EDITOR'S LETTER: Jingle all the way
“Jingle mail,” they’re calling it. It’s when underwater homeowners send the keys back to the bank and walk away from the debacles they once thought of as combination retirement pension and ATM machine.
The language is capable of some lovely turns, isn’t it. Take “jingle mail”: it’s concise, telling, cute, onomatopoeically intriguing, it’s got it all.
Or maybe you’re not familiar with the term. Maybe you were distracted last month by a different jingle - I’m talking about Goldman Sachs, that titan of the public dole, and its record-breaking $3 billion quarterly profit - and you took your eye off the steady unraveling of the real economy.
And let’s not fool ourselves, it is unraveling. Pick a post-TARP, post-$787 billion stimulus indicator, any indicator: unemployment, home prices, mortgage delinquencies, bank failures, business failures, bankruptcies, credit-card losses, or that oldie but goodie, the national debt, $11.6 trillion as we speak and expanding at a rate of almost $4 billion a day.
In June, Tim Geithner stood before an assembly of students at Peking University and said that their country’s holdings of U.S. Treasury bonds were safe. His audience laughed.
It is funny in a way. Last fall, when the global financial system was staring at apocalypse, all that dogma about the rationality of markets and their powers of self-correction was jettisoned in a heartbeat and the First World got its socialism on quick and in a big way. And here we are now not a year later and Goldman, which would’ve died face down in a pool of red ink if not for the taxpayers, is playing hardball with the American people over the repurchase value of its warrants and cutting itself $11.4 billion in salary and bonus checks (another record, by the way, for those of you keeping score, and a 159 percent premium over the firm’s return to its shareholders through the first half of 2009). Meanwhile, the folks who paid all the bills are left to wonder how you build a recovery around half a million job losses and a couple hundred thousand foreclosure filings a month.
Maybe it’s another of these language things. With “jingle mail” you’re on solid ground. There’s no room for ambiguity. You know exactly what it means. But someone define “recovery” in the context of our current travails. Is there a new wave of unsustainable, artificially inflated home prices on the horizon to induce the rest of the world to lend us scads of money we’ll never be able to repay so we can buy stuff we don’t need? Do we really think people are going to whip out the plastic and start shopping like it’s 2006, that is, as soon as they get to feeling confident again about the future?
The states, lacking the federal government’s New Deal wherewithal, have another idea. It’s called casino gambling. In the absence of a real economy it’s one of the more effective engines we’ve devised to provide work for people for whom there will never again be manufacturing jobs while simultaneously outsourcing to the private sector the politically unpalatable task of raising money for the public till.
Which makes it, for all the concerns it may evoke, a compelling idea in these desperate times. No wonder that in state after desperate state, from Cape Cod to the mouth of the Ohio and out into the Plains, the industry appears headed for another of its explosively defining eras of growth.
But is it still possible to “slice the pie higher,” as George W. Bush once put it? That’s the big question. The good news is, it won’t take Dubya’s irrationally exuberant credit markets to find out. Reasonably healthy ones, motivated by a certain willing suspension of disbelief, ought to do it.
So way to go, Tim. Way to go, Goldman.