(HOST) As he watches the Congressional debate over the proposed financial bailout, teacher, historian and commentator Vic Henningsen can’t help thinking that the conversation is really about something else.
(HENNINGSEN) The tug-of-war over the proposed $700 billion financial bailout plan reminds me why I hate roller-coasters.
But I’ve been struck that underneath the arguments about foreclosure rates, asset buybacks, and limits on executive compensation lies something much more profound
What I’ve heard is a debate about the kind of country we want to be. But deciding that requires Americans to make sense of the country we’ve become. At bottom, I think that’s what we’re wrestling with.
As an historian, I’m only mildly comforted by the fact that we’ve been here before. The newly emerging United States sought to prove that a republic could work in a monarchical world. But Americans first had to confront the fact that, after the American Revolution, the country had become, economically, a banana republic, deeply in debt, with a worthless currency and non-existent credit rating. If today’s $700 billion dollars sounds like a lot, compare it to the 1790 national debt which, in relation to federal revenues, would come to well over $10 trillion dollars today – this in a nation of 4 million people. Resolving those hard financial realities put Treasury secretary Alexander Hamilton in the Henry Paulson role, arguing for government cooperation with Wall Street. Jefferson and Madison resembled today’s congressmen, protesting that a democracy shouldn’t favor the wealthy few over the vast majority of ordinary citizens.
Then, in 1895 and again in 1907 a helpless government turned to America’s premier banker, J.P. Morgan, to rescue the nation from catastrophic financial panics. Americans were outraged to learn that Wall Street was much more powerful than their government – particularly when Morgan pocketed hefty fees. Addressing the issue forced them to understand that a government whose largest single agency was the post office was unequipped to handle an increasingly complex national economy. This led, among other things, to the creation of the Federal Reserve in 1913.
As we seek to understand the current crisis, we again find ourselves struggling with fundamental questions. Just who is this country for? Who should pay; who should profit? What role, if any, should government play in the discussion?
For answers, we must go deeper: how did we get here? How did we become a society in which, as the New York Times points out, ten cents of every dollar paid to the entire work force goes to investment bankers and financiers? How is it that major American CEO’s earn 275 times more than the average worker? What are we going to do about it? What can we do about it?
Tension between Wall Street and Main Street runs deep in our culture and in our history. Bad though the current crisis is, this isn’t the first time – or even the worst time – we’ve been through it. As citizens, we must not only listen to the details of the debate, but seek the deeper themes that underlie it.
It’s really about who we are.