A Dirt Farmer & A Dust Bowl Historian Both Speak The Truth

The Hopester has been chastised of late for being "too cool" while "the sky is falling." Now, The Hopester has been joined by a self-described "dirt farmer" from Montana in asking, "What the Hell is going on (and what's the hurry)?" Senator Jon Tester (D-MT) makes more sense in a single sound-bite than The Geezer and his Hockey Mom have made from Day One of their ill-conceived campaign. In today's column, Eags, who has written about The Great Depression (The Worst Hard Time), gazes upon our current malaise and recalls how Wall Street brought down Main Street in 1929-1933. The Geezer is Hoobert Heever (Peace, Harry Von Zell) reborn in 2008! The Geezer true-believers should be very, very afraid. If this is (fair & balanced) historicism, so be it.

P.S.: Pray to the Lord (of your choice) that Eags is wrong and that Senator Jon Tester won't become another Phil Gramm if Tester's elected to another term in the Senate.

[NY Fishwrap]
Crash
By Timothy Egan

The big guy with the crew cut and a hand that lost three fingers to a meat grinder looked out at the most powerful men in global capitalism Tuesday, and asked a pointed question:

“I’m a dirt farmer,” said Senator Jon Tester, the Montana Democrat who still lives on his family homestead. “Why do we have one week to determine that $700 billion has to be appropriated or this country’s financial system goes down the pipes?”

Good question, one that Treasury Secretary Henry M. Paulson and Federal Reserve Chairman Ben Bernanke have yet to adequately answer. If they seemed flummoxed, perhaps it’s because they still can’t explain what will be accomplished by nearly nationalizing the banking system and giving the treasury secretary more power than a king.

Another question — since we now own a big part of the world’s largest insurance company, A.I.G., does that mean I can save a load of money on my car insurance? — might be easier to answer.

This bailout, in present form, is toast. Now, with John McCain offering to suspend his campaign and delay Friday’s debate, it looks like the drainage of years past is pulling him down. He wants to back out of facing Barack Obama at the height of the campaign. Why not change the topic, from foreign affairs to the economy?

Some have already tried to protect the true villains of the crash of 2008. Witness Neil Cavuto of Fox News, he of the sycophantic questions to Enron executives and other thieves just before they were exposed, blaming the mortgage crisis on banks lending to “minorities and risky folks,” as he said last week.

There is certainly a food chain of greed, from the lowliest house-flipper in the Southern California exurbs to the Hamptons hedge fund manager. We all put reason in a box and buried it for a time. But before $700 billion is committed to a secretary whose decisions “may not be reviewed by any court of law or any administrative agency,” as the original draft of the bailout states, it’s worth remembering where the biggest heist took place, and how Wall Street dragged down the rest of the country once before. You could hear the echoes of history in Tester’s question, riding the fierce urgency of now at a time when the Great Depression and all its gloomy atmospherics are in the air again.

When the stock market crashed in 1929, losing 40 percent of its value over a brutal autumn, barely 2 percent of Americans owned stocks. People asked, sensibly: how could this affect me? Who cared about those swells on Wall Street when cars were rolling off factory lines and the big open expanse of middle America was flush with wheat and corn?

Today, with more than 90 percent of all homeowners paying their mortgages on time and on budget, the parallel question arises: how could this minority of bad loans drag down Western capitalism? It may be news to Joe Biden — with three gaffes this week, he’s approaching a record, even for him – but Franklin Roosevelt was not yet president during the crash. Herbert Hoover was, and there we have the reason why so many people cringed when John McCain said last week that the fundamentals of the economy were sound.

In his first days in office, Hoover said, “Americans are nearer to the final triumph over poverty than ever before in the history of the land.” Oops. And just before he was swept to the dunce corner of history, Hoover said, “No one has yet starved.” At the time, people in rural America were eating brined tumbleweed and road-kill rabbits; the unemployment rate was 25 percent.

But the larger lesson is how Wall Street brought down Main Street. Banks were largely unregulated then, free to gamble people’s savings on stock market long-shots. When the market collapsed, the uninsured deposits went with it. By the end of 1932, one fourth of all banks were shuttered, and 9 million people lost their savings.

In this century, thanks to the deregulatory demons released by former McCain adviser Phil Gramm and embraced by just enough lobbyist-greased Democrats, Wall Street was greenlighted again to act like a casino. Banks in the heartland passed on their mortgages to Wall Street, where they were sliced and diced in hundreds of largely incomprehensible ways. And while few people understand how those investment giants made money, this much is clear: it was a killing. In 2006 alone, Wall Street firms paid out $62 billion in bonuses.

With all the urgency of that famous National Lampoon magazine cover that showed a cute pooch with a gun to its head, and the line “If You Don’t Buy This Magazine, We’ll Kill This Dog,” President Bush says the biggest bailout in American history must be passed now or the world will crumble. He said a similar thing in the run-up to war.

Just once, it might be worthwhile to listen to a dirt farmer like Jon Tester, who wonders why the same breathless attention is not given to the concerns of average Americans. Ah, but he’s only been in the Senate two years. Give him another term and he may start quoting Phil Gramm with approval.

[Timothy Egan, a contributing columnist for The Times, writes the weekly "Outposts" column on the American West. Egan — winner of both a Pulitzer Prize in 2001 as a member of a team of reporters who wrote the series "How Race Is Lived in America" and a National Book Award (The Worst Hard Time in 2006) — graduated from the University of Washington with a degree in journalism, and was awarded an honorary doctorate of humane letters by Whitman College in 2000 for his environmental writings. Egan is the author of four other books, in addition to The Worst Hard Time — The Good Rain: Across Time and Terrain in the Pacific Northwest, Lasso the Wind: Away to the New West, Breaking Blue, and The Winemaker's Daughter.]

Copyright © 2008 The New York Times Company

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