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Across America

The past two weeks were a bad time for a financial columnist to be gone — or maybe they were a fine time. I've been warning about this collapse for years, not as a wish but as a concern. That our practices of deregulation, consolidation, hollowing out of the economy and building a vast Ponzi-scheme economy in its place would inevitably come crashing down.

Gone was a train trip from Seattle to Baltimore, where the Bouchercon mystery writers' convention was honoring my editor, Barbara Peters, and publisher, Robert Rosenwald. Susan and I wanted to take Amtrak across this big land before Republican John Sidney McCain III was elected and followed through on his longtime obsession to shut down the national passenger rail system. In fact, Amtrak does a fine job, especially considering the years of underfunding it must fight against, and the fact that it is a mere tenant on the railroads it travels (outside of the Northeast Corridor). It's interesting, and heartbreaking, to consider what we might have if we had been investing in high-speed train networks instead of financial swindles over the past 20 years. Even now, the trains are packed and popular.

The train forces one out of the crazy rhythms of flying and driving. You see how vast and varied this nation remains, especially in the places left behind by the Interstate highway system. Barely a golden arch profanes the route of the Empire Builder across the northern tier. There are the rotting, bell-towered schoolhouses sitting forlornly on the depopulated Great Plains, the little farm towns, down on their luck for decades but hanging on, the mountaintops our forebears conquered with blood and tears to lay steel rails from coast-to-coast. Anxieties about stolen elections and falling Dow give way to the gentle swaying of the train.

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Add cities to the list of victims of the Great Disruption

Some of America’s most prosperous cities are also among the casualties of what I’m calling the first stage of The Great Disruption — the current financial crisis.

Charlotte, a middling Southern town built into a city by two money center banks, will see its world changed radically whether Wachovia is bought by Wells Fargo or Citigroup. At least one-fifth of its jobs are in banking, and these are high-paid corporate jobs with benefits. Virtually every advance in Charlotte, particularly its revived downtown, came from the leadership of Wachovia and Bank of America. Now half of that will be gone, and the claim to being America’s second-largest banking center.

I make a prediction: Bank of America will soon move its headquarters to New York. The decision will likely be camouflaged in language of "dual headquarters" or some such corporate claptrap. But BofA’s best and brightest will feel an increasing need to be in what’s left of America’s financial capital. After all, the men who built these powerhouses as a powerful, personal gift to Charlotte are retired.

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A note to readers

I'll be taking a relaxing train trip to Baltimore and back, in case McCain wins and kills Amtrak, attending the Bouchercon mystery convention. I'll post when I can, but in…
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To bail or not to bail?

Let’s set aside the demands of the extremists on the right, calling for more deregulation and tax cuts to address the financial crisis. It’s like trying to discuss the finer points of Plato with a small, yapping dog. Otherwise, I can understand the desire on the left and right to "punish Wall Street" by defeating the bailout plan. Unfortunately, the markets are so intertwined and inherently fragile, the first casualties are going to be on "Main Street" (a bittersweet anachronism for a nation that has mostly abandoned its main streets).

Wall Street — and increasingly overseas investors — owns Main Street.

The plan voted down yesterday was flawed but better than the original Czar Paulson contraption, which would have given the former head of Goldman Sachs unlimited access to use American treasure trying to extinguish the wildfire he and his greedy buddies started. Well, not quite — and here we get back to the unworkability of "punish Wall Street" argument. Deregulation, a casino-like attitude on Wall Street and a bubble-blowing Fed were the biggest culprits in the mess. But, so, too were the American people.

We voted in the deregulators and stood cow-like as it happened, the jobs disappearing, wages stagnating. Worse, too many of us thought we could get rich quick off real estate, like day trading before it. We bought overside houses and ran up credit-card debt we couldn’t afford. We bought SUVs to drive ever-longer distances as oil was peaking. We wanted tax cuts that gutted our schools and infrastructure. We wanted all that stuff at Wal-Mart. The casino became our ruling totem. It’s quite a remove from the generation of the Boomers’ parents that saved and waited to make purchases until it could afford them. It’s their passed-along wealth that is helping cloak the "banana republic with nukes" that we’re becoming.

So here we are. Were it not for the legacy of Franklin Roosevelt, we would already be seeing bread lines. And how many better ways could we use $700 billion…

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Weekend reading

I call your attention to the "In-depth reports" headline to the left, and particularly the link on Republican John Sidney McCain III. This is a continuously updated news page with…
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Economics 101: Watch me fail to explain the crisis to the duhs and ignos

Commentators keep trying to explain the financial meltdown and subsequent bailout debate by using analogies that "average Americans" can understand. We hear such things as "imagine Wall Street was your kid that ate a big bag of candy and got sick, then wanted more candy," etc.

The problem is that the calamity is so bad partly because it is not simple. The venality behind it is something everyone should understand (and many "average Americans," with their get-rich-through-liar-loan-financed-rent-houses schemes participated in). But the essential mechanics and details of how we got here, and how the situation might be improved, are highly complex. This is a stark reminder of a danger facing us: America is saddled with one of the least informed electorates of an advanced nation, and one hardly as intelligent or engaged as their forebears who actually built the wealth in money, institutions and ideas that we are now rapidly throwing away. It shows the risk of the continued governance by "conservatism," which by its very nature can’t handle complexity.

Here’s an analogy for the bailout: triage, longer-term care and rehab. The paramedics and ER personnel need to identify those that can’t be saved and set them aside, while focusing on the most life-threatening cases where the patient can still be saved, leaving the less injured for later. But I can dumb it down no further. I can only add complicating factors. As in, the paramedics have tools that will have unpredictable effects not only on the patients but also on everyone in the world. The patients’ bodies are wired into everyone else in the world. And the medics are working on injuries they never trained for.

Simple enough? Of course not.

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Weekend reading

The New York Times editorial does a fine job of encapsulating the obvious weaknesses displayed by Vice President-elect Palin, in her ABC interview:One of the many bizarre moments in the…
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