January 31st, 2011 4:13 PM by Nick Rapplean
Two things in Sunday’s New York Times may prove to be extremely important—and relatively soon.
The first was Gretchen Morgenson’s discussion of the report published last Thursday by the Financial Crisis Inquiry Commission. As she said, the report didn’t contain any news that hasn’t already been parsed carefully in the press in what Morgenson calls the press’s “flood-the-zone coverage and analysis of the crisis since it erupted four years ago.”
No, it isn’t so much the shocking factoids the report uncovers as it is the fact that it’s pretty much all there, in print, for all to see. We cannot deny the many failures of our Federal Reserve, our regulators, our politicians or our bankers.
Now, with all of the information plainly in view, you’d think we could be confident that the kind of economic crunch we’re only now just beginning to emerge from could be avoidable in the future. But that isn’t the message here. It is as if this report declares, “This is how the whole thing happened, and it’s how it could happen again.” Distressingly, to say the least—little has been done or is being done to prevent a future economic melt-down.
Why? Because it has never been made profitable to do something truly helpful about this mess. Instead, it is still profitable to continue gambling with investor money and relying on the likelihood that the American people—like, more recently, the Irish—will take on the debt.
A student of the facts about the economic crisis cannot fail to reach these conclusions. Oddly, though, the nation as a whole seems incapable of doing something genuinely helpful about them.
Why do I write of these things in this space? Because they are like ravenous dogs nipping at our backs as we try to flee the recession into recovery. They will continue to reappear, and we must be vigilant.
The second issue reported on in The Times—oddly related to the first—is the question of how much the use of cell phones and Internet sites have made it possible for the uprising to outflank the Egyptian government. Quite simply, the Mubarak government was largely ignorant of how to use the communications technology of the day. Instead of using it to track down the places where protests would begin and the people who began them, and instead of using it to present a counter-story among the Egyptian people, the government was relatively vulnerable to the uses of the technology—even (especially?) when it tried to cut off the Internet and cell phones.
The point is that the new technology can work for both sides. It isn’t, as many have argued, a new force for democracy. And that insight reinforces the importance of taking the Egyptian uprising very seriously.
In spite of appointing a vice president a couple of days ago, Mubarak—should he fall, as he most likely will—leaves not even the weakest basis for a new government. And that becomes a very serious matter when we consider that, without surveillance, the Suez Canal could become a very risky channel for oil tankers. It is, you see, the only way oil gets from its producers to Europe.
Energy experts were already talking about the possibility of $4-a-gallon gasoline this coming summer before the current chaos visited Europe, making rising oil costs an even greater likelihood. Our interest rates could be taken lower or, at the least, held back by all of this (given the investor rush to the safe haven of Treasury securities), and our economic recovery could be greatly hurt. Remarkably soon.