There is no area of our society that is immune to conflicts of interest.  The revolving door between lobbyists and legislators — and the conflicts and difficulties they give rise to — was once again illustrated by Tom Daschel’s failed nomination.  Bankers and regulators often move in and out of bed together.  Physicians and pharmaceutical companies are intricately bound by competing needs and mutual interests.  Pentagon officials and defense contractors, accountants and their clients, reporters and their sources . . . .  The list goes on and on.

The problem won’t go away because the increasing complexity of our world requires that those who monitor and service industries know more and more about how they work in order to be effective.  That creates pressures to recruit those who not only know those industries intimately but also retain ties with them.  But then, of course, there are the advantages for those who are able to get on the inside track.  Pressures of competition mean that any advantage will be thoroughly exploited, and no amount of deterrance will prevent most people from doing their best to maximize whatever advantages they can, legitimately or not.

On the other hand, with our increasing sophistication and knowledge about how thinking is shaped by unconscious influences, we know we need to worry about the impact of these special relationships:  they impair and distort judgement, they skew decisions, they confound reality with powerful motivations.  Impartiality and neutrality may be impossible goals, in the last analysis, but that only means we have to struggle to maintain rationality, integrity and prevent corruption.  Disclosure is not enough.

Obama set out to put limits on influence peddling in Washington, and from the start he has been forced to make exceptions.  It is so pervasive and so accepted a part of business as usual, one has to wonder what kind of goal is reasonable to strive for.  At the same time, it is vitally important to restore integrity to the democratic process, and some greater degree of rationality, free of special interests, to public policy.  Because of the power of unconscious thinking, we so easily lose sight of what really makes sense, what actually needs to be done.

Dick Cheney’s career is the outstanding case in point.  After serving as Secretary of Defense, he went on to serve as CEO of Halliburton, leaving that job to be Vice President in the Bush administration.  One could argue — and no doubt he himself would and did — that the knowledge gained in each job was invaluable in understanding the whole.  But that is a perfect example of the “military-industrial complex” that Eisenhower warned us about at the end of his second term, the point of view embodied in the CEO who proclaimed “What’s good for General Motors is good for America.”  Who could maintain an impartial and objective perspective in the face of such merged experiences and convictions?

Are we destined to have a partial and corrupt view of the issues we face?  Will the example of Cheney set the standard, or will significant reforms be possible?  And even if reforms prevail, will it be possible to establish clear boundaries that protect us from the ever-present danger of unconscious influences distorting decision making.  We would have to really want to make those changes occur in order to be constantly vigilant and enquiring.



An economic recession inevitably produces psychological depression, and that, in turn, undermines our energy, hope and ability to recover.  We can’t help but ask ourselves, then: “How much of a psychological impact will this recession have?”  But we are asking the question indirectly, afraid to stare it in the face because we don’t want to know what we know the answer is likely to be.

]Those whose parents and grandparents lived through the great depression of the 30’s know how much they were permanently scarred by it, how they tended to live out the rest of their lives hunched over with fear.  We also know that such individual traumas as the loss of a significant job or a foreclosure and eviction can be as devastating as a fire or life-threatening illness, and the numbers of those enduring such losses is growing daily.  How great will the collective miasma become?  

We can detect this concern now in the media discussions about how long this recession will last — more precisely when will it end.  Time here is an underlying reference to depth and darkness.  The frequent analogies with Japan suggest that it could be a  very long time indeed.  Their banks were “dead” for ten years , and now their gross domestic product has declined at an annual rate of 12.7 percent.

In today’s New York Times (Friday, February 20th), Paul Krugman quoted from the minutes of the Federal Reserve, suggesting that some believe “more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates . . . of growth . . . unemployment and an appropriate rate of inflation.”  He had to go back to the Panic of 1873 to find an historical analogy, a depression that lasted five years, followed shortly by another that lasted an additional three. (To view the Times article, click here)

David Carr’s column in last Monday’s New York Times not only highlights the pessimism of some experts but the extraordinary reluctance of journalists to hear what they have to say.  Carr cites last week’s discussion on “Power Lunch” with Nouriel Roubini, the Stern School professor who has come to be known as Dr. Doom, and Nassim Taleb, author of “The Black Swan.”  If you know their work, you may not be surprised at their pessimistic view of the economy.  What is surprising and disturbing is how consistently the panel wanted to steer away from their message.  Asked to offer any sign that the economy was turning the corner, they demurred.  As Carr put it, they “did not play ball.”  It was too depressing for journalists, Carr noted, but too depressing for the public as well. (To view the Times article, click here)  

