There is some convergence about why we slit our own throats to protect the bankers that is starting to gel in some thought provoking ways.
First up, if you haven’t read it yet today, is Krugman’s Friday column in the NYTimes from Iceland. By the way, to get a better idea of what happened in Iceland and how it managed to get out from under its debts, check out Michael Lewis’s book, Boomerang, based on his tour of disaster capitalism around the world. In short, the former Vikings got bored with fishing, jumped into the currency market, got WAAAAY over their heads in debt and when the crash came and the banks said paid up, basically said, “f^&* this s^*#, we’re not killing our country just because you won’t take a haircut.” And they didn’t. They devalued their currency and made the banks eat it while they salvaged their social safety net.
But it’s worth stepping back to look at the larger picture, namely the abject failure of an economic doctrine — a doctrine that has inflicted huge damage both in Europe and in the United States.
The doctrine in question amounts to the assertion that, in the aftermath of a financial crisis, banks must be bailed out but the general public must pay the price. So a crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programs are slashed.
This doctrine was sold both with claims that there was no alternative — that both bailouts and spending cuts were necessary to satisfy financial markets — and with claims that fiscal austerity would actually create jobs. The idea was that spending cuts would make consumers and businesses more confident. And this confidence would supposedly stimulate private spending, more than offsetting the depressing effects of government cutbacks.
But a funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.
So how’s it going? Iceland hasn’t avoided major economic damage or a significant drop in living standards. But it has managed to limit both the rise in unemployment and the suffering of the most vulnerable; the social safety net has survived intact, as has the basic decency of its society. “Things could have been a lot worse” may not be the most stirring of slogans, but when everyone expected utter disaster, it amounts to a policy triumph.
And there’s a lesson here for the rest of us: The suffering that so many of our citizens are facing is unnecessary. If this is a time of incredible pain and a much harsher society, that was a choice. It didn’t and doesn’t have to be this way.
It was a choice. It was the same choice that Adam Davidson and Elizabeth Warren battled about in 2009. In fact, that interview may be more revealing than it seems on the surface. Michael Lewis suggests in his book that the Icelandic male is still a badass Viking who got a taste for marauding the modern way through speculation. But it was Icelandic women who pulled their asses out of the fire. In a similar way, when the recession started to affect the job market, Angela Merkel’s government decided to supplement the salaries of many workers who might otherwise have been laid off. Other workers cut back to part time work, the advantage being that part time workers do not lose their skills due to extended periods of unemployment. Merkel’s Minister of Labor is a woman. As a result, the German economy has held up pretty well since the crash. And just a few days ago, Christina Kirchner of Argentina won re-election for Presidentafter she vowed to continue her anti poverty programs while pissing off investors.
I hate to start attributing remarkable virtue to women because there’s just not enough data on how women would behave if they weren’t punished for behaving outside social norms, that is taking risks, being agressive, looking out for one’s self. Women who are ambitious are considered “political” and “calculating”. See this TedTalk from Sheryl Sandberg to understand this better.
But it is hard to ignore the data that we have that suggests that when the bankers get out of control, the countries that seem to be faring the best are the ones who have women as their stewards at the time of the crash. Here’s another one: Julia Gillard, Australia’s prime minister is steering her country through economic turmoil solidly while her opposition, another Julie (think Michelle Bachmann) is hammering her over deficit spending. But so far, so good for Australia who hasn’t yet succombed to conservative demogoguery in spite of its notoriety of being Rupert Murdoch’s birthplace.
Could we ever have a woman in charge in the United States? We will have missed our opportunity to try out the experiment that would show whether a woman in the White House would do things differently than a man. But maybe we should look on the 2008 election with fresh eyes. I’ve always been troubled by the primary voting irregularities and the DNC’s massaging of the rules to favor one candidate over another. And while the misogyny was awful, maybe there is something to the reaction to Hillary Clinton running for president that exposes a fault in our culture and government.
Women are underrepresented in Congress and many elected government positions. That’s not news. But what is it about our country that will not let it evolve? Has it been the reintroduction of religion into the public sphere? Has the return to conservatism been aided by the 40 year reaction to Roe v Wade that has been capitalised by Republicans? I think this is something we need to get a handle on. One of the things that bothered me most about the Adam Davidson interview of Elizabeth Warren is not that he rejected her argument. It was *why* he rejected her argument. He didn’t consider her a “serious person”. And I think that is the heart of what is wrong with our culture. Women are not taken seriously.
