Harold Meyerson’s column in today’s Washington Post is propaganda. It is so obviously biased in its consideration of facts and creation of myths that any other conclusion is impossible. Any essay that begins with this:
Putting together everything we’ve learned over the past 10 days about high finance in Manhattan, one thing is clear: If Eliot Spitzer had saved all the money he apparently paid”Kristen” and her co-workers at the Emperors Club, he could have bought Bear Stearns.
… derives from a partisan ever-interested in stuffing the events of the day through to his predetermined conclusion. In Meyerson’s case, that’s always some derivative of how government must act more, control more, and protect more. His political mind is one giant Care Bear Stare at the problem du jour.
Today, he’s concerned with workers.
The key lesson Americans need to learn from today’s troubles is how to distinguish faux prosperity from the genuine article. Over the past hundred years, we’ve experienced both. In the three decades after World War II we had the real thing. Led by our manufacturing sector, productivity increased at a rapid clip and median family incomes rose at a virtually identical rate. The value of the American work product grew significantly and that value was shared with American workers.
That value that’s shared with workers is generally referred to as a salary. Unless workers have stopped receiving salaries for the work they do, this argument is sophistry. Meyerson isn’t interested in anything more than pushing anti-capitalist, anti-corporate class warfare.
In the broadest sense, the American economy over the past three decades has been powered by ever more ingenious extensions of credit to a people whose incomes were going nowhere, unless they were in the wealthiest 10 percent of the population. There were some limits, as a result of New Deal regulations, on how old-line banks could extend credit, but investment banks and other institutions not legally obliged to keep a certain amount of cash in reserve operated under no such constraints. The risk was that one day, burdened by debt and static incomes, American homeowners would have trouble making their payments and the house of cards would come tumbling down. But what were the odds of that?
His entire argument is built on the italicized statement. To work, he needs both a conspiracy by his enemy class and a lack of self-control within his comrades in
arms spending. The former is a pathetic assumption not worth consideration. The latter is worth a simple demolition.
When I bought my house, I had a set income with a projected path of growth. For consistency within Meyerson’s frame, I’ll remove the assumption of growth. I also had a (declining) amount of debt consisting of my car and my education. I took on a fixed-rate mortgage for approximately half the amount a bank would’ve given me in 2005. I’ll also assume what a bank would offer me now is less than what it would’ve offered me in 2005, although it would no doubt still cover my original mortgage with a comfortable margin. My (assumed stagnant) income covered my obligations.
How is “burdened by debt and static incomes” relevant, as opposed to poor judgment and financial forecasting by consumers (and financial institutions)? Meyerson sees only the parenthetical and assumes that amounts to conspiracy. And oppression. The notion is biased.
Meyersons demands are unsurprising. I wonder if he wrote this paragraph first.
Pretty good, it turns out. And out of this debacle emerge two paramount lessons for our highest-ranking policymakers: Regulate the American financial sector, which is now turning to the government for a bailout. And commit the government to doing all in its power to generate broad-based prosperity, through laws enabling workers to bargain collectively, through a massive public commitment to projects “greening” the economy, through provision of universal health coverage and affordable college educations.
The lesson from Bear Stearns is that we need the government to give us broad-based prosperity through a massive public commitment to boilerplate progressive talking points. Yep, further buffering Americans from the costs of their financial decisions is exactly what we need, lest they learn to exercise the self-control Meyerson knows they do not possess because they’ve been conspired against by the goal of oppression executed by our financial elite.
But, if I may, a question. When the government makes a college education more affordable, should it regulate who may study finance, and which branches of finance, since its eventual practice carries the risk of unleashing more evil on workers?