One of the things you learn early-on in journalism is to be very wary of using superlatives or definitives such as “the only,” “the first,” or “the most.”
But as we reach the end of this year, I am going to break that rule because 2008 has turned out to be the most momentous year that I can remember experiencing in my lifetime.
It is almost impossible to believe–looking back to the beginning of the year–that we can have arrived at where we are now in the course of some 365 days, give or take a few. So much has changed, so much has collapsed. The underpinnings of our financial system must have been far more precarious than even the most dedicated pessimist was willing to allow.
We now know for certain, however, that the recession that is taking such a hard toll at present actually started in December of 2007. In our guts I think a lot of us knew that, feeling the spreading uneasiness that was oozing out like a huge uncontainable oil spill. Even a few months ago, I thought we were heading for a depression, never mind a recession.
Most people “knew” what was going on. The only entity that did not, apparently, was the government. Or maybe it did, but just wouldn’t admit it. Why does either option not surprise me?
Who would have thought that AIG, once the very symbol of insurance might (and symbol, many would say, of corporate arrogance) would have been brought so low in so short a time?
Who could have predicted a scenario a year ago where not one–not one!–investment bank was left on Wall Street to come up with ever more exotic ideas for making money and creating something out of nothing?
Gone for good are Lehman Brothers and Bear Stearns. And Goldman Sachs, the archetypal money-minting investment bank, the one that made money no matter what, is now a bank holding company? Give me a break.
The commercial banking landscape is littered with has-beens and basket cases. Washington Mutual, Wachovia, Citibank are just some of the biggies that were sold or partly nationalized, but there are many smaller regional banks that we’ll see no more.
Back here in the insurance kingdom, many of the publicly-held life insurers have seen their stock prices drop to an unthinkably low level, one that is ridiculously out of sync with the innate value of their business. But that, folks, is what panic does.
Some life insurers that had banking affiliates used that connection to line up at the federal trough known as the Troubled Asset Relief Program. Others who wanted to belly up to the bar but lacked a banking connection (which the Bush administration said they needed) went out to find partners on the cheap with names you’ve never heard of. But such moves will probably ensure they get a share of the TARP goodies.
Led Zeppelin’s “Dazed and Confused” is a great song and would be my pick for the soundtrack of the Bush administration’s handling of the burgeoning crisis in the year now passing into history. Every action the government took just seemed to make things worse, sapping whatever confidence was left among investors and consumers alike.
It was only with the election that people could see that there was a corner that would indeed be turned.
“Celebration Day” is another great Zeppelin song. Which reminds me, is it January 20th yet? And if not, why not?