The further to the left or the right you move, the more your lens on life distorts.

Saturday, September 27, 2008


In a unique style that is his, and his alone, Bill Whittle writes an intriguing essay recounting his recent experience passing a kidney stone, and somehow at the same time, tells us everything we need to know about the current financial crisis. He begins:
The only thing I remember about the drive to the hospital was that it was slow. I scratched my name on some forms, left my clothes on the bathroom floor after getting undressed, and didn’t give one sweet damn about any of that gown nonsense. I staggered out just holding the thing on. Because by now, my friends, my world was just a white-hot blinding light — all around me, the entire room was just bathed in that wall of pain and the only thing I cared about was getting that shot.

Whittle had let his health insurance lapse, but off to the hospital he went. His pain was excruciating and as is the case in most hospitals, he waited and waited to be seen…
But the fact is, after two hours of this I was screaming and cursing and calling out to God and Jesus and whoever else would listen. And all that second Demerol shot did was take that bright light down from filling the room to being a single, white-hot spot the size of my fist moving down and to the right at the speed of L.A. traffic. So after three hours of this, I was reduced to simply mewling, and at about 3:30 P.M., the doctor went away for 15 minutes and when he came back he gave me a shot of Dilaudid, which is the name I will give to my first child, male or female.

I’d been in serious pain only once before, about 20 years ago, when I cracked a molar that lit into the nerve that runs through your jaw. That put me on the floor, too — right quick. That was a toothache I felt in my hip. And the thing I remember about that time and on Friday too, was a sense that when you are in that universe of pain for three or four hours there simply is no other side to it. You can’t remember, and you can’t imagine, what it would feel like not to hurt.

So imagine my delight, ten minutes later, to see the hallway door melt away as room was filled with unicorns! Little cartoon unicorns, each with a silky mane of bright blue or green or pink . . . and when they giggled — which was continuously — they would lift up their little tails and rainbows would emerge. And in that one wonderful moment as my eyes rolled back and the white-hot light faded away and vanished — in that blissful instant I suddenly understood with perfect clarity the whole Hope and Change thing. I had gone from the horrible, nasty, mean Republican America to the other America. And it’s a much better place, it really is.

Whittle goes on to recount how his father suffered with the same condition many years ago, had painful surgeries and then …
I don’t want that experience. Just about any remedy, no matter how horrible, would be better than that. But I have re-negotiated my new job to include health insurance. Why today and not three years ago? Because I just came through a world of hurt. I don’t ever want to go through that again.

And this is my concern about the $700 billion kidney stone the economy is trying to pass. It seems to me that if we are going to change behaviors then the people who got us into this mess need to feel a little pain. If the hospital was handing out free Dilaudid every day my first question would be “what time do you guys open?” I’d pass 50 kidney stones a day if I could get to play with the unicorns instead of suffering for it.

Every decision we make is based on a risk/reward calculation. If we take away the consequences of risky behavior, we will see more of it. And if there’s a money-back guarantee for greedy and stupid decisions, we’re in real trouble, because there is only so much money in the bank but supplies of greed and stupidity are endless.

So how do we inflict some badly-needed pain on people who need to feel it, without hurting the rest of the good and honest folks who pay their bills responsibility? Well, there are three simple rules that we must follow. Unfortunately, no one knows what those three rules are. So here we are. I’m as flummoxed as the rest of you.

But there are a few simple rules that all of us should learn as we move forward.

Rule 1. Sometimes seemingly good ideas have unintended negative consequences. There are many reasons for this debacle and many villains, but it all began when politicians decided that every American, regardless of their financial position should have an opportunity to buy a home. A good idea on its face. Financing rules were relaxed, new mortgage products were created and loans were offered to people who had no real likelihood of paying them back. As long as housing prices rose, it all seemed good, but then, the bottom fell out. Now, it's true that taking out a loan you can't really afford is irresponsible, but that's human nature. What we needed and didn't get were political safeguards and ethical, responsible behavior within the financial community.

Rule 2. It seems that modern politicians, with very few exceptions care about only two things: (1) getting themselves reelected and (2) using partisan advantage to consolidate power so that reelection can be achieved. The actions of congressional leadership over the past few days have been shameful. It seemed that Nancy Pelosi and Harry Reid were more interested in allocating blame and ducking for political cover than they were in developing a meaningful short-term fix for the problem. Congressman Barney Frank, the committee chairman who blocked any reform of FannyMae and FreddieMac in 2005, now had the audacity to criticize everyone but himself. Congressional Republicans were overcome with ideology and, it seemed, were perfectly willing the blow everything up to make a point. Disgraceful.

Rule 3. Wall Street can no longer be trusted to create financial instruments that have a net long-term benefit for the economy. As a consequence of greed and irresponsible, unethical behavior, the Masters of the Universe in lower Manhattan put our entire financial system in jeopardy. There needs to be bloodletting and the Masters of the Universe need to feel pain, real pain. How? How's this for a thought? Federal law currently holds boards of directors personally and financially liable for malfeasance in the manner in which they control a company. Why not modify federal law to hold the CEO and senior members of the staff of selected major financial institutions personally and financially liable for damages caused as a consequence of malfeasance in the creation and/or sale of exotic investment vehicles. If losses are in the tens of billions and are deemed to be the result of these vehicles and “malfeasance” has occurred in their creation or sale, entities who have lost monies have the right to sue. Just the threat of billion dollar law suits against individuals will, I think, cause many Masters of the Universe to think twice. In addition, how about tying executive bonuses not only to their firm's short-term performance but also to overall performance of the markets, the economy, and the dollar in the longer term. Bonues are delayed to see whether unintended consequences occur. Unfair? Hardly. In fact, it might cause some Masters of the Universe to think twice before designing derivatives that could have broad, deleterious affects over the long term.

As Bill Whittle says at the end of his piece:
My own irresponsibility got me looking at 50 years of age without health insurance. I’m going to owe that hospital about two grand for this adventure. If you think I won’t miss that two grand, then you have over-estimated the financial value of internet punditry. But it’s my obligation; it’s my debt. I owe it and I’ll pay it, and I’ll try to remain focused on the fact that it could have been much, much worse. It was only that pain that got me to change my ways. [He signed up for Health Insurance afterward.]

Is that too much to ask of this [financial] mess? That from whatever pain we have to endure, we can perhaps learn enough from it so that we don’t go through this again?

It’s not too much to ask, but if the past is prologue, politicians, Masters of the Universe and even the general public won’t learn much at all.