This Unholy Mess


Ten Years Later: Slow Avalanche of Meltdown Fallout

You probably don’t remember losing that $70,000, do you? It’s understandable, since your loss came at a chaotic and frightening moment in our history, when financial ruin was so severe and widespread that it would take a long time even to begin toting up the numbers. But according to a new Federal Reserve report, $70,000 is roughly the amount of money lost by every man, woman, and child in the United States as a result of the Financial Meltdown of 2008, the biggest economic disaster in a hundred years. For me, that crisis marked the moment when the financial sector proved beyond a doubt that it is no longer a responsible partner in our society. And that’s no matter how many feel-good ads they run on TV, adds that you’re paying for, anyway. Wells Fargo: “Established 1852, Re-established 2018”? Toss me a good sturdy airsickness bag, would you?
Over the past decade, we have learned just how bad the behavior of the financial sector’s giants really was. I would count the ways–with interest, so to speak–but any list of their crimes would be too-big-to-mail, and the most obvious ones have been well-documented. At this point, it’s worth addressing the issues that go far beyond the immediate, high-profile effects of their actions. These issues represent a kind of Unified Theory of Global Disaster, based on the severe disaffection of average citizens.
In 2009, though the Tea Party focused on tax law and immigration while the Occupy Movement lashed out at Wall Street in particular, both were expressions of rage at large financial institutions and what was correctly viewed as government abandonment of average people. This disastrous government posture, which unfortunately ended up smearing the name of “government” in general, has turned out to be part of a domino effect, much worse than anyone could have predicted. It was terrible to see all the foreclosures, the lost jobs and other financial damage, but the waves from that ruinous splashdown are now being felt in systemic ways that are at least as bad and certainly more profound.
The worst of them is widespread public repudiation of our institutions, and rejection of the expertise that is a living part of them. A stubborn, know-nothing reaction against the pillars that have sustained America through its most difficult times has slouched its way to Washington, and is now ensconced in the White House, as well as in the minds of millions of Americans. It is no great leap to see the Meltdown and the government response to it as crucial missteps in causing this disastrous tumor in the American brain.
Immigration hysteria, a spike in drug overdoses, increasingly ridiculous conspiracy theories—all are part of this heinous package. The public resentment is so raw that it no longer knows or even cares about facts. It wants only to lash out indiscriminately at bogeymen that most often have nothing to do with their plight.
But it gets worse. There is also the international side of the clustermuck. Consider the effects of financial losses outside our borders, where there was even less fat on the land, less of a cushion to soften the blow. Think of the social upheaval in Greece, in Italy, in the recent “yellow vest” demonstrations in France. Best of all—or worst–think of the criminally irresponsible, ruinously successful Brexit vote. A perfect mirror of America’s simmering resentment, played out in a supposedly educated, sophisticated democracy like our own. The result was a triumph of manipulative forces that seem to subscribe to Steve Bannon’s ardent efforts to “destroy all of today’s establishment.” Cool idea. If you happen to be Vladimir Ilyich Lenin. Would this Brexit referendum result have come to pass if England’s economy had not been even more devastated by the Meltdown than ours? Very doubtful.
The overarching analogy par excellence, going out with love to all you history freaks, is the one you expected: Following the 1929 market crash, with the world economy in the toilet for years, political turmoil was the order of the day in many countries. The financial desperation induced by the crash gave both Germany and Italy thuggish, authoritarian leaders who promised their respective peoples a way out of the mess. Get rid of all those stodgy statesmen with their useless expertise. Buy into some grandiose, impossible promises, made by people not bound by much in the way of credentials–or scruples, for that matter.
Uncomfortably close to home. But listen: Wells Fargo, Citibank and the others want you to know they didn’t mean to dump the world into the Meltdown and its aftermess. They were just adhering to the most inspiring ideals of smash-and-grab, under-regulated capitalism. The ones that are now gaining momentum again. Oh joy.

Blog Index