Belmont Club

Who can you trust?

What a fine mess we’re in OllieA 3 month old video produced by the Boston Globe describing the effect of Barack Obama’s housing reforms in his district makes interesting viewing.  The accompanying article explains that “the squat brick buildings of Grove Parc Plaza, in a dense neighborhood that Barack Obama represented for eight years as a state senator, hold 504 apartments subsidized by the federal government for people who can’t afford to live anywhere else.  But it’s not safe to live here. … In 2006, federal inspectors graded the condition of the complex an 11 on a 100-point scale – a score so bad the buildings now face demolition. Grove Parc has become a symbol for some in Chicago of the broader failures of giving public subsidies to private companies to build and manage affordable housing – an approach strongly backed by Obama as the best replacement for public housing.”

Ronald Reagan once said that “the nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’ ” It’s a good line, honored more in the breach than the observance. Across a wide range of policies, from financial markets, carbon controls to health care, politicians are promising precisely that: more government help.  But the public anger at the proposed bailout of Wall Street may be an indicator of something even wider than a loss of confidence in government solutions. It suggests a loss of confidence in the elites who have for so long been trusted to decide what’s best for the country. The mistrust crosses party lines.  If the President is unpopular, Congress is even more so.  The press is held in such low esteem that journalists are trusted only slightly more than used car salesmen. The most remarkable thing about opposition to a bailout package isn’t the conviction that some plan to help markets make an orderly transition can’t be a good thing; it is the suspicion that nobody can be trusted to carry it out. The professional finance men, politicians — even the academics — all have fallen under the cloud of mistrust.

Newt Gingrich probably spoke for many when said “well, I think you have a Goldman Sachs chief of staff to the president and the Goldman Sachs secretary of the Treasury. And they convinced the president that the American people ought to send $700 billion to Wall Street, which I think is a very, very bad idea, and I would argue is a very un-Republican idea. I don’t understand what they think they’re doing.”  The Catch-22 is that even those who agree with every word Gingrich said would be reluctant to put Newt himself in charge of resolving the problem.  Not because there’s anything particularly objectionable about Newt Gingrich but simply because the public may not be inclined to trust anyone any more. Public life has become like the scenario from the science fiction/horror more,  The Thing: everybody looks OK, but who is for real?

Henry Kissinger once captured the popular disillusionment with politics in the observation that “ninety percent of the politicians give the other ten percent a bad reputation.”  But when this actually happens what emerges is a crisis of confidence which, if unresolved, ultimately leads to a loss of legitimacy. Arguably the problem with any bailout plan is that the professional finance men have simply lost their legitimacy. Nobody wants to listen to them any more. Yet because a society must continue to function, paralysis is intolerable. Legitimacy must somehow be restored to keep things going.  There are two general ways to do this. One is by a reorganization and the second is through wholesale housecleaning — a large scale replacement of the ruling elite.

But faith in reorganization as a cure to public disgust with government will be undermined by the memory of how the intelligence establishment didn’t reform itself in the aftermath of the September 11 attacks.  That grim day represented one of the greatest shocks to American society since the Second World War.  The intelligence establishment had very publicly been seen to fail.  But  many hearings, newspaper articles and Woodward books later nothing had changed. The same faces appeared in slightly different positions, like a deck of marked cards whose fundamental defects had been palliated by desultory shuffling.

That leaves a housecleaning as the only possible venue for reform. The emergence of a “pox on both their houses” feeling may be the reason why, as Christopher Hitchens observed, Barack Obama hasn’t put John McCain away despite the Wall Street meltdown.  It isn’t that people are thrilled with John McCain. It’s that not many trust Barack Obama either.

Tip Jar.