Featured Post

New book available! David Kaiser, A Life in History

Mount Greylock Books LLC has published my autobiography as an historian,  A Life in History.   Long-time readers who want to find out how th...

Saturday, July 14, 2012

Values again

The front page of today's New York Times tells us a lot about this moment in history. The lead story deals with Barclay's manipulation of benchmark interest rates, adding that the New York Federal Reserve was aware of the problem while it was going on but did nothing about it. Next to that story is another one on the enormous JPMorgan trading losses, now estimated at $7 billion instead of $2 billion. Sadly, the crash of 2008 was not enough to convince the powers that be--including President Obama-that destructive, risky financial practices are what our major institutions do for their very handsome living nowadays, and that drastic restructuring was necessary to get them on a different path. Another possibility would have been the return of high marginal tax rates. No one ever mentions the biggest reason for them: that people will give up scheming to make tens of billions when they know the government will take them, and perhaps think about doing something useful instead.

The headline on the left-hand side gives a clue to all how all might have happened. It is now clear that Joe Paterno, the most respected figure in American college sports at least since the retirement of John Wooden, collaborated in covering up Jerry Sandusky's serial pedophilia for more than a decade. Had Paterno not succumbed to cancer he would be in terrible legal trouble himself. Now we find that, as the scandal was beginning to break, he secured an extraordinary retirement package from the university on behalf of him and his family, one worth $3.5 million. His behavior is sadly reminiscent of that of many Wall Street tycoons.

Mitt Romney, meanwhile, is demanding an apology from the Obama campaign for pointing out that while he claimed to have left Bain Capital in 1999, filings with the SEC showed him as chairman of the board and sole shareholder for several years after that. His anger is revealing--the Obama campaign has clearly struck a nerve, and Romney knows he is in some trouble.

On a personal note, the past few months have been the busiest of my life, involving my retirement from the Naval War College, the purchase of new property in the Boston area, and packing up. Moving day is Monday. I am proud of not having missed a single week here. Next year, I'll be a visiting professor at Williams College once again, getting a first hand look at the state of academia. The extraordinary selfishness, the lack of any commitment to higher purpose, in so many of our institutions, is getting more and more apparent. The press, meanwhile, is getting weaker. The Newsroom, which I have been enjoying, is an interesting fantasy of what might have been. I certainly expect to live to see things begin to turn around, but that time has not yet come.


Anonymous said...


complete text of above excerpted speech:


A recent Rasmus poll found only 17% of Americans believe our national government possesses the consent of the government. 17%!! You are all young. The Americans in the room may think those figures bad but that they’ve been almost as bad since you’ve been in high school—so perhaps they aren’t shocking. But they haven’t always been bad.

In 1964, Pew found 77% of Americans expected their government to do “the right thing” almost always or most of the time. Today, fewer than 20% feel that way.

So the American people think our democracy doesn’t work. That could be enough to imperil its legitimacy even if they were wrong. But there are also many objective signs that it doesn’t work.

Anonymous said...

Prior to the 1970s, a member of Congress who aspired to a position such as a committee chair got it mainly through seniority and service. But the system changed — they started having to put money into the party coffers in order to get ahead, a topic studied by political scientist Thomas Ferguson.

“Both major parties now operate virtually a ‘posted price’ system in which representatives essentially have to buy their committee chair slots by raising money for their colleagues and, crucially, for the national party political committees,” states Ferguson, a professor at the University of Massachusetts in Boston.

The whole political system has become dangerously corrupted. Harvard Law professor Lawrence Lessig calls it “dependency corruption.”

Bozon said...


Thanks for this post.

Values; good, or even better, ones have been increasingly hard to come by.

This passage of yours reminds me of what Michael Lewis claims he had hoped, from writing Liar's Poker way back when, only to later find out he had been sadly mistaken:

"Another possibility would have been the return of high marginal tax rates. No one ever mentions the biggest reason for them: that people will give up scheming to make tens of billions when they know the government will take them, and perhaps think about doing something useful instead."

All the best,