Frank Rich has a powerful piece about Michael Lewis’s new book about the Fiscal Collapse, called “The Big Short” in the New York Times today. (Lewis wrote “Liar’s Poker” back in the 80’s which you might have read).
I’ve been very interested in “The Big Short” and wrote a long Comment to the Frank Rich piece which I reproduce here. I hope you enjoy it:
To: Frank Rich at The New York Times:
Staten Island, New York, U.S.A.
March 21st, 2010
Dear Frank Rich,
Thank you for writing about Michael Lewis’s “THE BIG SHORT”.
Since his book came out a few days ago, I have read/heard/seen a half-a-dozen reviews/interviews. As someone who has been seething since Bear Stearns & Lehman, I was delighted to hear about this book, and I give Lewis high marks for approaching his subject as a Story To Be Told. And understood. And embraced. (All very important to our education.)
This is the season –we are told– to “have things rammed down our throats!” But in this case, let the force-feeding of “The Big Short” begin! For all his story-telling skills, there is still a little too much jargon embedded in Lewis’s explanations. Also, it is hard to hear him say that “No one broke any laws.” On a more positive note, he does strike a chord when he talks about Publicly Shaming The Perps. It is vital that we understand the story –it’s hard to be angry when you don’t. And those folks need to feel our anger.
Most of all, we desperately need to understand that it is us, the American Public, –in Lewis’s raw phrase– who have been, and who continue to be “THE DUMB MONEY” at the table. Goldman & The Banks are betting against us (–the nation’s great institutions betting against the nation?). And it’s hard to blame them –Goldman just had it’s best quarter ever, and we are letting them get away with it. Blankfein is doing “God’s Work”!.
Lewis tells us that even Goldman did’nt understand what was going on. According to Lewis they almost went under, until they got AIG to be The Dumb Money. But Goldman were generally just so much sharper at manipulating the currents. Some surfers are better than others at riding the waves, but probably none of them really understand or can explain the science of Wave Dynamics.
I didn’t need Michael Lewis to tell me that Hank Paulson as CEO rode the waves & ran Goldman “very successfully “, but didn’t know how to fix the problem when he got to the White House. (And I confess that I have similar fears about all the “Wall Street experts ” who are/have been advising us about The Problem. Put another way,I get better vibes from Volcker than Summers.)
But we do know how to regulate. And speaking of regulation, we had better be ready for that Titanic Battle that is looming with the forces of Unregulated Capitalism. (Do we want The Fox to be in charge of That Henhouse –no matter how Fair and Balanced?)
To fight the good fight, we really need to understand what happened in The Collapse; we need a (non-partisan) list ofperps.Going “partisan” is a way to lose the fight –the issue dissipates into an “enough blame to go ’round situation, showing that we’re not serious about fixing the problem. We’ve got to think “Justice” rather than “My Team”. (For example, Fannie and Freddie DID play a part in the collapse, but –agrees Lewis, a relatively minor part!)
And we need a list of consequences –certainly, jail for the main perps; public exposure for the legit-but-unforgiveably-deceptive, etc. A set of clap-’em-in-irons stocks at the Stock Exchange? Nothing vindictive, but how would we feel about a little water-boarding? We’re not still queasy about that, are we? On a more serious note, The Huffington Post has good idea about us Moving Our Money.We need more effective “sanctions”, to use another term that’s in circulation these days.
But, first, everybody needs to take my Resolution Oath. Raise your right or left, hand and say after me:
“I will NOT BE The Dumb Money at the table. ” (I’m assuming you’ve already taken the Network Pledge: “I’m mad as hell, and I’m not going to take it anymore.”