The 'Invisible Hand.'

"A market needed no longer be run by the Invisible Hand, but now could create itself--its own logic, momentum, style, from inside.  Putting the control inside was ratifying what de facto had happened--that you had dispensed with God.  But you had taken on a greater, and more harmful, illusion.  The illusion of control.  That A could do B.  But that was false.  Completely.  No one can do.  Things only happen, A and B are unreal, are names for parts that ought to be inseparable..." 

-Thomas Pynchon, Gravity's Rainbow (1973).

Indeed, Pynchon.  Indeed.

However, I think he's got it only half right--both the 'Invisible Hand' and the self-created control mechanisms do nothing to control the one element of human nature that is infallible: greed.

On the one hand, we can scream and moan and preach and finger-wag at Bernie Madoff and the assholes running the American car companies--companies, mind you, that are icons of American culture--and the hedge fund gurus who discovered new and interesting ways to further confuse the already head-spun SEC agents, and we can lock up the mortgage brokers and the mortgage companies and all the willing and unwilling (or unwitting) participants in the scandalous mortgage nightmares; but will this solve things?

No.

On the other hand, we can turn our focus to the government and Barney Frank and the Financial Oversight Committee, we can lock up our legislators who failed us, we can impeach and bring charges against Bush and his cohorts, and we can attack and steamroll those regulators who failed us so miserably; but will this solve things? 

No.

As pitiful and defeatist as this sounds, things will not change--not permanently, at least.  We are humans and we are Americans, and Americans are Capitalists.  Unless they're is another revolution on the horizon (and, who knows, have we fallen than far?), we are stuck with the same miserable financial system, the same miserable wizards who were educated in the context of the same miserable archaic system.  We are products of products, and we have learned well from our own history.  

What we can do is fight small battles: feed the hungry, house the poor, enlighten the ignorant, expose small corruption, catch liars, and, most importantly (and simply), do good work.

Oh, Garrison Keillor, are you ever wrong?

The Stigma of Renting.

As Congress continues to work with disgraced financial officers, it's easy to get lost in the jargon and lose interest.  But, as Barney Frank pointed out yesterday, there is an social undercurrent to this crisis that fueled the expansion of the housing bubble and is worth a quick note.

All segments of the financial industry and Congress are, in part, to blame for the housing crisis. However, the consumers that were either duped or lied to themselves felt an overwhelming pressure to get into a home that they owned.  Congressionally funded programs like HUD were setting ambitious goals for homeownership which contributed to the broad social migration into unaffordable homes.

In the past 6-8 years, renting has become a lifestyle of a second-class citizen.  In order to stimulate the economy and prevent the mistakes of the past, as Mr. Frank suggests, the new administration must invest in repairs to crumbling public rental units, and begin to change the public lens with which we all view homeownership in the United States.