News Cut: October 2, 2008 Archive

On trust

Posted at 1:04 PM on October 2, 2008 by Bob Collins (3 Comments)
Filed under: Economy

The windows don't open and there are no ledges anyway at the world headquarters of News Cut. It's just as well, now that I've listened to Jeff Horwich's fascinating program on Midday today. A small group of economic experts and just plain folks gathered to talk about the economic meltdown and by the end of the program, not even eternal economic optimist Chris Farrell could've stopped me from heading for the glass panes.

One young man, said to be the youngest person on the panel, was coming to grips with the reality that he won't be able to live the kind of life that his parents did. Presuming that his parents are my age, his thoughts resonated with me because when I was his age I thought the same thing.

Still, these are not only difficult economic times; they're terrible emotional times. The language of the meltdown is no longer about bailouts, hedge funds, naked short selling, or credit markets.

Listen carefully and these are the words you hear now: trust, confidence, fear.

"I think we should just trust the government here," one panelist said. "History has shown that the country might actually make a little money on the bailout."

Easily said. Done with great difficulty.

Trust. What role is there for it to play where the future of a democracy is concerned?

I have no answers here, only the observation that, sure, I'm willing to trust.... if you go first.

The Bush administration tapped out its trust capital by being wrong about Iraq. We can argue -- and Lord knows we have for 5 years -- on whether the administration was intentionally wrong or accidentally so on the issue, but it doesn't matter; the result is the same.

Congress gets off no better. Its approval ratings are even worse and have been for years. So how can an "economic rescue plan" that depends on us trusting its makers be a logical suggestion?

In many ways, the public debate of the last two weeks has given voice to a larger problem: We as a people are not prepared to trust our leaders. In many ways, we don't even know how.

"No one quite knows how to harness our political system in opposition to major problems," the American Prospect's Ezra Klein wrote this week. "No one knows how to get real health reform through, or pass a global warming bill that could actually avert catastrophe, or shepherd a capital infusion that will avert possible economic collapse. Those problems are all different, to be sure, with different coalitions and different messaging strategies, but much of what blocks action is structurally similar. When it comes to the American political system, you can almost never believe in change."

Two other quotes, this time from the Washington Post, confirm the suspicion that we are a suspicious lot now.

"You've got massive public distrust and dissatisfaction, with the bailout specifically, with government in general, and George Bush and the entire political establishment," said Doug Muzzio, professor of public affairs at Baruch College in New York.

"This vote is a reflection of a lack of political capital, not of financial capital," said Mitchell Moss, a professor of urban planning at New York University. "The bankruptcy exists in our political leadership, not on Wall Street. We need to bail out Nancy Pelosi and George Bush."

How bad are things emotionally? Dan Ariely, a professor of behavior economics at Duke, suggested on Marketplace last evening that we're willing to punish ourselves just to get revenge against those who've made us angry:

But right now what we're doing is we're willing to sacrifice money -- the same way that you were willing to sacrifice $3 or $7 to punish me -- people are willing to suffer to get this (you know, I don't know what's a polite way to call this) . . . . people on Wall Street. . . . But people are willing to lose money to get those people to suffer more. In fact, I've asked people about this. Everybody feels this anger. They have violated, in a very important way, a social contract in the same way that I would have violated the social contract of you giving me your $10 and me walking away with $50.

In 3 1/2 months, a new president is going to take office and half the nation -- if the present polls are accurate -- aren't going to like the guy, and an entire media machine -- from the Internet to 24/7 cable channels -- will make its living by stirring up the pot of distrust; sometimes justifiably, sometimes not.

Is this a good situation? How do we know the difference between a healthy distrust of government and the kind that paralyzes and then divides a country? Several times burned, how can people be expected to trust again? If you don't trust government now, what would it take for that to change, especially when the government consists of a mix of two political parties?

I trust you'll have the answer.

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