MoDo, in “Dark, Dark, Dark,” says we need leaders to help us through our crises, not provide us with crude evaluations of our character. The Moustache of Wisdom gives us “Start Up the Risk-Takers,” in which he opines that precious public money should focus on investing in a new generation of innovative companies, not on bailing out the losers. Mr. Kristof, in “Sisters, Victims, Heroes,” says that world leaders will have to summon some of the same moral courage that Darfuris show all the time if the slaughter in the region is to end. Mr. Rich says “What We Don’t Know Will Hurt Us,” and that no one knows when there will be an end to the economic crisis, of course, but a bigger question may be whether we really want to know. Here’s MoDo:
Barack Obama’s grandmother told him to smile more. Bill Clinton tells the new president to strut more.
As the country takes a bullet train to bankruptcy, the last Democratic president urged the current one to “embody” that old American spunk. That spirit of — as they sing in “Oklahoma” — “We know we belong to the land and the land we belong to is grand! A-YIP-I-O-EE-AY!”
“It’s worth reminding the American people that for more than 230 years everyone who bet against America lost money,” Clinton told Chris Cuomo on “Good Morning America.” “I just want him to embody that and to share that.”
It’s rich. The Man from Hope whose Missus castigated Candidate Obama for raising “false hopes” is now criticizing President Obama for not peddling more gauzy hope.
Instead, he implies, the president’s warnings of calamity, designed to gin up support for borrowing and printing trillions to shore up the sagging economy, might actually be dragging down our already sagging self-esteem.
Says the ever-helpful Bill: “I just want the American people to know that he’s confident that we are going to get out of this and he feels good about the long run.”
It’s hard to muster moxie with stocks shriveling, Chris Dodd talking nationalization, and Paul Volcker making Chicken Little sound cheery — “I don’t remember any time, maybe even in the Great Depression,” he said, “when things went down quite so fast, quite so uniformly around the world.”
With this economy, as William Goldman famously said of Hollywood, “Nobody knows anything.” The only thing to fear is … everything.
We dutifully cut back on Starbucks macchiatos, designer water and even Girl Scout cookies, but we keep hurtling down.
While W. and Dick conjured an alternative reality about Iraq, our avaricious bankers created an alternative reality about our financial system. Now our busted trust is not so easily fixed.
In an Associated Press article headlined “Obama Plans Eclipsing New Deal Spending,” the Rutgers University political science professor Ross Baker notes, “Not surprisingly, people are wary of some very expensive proposals with no guarantee of success or even a high probability of how well they’ll work.”
In The Times, Eric Dash reported that Wall Street is losing confidence in Washington’s vague and shifting plans, sending shares of bank companies plunging to new lows on Friday.
President Obama disdains sound bites, and he does not have Bill Clinton’s talent for reducing the abstruse to aperçus. We wanted someone smart to gather a bunch of smart people around him to get us out of this fix. But Mr. Obama’s egghead manner has failed to soothe a nation with the jits. Maybe he has been so intent on avoiding the stereotype of the Angry Black Man, as he wrote in his memoir, that it’s hard for him to connect with and articulate public anger about our diminishment.
Though he demonstrated in the campaign that he has a rare gift for inspiring the country with new belief in itself, Mr. Obama has not yet captured either the grit the moment requires or the fury it provokes. He has not explained in a compelling way why Americans who followed the rules need to sacrifice more to help those who flouted the rules.
That is why the CNBC reporter Rick Santelli struck a populist nerve with his screed about the unfairness of responsible homeowners picking up the tab for irresponsible homeowners — following the unfairness of taxpayers who are losing jobs, homes and savings propping up the exact same bankers and carmakers whose greed and myopia caused the economy to crash.
He spoke for those who want a pound of flesh. With the Wall Street bailout, Mr. Obama at least gave bankers a bit of the belt, and capped their pay. But homebuyers who wanted more than they could afford seem to be getting a free ride.
Yet Obama is oozing empathy compared with his attorney general, who last week called us “a nation of cowards” about race.
