As Warren Buffett, the seer of Omaha, once said, “When the tide goes out, we learn who’s been swimming naked.” By that criterion, the most-admired capitalist nation in the world has turned into a nudist camp. Between the daily exposure of financial crooks and collapsing blue-chip institutions, it’s clear that the good times we thought we knew in this country were nothing but a mirage, a delusional exercise in smoke and mirrors.
Something sinister has begun to permeate the collective psyche. It didn’t need the swiftly dubbed “Mini Madoff” Robert Allen showing up in the New York Times yesterday as the latest multibillion-dollar con man to be frogmarched from his office by the forces of justice. It didn’t need the awful spectacle of the former revered titans of Wall Street sitting there before Congress last week like sheepish shoplifters in the dock as Gary Ackerman of New York and Maxine Waters of California threw verbal rotten tomatoes at them. Nor did it need yesterday’s stock-market plunge, and another stomach-clutching Wall Street Journal email alert that GM was about to seek an additional $16.6 billion in federal aid. If only it could be done without the tragic cost to so many people who don’t deserve it—47,000 jobs worldwide from GM alone!
We know too much now about the hollowness of institutions and the frailty of their leaders.
The sinister feeling that’s begun to take hold is that maybe this staggering, contagious collapse we’re living through is a necessary outcome that should not be thwarted. As consumers we’ve all been living on borrowed time as much as borrowed money—and deep down we knew it. And now Obama’s “rescue plans” don’t really feel like rescue plans at all. They feel like just another deluded way to postpone the inevitable reckoning. Even as the whole world tries to hang on to its job, there is also this weird parallel sense—almost a covert longing—that the old corrupt structures on which that job depends needs to be, ought to be, swept away. A new beginning for America!
The market understands that. For a guy who believes in hope, Obama doesn’t seem to be able to spread much of it around. How can he? We know too much now about the hollowness of institutions and the frailty of their leaders. Tim Geithner, Larry Summers, and their teams of economic wonks—“propeller heads,” Obama himself calls them—haven't a clue how to instill in us a reviving leap of faith.
Maybe it’s because we had to listen last October to the bizarre testimony of the last genius we deified as an infallible savant: Alan Greenspan. The former Federal Reserve chairman told the House Committee on Government Oversight and Reform that he was in a state of “shocked disbelief” that lending institutions unfettered from regulation “did not self-regulate to protect shareholders’ equity.” That’s the trouble with spending too much time with other propeller heads who mistake the university for the universe. You forget all about human nature and how even the best among us can be corrupted by access to big fast money. To save the banking system, Greenspan, along with a claque of Republicans like Lindsey Graham, now endorses nationalization. Obama himself touts “the Swedish model,” which sounds like a frisky playmate for the Stimulus Package.
One of the biggest ironies of the new administration’s predicament is that campaign rhetoric about changing the ethical climate of Washington is in danger of locking the new president into increasingly rarified advice. If only for PR reasons, it would have been nice to see one bluff, practical CEO from a company that’s actually makes something participating in the planning of the fate of the auto companies. Meanwhile, at Treasury, it’s become so difficult to find qualified people not tainted by Wall Street that there are a worrisome number of vacancies for assistant secretaries and undersecretaries. The Washington Post reported yesterday that the handful of midlevel staffers who have started to work are still groping around trying to find their offices and getting their building passes and BlackBerrys. Is that why Obama felt he had to give the job to propellerhead-in-chief Geithner and the now impossibly powerful Summers—and, while he was at it, give them the auto bailout to deal with, too? The workload is insane. Maybe on Sundays they could help George Mitchell out with the Middle East peace process. Geithner was already being crucified for not having “thought through” the details of the bank-rescue plan. He hadn’t even had time to think through where the men’s room is.
Cable TV is the only place left that has an appetite for pretending that public figures and talking heads have “answers.” Every other smart person trained to think about these things trails off into silence when the inevitable bailout conversations happen. (“I don’t know…..” they finally reply after a ten-minute burst of animated debate. “It’s a problem…..”) People who aren’t paid to be pundits are perfectly well aware that no one knows anything and everyone who tells you they are doing well is probably lying. Or if they’re not, like the banks, they’re just patients who haven’t got the stress-test results back.
Tina Brown is the founder and editor-in-chief of The Daily Beast. She is the author of the 2007 New York Times bestseller The Diana Chronicles. Brown is the former editor of Tatler, Vanity Fair, The New Yorker, and Talk magazines and host of CNBC's Topic A with Tina Brown.