While I was hiding late last week through last weekend in the Mendocino redwoods with friends celebrating anniversaries and times spent there in the simpler world of the early 70’s, America shifted into full-on Populist Revolt-time. Maybe it was the AIG-bonus massacre, maybe Madoff, maybe Geithner’s still unready for primetime presentations of this and that staggering new program, maybe the Cable News and Talking Heads’ onslaught of video clips from protesters with those Anti-FatCat signs (I particularly like the Oliver Twist – ‘Please Sir, May I have Some More,’ one).
Perhaps it is the drumbeat, starting softly last Fall, and growing in urgency with revelations of wretched excess and corporate risk-taking madness, growing even louder since, but my return from a four-day trip feels like I’ve been away for months and have returned to something which once again feels like we are caught in the throes of another B-Movie screenplay, splashed across American Media.
Many of us thrilled to monster movies as kids; we now have Financial Monster movies playing 24/7 for News Junkies who cannot resist (Guilty!). I see this morning that AIG has taken its Manhattan HQ sign down and plans to put up another: “AIU Holdings,” as if this bit of stealth anonymity will shield them from the gathering storm.
And the stock market is going absolutely bananas as this week opens, greeting the long overdue news of the Bank Bailout – Let’s Make a Toxic Asset Deal! – and all we need now is Monty Hall and a cheesy game show background with some canned studio audience laughter. But, economists like Paul Krugman of NYT are not happy about this plan at all. In his “Financial Policy in Despair,” column Monday, Prof. Krugman’s blunt criticism that this only “recycle[s] Bush administration policy — specifically, the ‘cash for trash’ plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson,” and darkly concludes, “this is more than disappointing. In fact, it fills me with a sense of despair.”
Krugman’s main beef is that the plan gives all the upside to the private investors, whom the Financial Gurus at our nation’s helm fervently pray will now rush in and cherry-pick the gold out of trash-laden bank portfolios, and none of that upside to the American taxpayer, funding yet another Trillion-dollar rescue in these perilous times. Prof. Krugman may have a point there, but we are running out of options.
The problem of our banks continuing to carry these toxic assets that nobody can value (and, seemingly, nobody wants) is like keeping rotten food in your refrigerator – it’s not going to get any better no matter how long you wait, and every time you summon the courage to open the door, you can smell the problem that awaits your committment to deal with the garbage.
The real problem is that the American public can smell the stench of this financial garbage, and it is becoming overpowering, even with the door closed. The public has waited a long time for things to get better, only to be greeted with dire forecasts, promises, and more outrageous news of greedy excess and taxpayer rip-offs. The shantytown encampments called “Hoovervilles” sprung up in and around cities and towns in America during the Great Depression of the 1930’s; Sacramento has one now estimated at some 1200 souls, living near the seat of our state’s government – some have taken to calling it “Bushville.”
In the musical, “Annie,” the song: “We’d Like to Thank You, Herbert Hoover,” is sung in a Hooverville encampment beneath the 59th Street Bridge (a/k/a the Queensboro Bridge) in Manhattan – the very same bridge immortalized just a few decades later in the Simon & Garfunkel tune, “Feelin’ Groovy,” also known as the “59th St. Bridge Song” (“Parsley, Sage, Rosemary and Thyme,” (1966)).
And, some are now calling the handling of the AIG Bonus Debacle, President Obama’s very own ‘Katrina Moment.’ (Frank Rich’s over-the-weekend, March 21, NYT column). Just like the now famous, but variously attributed, quote that ‘a Recession is a Terrible Thing to Waste,’ presidential popularity poll ratings are very fragile things – just ask Michael Dukakis and so many others – how soon does this burgeoning populist frenzy, incessantly nurtured by our ever-fawning Media and 24/7 access to everything on every electronic gizmo imaginable, turn into crashing polls and dramatic shifts in the electorate’s views? The days of a honeymoon for a new president are long gone now and, yes, it is perhaps unfair to rate a new president based on little more than two months in office, but, that’s our sound-bite world and we live in it.