Eric Holder, who showed precious little bravery in standing up to Clinton on a pardon for the scoundrel Marc Rich, is wrong. We have just inaugurated a black president who installed a black attorney general.
We need leaders to help us through our crises, not provide us with crude evaluations of our character. And we don’t need sermons from liberal virtuecrats, anymore than from conservative virtuecrats.
In the middle of all the Heimlich maneuvers required now — for the economy, Iran, Pakistan, Afghanistan, health care, the environment and education — we don’t need a Jackson/Sharpton-style lecture on race. Barack Obama’s election was supposed to get us past that.
Besides, the president has other issues that demand his passion.
Here’s The Moustache of Wisdom:
Reading the news that General Motors and Chrysler are now lining up for another $20 billion or so in government aid — on top of the billions they’ve already received or requested — leaves me with the sick feeling that we are subsidizing the losers and for only one reason: because they claim that their funerals would cost more than keeping them on life support. Sorry, friends, but this is not the American way. Bailing out the losers is not how we got rich as a country, and it is not how we’ll get out of this crisis.
G.M. has become a giant wealth- destruction machine — possibly the biggest in history — and it is time that it and Chrysler were put into bankruptcy so they can truly start over under new management with new labor agreements and new visions. When it comes to helping companies, precious public money should focus on start-ups, not bailouts.
You want to spend $20 billion of taxpayer money creating jobs? Fine. Call up the top 20 venture capital firms in America, which are short of cash today because their partners — university endowments and pension funds — are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way. If they go bust, we all lose. If any of them turns out to be the next Microsoft or Intel, taxpayers will give you 20 percent of the investors’ upside and keep 80 percent for themselves.
If we are going to be spending billions of taxpayer dollars, it can’t only be on office-decorating bankers, over-leveraged home speculators and auto executives who year after year spent more energy resisting changes and lobbying Washington than leading change and beating Toyota.
I’ve been traveling all across the country on a book tour, and every evening I return to my hotel with my pockets full of business cards from inventors in clean energy. Our country is still bursting with innovators looking for capital. So, let’s make sure all the losers clamoring for help don’t drown out the potential winners who could lift us out of this. Some of our best companies, such as Intel, were started in recessions, when necessity makes innovators even more inventive and risk-takers even more daring.
Yes, we have to shore up the banking system, which underpins everything; and finding a fair way to prevent hardworking people, who played by the rules, from losing their homes to foreclosure is both right and essential for stability.
But beyond that, let’s think, talk and plan in more aspirational ways. We’re down, but we’re not out. As we invest taxpayer money, let’s do it with an eye to starting a new generation of biotech, info-tech, nanotech and clean-tech companies, with real innovators, real 21st-century jobs and potentially real profits for taxpayers. Our motto should be, “Start-ups, not bailouts: nurture the next Google, don’t nurse the old G.M.’s.”
To be fair, the stimulus package that the Obama team and the Democrats in Congress recently passed — with virtually no Republican help — goes some way toward doing just that. Hat’s off for that. Now let’s do more.
The renewable-energy business — wind, solar and solar thermal — was almost dead in this country. Most new projects stopped last fall because they depended for their financing on selling their renewable energy tax credits to Wall Street firms. As those Wall Street firms went bust or suffered steep losses, they had no need for tax credits because they had no profits to offset. The stimulus package created a mechanism for renewable energy innovators to bypass Wall Street and monetize their tax credits directly through the U.S. Treasury, for any project that starts between now and the end of 2010.
The wind and solar industries in America “were dead in the fourth quarter,” said John Woolard, chief executive of BrightSource Energy, which builds and operates cutting-edge solar-thermal plants in the Mojave Desert. Almost five gigawatts of new solar-thermal projects — the equivalent of five big nuclear plants — at various stages of permitting were being held up because of a lack of financing.
“All of these projects will now go ahead,” said Woolard. “You are talking about thousands of jobs … We really got something right in this legislation.”
