Think of our news as a dartboard game and opinion as a dart. As long as your dart hits and sticks in the target, your dart scores, you earn points and you can espouse an opinion. Since the dart board is the size of an empty store building, it’s hard to miss. Without a toss we can start with the news that the store building is empty and have an opinion on its emptiness. But, could we have seen it coming? Shouldn’t we have?
I spent some time as a television reporter. A shopping mall had burned to the ground and was still smoking when I arrived with another hundred reporters from regional newspapers, radio and television stations. I shot video above the scene from the skids of a sheriff’s helicopter — a panoramic view that included all those other reporters standing behind the yellow police tape. The next day, only reporter on the scene, I shot video from inside the smouldering ruins of the mall. Wet and smoky, the eerie scene got personal when my camera caught a man and a woman hunkered down just inside the door of what, just days before, had been their store and their life savings. Except for the arsonist, no one saw that devastation coming.
No one saw California based department store chain Mervyn’s closing. At least the employees and customers did not until the company filed for Chapter 11 bankruptcy protection last July. Cerberus Capital Management, the company that owns Target, saw it coming. Target owned Mervyn’s. The problem is that Mervyn’s was not financially big enough to be saved from failing. GM and Chrysler, by comparison, are too big to let fail, at least for now. Cerberus, the financial company not the mythical guardian of Hades’ gates, also owns GMAC and Chrysler.
Hurricanes are huge. We can personally run from one, but property damage is still going to happen. If we cannot run, the risk of not surviving increases. If we cannot see it coming, we do not know to run. A hurricane is a huge depression, the effects of which are only mitigated by our meteorological forecasting technology. Do we really lack economic forecasting technology? Could we not see this recession coming?
We seem to need something to blame. I blame the news dartboard. It is too big to miss. Unfortunately, it is also personality dependent so we always need someone to blame. We blame the weather forcaster for the tropical depression instead of blaming an inaccurate forecast.
Since blame is personality dependent, we throw another dart and hope to hit a person. Bullseye! Bush! That will work, but the target is too big, too easy, too many more column inches to write, and too many writers to fill those inches. How about Madoff, the $50-billion Ponzi scheme guy? The same result as Bush. I am afraid that blame is only interesting.
The news dartboard makes it abundantly clear that a lot of things are not in our best interest, like Ponzi Schemes, predatory lending and poor public policy. What it does not make clear is that we do not have to stand for it like an animal in the beam of oncoming headlights. We seem to have a tremendous amount of information at our disposal. Oddly, what we do not seem to be is aware.
For example, are we aware that banks and credit card companies have no mandate to make our business and personal financial lives suck? As institutions, they are not bright lights. At best they are rearview mirrors. From a behavioral point of view, they are like lemmings. They actually need us not to follow them over a cliff. We are their customers and following their plummet does not work for us. Maybe blaming banks will.
Back at the news dartboard, the scoring point for bank failures is a triple score. In Georgia, for example, there have been five bank failures in the last five months and the hits just keep on coming. Another fifteen banks are expected to go under this year, more than twice the number that collapsed there during the savings and loan crisis twenty years ago.
I do not see a scoring headline that says “Banks and Credit Card Companies Lead Country to Prosperity.” Should we blame them further? On one side I can argue that we cannot blame people for not doing what they do not know how to do – such as lead. On the other side I am troubled when bankers who have received tax dollars from the Troubled Asset Relief Program (TARP) refuse to say how that money is being spent.
“We've lent some of it. We've not lent some of it,” said a spokesperson for JPMorgan Chase, which received $25 billion. “We have not disclosed that to the public. We're declining to." Really!
As a business management consultant with years of experience asking for and getting money for my clients, I can guarantee you that bankers ask two make-it or break-it questions. One is, “What are you going to do with the money?” The second is, “Where did you spend the money we gave you?” I can also guarantee you that answering, “We're choosing not to disclose that," would get me and my client shown the door. Bank of New York Mellon got about $3 billion of the TARP and that is what they told the Associated Press.
Fortunately, there is the Treasury Department. It is monitoring how our taxpayer TARP billions is being spent. How is it doing that monitoring? "What we've been doing here is moving, I think, with lightning speed to put necessary programs in place, to develop them, implement them, and then we need to monitor them while we're doing this. So we're building this organization as we're going."
That might sound like a Sarah Palin answer, but it is worse than that. Those are the words of Treasury Secretary Henry Paulson. Let’s overlook the “lightening speed” bit and focus on Paulson’s central point. If he had said “We are making it up as we go,” he would use fewer words to tell the truth. We would at least be aware that he was a banker.
While we deserve more in the way of public policy than “making it up as we go,” that is what we have. It is public policy as a dartboard game. Now that we are aware of that, perhaps we had better learn how the game is played.