finished it I thought to myself, "They have no clue what's going on."
The grave economic crisis America and the world faces is a great leveler. Neither the most astute economic brains in the world nor your next-door neighbor can fathom what's taking place. There is equality in our confusion.
In my case I didn't go to Harvard or Yale, MIT or Cornell. I didn't study under Milton Friedman at the University of Chicago or Paul Krugman at Princeton (both Noble Prize Laureates). I'm just a guy who went to a small Christian liberal arts school (Pasadena College then, but Point Loma Nazarene University now), but apparently the education I received was enough to understand what you understand, that Wall Street swifties and their economics brain teams have led us into a truly dangerous situation; one so dangerous that in time it may trump the Great Depression.
Last week the Bush Administration announced another bailout, this time Citigroup. The Government has now pledged more than $3 trillion to rescue Wall Street and failing banks - with no end in sight. Where does it end? How many more Wall Street firms will collapse? And just this week we're told the United States is a recession, and has been since December of '07. (Will they tell us next December the recession has become a depression?)
In the meanwhile, Sheila Bare, the head of the Federal Deposit Insurance Corporation (FDIC), has announced that if we can't find a way to stop home foreclosures, there will be more than 5 million people out of their homes by the end of next year - 5 million!
On the day of the Citigroup bailout the New York Times ran a story about a farmer and his family in Platteville, Colorado, who announced they would give away produce left over from the farm's harvest. On the day of the give away 40,000 people showed up. Why? Because people are hurting and hungry and the free produce - more than 600,000 pounds of carrots, leeks, and potatoes - was manna from heaven.
On the day before that in the Los Angeles suburb of Montebello, 4,000 people waited long hours for free food being distributed.
What's wrong with this picture? Billions for banks and Wall Street and nothing for Main Street, nothing for those Americans who once constituted the Middle Class, never mind the poor. It's a damnable outrage, and at its core is moral rot - the moral rot of Wall Street, the moral rot of the Economic Royalists who told us deregulation was good for America, good for the world. No it wasn't!
The Economic Royalists who fought Franklin D. Roosevelt and the New Deal are still with us (not a few of whom made up Bill Clinton's team of economic advisors, and some of whom now counsel the President-elect). They, both Republicans and Democrats, are Economic Darwinians. They believe in the survival of the fittest - as long as they are counted among the fittest. They, in the name of free and unregulated markets, created mechanisms - do you know anyone who can explain a derivative? - by which they could achieve obscene wealth - as in the $54 billion given out by Wall Street in Christmas 2006 bonuses - without accountability to either investors or government; mechanisms so convoluted as to be beyond the comprehension of even those responsible for their creation.
This rush to deregulation began under President Reagan. It grew significantly under President Clinton, and exponentially under President Bush. But this unrestrained faith in free markets, a faith not even Adam Smith, a moral philosopher, fully embraced (although try and tell that to his conservative acolytes), was a horrendous miscalculation, not alone of markets but even more telling of human nature. But today, amid economic devastation, amid crumbling markets, amid rampant economic uncertainties, those responsible for permitting such greed, greed that threatens the very foundations of our Republic, have slipped away in their Ferraris to mansion number two, maybe mansion number three, or four. They got theirs while the getting was good - and the rest of us be damned.
When we dared to question the beneficiaries of this massive wealth accumulation, those responsible for the greatest mis-allocation of wealth in our history, to challenge their moral values, they responded forcibly by saying we must not engage in "class warfare"; it's a dangerous thing, they warned, for a democracy to pit class against class. They said this even as they all but destroyed the Middle Class; as they ran over it as so much road kill on the their highway to ungodly riches.
In the end, the long-term consequences of unregulated markets and uncontrolled greed may impact our country for a longer period of time than even the devastating attacks of 9/11 - as horrifying and tragic as was that terrible day in our history.
I will end this by making a suggestion: If you truly want to understands what's happened to the economy, don't ask your banker or stockbroker, least of all an economist - ask a theologian.
George Mitrovich is a San Diego civic leader. He can be reached at firstname.lastname@example.org.