These jobs will be in engineering, constructing and operating huge solar systems and wind farms and manufacturing new photovoltaics. Together they will drive innovation in all these areas — and move wind and solar technology down the cost-volume learning curve so they can compete against fossil fuels and become export industries at the “ChinIndia price,” that is the price at which they can scale in China and India.
That is how taxpayer money should be used to stimulate: limited financing, for a limited time, targeted on an industry bristling with new technology start-ups that, with a little push from Uncle Sam, won’t just survive this crisis but help us thrive when it is over. We need, and the world needs, an America that is thriving not just surviving.
Here’s Mr. Kristof, writing from Goz Beida, Chad:
So I’m bunking with George Clooney in a little room in a guest house here in eastern Chad, near Darfur in Sudan. We each have a mattress on the floor, the “shower” is a rubber hose that doesn’t actually produce any water, and George’s side of the room has a big splotch of something that sure looks like blood.
He’s using me to learn more about Darfur, and I’m using him to ease you into a column about genocide. Manipulation all around — and, luckily, neither of us snores. (But stay tuned to this series for salacious gossip if he talks in his sleep.)
The slaughter in Darfur has continued for six years largely because world leaders have been complacent and preoccupied. In the coming weeks, the International Criminal Court is expected to issue an arrest warrant for Sudan’s president, Omar Hassan al-Bashir, for orchestrating the killings — and that will give the world a new opportunity to end the slaughter.
But to seize that opportunity, world leaders will have to summon some of the same moral courage that Darfuris show all the time.
Take Suad Ahmed, who is in the pantheon of my personal heroes. I introduced her to George in her little thatch hut.
Suad, 27, fled from Darfur to a refugee camp in Chad five years ago with her husband and beloved younger sister, Halima, who is now 12 — if she is still alive.
Then Sudan dispatched its janjaweed militias into Chad to slaughter members of black African tribes — applying to eastern Chad the same genocidal policies that had already gutted Darfur.
Shortly before I met Suad two years ago, she was out gathering firewood with Halima. A group of janjaweed fired into the air and yelled at them to stop.
Suad, who was married with two children and another on the way, ordered Halima to run back to camp. Then Suad made a decoy of herself and ran loudly in the opposite direction, making sure that the janjaweed saw her.
That night, after the janjaweed had left, the men from the camp found Suad semiconscious in the bush, brutally beaten and raped.
Suad refused medical treatment, for fear that word would get out that she had been raped, and she didn’t even tell her husband, instead saying that she had been robbed and beaten. Yet she revealed the full story to me and allowed me to use her name.
I grilled her to make absolutely sure she understood the dangers of publicity — from stigma and revenge — and finally asked her why she was willing to assume the risks. She replied simply, “This is the only way I have to fight genocide.”
Ever since, in a world that has proved so craven in the face of Sudan’s genocide, Suad’s courage has haunted me. Thus on this trip I tracked her down and introduced her to George and to Ann Curry of NBC News, who for years has borne powerful witness to the madness of Darfur.
Alas, Suad’s latest news isn’t good. Her back, injured in the beating, still pains her. She doesn’t dare go outside the camp to get firewood, so she must buy wood, which leaves the family poor and short of food. Her baby, Abdel Malik, whom she was carrying at the time of the rape, is one and a half years old and was just hospitalized for malnutrition.
The most heartbreaking news concerns Halima. Ten months ago, Halima decided to go back to Darfur to the camp where her parents were living. They had sent messages that they were sick, and that there were too many soldiers around for them to escape to Chad.
So Halima, at age 11, resolved to walk back through janjaweed lines into Darfur to rescue her parents and bring them to safety.
The girl disappeared into the desert.
“I haven’t heard from her since,” Suad said grimly. “I don’t know if she got there, or if she was killed on route.” Suad has spent a fair amount of money trying to call people in the camp to find out news of her sister and parents, but she has found out nothing. We tried with our satellite phones and couldn’t get through either.
This is my 10th trip to Darfur and the area around it, and people always ask how reporters and aid workers keep their sanity among such horrors. Yet the truth is that genocide spotlights not only the worst of humanity, but also the best — the courage and altruism of people like Suad and Halima.
