The Linkage Between 9/11 & the Global Crash
Daniel Berman explains what 9/11 meant to his generation, who were in high school at the time.
10 Sep 2011, 23:00
Daniel Berman's 9/11 memory
That changed abruptly after 9/11, and for all the discussion about the lack of connection between Saddam Hussein and Al-Qaeda, the date and its memory rapidly became wrapped up in the conflicts that followed. By the time of the second anniversary of the attacks in September of 2003, there was a new war in Iraq dominating the focus, while the following year the date became an issue in the Presidential campaign between John Kerry and George Bush. The year after, the anniversary fell in the midst of the catastrophic aftermath of Hurricane Katrina, while in 2006 it followed Iraq’s worst months. In 2008 it had to compete with Sarah Palin, and the following year the triple implosions of healthcare, the economy, and the War in Afghanistan it had touched off eight years before.
As an era it has not been a happy one for almost anyone. Few Americans would argue that the country is better off today than it was in September of 2001, whether economically, militarily, or politically. There is a certain irony in this. Those years have seen the rise of Apple, Facebook, and Google, as well major advances for Gay Rights. Yet many Americans, especially of my generation are pessimistic about the future, and to extent they will be looking back this weekend, it will not be on what has been accomplished but more wistfully at what has been lost.
A large function of this is that for many of them, 9/11 began a period of dislocation that dominated their adult lives. For those born between 1982 and 1990, they have lived the formative years of their lives in times of crisis. The crisis of terrorism following the attacks; the crisis and divisions over the War in Iraq; the threat of a Nuclear Iran, and finally, for those younger members of the generation, the economic crisis of 2008, which destroyed expectations built up over years.
As someone who began High School the year of 9/11, I recall the confusion and lack of information that spread in my class, the refusal to believe for days and weeks after that everything had changed. Shock at the events mixed with greater shock at the consequences. It was hard for a politically invested 15 year old to comprehend how one day could upset every constant. This lethargy on a greater level perhaps explains some of the ferocity of opposition to Iraq, and to the Bush Administration.
At the time almost everyone I knew was a Clintonian politically, a supporter of a continuation of the policies of the previous Administration, perhaps not surprising in Massachusetts where Bush barely broke 30% in 2000. People believed in a centrist consensus, with the government doing the minimum necessary in Foreign Affairs, and mediating domestic disputes, and the belief arose among many that the Bush Administration was “using” the tragedy to advance a destructive agenda – that the conflicts with Iran, North Korea, even the Israeli-Palestinian conflict could have been settled without 9/11. For the next eight years, through Afghanistan, Iraq and the 2008 Elections the dominant desire was to turn back the clock and go back to the 1990s. The opposition that followed to the Bush Administration was in many ways a reaction to the fact he was not Clinton, and ignored the possibility he did what he did because it was one of the few options available in the new climate. For seven years after 9/11 millions of Americans, especially in my generation, stayed true to the belief that the current climate was temporary, that someday things would go back to the way they were.
If 9/11 were a beginning, then the financial crisis of 2008 was an ending to those hopes, and to my class, the class of 2008, it was the cruelest of all. Students who entered the workforce in 2006 and 2007 received the opportunity to pursue careers and establish themselves before disaster hit. Those who graduated in 2009 and 2010 entered the market with low expectations and low demands. My classmates entered a market of enormous promise, with a new President sure to bring in a new era. Many had offers from leading banks, and a number even started work for several weeks before laid off amidst the catastrophe of that fall.
I bring this up not as a digression, but as a key to understanding. In the American psyche, the financial crash and the current economic crisis are intrinsically linked to the memory of 9/11. September 11th was as much an attack on American innocence and invincibility as it was an attack on the people in those towers, and that invincibility was not understood in terms of foreign threats but as invincibility to history itself. We are now part of a wider world aware to our limitations. No one would have talked about debt before 9/11 and Al Gore received little credit for his plans to actually eliminate it in the 2000 election. Now everyone is aware of our vulnerabilities, our losing war in Afghanistan, indebtedness to China, and the seemingly inability of our country to do anything about them regardless of who is in office.
The failure of Obama to bring back the 1990s, a failure that was impossible to avoid from the moment of his inauguration has left a generation listless. It is not a matter of being pessimistic about the future – more than that, it’s a matter of having no idea of even what individuals want from that future.
