99 percent watch: Suitable for the teach-in!

FRIDAY, OCTOBER 14, 2011

Do we know how to explain it: Paul Krugman’s column today is quite basic.

For that reason, we’ll recommend it for the teach-in.

In his piece, Krugman goes over the way we all got here. We like the fact that a ranking professor knows how to keep it simple:
KRUGMAN (10/14/11): Above all, the long crusade against financial regulation, the successful effort to unravel the prudential rules established after the Great Depression on the grounds that they were unnecessary, ended up demonstrating—at immense cost to the nation—that those rules were necessary, after all.
Financial regulation was needed! We know, we know—that’s very basic. But as a recent survey showed, most citizens can’t even name the current Republican candidates. Simply put, most people don’t follow this stuff with great care.

For that reason, it’s important to learn how to keep this stuff simple.

The Occupy movement has advanced a new math, in which the one percent has ripped everyone off. Most people in that large ripped-off group don’t understand how we got here. If we want people to understand better, we will try to establish forums in which recent history gets explained, in simple terms, to people of various tribes.

(Or do we prefer our favorite pastime—calling average folk names?)

In his next paragraph, Krugman explains the upside-down history found down the GOP’s rabbit-hole. This passage involves basic history, too. It too should be part of the teach-in
KRUGMAN (continuing directly): But down the rabbit hole, none of that happened. We didn’t find ourselves in a crisis because of runaway private lenders like Countrywide Financial. We didn’t find ourselves in a crisis because Wall Street pretended that slicing, dicing and rearranging bad loans could somehow create AAA assets—and private rating agencies played along. We didn’t find ourselves in a crisis because “shadow banks” like Lehman Brothers exploited gaps in financial regulation to create bank-type threats to the financial system without being subject to bank-type limits on risk-taking.
Krugman’s construction here is complex—but his history is simple. According to Krugman, Wall Street pretended that rearranging bad loans could somehow create AAA assets—and rating agencies played along. “Shadow banks” exploited gaps in regulation to create threats to the financial system—without being subject to traditional limits on risk-taking.

People don’t understand what happened. We liberals have rarely tried to tell them. If we want to explain, it has to be simple—and we can’t start by saying they’re very bad people, though this is our tribe’s favorite tale.

Many folk will be able to process the truth. Does our tribe know how to tell it?

21 comments:

  1. I highly recommend the most recent post by John Quiggin at Crooked Timber which looks at the next 19% as well as the 1%; interesting comments, too.
    As to the counter reformation claim of the 53%, Quiggin says it's: "redolent of the Buchana-Nixon plan to 'tear the country in half and take the bigger half'...The fact that anyone could see this slogan as clever politics is an indication....of a hermetically sealed thought bubble like that of the US right.

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  2. Tom M,

    I keep hearing from my fellow liberals about how stupid conservative politicians are supposed to be yet I cannot help but notice that, despite all their indefatigably cited stupidity, they somehow keep beating us in elections.

    In 1968 Nixon and Wallace got 57% of the vote. In 1972 Nixon got over 60%.

    From what I've seen it looks like their hermetically-sealed bubble beats our hermetically-sealed bubble almost every time.

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  3. Which "fellow liberals" keep saying, so that you can "keep hearing," "how stupid conservative politicians are supposed to be?"

    Did anyone ever suggest that Richard Nixon was "stupid"? From what I recall, he was considered one of the smartest, shrewdest and craftiest politicians of all time.

    I think of the various Republicans running. It's clear to me, at least, that Michelle Bachmann, who does have a law degree, and Rick Perry, are not that bright. Rick Santorum strikes me as mentally ill given how fixated he is on homosexual sex and abortion, given that he's neither gay nor a woman. But I cannot think of a single person I know who thinks that Mitt Romney, Herman Cain, John Huntsman, Gary Johnson, or Ron Paul, is "stupid." I'm of two minds about Newt Gingrich; I think he's diabolically smart, but also quite foolish at times, and dangerously so, as we witnessed repeatedly in the 1990s. But I don't think I've ever heard anyone I know, certainly no liberals, "stupid" or "dumb" or anything else.

    There are certainly some stupid Republicans. There are stupid Democrats too. And speaking of election years, Barack Obama won 53% of the vote, or about 7.2 million more votes, than John McCain. Franklin Roosevelt won four consecutive elections over Republicans. Lyndon Johnson defeated a Republican in a blowout in 1964. What exactly is your point in citing Nixon, for example, and not, say, George W. Bush, or McCain, or Ford in 1976, etc.?

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  4. Jeepers, Dude, I was responding to the comment above mine where Tom M said, "As to the counter reformation claim of the 53%, Quiggin says it's: "redolent of the Buchana-Nixon plan to 'tear the country in half and take the bigger half'...The fact that anyone could see this slogan as clever politics is an indication....of a hermetically sealed thought bubble like that of the US right."

    Now, my interpretation of "...[T]hat anyone could see this slogan as clever politics is an indication...of a hermetically sealed thought bubble..." indicates contempt for the intelligence of the people who concocted it. That's pretty obvious, no?

    How about the left's take on Ronald Reagan?

    http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6113387

    I heard a lot about Reagan's stupidity during his reign. The guy beat us though, good and hard.

    And how about George Bush being "misunderestimated?"

    http://politicalhumor.about.com/od/bushquotes/a/dumbbushquotes.htm

    If you don't think that our side regards righties as stupid, my advice to you is to spend some serious time over as Eschaton or (urk!) Pandagon.

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  5. I'm a self-confessed economics idiot, but reading Krugman's column it seems to me that both the unregulated greed of the bankers and the unintended consequences of well-intended government policies and quasi-governmental agencies like Freddie Mac contributed to the debacle. Like so many issues that have gone tribal, I choose my team first, then my team's positions come along with that choice. If I'm a Republican I have to ignore the role of unregulated greed. If I'm a Democrat my team requires me to not notice the role of government. Just like the Tea Party and the OWS: why can't they both be right, to some degree?

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  6. I have a slight quibble with "[w]e liberals have rarely tried to tell them" how the financial crisis happened. Plenty of liberals tried to tell them, just not the ones with the biggest voices. Even members of the Obama Administration itself tried to speak up (Christina Romer) but they were ignored.

    There is something systemically wrong here. Like in "V for Vendetta," everyone knows there is something wrong with the country but no one wants to be the one to take the initiative to change things. No one has the courage to jump off the cliff; and to be honest I must count myself in that number. I'm waiting for a leader to get behind, and one isn't coming.

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