The New Era of Hope

One guilty pleasure of mine that I've written about here often is my penchant for listening to sports talk radio. I love it. Especially here in New York. The New York sports fan is a special breed, feeling utterly deserving of winning every single championship in every single sport every single year, accustomed to always having the very best talent in whatever league is under discussion, and yet at the same time tending towards the whiny and blinded type of fan that is so prevalent in the Northeast. It makes for a great mix of callers and topics for any sports station in New York City.

That said, as I got in my daily dose on the way back from the gym on Tuesday night, it was very interesting to hear the topics being discussed, which centered primarily, surprisingly enough, on Barack Obama and the state of the country, highly unusual for sports talk radio. Probably about 75% of the callers were optimistic, talking about the plane crash last week that many of us saw right from our offices here in Midtown and how it was a turning point for the country, with one guy even claiming that the Cardinals making the Superbowl was something we could all rally around as a country along with the presidential changeover and the miraculous plane crash a few days ago. The other 25% of callers were more pessimistic, expressing hope for the incoming administration but pointing out that of course the problems our country currently faces cannot possibly be cured overnight, and that when Obama wakes up on Wednesday morning, he will still be facing a horrible stock market, a completely destroyed banking system, a sagging economy and a very uncertain global outlook.

At this point, one caller said something I found very interesting. At the end of whatever point he was making, this caller says that it seems like right now Barack Obama could get 70% of the country to do pretty much whatever he says. Whatever he wants, anything, 70% of the American people would do right now, given the fragile state of things we have been left with from the Bush administration. Anyways he says that it reminds him of just after 9-11, when this caller estimates that 90% of Americans would have done whatever George Bush wanted, also due to uncertainty and the extreme fragility of the situation at that time.

That shit's fucked up isn't it?

Because I think he is right. 90% of us, myself very much included, were so dam scared, and I mean seriously fucked up immediately following 9-11 that we were basically willing to go along with whatever George Bush said. We allowed ourselves to buy in to his thing, to go along with what he said we needed to do to protect ourselves as a country. We trusted him, more or less blindly, to always serve our best interests as a country and as a planet, and in a nutshell, President Bush betrayed that trust. Bush's policies strained the bounds of human rights in many areas, most notably in wiretaps and other invasions of our personal freedoms, and in the torturing of POWs that went on as a rule in our terror detainee facility at Guantanamo. 90% of us put our trust in George W. Bush 7 1/2 years ago, and Bush told us he would take care of everything. He told us to put 9-11 behind us, and to party hard, economically speaking. Interest rates were literally at historic lows, banks were running amok handing out money to anybody, some of that actually mandated by Barney Frank in the House and Chris Dodd in the Senate's respective finance committees, but otherwise nobody was watching over interest rates, or over the quality of loans being made by banks in the U.S. and all around the world, in particular loans to purchase houses. Regulation on the Private Client businesses of the major investment banks, serving hedge funds and super-rich clients, had been decreased to long-time lows by the repeal of the Depression-era Glass-Steagall Act by the Clinton administration a few years earlier. As the Bush term wore on, those investment bank business came under increasing pressure to divert their wealthy clients' money into complex financial instruments, created by the investment banks themselves, and often backed by various types and ranges of mortgages and other loans. More client funds were diverted into hedge funds, which were also not being regulated by anyone even as they too exploded under the Bush administration (Bernie Madoff, anyone?). Many hedge funds actively invested in various types of public and private debt, including mortgages, student loans and other bank assets, in addition to other complex financial instruments like credit default swaps, another creation of the finance wizards on Wall Street that proliferated over just the past ten years or so, yet another entire part of the finance markets -- estimated to be a $4 trillion industry -- that was more or less entirely unregulated under the Bush Administration (AIG, anyone?).

President Bush told us to trust him after 9-11, while he ultimately oversaw the relaxation of regulation on the entire supply of money in this country, and the 90% of us that were willing to do whatever our leader told us to do in a time of historical national crisis partied hard at his behest. And now, we have a hangover. It's that simple, really. You can't party like we did with money over the past ten years or so, and not eventually run out of steam in a big way. It's like its own giant Ponzi scheme, where as a country we continued to "get" more and more money, taking out massive mortgages that many of us as a nation really could not afford, taking loans for more than we needed, refinancing again and again as interest rates dropped to multigenerational lows, taking out home equity lines of credit, borrowing directly against the equity we did have in our homes, and running up ever-increasingly historic credit card debt along the way. Eventually, when one part of the system finally caves in -- in this case it started as the sudden inability to continue accessing money in general at the rate we had been for the past few years, and that quickly turned into increasing defaults on the riskier side of the borrower spectrum where the supply of additional money was always going to be needed to pay off current debt levels -- that becomes the hangover that inevitably must follow since a hard session of partying down. That's just the way of the world, even with respect to the economy.

So there it is. Right now 70% of us would do whatever Barack Obama tells us to do. The last time we put our faith in our leader in a time of extreme crisis, we were taken advantage of, repeatedly lied to, and ultimately led down the path that directly created the economic and financial disaster of the past 18 months or so. Let's hope that Mr. Obama will act with more integrity with respect to the trust he has in his corner from an emotionally fragile base of citizens in our country today.