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Financial Crisis a Cultural Failure

The more I read on the current financial crisis and the more I think about the ramifications, the more I realize that September 2008 will probably have as much of a lasting effect on our nation as has September 2001. That's because what we've witnessed is not just a political failure and not just a financial failure. This is a cultural failure.

Victor David Hanson has it right when he lays the blame at all our feet. Yes, insufferable Wall Street greed played a major role as did incompetent, ignorant, servile and just plain corrupt Washington politicians. I'd like to lean back in my chair, point fingers and quietly absolve myself and all the rest of us who neither work on Wall Street nor in Washington. But I can't.

A lot of us took part in the credit-shuffling game that was the real estate boom. I was even one the lucky ones who sold a property at a ridiculous profit. I didn't intend for my home to be such a tremendous investment, but I sure as heck didn't care what cultural forces or what financial shenanigans made my windfall possible. I took the money. Gladly.

A lot of other people did too. And many of those who eventually got caught holding the bag were not innocent victims of the system. They were players. They knew they were taking out unsustainable loans but they believed the profits they could make in the market more the justified the risk. They were stupid and wrong. Their banks were stupid and wrong. Our culture that demanded easy credit and high returns was stupid and wrong.

We took the wealth and prosperity part of the American Dream and jettisoned the hard work part. We believed that the house flippers on TV were smarter and more interesting than the people and businesses doing real work and slogging out real, if mundane and small-margined, profit. Even as many of us decried our nation's free-spending, gilded-age ways, we grumbled when our investment accounts fell short of the high returns enjoyed by others.

Blame the Wall Street profiteers. Blame the Washington imbeciles, cowards and thieves. They deserve our scorn and whatever punishment the law allows. But $700 billion is not the indulgence that absolves the rest of us. We have much harder tasks ahead if we really want to get our nation back on track. Now, I don't know how to change a culture. Chances are, it will take much more than a rocky autumn to make most people stop lusting after easy credit and high investment returns. These bailouts might just be postponing the needed reckoning.

But I'd like to think that these last few weeks have at least opened the eyes of enough of us - have made enough of us realize that wealth is not something that can be generated quickly if we want to generate it sustainably. That sounds like commonsense. But, apparently, most of us had, in one way or another, forgotten the realities of markets. The market has shown us our folly. Let's see if enough of us can remember the lesson.

Alan blogs daily at Donklephant.com

Cheney May Not Attend GOP Convention

Some politicians are unpopular. Some are toxic. Vice President Dick Cheney is apparently the latter. Looks like the most powerful (and most unpopular) veep in recent history will be sitting out the Republican Convention. Seems John McCain's people would rather not have viewers at home reminded that, you know, McCain is in the same party as Cheney.

With the McCain campaign already considering timing the announcement of the VP choice to minimize coverage of President Bush during the convention, you have to wonder what else McCain might do to distance himself from the current administration. Look for his acceptance speech to be chock-full of criticisms of the White House and promises for change.

Alan blogs daily at Donklephant.com

McCain Caught Simplifying History

Rattling around the Internets yesterday was this report that, in an interview with CBS, John McCain misstated the timeline for the Iraq surge and the Anbar Awakening. The Awakening began before President Bush announced the troop increases but McCain's statements made it sound as if the surge directly led to the Sunni revolt against al-Qaida in Iraq.

Now, McCain is denying that he misstated the timeline, insisting that critics misunderstand the meaning of "surge." McCain says the surge included numerous counterinsurgency initiatives, some of which began several months before Bush announced the strategic change in January of 2007. McCain continues to maintain that, without the surge/counterinsurgency efforts, the sheiks who revolted in Anbar could not have succeeded because we could not have protected them.

While McCain can validly argue that our increased troop levels and improved counterinsurgency efforts helped insure the success of the Anbar Awakening and similar Iraqi-led revolts against al-Qaida, he knows full-well that the common definition of the surge is the increase in troop levels President Bush initiated in January 2007. The Anbar Awakening was underway well before then.

I think McCain got caught simplifying history for the sake of a clean argument. It's not that he doesn't understand the order of events it's just that the order of events are inconvenient to his argument. Much like the success of the surge is inconvenient to Barack Obama's arguments. Both men are struggling to present the facts as they stand and not as they wish they stood. We will need some serious media and citizenry vigilance as we go forward in this campaign to make sure both candidates are painting an accurate portrait of Iraq and our successes and failures there.

McCain deserves to get smacked for simplifying events and appearing ignorant of the historical timeline. But his greater point is not wrong. The surge helped insure that the Sunni revolt against al-Qaida succeeded. Will Obama ever admit the same?

Alan blogs regularly at Donklephant.com