The Truth About Those Awful People at AIG

Among the many very interesting comments uttered by President Obama in last night's prime-time news conference (remember those?) were two regarding the blind populist rage currently being directed toward Wall Street. 

The first came when he was asked about all the plumbers, teachers, doctors and cops out there who are ready to set lower Manhattan ablaze to exorcise our economic demons. Obama acknowledged his and the country's anger at those who are "enriching themselves on the taxpayer's dime." But, he cautioned, the country "can't afford to demonize every investor or entrepreneur who seeks to make a profit." So much for Obama the supposed Commie.

Then, when pressed hard by a CNN correspondent (so much for the liberal media conspiracy) about why he "waited two days" to express his outrage at the American International Group bonuses, the President, clearly a bit miffed, responded, "because I like to know what I'm talking about before I speak."

Kudos, I say. Instead of mindlessly glomming on to the oversimplified political point of the moment — those greedy Wall Street bastards are ruining the country and should be drawn and quartered in front of Federal Hall — the president actually wanted to explore the facts in all their complexity. (As I've noted previously, Americans today seem to have a hard time grasping complex subjects). 

But it's too bad Obama, along with all the "regular folk" out there ready to pillory Wall Street scum, didn't have a chat about a week ago with Jake DeSantis. An 11-year veteran of AIG, DeSantis' resignation letter, published in today's New York Times, powerfully and poignantly captures what all the uninformed populist mouth-foaming neglects: most of the people who work on Wall Street are at least as decent, honest, hardworking and patriotic as people from other walks of life. This includes the vast majority of the hundreds of people who work in the demonized Financial Products division of AIG. 

A son of rust-belt schoolteachers, DeSantis studied hard, got into MIT on financial aid and did very well for himself as a Wall Street trader. He had nothing to do with the credit derivatives that helped bring AIG and the global financial system to its knees. He earned his money fair and square. If you do nothing else today that faintly resembles civic duty, you absolutely must read his letter. Here's the link again in case you missed it above. 

To be sure, there are plenty of other folks out there who have lost jobs and compensation despite doing nothing to damage the financial system or the global economy. I'm not suggesting that DeSantis and other AIG employees shouldn't expect that problems with their company — even problems they had nothing to do with — won't negatively affect their employment prospects or incomes. What isn't right is how he, others in AIG's Financial Products unit and indeed, all who are gainfully employed in finance, have been demonized as the cause of all our woes. 

Never mind those "regular folk" who took out mortgages and bought homes they knew they couldn't afford. Or the local mortgage brokers that inflated their commissions by signing "no documentation" loan applications for those borrowers. Never mind the members of Congress who gutted financial-services regulation in the 80s and 90s yet now have the audacity to fuel the witch hunt by pointing fingers at Wall Street. Never mind the Federal Reserve, which flooded the financial system with so much liquidity following the dot-com bubble and 9/11 that risk became a quaint notion. It's much easier to blame the Wall Street fat cats. 

This is wrong not because it hurts the feelings of those who work in finance. Rather, it's dangerous because it is directly linked to the policy that Congress, the White House and regulatory agencies will make in response to the crisis. To ensure that we have the right laws, rules and policies in place to prevent another meltdown, we need to first understand the problem we're trying to fix. Not as a 5-second sound bite in a Congressional hearing that gets wedged between Natalee Holloway and American Idol on the evening "news," but in all its nuance and complexity. 

The Merits of Rewarding Good Teachers

Few people have more influence over the future of the country than teachers. 

We all remember teachers who helped shape the people we became as adults. Often we don't realize just how good they were until later in life. I'm talking about the tough teachers, with high standards and strong work ethics. The ones who won't settle for anything but the best from us. 

Among the educators I remember is Miss Lathrop, who taught me how to diagram sentences in the sixth grade. And Mrs. Van Dyk, who, a few years later, instructed me in the unceremoniously dying art of arranging those sentences into cogent paragraphs, essays and stories. They — and the other skilled, passionate teachers under whom I was fortunate enough to study — fostered my intellectual curiosity and fed my nascent talents. They helped make possible the livelihood I've enjoyed as a journalist and an analyst. 

Sadly, we also forget far more teachers than we remember, and I certainly had my share of this group. They did only what they needed to collect a paycheck. That is to say, they showed up for class, assigned textbook reading and homework and, ultimately, administered exams. They viewed teaching as just a job and approached it as such, with no passion or creativity. 

It is, of course, no secret that too many of our schools today lack for teachers like Miss Lathrop and Mrs. Van Dyk. Instead, they are overrun with mediocrity or, worse, incompetence. 

That's why I'm so encouraged by President Obama's plan to improve our public education system by, among other things, more accurately measuring teacher performance and rewarding the best in the field with higher compensation. Other highlights of the proposal: foster the development of charter schools, beef up curriculum standards and weed out bad teachers. 

The National Education Association and other teachers' unions for years have resisted common-sense measures such as these that would greatly enhance both the quality of our culture and our economic competitiveness. Predictably, the unions greeted the Obama plan as it does any idea that would inject accountability for performance: with an unenthusiastic whimper. Take the following excerpt from the New York Times coverage of the plan's release:

Randi Weingarten, president of the 1.4-million-member American Federation of Teachers, said her union embraced “the goals and aspirations” outlined by Mr. Obama. “As with any public policy,” Ms. Weingarten said, “the devil is in the details, and it is important that teachers’ voices are heard as we implement the president’s vision.”

