I heard the news of Bear Stearns’ ignominious end from two Ukrainian investment bankers, having missed the denouement of the express financial drama while in flight from New York. The scene was one familiar to any financial journalist or other big-money hanger-on: a private booth in a marble-appointed sushi restaurant, two financiers looking conspicuously too young for the cash they have to throw around, looking faintly board at having to waste time and words on a mere hack who can’t directly help them make any more. Exactly the kind of scene played over a million lunches and dinners during better times on …. Wall Street.
But here’s the twist: These elite scions of a country most Americans (with some reason) think of as third-tier all-but mud-hut benighted, if they are aware it exists at all. taking the chance to send some well-deserved scorn back across the Atlantic. Bear Stearns sold for $250 million!” they chortled over the laughable sum. “Maybe a Ukrainian bank should have bought it!’ And indeed Ukrainian banks have been hot properties over the past two years or so, selling out to continental European cousins at $1 billion and up for the bigger ones.
My mind jumped back a few days to last Friday, when I first heard about Bear Stearns going into meltdown via Fox Business News, while eating some tuna fish (Bumble Bee from the can on this occasion) at home on Staten Island. Some American financial talking head in a $3,000 suit and $1,000 glasses was cogently arguing that governments could not allow banks to fail even though they had acted like idiots and wasted their capital on bad investments, how the central banks of the world needed to raise a $1 trillion rescue fund as the only means of staving off a rerun of 1929.
Now my first observation was commonplace: how when these clowns are riding high they sneer at government and revile the necessity of paying taxes in blithe assurance that the “self-correcting” market is all that’s necessary for the further progress of mankind. How we don’t hear any of the kings or pawns who created this mess volunteering to give back any of the hundreds of millions they raked off the top as the first contribution toward a rescue fund. How in Korea at least disgraced executives make ritual public apologies and crinkle their faces on TV.
The audacity of the money class in changing from universe master to humble petitioner is an old story. What was new, buried in the interior of the talking head’s remarks, was an additional address of the petition, foreign investors. Having emptied its collective pockets like a drunken sailor on a six-year or so binge, America now seeks to replenish them from the folks who have cash: China, Dubai, etc. “The foreigners will be coming in soon,” my friend on Fox assured us. Ukraine was not yet on the list of potential white knights. But you can feel certain that no one would turn away a chunk of Russian money that wanted to buy into Citibank or Morgan Stanley at this point.
Here’s what’s interesting: The financial class, being by its nature pragmatic and mercurial (See Mitt Romney for a glaring example) has easily switched gears to the reality of America as a capital supplicant, the necessity of name-brand American institutions dancing to Chinese or Dubaian tuunes if they want to support their managers in the style to which they have, since Ronald Reagan opened the floodgates of righteously self-justifying greed, become so firmly accustomed.
The general population, on the other hand, is set in its ways and emotional, like general populations anywhere, and clings to the pleasant idea of America as boss of the world, able if not obligated to intervene in the remotest corner of the globe to protect freedom and civilization, the unquestioned leader among nations. Neither Vietnam nor Iraq has shaken the broad conviction that we are morally obligated to maintain our benign (as we see it) empire, that the White Man’s Burden passed to us after World War II and we must carry it (preferably with soldiers hired from minorities and the lower economic classes). The presidential candidates will fiercely debate how and whether we should soldier on in Iraq, but no one will mess with the shibboleth that the USA needs to be “strong.” (Except good old Ron Paul, who was laughed congenially out of the race.)
Now it only stands to reason that the rest of the world is not going to pay for us to boss them around. The American public will have to take a long, painful journey to reach the conclusion that Wall Street grasped instantly: We are one nation among others. We’ll have our better and worse moments. Sometimes we can help and sometimes we’ll need help. The sun set on the British Empire at last. For America it’s looking well into the afternoon.
Tags: Bear Stearns, China, Citibank, Dubai, investment banks, Ukraine
