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?