Don't Know Much About History
The reason that our financial system isn't going to crash and burn again, the reason that taxpayers won't have to fork over another trillion dollars of no-strings-attached bailout money, is -- well, I forget.
I haven't forgotten the reason, because there isn't any. What I've forgotten is that there is no reason it can't happen again. I've forgotten the bipartisan sliminess that enabled this catastrophe, like the demolition of the Glass-Steagall wall between banking and stock speculation. I've forgotten the battalions of Wall Street lobbyists armed with limitless campaign cash that decimated Dodd-Frank's attempt to regulate derivatives. I've forgotten the obscene bonuses, underwritten by our rescue money, that plutocrats have kept on awarding themselves to celebrate escaping accountability.
I know: I haven't really forgotten them. In fact, I'm enthralled and repulsed by accounts of what went wrong, from the terrific three-part "Money, Power and Wall Street" documentary that Frontline just aired, to books by Michael Lewis, Simon Johnson, William D. Cohan and other chroniclers of greed, criminality and a political system addicted to legalized graft.
But if more people were paying even a modicum of attention to the past, the economic debate in the 2012 presidential campaign wouldn't be between one political party beholden to big money that dreamily depicts investment bankers and oligarchs as jobs creators, and another political party, also beholden to big money, that wants applause for fixing the problem. If more people remembered which policies worked and which failed during the Depression -- as Paul Krugman documents in his new book End This Depression Now! -- then the jobs debate in this election wouldn't be about austerity and deficits, it would be about stimulating short-term demand and making long-term investments in education, research and infrastructure.
Total recall is a total buzz killer. Take Instagram, a photo-sharing startup that has yet to make a penny, but was just bought for a festive billion dollars by Facebook, which in turn is being valued at $100 billion. Hello? Dot-com bubble burst of 2000? Tulip sector -- I mean, tech sector valuations like these, larger than many nations' GDP, don't derive from companies' cash flows or their assets and liabilities. They're a function of expectations, of the wisdom and the madness of crowds. The worth of your pension fund is about to depend on the forgetfulness of the stock market, which is actually a pretty good example of a senior moment.