The unions can no longer blindly fight any reforms that would alter a status quo that for too long has been poorly serving our youth, and thus our nation. It may not win me many admirers to say this, but poor teachers should have no job security. If I don't perform well at my job, I could be in danger of joining the unemployment line. Because their work is so important to the greater good, teachers should be held to no lower a standard. Conversely, the most outstanding educators should be rewarded commensurately, so that the best and brightest of our college graduates may be drawn to teaching careers rather than selling out to the highest bidders on Wall Street or in corporate America. 

Americans can only hope that our elected representatives in Congress have the courage to transcend the tired political battles over public education and back the president's and other out-of-the-box approaches that might actually begin to solve the problem of our failing schools. Everyone deserves to remember at least one good teacher's positive influence. 

The Limbaugh-ification of American Discourse

As political pundits go, the Wall Street Journal's Daniel Henninger is a serious, sober intellectual. Though a dyed-in-the-wool Reaganite, Henninger is most certainly not the hyperventilating, hatemongering, inferiority-exploiting sort that has dominated the extreme right for decades and, increasingly, defines the Republican mainstream. 

Yet even as he thoughtfully jabs the Rush Right in his column today, Henninger falls victim to a milder form of its toddler-like tactics — which, by the way, are exposed for all their childish ineffectiveness by Timothy Egan today in a brilliant New York Times op-ed. Both are worth a read.

Henninger's piece argues that Republicans must appeal to voters by ditching their calls to prayer that Obama will fail and instead reclaiming Ronald Reagan's confident, pro-private-sector rhetoric. To draw a contrast between his prescription and the vision for the nation being put forth by Democrats, Henninger quotes Clinton Labor Secretary Robert Reich and longtime Democratic strategist Bob Shrum, both suggesting that Obama is in the process of unwinding the 1980s Reagan Revolution. 

Henninger is right to criticize these statements. Reich and Shrum should acknowledge that the Reagan Revolution shouldn't be completely undone — that some portion of what Reagan and his disciples did for the country was both positive and essential. It was good for the country that Reagan called out the government for being too bloated and inefficient, and for often preventing private enterprise from achieving its full potential to foster economic growth. And it was equally important to do something about that by reducing taxes, rethinking our approach to regulation and trimming the size of government. 

I, of course, believe that Reagan's movement ultimately went too far, contributing to much of what ails us today. But you can read my posts on such topics as bank bailouts, the gutting of food safety regulations and how smart regulation keeps capitalism from eating itself for more on all that. 

Back to Henninger and Rush. Unfortunately, in putting forth the idea that Republicans should reclaim the Reagan pro-growth mantle, Henninger relies on some Limbaugh-esque fakery. He suggests, for example, that appealing to voters with this argument should be easy, because Democrats have become nothing less than capitalism-hating socialists:

Arguably at no time in their lives have more Americans been this sharply focused on the economy. They think and talk about nothing else. The Republicans have been handed on a tarnished silver platter the chance to offer the American people an alternative vision of how their economy works -- and grows.

They should take political ownership of the 75% of the U.S. economy that the Democrats have abandoned -- the private economy.

Over the past four decades and the decline of private-sector industrial unions, professional Democrats -- politicians, intellectuals like Robert & Robert, campaign professionals, unions and satellite groups -- have severed their emotional and intellectual connection with private production.

Today, frontline Democrats see the private sector as doing two things: It produces tax revenue for $3.9 trillion federal budgets, and it shafts workers. The private sector in the Democratic worldview is necessary but nasty. Their leadership gives the impression of not having the simplest understanding of how an employer's life unfolds day to day.

Not exactly. Henninger conveniently forgets for a moment that we are in the midst of the biggest economic downturn since the Great Depression. Of course those who are charged with getting us out of this mess are using government as their primary tool. For more than a year, the private sector has proven itself incapable of accomplishing that goal. So government must step in and make what in normal times would be unthinkable incursions into private affairs. 

Henninger, tellingly, also fails to point out the inherent inaccuracy of what Reich and Shrum said about Obama rolling back Reagan's policies (or at least what their out-of-context quotes suggest they believe). Obama is definitely not restoring what existed before 1980. For example, he does not propose anything remotely like reinstating income tax rates to the pre-Reagan 60-70% range for the nation's top earners.

Here, the esteemed columnist is exposed as under the influence, likely despite all his best highbrow intentions, of the talk-radio bully. He has set up a straw man to be knocked down because doing so renders an otherwise iffy argument much easier to "prove."

Egan's tour-de-force undressing of Limbaugh today points out that Rush is really little more than a classic demagogue, so bereft of real ideas that he must constantly construct straw men to tear down. (He also does a fine job of exposing Rush's trouble with black people and women - it really is a fantastic read). Henninger is no demagogue, but the Rush-ification of our national political debate can be seen in even his resorting to this tactic.  

I spend considerable time discussing all of this because it is yet another example of how our discourse about public affairs has degraded into little more than infantile name-calling wedged between an endless stream of celebrity gossip and reality TV. As you know, that makes me sad. And it hurts our country. Please do your part to recognize and stop it. 

One way to do that, of course, is to create some real discourse of our own. What do you think? Please post your comments. 

Thanks.