So the most indelible memories I will take back from the region aren’t from my famous roommate on the mattress beside me, but from uncommon heroes like Suad and Halima. We can learn so much from them.
And now here’s Mr. Rich:
And so on the 29th day of his presidency, Barack Obama signed the stimulus bill. But the earth did not move. The Dow Jones fell almost 300 points. G.M. and Chrysler together asked taxpayers for another $21.6 billion and announced another 50,000 layoffs. The latest alleged mini-Madoff, R. Allen Stanford, was accused of an $8 billion fraud with 50,000 victims.
“I don’t want to pretend that today marks the end of our economic problems,” the president said on Tuesday at the signing ceremony in Denver. He added, hopefully: “But today does mark the beginning of the end.”
Does it?
No one knows, of course, but a bigger question may be whether we really want to know. One of the most persistent cultural tics of the early 21st century is Americans’ reluctance to absorb, let alone prepare for, bad news. We are plugged into more information sources than anyone could have imagined even 15 years ago. The cruel ambush of 9/11 supposedly “changed everything,” slapping us back to reality. Yet we are constantly shocked, shocked by the foreseeable. Obama’s toughest political problem may not be coping with the increasingly marginalized G.O.P. but with an America-in-denial that must hear warning signs repeatedly, for months and sometimes years, before believing the wolf is actually at the door.
This phenomenon could be seen in two TV exposés of the mortgage crisis broadcast on the eve of the stimulus signing. On Sunday, “60 Minutes” focused on the tawdry lending practices of Golden West Financial, built by Herb and Marion Sandler. On Monday, the CNBC documentary “House of Cards” served up another tranche of the subprime culture, typified by the now defunct company Quick Loan Funding and its huckster-in-chief, Daniel Sadek. Both reports were superbly done, but both could have been reruns.
The Sandlers and Sadek have been recurrently whipped at length in print and on television, as far back as 2007 in Sadek’s case (by Bloomberg); the Sandlers were even vilified in a “Saturday Night Live” sketch last October. But still the larger message may not be entirely sinking in. “House of Cards” was littered with come-on commercials, including one hawking “risk-free” foreign-currency trading — yet another variation on Quick Loan Funding, promising credulous Americans something for nothing.
This cultural pattern of denial is hardly limited to the economic crisis. Anyone with eyes could have seen that Sammy Sosa and Mark McGwire resembled Macy’s parade balloons in their 1998 home-run derby, but it took years for many fans (not to mention Major League Baseball) to accept the sorry truth. It wasn’t until the Joseph Wilson-Valerie Plame saga caught fire in summer 2003, months after “Mission Accomplished,” that we began to confront the reality that we had gone to war in Iraq over imaginary W.M.D. Weapons inspectors and even some journalists (especially at Knight-Ridder newspapers) had been telling us exactly that for almost a year.
The writer Mark Danner, who early on chronicled the Bush administration’s practice of torture for The New York Review of Books, reminded me last week that that story first began to emerge in December 2002. That’s when The Washington Post reported on the “stress and duress” tactics used to interrogate terrorism suspects. But while similar reports followed, the notion that torture was official American policy didn’t start to sink in until after the Abu Ghraib photos emerged in April 2004. Torture wasn’t routinely called “torture” in Beltway debate until late 2005, when John McCain began to press for legislation banning it.
Steroids, torture, lies from the White House, civil war in Iraq, even recession: that’s just a partial glossary of the bad-news vocabulary that some of the country, sometimes in tandem with a passive news media, resisted for months on end before bowing to the obvious or the inevitable. “The needle,” as Danner put it, gets “stuck in the groove.”
For all the gloomy headlines we’ve absorbed since the fall, we still can’t quite accept the full depth of our economic abyss either. Nicole Gelinas, a financial analyst at the conservative Manhattan Institute, sees denial at play over a wide swath of America, reaching from the loftiest economic strata of Wall Street to the foreclosure-decimated boom developments in the Sun Belt.
