It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.
---Theodore Roosevelt, in a speech at The Sorbonne, Paris, April 23, 1910, entitled "Citizenship in a Republic."
It wasn't that Roosevelt had no use for critics, it was that he had little use for what he called "pure critics." In a much earlier speech, he gave his thoughts on such men.
"Criticism is necessary and useful; it is often indispensable; but it can never take the place of action, or be even a poor substitute for it. The function of the mere critic is of very subordinate usefulness. It is the doer of deeds who actually counts in the battle for life, and not the man who looks on and says how the fight ought to be fought, without himself sharing the stress and the danger."
Roosevelt's criticism of critics is timeless, and appropriate to recall at this time. We're in the early stages of a massive intervention by the US federal government into the financial system of the country in an attempt to avoid a long, deep recession and, even more dangerous, a depression. Critics of the recent actions of the Administration and Congress have come from all sides. Some of the criticism may turn out to be valid, especially in hindsight. The difficulty of suddenly staring into the abyss-and then trying to avoid running head-long off a cliff into it-by improvising a solution on the fly, is that you're likely to concoct a plan that is less perfect than one created by cool heads with more time for due deliberation. Yet, that's the situation that I understand occurred when Hank Paulson, Ben Bernanke and other federal officials claim they realized that the US financial system was approaching liquidity and credit gridlock, and that the rest of the civilized world would quickly follow. The "bailout" program they hammered out with Congress over a two-week period includes (i) direct investments in non-voting equities (preferred stock and warrants) of US banks in order to give those banks capital to use to borrow and to lend, and (ii) the purchase of massive amounts of "toxic" assets from banks and other financial institutions in order to substitute cash or "clean" securities for those bad assets, again to provide collateral that those banks can use to fund the borrowings that they need to "operate" (especially, to resume lending not only to one another, but to American businesses and consumers).
Free market ideologues have had a field day with the bailout program. Some particularly virulent criticism has come from academics and what I call "professional critics." Among the more annoying of the latter are a group of young, mostly male, conservative bloggers and/or magazine columnists whose working life experience appears to consist solely of having gone to graduate school and then (or simultaneously) becoming "influential" voices of American conservative intellectual opinion through their blogs and online magazine sites.
I tried to check out one particularly condescending and arrogant punk, one who is oft-cited by other bloggers I read, and all a Google search revealed was that the "expert" in question was a doctoral student in Byzantine History. Nevertheless, he felt qualified to sneer at Prof. Stephen Bainbridge for stating that while Bainbridge considered himself a believer in free markets, he thought that the current crisis was such a potentially devastating danger that exceptional governmental intervention was justified. This professional critic sniffed that the true test of a believer in free markets was that the "true believer" allowed those markets to operate without governmental "interference" when the consequences were "painful," not merely when they weren't. As best I could determine, this young man has little idea what he's talking about when he boldly dismisses "painful consequences." We're talking not about the market participants who caused the painful consequences as being the only ones harmed, but widespread pain being visited upon all of us. Moreover, the "pain" is a pain of catastrophic proportions: another Great Depression, not one of the relatively milder forms of economic recession I lived through as an adult in the 1970s, 1980s, 1990s and early 2000s, as "painful" as those were at the time we lived through them. Only a Kool-Aid drinking fanatic, or a young punk with an advanced degree, a fine intellect, a way with the written word, a hefty dose of ignorance, and profound lack of common sense, would cling to his ideology to that degree.
It might help some of these ivory tower dwellers if they actually understood how our banking system operates, at least in the real world, not in theory. They might also benefit from an understanding that the commercial banking system in this country is not a "free market." Banks are heavily constrained in their operations by laws, regulations and the policies of regulatory authorities, and by routine (and extraordinary) visitorial powers of federal and state supervisory authorities. The regulatory scheme may not function well much of the time (being designed and operated by fallible human beings), but government interference in its operations, from the birth to the death of each bank within it, is a fact of life. The "meltdown" of the banking system system was caused primarily by bad actors outside that system-the unregulated, free market renegades-but it was the regulated financial system that was about to freeze up, taking the rest of the US, and the world's, economy with it. Under the circumstances as outlined by Chairman Bernanke and Secretary Paulson, the action recommended was reasonable.
Knowledgeable participants within the financial system, and some current academics who have participated in the system in the past, criticized the initial proposals from the federal government. Some of those criticisms were valid, and some important suggestions from those critics were incorporated into the final legislation (or are being implemented by policies adopted after the legislation passed). I'm disappointed that these actions had to be taken, that the final bill was larded up with pork, and that the federal government operates so poorly, on so many levels. However, I didn't find any of the criticisms of the young punk conservative ideologues to be credible in light of my thirty-four years of participation in the financial system. Their lack of expertise, married to a faith in "big ideas" warped into an ideology, made their ideas worse than useless. It made them harmful.
Not that any of these blowhards will stop their snark. It's always difficult to explain the concept of "light" to a man blinded by the fact that his head's shoved up his ass eyes are turned inward. On the other hand, each of them now has one less potential source of "click-throughs" on their blogs and magazine web sites.
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