Page 1 of 2 When Timmy met Sheila
By Julian Delasantellis
Since the literary and cinematic convention known as the "buddy film" can be
dated at least to Achilles and Odysseus leaving Greece to fight in the Trojan
War some 3,200 years ago, it could be presumed that the genre satisfies a deep,
innate need of the human psyche - the desire for male companionship, and the
desire to triumph over evil.
Cultural observers have noted that, if anything, the genre became even more
powerful with the rise of the feminist movement, as male audiences seemed to
identify the struggles of two men against a hostile or corrupt world with what
men felt they had to face daily in adapting to a strange and newly feminized
culture. The 1971 novel Watership Down even extended the buddy saga to
the culture of rabbits. The 1991 film Thelma and Louiseturned the
genre on its head, with two women bonding in the fight against male culture.
But one place the buddy genre very rarely visits is the realm in which the
buddies are of different genders. There was the 1976 Clint Eastwood, Dirty
Harry, sequel The Enforcer, which teamed Eastwood with a female partner.
Other movies have blended gender crime-fighting teams, such as 1987's Robocop,
1990's Internal Affairs and 1992's A Stranger Among Us.
The underlying elements of sexual tension and frisson - the question as to
whether the buddies are to be lovers or just partners - make this a plot path
few storytellers dare to traverse. Still, there are exceptions; for example,
screenwriters of the TV show and movie The X files, who milked for all
it was worth the uncertainty over whether agents Mulder and Scully were lovers.
With all the tension inherent in their relationship and in all their dealings,
it's no wonder that United States Treasury Secretary Timothy Geithner and
Federal Deposit Insurance Corporation Chair Sheila Bair can't get together to
agree on proposals for financial reform.
Michel Foucault's 1975 Discipline and Punish chronicles Western
society's 300-year journey from torture to imprisonment to sanction social
deviancy. This trend was well established by the time of the US Savings and
Loans scandal of the early 1990s. Last week, the Financial Times noted that
more than 1,000 banking executives saw sunrises from behind bars as a result of
their roles in that debacle. As far as we know, not one was flayed with
nail-studded whips, nor had eyes gouged out with hot pokers, no matter how many
ruined stockholders or depositors would have wished it.
Now, approaching the commencement of the third year of the present financial
crisis, the running total of those convicted and imprisoned for their role in
it remains constant - zero.
If society uses its justice and penal systems to punish bad behavior, one might
get the impression that the powers that be just don't see that much wrong with
the previous "behaviors" that have now cost the world financial system over
US$10 trillion. How can that be?
Just last year, the armies of a better future stretched on endlessly into the
night, filling stadiums and public squares by the tens of thousands at every
place presidential candidate Barack Obama spoke. The candidate sang a song of
change, and the crowd devoured it; like a pre-teen with an old singles record
player, they listened to it again and again, wearing out the vinyl with each
successive spin under the needle.
A year later, "change" has become a pejorative containing the most foul
connotation. After realizing that the administration's cap-and-trade initiative
on global warming might raise gasoline prices a few pennies - and after
swallowing in one gulp lies about the Obama healthcare initiative - America has
so abruptly and fully turned against the concept of change that it seems now to
want everything up to and including its backyard crabgrass declared a permanent
national asset.
This suits the perpetrators of the crisis, the bankers and the collateralizers
and the ratings agency liars just fine. Three hundred years ago, they might
have got a hot coal shoved in their mouth; two decades ago they would have done
hard time. Currently, if no new rules or regulations are implemented to prevent
what was done then from being done again, what's to stop it from happening
again?
In fits and starts over the late spring and summer, Obama's financial system
reform plans have been released to the public.
As the financial crisis was bred and thrived through the chaos of 2007 and
2008, one thing that slowed positive policy responses was the question of who
actually had regulatory authority over it. The brave new financial alchemists
of the boom had spread their trading net all across markets in stocks, bonds,
commodities and other new and thus unregulated financial hybrid instruments -
such as swaps - that were essentially barely decipherable combinations of all
three at once.
When they fell, it was not obvious who held sufficiently clear regulatory
jurisdiction to get the first emergency phone call. The US Federal Reserve held
a broad mandate for overall system stability, but even so, did that mean that
it had the right to push the Securities and Exchange Commission out of the way
in a case that involved a crisis seemingly limited to a company's stock?
By calling for the establishment of a so-called "super regulator", the Obama
plan needs someone with sufficient mandate and responsibility not to let a
small problem fall through the cracks and become a major crisis. This could be
the Federal Reserve chairman, with jurisdiction across all domestic financial
markets, whether formally regulated and traded on an exchange or not regulated
and traded informally over the counter - like swaps and many other derivatives.
As with any proposal for change, squeals of protest were heard from the oxen to
be gored by this new system. Companies that thrived under the light hand of the
musical chairs shtick of revolving-door regulation protested at being tamed and
broken under the tighter bridle of the new order.
More surprisingly, opposition is apparently also heard in the corridors of
power from the generalissimos of the regulatory armies that will lose authority
to the super regulator. It's not all that surprising that the regulator with
apparently sufficient cojones to take the issue public was FDIC chair
Bair (I wrote about Bair's very positive role in addressing the crisis of last
autumn in Soulmates
in latte land, Asia Times Online, October 16, 2008.)
In an August 31 op-ed in the New York Times, Bair wrote:
Concentrating
power in a single regulator would inevitably benefit the largest banks and
punish community ones. A single regulator's resources and attention would be
focused on the largest banks. This would generate more consolidation in the
banking industry at a time when we need to reduce our reliance on large
financial institutions and put an end to the idea that certain banks are too
big to fail. We need to shift the balance back toward community banking, not
toward a system that encourages even more consolidation ... We can't put all
our eggs in one basket. The risk of weak or misdirected regulation would be
increased if power was consolidated in a single federal regulator. We need new
mechanisms to achieve consensus positions and rapid responses to financial
crises as they develop.
Bair has established tremendous public
credibility as the official more concerned with the welfare of the people. As
former Treasury secretary Henry "Hank" Paulson, his successor Geithner and
others served up their billion-dollar bailouts to bankers, they lined up behind
her skirts - a place that has become a fairly safe refuge for bankers and
financial system executives who have their current regulator eating out of the
palms of their hands.
This is known as "regulatory capture" - the phenomenon where a regulator comes
to represent the interests of the regulated, instead of those of the people.
Suddenly, the financial industry took up the faux populism of the tea parties,
with every two-bit car salesman who used to sell option adjustable rate
mortgages to those who could never afford paying them back decrying the tyranny
of the super regulator in tomes worthy of Cicero denouncing the dictatorship of
Catiline (108 BC-62 BC).
The lesson Obama should be taking from this is that the window wherein the
fickle and feckless electorate will accept real change is all too brief and
fleeting. By the time Obama and congress emerge bloodied and battered from the
healthcare wars late this year, there will probably be precious little appetite
for change - other than the kind one uses to buy sodas from vending machines.
Next year is an election year in which nothing will get done. If, as is now
expected, the Republicans make big gains in the mid-term congressional
elections of that year they'll be no more significant reform legislation out of
Congress - on this or any other subject - until at least after the next
presidential election in 2012. If what follows 2012 is another eight years of
Republican rule, there might not be any significant financial reform
legislation enacted until 2021. That means that if another financial crisis
comes upon us from now until the spring of 2013 or beyond, it'll have to be
dealt with using the legal and regulatory framework of 2007-08.
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