Unhappy New Decade (A Rant)
posted by Lawrence Cunningham
This century’s inauspicious beginnings, marred by terrorist attacks on Sept. 11, 2001 and 2001-02’s corporate ruination at Enron and a half-dozen likewise fraudulent industrial companies, are eerily echoed by this decade’s ill-fated close, marred by the terrorist airplane assault on Christmas Day 2009 and ruination at AIG, Bear Stearns, Citicorp and a score of likewise irresponsible financial companies in 2008-09.
Official responses to the earlier ills were remarkably unsuccessful, offering greater occasion for political grandstanding and gains to the powerful than justifiable comfort to citizens. After 9/11, the Bush administration and Congress renovated and expanded government bureaucracy and waged two costly, endless, losing wars, with the losers being travelers, soldiers and taxpayers and the winners those in command of government, the military and companies benefiting from procurement and administration.
Despite weekend blathering from an Obama administration official, suggesting the 2009 Christmas bomber’s botched plans showed the Bush-installed system works, the system failed. And despite that failure, already official responses are making air travel even more difficult, costly and painful, with no basis for believing that official steps will be on target.
The Obama administration needs to correct this by implementing recommendations of the 9/11 Commission, like matching known terrorists to airline flight reservation systems, not putting passengers through inspection charades, like removing shoes and opening lap tops, designed more to keep us flying than prevent terrorists from flying.
After Enron, government enacted Sarbanes-Oxley, purporting to crack down on accounting abuses, installing a potpourri of measures advertised to end large financial frauds. Results were enormous costs imposed on many companies and big profits for auditing firms. Though benefits included superior audits for many companies, the financial crisis shows how wildly off-target that political response to obvious problems was.
Investors gained something from better general audits, but lost enormous wealth from galactic failure by both government officials and financial executives. The Federal Reserve, SEC, bank regulators, Congress and financial institution leaders should face up to their failures in allowing or promoting the proliferation of exotic securities whose risk attributes no one understood.
Once again, however, nothing of that sort is likely, and the response by government and business so far has been wildly off-target, hurting citizens while helping political and financial elites. The focus has been on how banks made billions of dollars in irresponsible loans to people who could not document their ability to repay them.
As reflected in President Obama’s unsuccessful jawboning of lenders to get lending going again, the response so far has been curtailed lending and increased hurdles borrowers must surmount before obtaining financing. It has become extraordinarily difficult for the most credit-worthy small businesses and hopeful home-owners to get loans, with loan officers and bank underwriters requesting, often repeatedly and sometimes maliciously, the most absurd documentation.
Characteristic of the century’s first decade, this off-target over-reaction simply ignores those at the heart of problems, primarily senior politicians, regulators and financial executives. Of course the financial crisis arose from low-level bank employees authorizing irresponsible loans to irresponsible individuals.
But this was allowed and promoted by high-paid bankers peddling global securities products under the indifferent oversight of officials in the Federal Reserve, SEC and Congress. It will not be cured by having low-level employees harass creditworthy potential borrowers. Meanwhile, legislation on the matter is stalled, with high-paid K Street lobbyists showering politicians with gifts on behalf of highly-paid banking executives. And high finance keeps innovating intricate products, rewarded with sizable bonuses.
The terrorism of 9/11 and Christmas 2009 is complex and may be intractable. And while low-level airport employees, private and public sector, may bear some fault, ultimate responsibility and blame goes to political, diplomatic and military leaders, not those employees and certainly not travelers—the only ones who actually disrupted the terrorist.
The President and his administration should look inward to find fault and solutions, and certainly not claim the system is working. There’s reason to be skeptical and gloomy about whether they’ll do so, however, and one can forecast another unhappy decade coming, with everything at risk from travel plans and safety to financial goals and security. Yet given how bad the past decade was, the hopeful still will want to shout Happy New Year at this week’s end.
December 29, 2009 at 11:18 am
Posted in: Current Events
Print This Post
Responses (8)
Landline - December 29, 2009 at 12:06 pm
Whew. Aside from that, how was the play Mrs. Lincoln?
A.J. Sutter - December 29, 2009 at 6:24 pm
Cheer up — the decade ends on 12/31/2010 (just as the century began on 01/01/2001). It’s got time to improve.
Jake - December 29, 2009 at 6:49 pm
As far as fighting terrorism goes, the Bush Administration’s signal omission was its failure to drop a 100-megaton warhead on Mecca on 9/12/2001. The animals who wish us nothing less will never understand anything less.
And the Obama Administration’s reaction to the attempted Christmas Day airliner bombing resembles nothing so much as a Roman bureaucrat, circa AD 100, complaining about how the Gauls smell, speak, and appear.
The Bush Administration had its faults, but, for God’s sake, one never had the current sense that matches are in the hands of ignorant children in the dynamite shack.
Bruce Boyden - December 29, 2009 at 7:10 pm
Jake, how exactly would murdering millions of innocent people solve anything?
The Law in 2009 (and what’s to come!) | usDemoCrazy - December 30, 2009 at 12:58 am
[...] Finally, Concurring Opinions just gives us a good ol’ fashion RANT: This century’s inauspicious beginnings, marred by terrorist attacks on Sept. 11, 2001 and 2001-02’s corporate ruination at Enron … are eerily echoed by this decade’s ill-fated close… [...]
Christa - December 30, 2009 at 9:17 am
Things will look up eventually; once the market regains some certainty, maybe many other things will get rose-colored glasses. Being a military wife, I get more and more upset about the escalating war and security threats like the Christmas attempted attack, but I rarely feel hopeless unless I talk with people who are fearful about the stability of the economy.
Paul Horwitz - December 30, 2009 at 10:44 am
Jake, my recollection may fail me here, but I’m pretty sure some folks did have the nagging sense from time to time during the Bush Administration that matches were in the hands of ignorant children in the dynamite shack. That is, as they say on the blogosphere, IIRC.
Jake - January 1, 2010 at 7:12 pm
Paul — then please consider the Clinton Administration, asleep at the wheel (due to the good cigar and blue dress lullaby), while the forces of international terrorism grew unopposed, only to be dumped on Bush.
Tag. Your turn.
Leave a Reply