with Beth-Ann Kozlovich
HONOLULU—Remember these words: credit default swaps, derivatives, subprime mortgages? While it now seems we can go five minutes without hearing a news report containing any of them, the question is whether we and our government can clean up the lingering mess and prevent a similar scenario in future, according to “News Dissector,” journalist, and filmmaker Danny Schechter.
Schechter was among the first to see the housing market sucked out into the bay before the financial tsunami hit. On the heels of his film, In Debt We Trust, Schechter published Plunder, which he has now made into a film, Plunder: The Crime of Our Time. In both the book and documentary, Schechter says embedded journalist mentality is partially to blame for the public’s blind side. There was, he writes, a “complicity of the major media outlets, which failed to sound the alarm or investigate wrongdoers.”
It wasn’t just the greed of a few bad guy Bernie Madoff types or even rampant, generationally inbred consumerism that sent us toppling into financial free fall. It’s a systemic problem within our government—and Schechter agrees it’s not going away anytime soon.
“There are eight lobbyists for every member of Congress from the financial services industry. They fund campaigns, write bills and legislation; and a lot of the people who are elected do their bidding. There are compromises, but basically, they [lobbyists] have been very effective at shaping the narrative in favor of market-based solutions, which, in the end, benefit those in the market but not those pushed out of it,” Schechter says.
Three months ago, the U.S. House quickly passed the Wall Street Reform and Consumer Protection Act of 2009. Among other things, it was supposed to create an agency to regulate the financial industry and safeguard consumers from predatory practices. The bill is now with the Senate’s Banking, Housing, and Urban Affairs Committee—a committee on which Hawaii Senator Daniel Akaka also sits.
In a statement issued yesterday, Senate Banking Chair Christopher Dodd (D-Connecticut) says he will unveil “a substitute to the original reform package” next Monday. But Tennessee Republican Senator Bob Corker, who has been working with Dodd to craft the bill, says it won’t be introduced as a bipartisan measure. Schechter finds no surprise in Corker’s statement, only an unfortunate irony: Republicans and Democrats have worked together over decades to slowly erode the banking industry regulation created under the 1933 Glass-Steagall Act. Glass-Steagall was repealed in 1999 during the Clinton Administration.
‘It takes a long time for the truth to catch up with the political process,” Schechter adds. With the current partisan stalemate and accusative fingers pointing across the aisle, new banking regulation may not happen well or at all. And he says that just serves to extend the control of those who understand that despite an R or D label affixed to a politician, there is always someone “to rent. Dodd and many others are doing the business of business more than they are of labor or movements of change, of homeowners. This legislation is mostly spineless, so even if the legislation passes, I’m sure the banks have already figured out ways to get around it.”
Meanwhile, the markets are rebounding—it only took a year for the Dow to again cross into 10,000 territory—and there are small signs that a gradual recovery is happening. Just enough, perhaps, for an overwhelmed working public to say they just want to get on to better days, and get back to “normal.” Schechter says that’s dangerous.
More middle class families who have lost jobs, or who’ve had someone in the family lose income, will be affected by future foreclosures. The financial fallout hasn’t yet settled and now is moving away from subprime and into prime loans. “These are people who had good credit histories,” Schechter says. “They were not people who were uncertain they could really afford it and these people are losing their homes now. This affects all of us and that should worry us.”
The developing, optimistic news is that there are indeed those who are not so much worried as they are prepared to take on the challenges of fixing the system. Many in the Millennial Generation, those born between 1978 and 2000, consistently skew toward a progressive agenda according to the Center for American Progress. What they seem to be asking themselves is whether market growth is the same thing as stability. As they reach voting age, the sheer number of them, some 90 million, may force the question and demand a different answer than one that would have satisfied their older counterparts.
Whether or not that happens in the coming decade, no one is off the hook, says Schechter. We have to look for unconventional solutions, learn how to change ideas, even the functions of outmoded resources. One idea: turn empty or soon-to-be-closed post offices into community counseling centers. “People need places where they can get real help,” he says. Those places should be close to where they live. Smaller, community post offices are already there.
Advocating a return of an American ethos of personal responsibility and life beyond the superficial, Schechter knows this prescription sounds good and is far from easy. But he says it’s necessary. Americans fought back from the Depression and they can and will have to do it now.
First, go smaller and go local. Schechter argues that most of what we need can be found closer to home: everything from food to financial services. Talk to a credit union or hometown bank, shop with local merchants and service providers, and build community. We are in a time when we need to be acutely aware of each other, he says. For Hawaii, where the geography alone separates us from ourselves while keeping us far from anywhere else, we should especially take note. And in the continuing age of media consolidation, Schechter is calling on everyone to reawaken or learn new critical thinking and research skills—and teach them to children.
“If you don’t arm yourself with information, you’re going to harm yourself,” Schechter says. “That’s the reality now.”
To hear more reality according to Danny Schechter, you can access the entire Town Square interview at HawaiiPublicRadio.org.