by Peggy Noonan, Wall Street Journal, December 19, 2008
It's become a status symbol in New York to know someone who lost everything, as we now say, with Bernard Madoff, and to provide the details with a tone of wonder that subtly signals, "I of course was too smart for that, but I do feel compassion." It reminds me of the study I was told of years ago of soldiers who had seen a nearby comrade killed in battle. Their first thought tended to be not "Oh no!" or "Poor Joe," but "I'm not shot."
There has been criticism of Mr. Madoff's investors: How could they not have diversified? But people who were receiving quarterly reports on supposedly broad portfolios run by Mr. Madoff thought they were diversified. They didn't know he was the original toxic asset.
The most memorable line came from a Palm Beach, Fla., doyenne who reportedly said of his name last week, "I know it's pronounced 'Made-off,' because he made off with the money." A more sober observation came from a Manhattan woman who spoke, on the night Mr. Madoff was arrested, and as word spread through a Christmas party, of the general air of collapse in America right now, of the sense that our institutions are not and no longer can be trusted. She said, softly, "It's the age of the empty suit." Those who were supposed to be watching things, making the whole edifice run, keeping it up and operating, just somehow weren't there.
That's the big thing at the heart of the great collapse, a strong sense of absence. Who was in charge? Who was in authority? The biggest swindle in all financial history if the figure of $50 billion is to be believed, and nobody knew about it, supposedly, but the swindler himself. The government didn't notice, just as it didn't notice the prevalence of bad debts that would bring down America's great investment banks.
All this has hastened and added to the real decline in faith—the collapse in faith—the past few years in our institutions. Not only in Wall Street but in our entire economy, and in government. And of course there's Blago. But the disturbing thing there is that it seems to have inspired more mirth than anger. Did any of your friends say they were truly shocked? Mine either.
The reigning ethos seems to be every man for himself.
An old friend in a position of some authority in Washington told me the other day, from out of nowhere, that a hard part of his job is that there's no one to talk to. I didn't understand at first. He's surrounded by people, his whole life is one long interaction. He explained that he doesn't have really thoughtful people to talk to in government, wise men, people taking the long view and going forth each day with a sense of deep time, and a sense of responsibility for the future. There's no one to go to for advice.
He senses the absence too.
It's a void that's governing us.
And this as much as anything has contributed to the sense you pick up that people feel all trends lead downward from here, that the great days of America Rising are over, that the best is not yet to come but has already been. It is so non-American, so unlike us, to think this, and yet one picks it up everywhere, between the lines and in asides. The other night a man told me of his four children, and I congratulated him on bringing up so many. From nowhere he said, "I worry about their future." At another time he would have said, "Billy wants to be a doctor."
People are angry but don't have a plan, and they'll give the incoming president unprecedented latitude and sympathy, cheering him on. I told a friend it feels like a necessary patriotic act to be supportive of him, and she said, "Oh hell, it's a necessary selfish act—I want him to do well so I survive. We all do!"
This is a good time to remember who we are, or rather just a few small facts of who we are. We are the largest and most technologically powerful economy in the world, the leading industrial power of the world, and the wealthiest nation in the world. "There's a lot of ruin in a nation," said Adam Smith. There's a lot of ruin in a great economy, too. We are the oldest continuing democracy in the world, operating, since March 4, 1789, under a vibrant and enduring constitution that was formed by geniuses and is revered, still, coast to coast. We don't make refugees, we admit them. When the rich of the world get sick, they come here to be treated, and when their children come of age, they send them here to our universities. We have a supple political system open to reform, and a wildly diverse culture that has moments of stress but plenty of give.
The point is not to say rah-rah, paint our faces blue and bray "We're No. 1." The point is that while terrible challenges face us—improving a sick public education system, ending the easy-money culture, rebuilding the economy—we are building from an extraordinary, brilliant and enduring base.
The other day I called former Secretary of State George Shultz, because he is wise and experienced and takes the long view. I asked if he thought we should be optimistic about our country's fortunes and future.
"Absolutely," he said, there is "every reason to have confidence." He told me the story of Sumner Slichter, an economics professor at Harvard 50 years ago. "He was not the most admired man in his department, but he'd make pronouncements about the economy that turned out to be right more often than his colleagues'." After Slichter died, a friend was asked to clean out his desk, and found the start of an autobiography. "It said, I'm paraphrasing, 'I have had a good record in my comments on and expectations of the American economy, and the reason is I've always been an optimist. How did I get that way? I was brought up in the West, where the future is more important than the past, in a family of scientists and engineers forever developing new things. I could never buy into the idea that we had crossed our last frontier, because I was brought up with people crossing new frontiers.'"
Mr. Shultz laid out some particulars of his own optimism. There is "the ingenuity, the flexibility, the strengths of the national economy." The labor force: "We are so blessed with human talent and resources." And the American people themselves. "They have intelligence, integrity and honor."
We should experience "the current crisis" as "a gigantic wake-up call." We've been living beyond our means, both governmentally and personally. "We have to be willing to face up to our problems. But we have a capacity to roll up our sleeves and get down to work together."
What a task President-elect Obama has ahead. He ran on a theme of change we can believe in, but already that seems old. Only six weeks after his election he faces a need more consequential and immediate. In January, in his inaugural, he may find himself addressing something bigger, and that is: Belief we can believe in. The return of confidence. The end of absence. The return of the suit inhabited by a person. The return of the person who will take responsibility, and lead.
Link to article: http://online.wsj.com/article/SB122963827032919761.html