Politics & Media
Dec 23, 2009, 07:07AM

The Buck Stops With Us

In response to backlash over its enormous executive bonus packages, Goldman Sachs is giving $500 million for some 10,000 small businesses. That helps, but it's not the whole answer.

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John M. Barry’s exhaustively researched The Great Influenza: The Epic Story of the Deadliest Plague in History is full of the sort of statistics that, when read on the page, scarcely seem able to convey the atmosphere of death and desperation of that time period. The H1N1 flu virus spread across the entire planet, taking the lives of anywhere from 50 to 100 million lives, approximately 700,00 in the US alone—proportionally, that’d be millions of deaths if the epidemic occurred today.

Barry’s narrative consists mostly of biographies of heroic medical and public health officials racing to find something, anything, to alleviate the suffering. The peaks and valleys of catharsis and dread are dizzying, but if any one anecdote stands out, it is the story of the people of Philadelphia and their experience with the epidemic.

President Woodrow Wilson had the entirety of the United States preparing for World War I; anti-sedition acts, Gestapo-esque surveillance and nationalist parades were the norm across the country, and everyone was encouraged to purchase war bonds—in effect loaning money to the government to finance its military machine.

The H1N1 epidemic first found its footing in the ludicrously overcrowded soldier barracks across the country. Medical officials desperately tried to keep the sick quarantined from the public and convince local officials to cancel all planned crowds and gatherings. The warnings were not heeded. Infected soldiers were transported across the country and overseas, providing a brutally effective network of transmission. As the flu burned across the country, closing in on Philadelphia, city public health officials were lobbying desperately for the mayor to cancel the upcoming war bond parade. The whole city would be turning out, and officials were terrified that the worst-case scenarios were in fact the most likely.

The Wilson administration feared any signs of weakness as the country was preparing for war so it wanted everything to appear as if it were business as usual. The mayor gave the parade the green light and within weeks of the parade a majority of the city fell ill with the flu virus. And then the bodies started piling up. Hundreds were dying every week; hospitals were overrun in days; there weren’t enough nurses, doctors, coffins or ambulance drivers; and gravediggers wouldn’t touch those who died of the flu. The city effectively shut down. No one came outside; people donned masks and faced away from each other when talking. The doctors and nurses who remained were falling ill and dying.

The situation quickly got the point where many people died simply because they didn’t have the strength to take care of themselves—and no one was willing to help them. Spouses died next to each other, dead children wrapped in sheets and left in the closet. Houses turned into mausoleums of the forgotten. Katherine Ann Porter’s Pale Horse, Pale Rider is a deeply emotional first-person narrative of the author’s experience with the epidemic, and remains one of the most poignant piece of evidence as to the blanketing fear and desperation of the period.

This story left me stunned with grief with the thought that the people of Philadelphia (and other cities as well) simply abandoned each other. The flu killed thousands with brutal efficiency and left a bone-deep fear among the living. The profound irony is that a nationalist parade provided the kindling—the gasoline—for the flu’s scourge in Philadelphia. Who knows how many thousands would have lived if more had answered the call for help. In 1918, countless people lost their lives in part because the government wouldn’t head the warnings of its own experts.

The worst medical disaster in the United States was, at the least, a significant catalyst for the American public health, pharmaceutical and medical industries and research institutions. Under the auspices of unstoppable death the foundation for was laid modern medicine as we know it.


One of the central themes of the current economic crisis is the tension between Main Street and Wall Street. The Bush Administration bailed out the banks; the Obama Administration bailed out the auto industry; foreclosures are shelling whole neighborhoods; and populist commentators both shrill and serious point out the disconnect the general public feels toward the financial and real estate industries and big business in general. Not since the collapses of Enron and WorldCom have I sensed such deep-seated anger. This was white-collar crime at its most pervasive.

Credit default swaps, sub-prime mortgages and other artificial financial tools brought low hundreds of thousands of families and communities; health care in America is a vacuum of cost and efficiency; and Congress is as polarized as its ever been. And despite the modest surge in stock indexes and the solvency of such institutions of GM and the financial district, unemployment continues to rise. A jobless recovery is a bitter pill to swallow—made more so by Republican-led logjams—from blocking the extension of unemployment insurance to the delaying of military funding for cheap political points.

