The Politics of Panic

One thing that annoys me about politics is that every little thing seems to get blown out of proportion and presented as if it were the Most Important Thing Ever. Only one thing can possibly be the Most Important Thing Ever so there's clearly some hyperbole going on. I suppose it's a consequence of having a representative government theoretically accountable to the people -- special interest groups, corporations, and members of the government themselves all want to win the people over to their side. If they have to overstate a problem or two, they'll do it...it's the price they have to pay for Victory.

Unfortunately, the problem seems to have gotten worse in the United States since September 11th, a panic-inducing event if we ever had one. The American public was undoubtedly mislead into thinking Iraq presented a clear and present danger to their country -- I think OJ is still out looking for the REAL weapons of mass destruction from prison. I'm perfectly willing to believe the Bush administration were merely following poor intelligence...deliberate manipulation isn't always necessarily the problem. However, the shortage of skeptics was a problem -- why wasn't the administration more circumspect about the very idea of going to war again? Didn't they consider that their basic thesis might be wrong? Didn't they worry that they might be deceiving people and thus would tarnish their place in history? Unfortunately, I think they just saw their panic mongering as a means to a desired end -- I'm sure they realized from the very start that they were exaggerating the threat, but they'd already decided war with Iraq was necessary so it was just part of the process for them. The administration didn't ask the right questions, the Congress didn't question the administration closely enough, and the public was too trusting.

The politics of panic may have reached its zenith during the financial crisis of 2008. "Too big to fail" ranks right up there with WMDs in the lexicon of classic panic terms. In this case, I think the financial industry stirred up much of the panic themselves. At the end of the day, what these oversized institutions were arguing is that they deserved to be treated better than all other institutions. Most banks that are in danger of failure get closed down by the government -- I mean that literally. Banks don't really go bankrupt in our system, and oftentimes all deposits get saved (even beyond the FDIC insurance limits) as long as another bank can be found to take them over. What Citigroup and Bank of America and the other recipients of bank bailout funds argued was, "You can't treat us like other banks." They were able to convince the government of that, and as a result they're still in operation today and still too big to fail. Essentially, the bank bailout was all about preserving bad institutions as they were -- I see no reason why the big, bad banks couldn't have been split up and shrunk dramatically instead of saved intact. It's not like they were in a position to bargain...in a pure capitalistic system, they'd all have failed completely. It was blatantly unfair to treat the bigger banks so much better than the smaller banks (which are still being closed weekly by the government), but the bigger banks were able to use their bigger voice to incite fear, an option the smaller banks just didn't have. Was there an element of truth to "too big to fail"? Of course. But failure wasn't really an option -- the thing is we didn't have to preserve Citi, BOA, etc as they were. They could have been punished and better (or at least less risky) institutions could've taken their place with the assistance of the government. A bank bailout of some kind was probably unavoidable, but it didn't need to take the form it did in my view...it improperly rewarded the banks that cried wolf. For now, at least it does look like the government will make money on those bailouts, if that was the object. (Maybe governments should drop that whole taxation thing and just become moneylenders full-time!)

The health care debate has brought a new burst of public panic. The critics warned of death panels and a government takeover of health care. You could make a slippery slope argument that the current health care reforms being debated could lead to those things down the line (many reform advocates see the public option as a road to single payer, which is definitely a government takeover), but the common argument seemed to be that proposed reforms would lead to that immediately. Definitely panic-mongering...and definitely misleading. On the other hand, proponents of health care reform aren't opposed to a little rabble-rousing of their own -- the way some speak it's a wonder that there's still anyone hasn't been dropped by their health insurer for having some mild health problem. The truth is health insurers pay for an awful lot of health care...the problem with them is they haven't delivered a universal solution that works for everyone who needs care and they haven't always behaved ethically.

The politics of panic makes it harder for anyone to find the truth, unfortunately. You have go past all the noise, all the loud voices, and all the fear-inducing catchphrases to look at the fundamental issues involved. It's rare that there isn't a grain of truth in what the fearmongers say -- failing institutions do pose a threat to the financial system, Saddam Hussein wasn't a very nice guy, government health care does tend to lead to more rationing, etc -- but they never give you the whole story. They have a slanted view of the issues and want you to have a slanted view of them as well. It's a mistake to ever made a decision solely based on panic...even in life-threatening situations calmness and thoughtfulness are assets. To preserve representative democracy and maintain the dignity of the voter, we must fight against the fear that supercedes thought.