article

02.12.09

Where's The Outrage?

Despite the downward economic spiral, there is no clear plan to pull us out. Dan Rather on why he’s finally getting angry about it.

In this week of seismic economic news, I had the opportunity to talk to one of the very few people who seems to have a real grasp of what’s going on— Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard University and Chair of the Congressional Oversight Panel, which was established by Congress last October alongside its authorization of the Troubled Asset Relief Program (TARP).

In discussing Treasury Secretary Tim Geithner’s newly announced approach to the bank bailout plan and the background and ramifications of the ongoing financial crisis, Professor Warren’s demeanor was every bit as calm, measured, and professional as her credentials would suggest.

Your reporter, however, found that the more he learned, the madder he got.

Outrage is seldom justified and rarely wise, but in this fix it is both. Nevertheless, what we have gotten and are getting still is blather.

In the hours following the interview, a question that had been nagging at me for months now was growing in volume and insistence. That question, regarding the economy and our government, is: Where’s the outrage?

Where is the outrage from We The People? And where is the outrage—or sense of outrage—from the Treasury Department, from Congress, and, yes, from the White House and the new president himself?

We are in a downward economic spiral and the worst is probably yet to come. The situation threatens our own and future generations. Yet there is no transparency, no accountability, and no clearly-stated plan to pull us out.

Outrage is seldom justified and rarely wise, but in this fix it is both. Nevertheless, what we have gotten and are getting still is blather.

We got it from the previous presidential administration and its Treasury secretary, and from both sides of the Congressional aisle. Now we’re getting it from the new office holders. It’s a version of “We know what we’re doing, we’re deep in the process of addressing what’s wrong, but we’re not going to give you any details. And forget about transparency, much less accountability.”

This is not supposed to be the American way. The American way of meeting a challenge of the magnitude we’re facing now does not involve dithering, hiding, or dealing in sophistry.

The last president, Treasury secretary, and Congress somehow failed to grasp this. We had hoped, and still hope—although hope is waning—that the new Washington power structure would be different.

But are they? Do they really get it? Do they understand and are they prepared to act, decisively and quickly, on the core problems?

As I understand it, the most important two things to know about the debacle we’re living through are:

1. There is a fundamental question about whether and when a financial institution is insolvent—that is, whether and when it owes more money than it has in assets. Once that question is answered, we face a choice. Is the wiser course to let an insolvent institution go bankrupt, strip down the equity investments in it, write down the debts, and try to get its balance sheet straight? Or, is it to support the current investors and equity by way of trying to attract more of both?

This is a profound policy question that needs answering, quickly. Treasury Secretary Geithner seemed to be saying in his first news conference Tuesday that he favors the second way. But, frankly, it was hard to know for sure, and it remains unclear whether he really believes that is the best way.

2. Household financial problems are acute for many millions of Americans. They are out of work. They can’t pay their mortgages. They struggle to pay off their credit card debt, having to contend with what not so long ago would have been illegal, usurious interest rates. The stream of revenue that these families produce is declining, drastically and daily.

This winnowing stream represents the lifeblood for Wall Street, for businesses large and small, and for our economy as a whole.

Our elected representatives in Washington need to start seeing these two pictures as components of an interconnected whole—or to start acting as if they do. Our huge economy is comprised of a vast collection of families, and the health of our markets and our financial institutions revolves around those families.

So far, however, there has been little if any real help for these families, the hard-working, trying-to-make-it members of the middle class and the working poor.

Again and again, they are told, “Help is on the way.” Where is it? And while those in power in Washington dither over these people’s problems while prioritizing the problems of financial institutions, where’s the transparency and accountability?

Author’s Note: This piece owes much to my aforementioned interview this week with Professor Warren, who neither has knowledge of nor bears any responsibility for this article. In tone and substance, it is mine and mine alone. Professor Warren can be seen on the next edition of Dan Rather Reports, on the cable and satellite channel HDNet, which will first air next Tuesday night at 8PM Eastern, 7 Central, 5 Pacific time, to be repeated at various times during the week.

Dan Rather is anchor and managing editor of HDNet's Dan Rather Reports. For 24 years he served as anchor and managing editor of the CBS Evening News with Dan Rather. His books include The American Dream, Deadlines and Datelines, The Camera Never Blinks, and The Palace Guard.