Vic Socotra

29 September 2008

Jump

Paul Newman left us over the weekend. He had the most striking blue eyes in Hollywood for several decades, a good solid marriage and great salad dressing. His eyes looked out at me from the fridge when I went to start putting dinner together and suddenly felt a sense of deep and irreparable loss.

When I read the obit, I was not surprised to discover he had been a Navy gunner in torpedo planes in WW II. He never had to jump out of one, but he was there in the uncertain sky. With the rest of America, he put his ass on the line with the other millions who went off to the show, the one overseas and the one right here.

Paul certainly seemed confident on screen. the sky It is still hard to reconcile the rascal Hud with the old man who died of cancer.

How did that tough young man get old? It was not until I got a package of pictures from the pool closing that I realized the horror of the situation. The man who wears my skin looks more than a bit like a walrus. Newman had taken all of us along with him.

The sense of deep and irreparable loss pervaded the weekend, entwined with the rains of autumn. The bail-out slash rescue package appears to be ready to go in the Congress later this morning, but the smart money is saying it is not the magic bullet that will make everything fine again.

Examples from the past are trotted out; the calamitous collapse of the house of cards of the Great Depression, in which the Government did too little.

The lost decade of Japan, the world’s second largest economy, that occurred after their real estate bubble collapsed and the government did too much.

The plucky Swedes, who chose a middle course and eventually turned things around with a modest profit in the early 1990s.

They say our leadership is well experienced in these painful examples of governmental intervention, but there has never been anything quite as large as the American economy in this world, and the liabilities stretch further and deeper.

It could be that rescue will work, and we will digest all the bad debt and emerge stronger than ever. Anything is possible, I suppose. But I am more resigned to the poignant view of an economist pal, who noted that the Baby Boom is not going to see any retirement at all, certainly not the way we thought.

Paul Newman’s generation took their sacrifice early. Steeled by the Depression, hardened in cauldron of the Second World War, they took care of things. They were fruitful. They saved. They multiplied.

That's us. The Baby Boom has always managed to have smaller parts of the society do their sacrificing for them. There was always the assumption that sacrifice could be deferred. At the end of the Clinton administration, Fannie Mae and Freddie Mac lobbied hard for lowering standards for lending in the interest of expanding home ownership. It was touted as the "unsung accomplishment" of the Clinton years, loosening the stodgy old requirements and spreading money around. It fueled a bubble in real estate, and I remember when it began in my own neighborhood in Fairfax County.

It was a convenient means to benefit the two quasi-governmental institutions, and particularly their management, while placating the social desire to do something for those who had so little. The de-coupling of the means to pay from the desire to own was intoxicating, and the lenders and the bankers ran with the idea, right through a decade of increasingly reckless lending.

Mr. Greenspan noted the concept of “irrational exuberance” during his tenure at the Fed, We have been irrational, if not downright delusional, for a long time. It really is not possible to do that, and now we have proven it.

I liked the cardboard sign that someone was holding outside Wall Street the other day. It expressed exactly what a lot of us think. Someone needs to pay for this, publicly, and then we need to move on and get back to work, This is going to take a long time to fix, and a little bit of sacrifice along the way.

Not for the first time am I filled with envy for Paul Newman’s generation. They had the opportunity to get the bad times out of the way early, learn from the experience, and apply hard work to making a better world.

The Baby Boom seems to have succeeded in saving the worst for last. I wish there was a place of safety to jump to, but I think we need to get back to work.

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