America is more than the sum of its GDP and trade deficit. It more than the sum of major banks’ top sheets and bottom lines. American capitalism is proud of its colossal influence in the global economy, but as jobs are shed, health care is denied and personal finance still perilous the economy feels more and more like, in the brilliant words of one blogger, Obama’s “Mission Accomplished” moment.

Across the board high-level executives are pilloried for handing out massive bonuses to their employees. In an industry where even the basics are too dense, too complex for most citizens to understand, end-of-year bonuses are a perfect reference point, a perfect conduit for populist anger. Goldman Sachs has emerged as the unqualified “winner” of the recession. It has reported massive profits—and subsequent bonuses totaling in the billions. Public anger has reached such a fever pitch that the financial giant issued an apology to the tune of a $500 million initiative aimed at helping out some 10,000 small businesses. Those are real numbers—real in the sense that it’s not hard to grasp their immediate significance.

The current recession has and will not reach the scale of the Great Depression, but it may act as a bellwether for the United States in the decades to come. The vast infrastructures of private and public financial institutions proved entirely too weak to stem the hurt suffered from the collapse of 2008. Long after Obama and his administration have vacated the premises, the issues raised by the current crisis will continue to occupy the call sheets of economic advisers and councils and czars.

That is unless ultimately the Obama Administration and its successors merely continue to pass the ball on to the next person.

So far I’ve found the Administration and Congressional Democrats’ efforts to be on the whole in good faith and with an eye on the long-term picture of financial reform. As we’ve seen with health care, many of the more significant amendments have been stripped to keep moderates on board, but what remains is a bill that lays the groundwork for future reform, a bill that finally says to the American people “Yes, your government listens to you once in a while.” Congressional Democrats have been steadily pushing through banking and credit card reform that will have real impact on fledgling bank accounts, and the stimulus package is continuing its steady march. Early to mid summer, with unemployment declining drop by drop, Democratic Party campaigns across the country will be armed with the conviction that the Administration’s stimulus package and management of TARP—however controversial initially—have kept this country back from the brink and then some.

But that’s a while from now.

The move by Goldman can be seen in the context of oft-quoted Reagan axiom: “Government is not the solution to our problem. Government is the problem.” It’s not that government is the solution; it is but one. And in the emotional turbulence of economic recession, political posturing and a hyperventilating media circus, a move like Goldman’s—no matter how calculated, no matter the ties between the financial giant and the government’s top financial officials—is a good and important thing.


Before the turn of the 20th century the phrase American medical community was a misnomer, as there was nothing to speak of resembling a professional medical community. Germany and France were far more developed in the areas of science and research than the US. In the US, the medical profession was ridiculed, bleeding people was the answer to pretty much everything, and there existed almost no centers of medical learning.

A few guys with a lot of money decided to change that, and that’s why we have Johns Hopkins. No established history, no organic movement—Hopkins was born from that fundamental American pathos of having a lot of money coupled with the desire for prestige, influence and legacy. Goldman Sachs and the financial industry does not appear all that concerned with either the fallout surrounding their bonus practices or its role in the greater recovery as a whole. But 10,000 businesses are going to receive some half a billion dollars. That is real money—but not in the sense that it is a bailout. The money is going toward educational and training programs, and the net effect of such an initiative isn’t entirely measured in top sheets and bottom lines. At the very least it’s a gesture of good will—of humanity—to those 10,000 small businesses and their employees, a small sense that we are in this together.

After the holidays and the passage of historic health care reform there will still remain very tough questions on the direction of our economy and the steps to take. But good will—charity—does exist on a large scale; what happened in Philadelphia almost a hundred years ago—the abandonment family, friends and neighbors—reminds us that despondency can exist on a large scale.

2010 will tick into existence in a few days, and we’ll look back on a decade full of sorrow, national pride and partisan division. President Obama, speaking on his decision to send some 30,000 additional troops to Afghanistan, wondered out loud if as country we could regain our unanimous support of the war effort. That’s not going to happen with Afghanistan; what I’d like to see is something resembling unanimous support for each other as we pick up the pieces, rebuild the neighborhoods and rethink our priorities, because national unity and recovery is not always and forever a top-down process, because I’m tired of waiting in vain for our elected leaders to clear the fog of uncertainty.


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