In recent years we have come to appreciate that the cost of war inevitably includes the penalty of Post Traumatic Stress Disorder, an inescapable consequence of exposing our soldiers to battle. And sometimes it does not show up until much later.  A financial setback is not a trauma in the same sense, and yet it comes with its own emotional cost of discouragement if not hopelessness, fear and withdrawal, avoidance of risk and circumscribed ambition — and it can take years to recover from such symptoms, if indeed recovery ever comes to all.


The Underlying Fear

It is not difficult to see behind the criticism of Wall Street bonuses and the proposed salary cap for senior executives, the looming threat of a major battle between the haves and the have-nots.  It is the story hidden inside the congressional battles over the financial rescue package and Obama’s failing efforts at bipartisanship.

Class warfare has been a central feature of western history since the French Revolution, and it has played itself out again and again in European politics.  FDR’s New Deal, crafted while armies of the unemployed marched in protest and camped out on the Washington Mall,  is widely seen as the effort that “saved” the US from a proletarian take-over.  Now, as Obama’s rescue plan is being compared with Roosevelt’s, we can’t help but sense the same underlying threat beneath the surface.  The anxiety is that there could be winners and losers on a scale unprecedented in our history.

The signs of this fear are subtle, and many of them are masked as denial.  Newswee, for example, featured an article last week on “Why There Won’t be a Revolution,” making the point that  “Americans might get angry sometimes, but we don’t hate the rich.  We prefer to laugh at them.”   And to make their point, they posted a picture of Donald Trump in his absurd, over-the-top bedroom, evoking images of Versailles.  But there isn’t much laughter these days and there is not likely to be any more laughter as unemployment mounts, foreclosures continue, and people watch their retirement savings disappear.  

Obama was chastised during his campaign for suggesting the tax system be used to “redistribute wealth,” actually an old-fashioned, commonplace idea.  In these days, however, it smacked too close to what more and more people wanted to see happen, but were afraid to say or hear.  Now, if anything, the sentiment is rising.  Curtailing salaries and bonuses, a far more radical idea, looks as if it is about to happen.

American politics has usually been a subtle dance between two parties both close to the center.  Radical change is kept at the margins. For all his occasional radical talk, FDR’s establishment ties made him a credible mediator, and his policies did undermine the prospects for revolution in this country.  Obama, similarly, is no radical.  He wants to bring us all together.  Class warfare, no doubt, is the last thing he wants to stimulate.

I am not suggesting that class warfare is actually lurking in the wings.  It’s not so much that we like to keep the rich around to laugh at as that, for the most part, we still hope to emulate them. America has not lost its promise as the land of opportunity, and we want our rich to represent the reality of that promise — though that want is no doubt hedged about with more and more ambivalence.

My point is that the unconsciously registered threat of class warfare is actually inhibiting the discussions we need to have about what to do.  The gap between the haves and the have-nots is just too great.  The disparity between the almost $15 million average salary of CEO’s and the average wage is unfair and, at this point, discouraging.  What we don’t know we know about the issues we face is that our hidden fears of class warfare may prevent us from thinking and speaking freely about the remedies we need to consider.


“I Screwed Up”
It was bound to happen, and the specifics were predictable.  And yet there is something refreshing in the way Obama owned up to it.  (See my entry for December 24th: Obama’s First Mistake.)

To be sure, it took the New York Times, among others, to call for Daschele to withdraw his nomination after many days of unsuccessful damage control.  And it followed hard on the heels of Geithner’s tax problems.  But the response was candid,  efficient, even acknowledging the nature of the fault.  Perhaps it is a new era in politics, but also Obama is still riding the wave of hope, and he gets an easy pass.

This was brought home in today’s Times, when Brandeis University’s president paid him the ultimate compliment of imitation. Referring to his own “mistake” of announcing the close of the Rose Museum on the Brandeis campus, he said “I screwed up.”  Maybe he will get away with it as well.