Think of how many times we have heard of women with their hands on the reins of power who have been prevented from exercising that power by men who think of themselves as more serious people. Brooksley Born wanted to regulate derivatives. Robert Rubin and Larry Summers put a stop to that. They called her “hard to get along with” and “not a team player”. One of her assistants said that couldn’t be true because she was never issued a uniform, suggesting that Rubin and Summers were pre-disposed to not cooperate with her. Then there was Sheila Bair of the FDIC. She wanted to shutter some of the big banks. But when Obama directed Tim Geithner to draw up a plan to close Citibank, Geithner sat on the project. One of the reasons he gave was that he didn’t want to have to tell and work with Sheila Bair. Christina Romer, Obama’s senior economic advisor told him that the stimulus package was too small by about $600 billion dollars and later that about $100 billion could be used to create a million jobs. Obama mocked her and preferred Geithner’s plan to hers.
And then there was Hillary. In 2008, just as the market was crashing, she made numerous appearances on morning talk shows advocating for a new HOLC type of program that would aid homeowners directly in order for them to keep their homes and continue to pay their mortgages. By the time the crisis was upon us, the bankers had already nominated their man.
If we can see any trend at all in these examples of women as heads of state and women who were denied power it appears that they are calculating several moves ahead. They look at their present set of circumstances and extrapolate. They also tend to be more concerned with the soundness of society as a whole. They focus on saving their safety nets, their labor markets and the wealth of the many as opposed to the demands of a few. They are concerned with heading off future crises with new rules. If we could generalize these trends we might say that these women (but not necessarily all women) value stabilization over risk taking. A prosperous citizenry is one that is not subject to social or economic instability. These women appear to prioritize and value societal stability.
That does not mean that men are incapable of this kind of leadership. In fact, we have held up as examples male leaders who also behaved this way. Leaders who immediately come to mind are Abraham Lincoln and Franklin Roosevelt. Those people who check lawlessness and economic injustice that lead to instability are our role models. We appreciate and recognize the leadership qualities in men but in women, we do not see them as attributes but as unserious.
Maybe this period of our country’s life will promote reflection of what we value and who is most capable of seeing our way through to a more stable future. I think that Elizabeth Warren is finally benefitting from such reflection and re-evaluation. The more examples we see of women leading their countries through economic crisis, the more we may be inspired to follow their lead and elect more women to powerful positions here. But I worry that the impetus to empower women in this country is very fragile. And one of the things that troubles me the most is that we still have so few female pundits and voices of authority who are considered “serious people”.
A good example of this can be found at Greg Sargent’s The Plum Line blog at the Washington Post. Sargent’s blog is pretty good for collecting the voices on the left who are considered up and coming and serious. But almost all of his citations go to men on other blogs and prestigious online media outlets. He frequently cites Matt Yglesias, Ezra Klein, Kevin Drum, Steve Benen, Dave Weigel, etc. There are very few citations from women. Sargent might reasonably argue that those men have the most access to the people in charge. But then we must ask ourselves how it is that they got to be in those positions of power. How did such young men, without families, maturity or even much work experience, get access? It wasn’t too long ago that many of them were just bloggers themselves. Meanwhile, a blogger with the writing and analysis skills of Digby is posting on Al Jazeera. Don’t get me wrong, this is a sweet deal and well deserved, but cases like Digby are very rare. We can think of a handful of others like Ariana Huffington, Joan Walsh and Rachel Maddow. But how many of us consider them “serious people”? Each one of them gets a label. Ariana is one of the 1%. Joan is a hopelessly compromised Democratic party loyalist. Rachel Maddow is starting to be upstaged by Chris Hughes and is the token lesbian. We see them as women first and not individual voices of persons who have unique thoughts and views. Somehow, their personas are flawed.
In the future, Ezra, Matt and Kevin will grace the opinion pages of the New York Times and the Washington Post taking the place of the David’s, Brooks and Broder. Joan will be making occasional appearances on Hardball, Rachel may move into anchoring the evening news somewhere and Ariana will be jetting off to interview some sultan in the desert but their opinions will not have the same heft.
When it comes time to make decisions about which road we will take and who will get saved and who will be tossed overboard to be eaten by sharks, it is the voices we have blessed with the title “serious” that we listen to. And in our society, in the 21st century, in a country that started with so much promise and has evolved so quickly in most other respects, those voices are not women. We are passing on the women who see the political and economic landscape from a perspective that favors stability.
It is not the only reason why we’re in this mess but it is one that is increasingly and embarrassingly hard to ignore.