When we spoke last week, she talked of would-be bankers who, upon graduating, plan “to travel in Asia and teach English for a year” and then pick up where they left off. Such graduates are dreaming, Gelinas says, because the over-the-top Wall Street money culture of the credit bubble isn’t coming back for a very long time, if ever. As she observes, it took decades after the Great Depression — until the 1980s — for Wall Street to fully reclaim its old swagger. Not until then was there “a new group of people without massive psychological scarring” from the 1929 crash.
In states like Nevada, Florida and Arizona, Gelinas sees “huge neighborhoods that will become ghettos” as half their populations lose or abandon their homes, with an attendant collapse of public services and social order. “It will be like after Katrina,” she says, “but it’s no longer just the Lower Ninth Ward’s problem.” Writing in the current issue of The Atlantic, the urban theorist Richard Florida suggests we could be seeing “the end of a whole way of life.” The link between the American dream and home ownership, fostered by years of bipartisan public policy, may be irreparably broken.
Pity our new president. As he rolls out one recovery package after another, he can’t know for sure what will work. If he tells the whole story of what might be around the corner, he risks instilling fear itself among Americans who are already panicked. (Half the country, according to a new Associated Press poll, now fears unemployment.) But if the president airbrushes the picture too much, the country could be as angry about ensuing calamities as it was when the Bush administration’s repeated assertion of “success” in Iraq proved a sham. Managing America’s future shock is a task that will call for every last ounce of Obama’s brains, temperament and oratorical gifts.
The difficulty of walking this fine line can be seen in the drama surrounding the latest forbidden word to creep around the shadows for months before finally leaping into the open: nationalization. Until he started hedging a little last weekend, the president has pointedly said that nationalizing banks, while fine for Sweden, wouldn’t do in America, with its “different” (i.e., non-socialistic) culture and traditions. But the word nationalization, once mostly whispered by liberal economists, is now even being tossed around by Lindsey Graham and Alan Greenspan. It’s a clear indication that no one has a better idea.
The Obama White House may come up with euphemisms for nationalization (temporary receivership, anyone?). But whatever it’s called, what will it mean? The reason why the White House has been punting on the new installment of the bank rescue is not that the much-maligned Treasury secretary, Timothy Geithner, is incapable of getting his act together. What’s slowing the works are the huge political questions at stake, many of them with consequences potentially as toxic as the banks’ assets.
Will Obama concede aloud that some of our “too big to fail” banks have, in essence, already failed? If so, what will he do about it? What will it cost? And, most important, who will pay? No one knows the sum of the American banks’ losses, but the economist Nouriel Roubini, who has gotten much right about this crash, puts it at $1.8 trillion. That doesn’t count any defaults still to come on what had been considered “good” mortgages and myriad other debt, whether from auto loans or credit cards.
Americans are right to wonder why there has been scant punishment for the management and boards of bailed-out banks that recklessly sliced and diced all this debt into worthless gambling chips. They are also right to wonder why there is still little transparency in how TARP funds have been spent by these teetering institutions. If a CNBC commentator can stir up a populist dust storm by ranting that Obama’s new mortgage program (priced at $75 billion to $275 billion) is “promoting bad behavior,” imagine the tornado that would greet an even bigger bank bailout on top of the $700 billion already down the TARP drain.
Nationalization would likely mean wiping out the big banks’ managements and shareholders. It’s because that reckoning has mostly been avoided so far that those bankers may be the Americans in the greatest denial of all. Wall Street’s last barons still seem to believe that they can hang on to their old culture by scuttling corporate jets, rejecting bonuses or sounding contrite in public. Ask the former Citigroup wise man Robert Rubin how that strategy worked out.
We are now waiting to learn if Obama’s economic team, much of it drawn from the Wonderful World of Citi and Goldman Sachs, will have the will to make its own former cohort face the truth. But at a certain point, as in every other turn of our culture of denial, outside events will force the recognition of harsh realities. Nationalization, unmentionable only yesterday, has entered common usage not least because an even scarier word — depression — is next on America’s list to avoid.