Mass Idiocy? Not At All

David Brooks of the New York Times recently wrote that the financial crisis on Wall Street stemming from the sub-prime mortgage market meltdown is an example of "mass idiocy," justifying the intervention of the federal government in the form of a bailout. Setting aside the blinding contradiction from a fundamentalist such as Brooks that markets always work perfectly except when they don't, I respectfully disagree with his assessment. Those who profited handsomely from the subprime bubble were not idiots at all. They were capitalists. They were the economic heroes of the last seven years. Without their brave risk-management strategies and mind-boggling financial wizardry, we never would have recovered from the 2001 recession. It was their willingness to take on risk, to package it into ever new and exotic schemes, to invent for the 21st century a metaphysical language and style defying any effort by finite beings to comprehend, that we have all benefited from during this time. They were the ones that made it possible for the mighty American consumer to keep on trucking, even while wages remained stagnant and the government was hemorrhaging debt. It is understandable that a market fundamentalist such as Brooks would want to distance himself from the current fiasco by saying that what we are seeing is idiocy and not capitalism. But it's a lie, in the grand tradition of apologists for the Soviet Union who made fine distinctions between the supposed purity of socialism and its unfortunate manifestation in the form of the totalitarian state. What we are currently witnessing is none other than the most robust illustration of global capitalism at work. And this gets to my broader point. We often hear about incompetence, and now greed, wrecking what would otherwise be very fine plans, for instance, to expand wonderful economic opportunity to the rest of the world, or to liberate Iraq from itself, or whatever. I think this is mistaken. Just this week Vice-President Dick Cheney went to Iraq and declared it a success. His boss, President Bush, said the same. Why not take them at their word? Why assume the existence of incompetence when all evidence is to the contrary? Isn't it more likely that what's happening today, from Wall Street to Baghdad, was the plan all along?