In October of 2008, Alan Greenspan, once the most powerful man in the most powerful sector in the most powerful country in the world, stood before congress with the wreckage of 34 trillion dollars of destroyed wealth in tow.
The financial markets had collapsed. The culprit, debatable to the extent but not to its involvement, was a global obsession with short term gains made on risky debt that was packaged, bet on and then distributed like a sickness to the corners of the globe.
Nowhere was safe. The government of Iceland went bankrupt.
Greenspan, appointed as the Chairmen of the Federal Reserve by President Reagan, where he served as the de-facto head of the financial world for 16 years, had something to share.
He was wrong.
“I made a mistake in presuming that the self-interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders,” he said.
Greenspan believed, in his heart, that Wall Street could be trusted to the extent that they would never jeopardize long term profitability, decades of making themselves and the world rich by financing a growing and prospering economy, for a few short-term basis points; no matter how many basis points that could be.
The policies he advocated for, like refusing to support regulation for credit default swaps, a type of insurance bet that accelerated the impact of the crisis, reflected his belief in the inherent sustainability of the markets. Those policies attacked the true evil; that of regulation and those things that unnaturally restricted the flow of capital and finance.
The economy was much more likely to choke to death than it was to set itself ablaze with the folly of toxic securitization.
It wasn’t that Greenspan believed, as the fictitious Gordon Gekko from Oliver Stone’s Wall Street put it, that “greed was good”. It was that he didn’t believe it was the true risk. So, he put his energy where he felt that risk was.
As he said, he was wrong. With great consequence. And he had his moment in history to say it.
Two years ago, I had my own Greenspan moment.
As a self-described conservative, I had deep set beliefs about the role of government and the direction of our society. In my life, a child of the 70s and 80s, and a veteran of two wars, the march of progress seemed unstoppable.
Increases in immigration, civil rights, Title 9, women’s reproductive rights, LGBT acceptance in the military, same sex marriage, healthcare reform, all were recent, clear advances in the progressive agenda. As a reasonable conservative, I viewed them not as negative evolutions. But as a natural and true expansion of access to the American dream.
They were societal shifts that, in my mind, were inevitable. They didn’t need government to push them. The people would get there on their own and government would move in response, when required.
My identification as a conservative was grounded in that belief. There was no risk to backslide into the America of narrow privilege. And a tremendous risk that a government, spending half of every cent it spent on entitlements and a national discourse so insistent on political correctness that truth took a back seat to a concern about hurting people’s feelings.
I believed that our risk was that of a welfare state. And a society that denied hard realities and could therefore not be trusted to make hard decisions to bolster our sustainability. I was not against progress. I just didn’t think it needed any help.
In June of 2015, Donald Trump announced his candidacy for the Republican nomination for President. He started with an anti-immigration rant that labeled Mexicans as criminals and rapists. The Trump Corporation immediately lost business agreements with several corporate partners like Macy’s and NBC. And in my mind, the market corrected itself. Progress was inevitable. His candidacy would be a blip; the trough of a sine wave angled upward in the direction of social progress and inclusion.
18 months later, he was elected. And I was wrong.
I wrote a thousand word essay (LINK) on this blog. My Greenspan moment.
“If insistence on decent treatment of all Americans makes me a liberal in the eyes of conservatives, then maybe we should take some time to reflect on who our modern conservatives actually are.” I wrote.
My ideological reckoning went viral to millions of readers.
Over the last two years, as President Trump has successfully pushed a conservative agenda on key items like tax reform and appointments to the judiciary, much of the conservative conscience of America has fallen in line with him. Running in the background has been a long list of personal frailties that have opened the American government to investigation, global ridicule and an erosion of social capital.
Those who have held an outdated line of the old conservative guard have earned the label “Never Trump-er”. The last two years have witnessed a type of sorting of conservatives.
-Those of us who believed in conservative approach to government because we believed that liberalism was woven into the ether of our society. And that progress required a check lest we drive us off a progressive cliff.
-Those ideologues willing to tolerate anything to get a conservative agenda driving our government.
-Those who saw the Trump movement as an opportunity to normalize long atrophying American tendencies towards ethno-centrism and nationalism.
As we speak, a week before national mid-term elections, the U.S. Department of Defense is mobilizing a third as many troops as we have fighting the Taliban in Afghanistan to defend our southern border against a caravan of migrants weeks to months away from the border, walking from crime and poverty in broad daylight.
I’m not for open borders. But as an Iraq war veteran and an American living in sight of our border with Mexico, I see it for what it is; mobilizing troops for political end on American soil. And that’s not ok. Those of us searching for a line to hold, in which we insist that the current administration not cross lest we do irreparable damage to our nation and precious institutions, built with blood and toil over centuries, would do well to look behind us. We’re several steps over it.
If there is a pure signal that the risk in America has exposed itself to be different than perhaps what many of us thought it was, before 2016, that of lubricated spending and value signaling self-deception, we’re in receipt.
The risk to America, at present, is not overheated progress. The risk resides in the executive branch of the United States government and its ability to usher in a recession of western liberal values.
As an enfranchised people, we’ve got a clear opportunity and responsibility, by design, to check that risk. The Republican controlled Congress has shown us that as long as they control the legislature, there’s enough political motivation and party loyalty, even in the face of substantial risk, that the designed check can’t be counted on.
We can’t count on the ideologues to manage the risk either. And we certainly can’t count on the ethno-centrists. But we need to count on us, those who once believed things about the world that turned out not to be quite as true as we assume, to come forward and act.
Unlike Greenspan, whose only recourse was to stand in front of Congress and attempt to pay back some of the 34 trillion in lost prosperity with a nominal amount of his own historical legacy, we have a chance to manage the risk we until recently under-valued.
We consequentialist conservatives are the margin required and the express charter of accountable government.
The world is watching.