David Reynolds | Smokescreen
Did you fall for it? Did you have so much smoke in your eyes that you failed to see the real issue, the big bucks and the bigger picture? I can understand. It is easier to see money on trees than the economic vitality of the forest.
That was a very smart diversionary tactic by the president and his congressional spin masters. We bought it hook, line and economic sinker. Don’t worry about the whole picture, just get angry at that speck of dust on the frame. Don’t worry that we threw away hundreds of billions of our dollars like spaghetti against a wall, hoping that some of it would stick. And don’t worry about money provided foreign banks, about hedge fund bets or about short selling the housing sector. No need to worry about anything, just as long as our T-men are in action.
If you must, go ahead and keep talking about those AIG bonuses. We can understand them a heck of a lot better than the complexities of credit-default swaps or whatever a derivative is. It is hard to get mad at anything you don’t understand.
Therefore the smokescreen was established to have you turn your head away from seeing the whole picture. Focus on what you know. Don’t do the heavy lifting necessary to learn the latest twist going into the black hole we call global finance.
I thought as adults we had put away childish games — the game of getting even. I thought we knew that to hurt the other guy is not the same as helping yourself. The current strategy is not new. During the Viet Nam war the White House had the Viet Cong body count smokescreen going strong. It was designed to show the nation that we were winning the war. It worked. At least until the truth won out.
So, how long will it take the smoke to clear for us to see the truth? When will we realize that attempting to take back $165 million plus in bonus money is 0.001 of the amount we gave away in four easy installments to the same gang?
Well, I guess you can say we may get one-thousandth of our gamble back. But that’s all. We live in a touchy-feely society. If getting even makes you feel better, so what. It’s the right touch. Some day we may be able to put our heads back on and cool it.
Here’s my thinking on the AIG foolishness. You have a business friend who is hurting for some cash. You lend him money. But he needs more. Much more. All along you knew he wasn’t selling insurance as he claimed, but was a Vegas high roller. Question No. 1: Who made the mistake? You! You lent the money using poor judgment. Hope won out over reality. Question No. 2: So why blame AIG and not ourselves? Ask Pogo, he knows. Animals can see through smokescreens.
Remember, there are bigger fish to fry. They swim inside the Capital Beltway. And their time is measured in even numbered years. So hold off your personal anger until the next election. Don’t vilify corporate America. Vilification is not the answer — unless, of course, you are a president or a member of congress with another agenda up your sleeve. After all, as we have been told, a crisis is a terrible thing to waste.
But, please, please, don’t worry. Don’t get discouraged. You are not alone. The polls prove it. Gallup tells us that 83 percent believe that Mr. Obama’s steps will not bring about a happy dance. And the same poll tells us that 69-78 percent believe bigger government and inflation are in their future. Rasmussen tells us that by a 46-41 margin the people oppose the president’s budget. That same poll also tells us that by a 48-36 margin that the plan to help homeowners refinance their mortgage is unfair, benefiting those who have been irresponsible. Pew Research tells us that only 30% of Americans think it is right to provide reverse auto loans, from us to the car manufacturer. And get this: 45% say they do not have confidence in Mr. Obama’s goals and overall direction, a number that has grown over recent days! Conclusion: The public’s confidence in our government is low and going lower. This is far more important than whatever the Dow did today.
Ain’t America grand! The people can be fooled for a while. But we always have the last word. Why? Because Americans, after trying everything else, eventually get it right.
But that begs the question on the horizon, one being asked after having been robbed by those outside of government and fooled by those inside. It is what worries the Fed chairman who said, “The biggest risk is that we don’t have the political will. That we don’t have the commitment to solve this problem, and that we let it just continue. In which case, we can’t count on recovery.”
Don’t worry, Ben, we have the will. And maybe someone will have the smarts.
– Column by David Reynolds