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.