Friday, December 5, 2008
On the Edge of Our Armchairs
Time has the reputation for being a clock. It's not. It's what you make it and the National Bureau of Economic Research has decided to make it disappear from recent memory.
They have collapsed all semblance of the time stamp continuum into the newly revised start date of our dark and stormy economic night. This leaves the media to fish through its Blackberry-world view for competing forecasts of a morning still seasons away. This leaves you and me to glint through our jaundiced eyes at what was happening a year before the Bureau had hindsight at its back:
* Investment houses that have since collapsed were lavishing their traders with larger-than-lifetime Christmas bonuses
* The Illinois AG inhaled the first public whiff of Countrywide a year ago next week
* Citigroup lost more money the last quarter of '07 than any team in the history of capitalism but the mullahs flush on $100 and rising oil are the rescue package of choice (back in the day)
No bailout package will go wide or deep enough to dig out the worthless debts piled at the fringes of our great ownership society. Could this new revisionist history be a step forward? Is it the prequel that spares the sequel? Prequels emancipate us from the present mess and what could be a worse sequel than a messy recession -- a really deep recession? Perhaps lengthening the unendurable by a year will make temporary the perils staring us down and make permanent the promises we've yet to keep -- and we will keep them, right?
I urge PE Obama to reconsider that the Bureau did not go far enough. What if the starting times could be pushed back to '06? Then we'd really be due for a rally. Two years? That's so ancient the Surge was just a glimmer on the horizon, as was an Obama candidacy.
It's as if the high-pressure tactics used to rush borrowers through their loan closings could be replayed ahead of the panicking herds. A positive ID could be made. The financial whizzes who engineered complex debt instruments would be stuck with owning the agreements. They couldn't honor them but there's nothing complicated about criminalizing their creative genius -- at least until gravity returns to the weightless and value returns to valuations.
What's the good in that? Look at the politics. The unimaginative middle class stops looking at its wanting to play by the rules as a serious mental flaw. That is the going price for justice. And it needs to be settled before a single innocent borrower plead for the same loan forgiveness as our competing titans of victimized industries.
As we lurch from the banks to the cars to the credit cards and the retailers we wonder what deadening balance can absorb another pendulum swing. A year ago we began to see "that the economy will pay a price for the speculative binge of the last two decades." What the last year has taught us is that the return of gravity doesn't usher in normalcy. It spirals us into a moribund orbit. Our shackles mire us in crisis mode --not moderation as Bernanke had hoped. The opposite of extreme is not moderation. It is the opposite extreme. The only way to achieve moderation is to subsume our excesses.
Say, we've got a nameless decade that's coming to a close a little more than a year from now? What would the National Bureau of Economic Research name the 00s ('uh-ohs") if we had 2010 hindsight today?
- Marc Solomon
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