So when Americans gather to remember the events of ten years ago this Sunday, it will not be in a triumphal mood over the killing of Bin Laden. That celebration has passed. Rather it will to try and figure out an alternative path forward that does not rely on returning to the past..
Comments (2)
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You seem to think the financial crash was a result of moving to the right as a response to 9/11.
Unfortunately you're mistaken. The financial crash was a result of sucessive Governments trying to make home ownership available to people who couldn't afford them. You may find it a bitter pill but that policy was primarily started by Democratic Politicians.
The one thing Clinton did do was to reduce the deficit fir a few years. But generally politicians of all parties have spent a got in debt, in the belief that they could simply print dollars; because they were the reserve currency.
Sadly what you're not facing up to is the US has let it's competitive edge go - and thats been down to the left creating politically correct nut not economically correct social policy - and the right creating ideologically correct but not economically correct foreign policy.
11/09/2011 08:47I don't think I said the turn to the right caused it. I was more expressing the general shift a lot of people in my generation went through over the last ten and then two years. I supported McCain in 2008, at least until he seemed to want to go to war with Russia over Georgia,
There were of course people who opposed George Bush ideologically. But a large part of the opposition was a wish to have Bill Clinton back, which in a sense was pre-9/11 nostalgia. This was held in check during 2002-2005 when 9/11 was fresh and going back seemed to be giving up the battle, but afterwards it became overpowering, and everyone began reinterpreting Bush's behavior in 2001-2003 in light of what happened in 2005-2007.
As for my views on the financial crisis, I think there were three problems.
1. The housing crash, which was certainly an issue, but a commodity crash could do the same thing right now, especially given gold's non-existent real world utility. What made it dangerous was bank's overexposure, which did not have as much to do with government encouragement as a transition in Wall Street culture since the 1980s.
2. In the old days banking careers were tied to companies and firms. Like Law firms they were run in the family and people were attached. Modern ibanking has developed in a way in which a career in it is not viable, or not viable at the level of direct engagement for more than a few years. When combined with the fact that the path of promotion from a summer intern, to an associate onwards is based on rewarding results over a short-period and deals on the basis of their size, you have an incentive to make decisions that maximize returns over the next 2-3 years and very little reason to care what happens to Goldman ten years down the road. Maybe you have some stock, but even the CEOs don't last for that long.
The issue is not that there was a bubble. It was not that bankers did not know there was a bubble. It was the fact that every single incentive operating on junior traders in say, 2005, pushed them into deliberately inflating a bubble, because it was not going to be their heads on the chopping block, well at least not first. The first ones out in 2008 were going to be recent hires.
I went to a discussion panel regarding Bates' College's management of its endowment fund in September 2008. Amidst stupidity such as dismissal as to the potential of twitter, one of the discussions focused on how Bates had achieved only a 19% return per year over the last three years, wheras our competitors were ranging from 20-24%. Harvard was in the low 20s. Now let's ignore the point that there is no reason why Harvard needed that return, and also add that no serious investor would expect that sort of return to be sustainable over the long-run. The fact was that Universities were being forced by peer pressure into massively overexposing themselves unnecessarily. When the collapse hit, Bates lost 37%, Harvard around 32%(over 11 Billion) largely because they had forgotten what they were supposed to be doing, and because the schools, blinded by years of 20% annual growth, would have fired anyone who recommended otherwise.
3. The above problem is mixed with another, the one you bring up about government fiscal policy. Fiscal sanity, and conservatism does not rule out stimulus spending, but it always assumed that governments would accrue debt in bad times, and then retire it in good. Starting in the 1990s at the state level, American politicians, and for this that class of governors deserves blame, began massively cutting taxes during good times, then borrowing extensively during bad. George Bush simply brought the 1990s Gubernatorial model to the national level. And it worked, producing a boom during the good times. But when times turned bad, the government found itself so heavily in debt, that stimulus spending was actually counterproductive, with the uncertainty it produced in regards to debt, combined with poor implementation and fears about the dollar(and Euro) undermining any benefits. Obama's Administration and economic team were fundamentally backward looking, and had the very viewpoint I described in this piece, looking at Bush's term as an interregnum from which they could resume governing as if it was 2001, rather than realizing the whole economic constellation of forces was changed beyond recognition.
11/09/2011 17:34