So seldom do we motley millions all think and talk about the same thing at the same time—let alone two great big things, let alone intensely and continually for weeks at a time.
Welcome to the extraordinary fall of 2008. As the imploded financial industry is nationalized, and we prepare to elect—can it really be?—an African-American intellectual the next president, New Yorkers are in a kind of breathless, Twittery mind meld about matters of huge historic consequence. Because Wall Street is (excuse the expression) ground zero for the present cataclysm, we are probably experiencing financial vertigo more acutely than most of our fellow Americans. And yet at the same time, because something approaching nine out of ten New York voters will pull the lever for Barack Obama two weeks from now, we are at the same time brimming with uncanny, yes, hopefulness about the imminent change in national leadership and policy. Every day, crazily fibrillating numbers (the Dow down 777 points, the Dow up 936 points) make us feel sick, while another set of equally amazing numbers (Obama well ahead in every national poll, and tied or better in three southern states) puts a song in our hearts. This data-driven combination of sky-is-falling dread and OMG giddiness—meth-laced Ecstasy, anyone?—is bizarre, unprecedented. And more cognitively dissonant still, the good news is being driven in some measure by the bad news.
Exactly seven years ago, we had already become accustomed to the cliché that the previous month’s terrorist attacks had “changed everything.” As we know now, they did and they didn’t. (Irony, for instance, did not die.) Seven years from now, I’m betting, we’ll look back and reckon that this fall changed everything at least as much as the fall of 2001 did, and maybe more.
When the financial system started spectacularly and undeniably falling apart in mid-September, two weeks into the Sarah Palin Era and a week after McCain had caught and passed Obama in the polls, for a couple of days I welcomed the change of subject, the eclipse of one mind-boggling new bummer by another. I didn’t feel any jolt of Schadenfreude for the bankers whose lives had been suddenly upended—although frankly, not much pity either.
The fact that the stock market was more or less steady as she goes for another couple of weeks after that first shocking Monday allowed most of us—those of us who had never heard of credit default swaps, or earned seven-figure bonuses—to watch the disintegration of Lehman Brothers and Merrill Lynch with a certain sangfroid. It was like reading about a bloody gang war—this was the business they had chosen, no?—or watching wildfires from miles away. Given that we’d felt only glancing, tsk-tsk pity for the poor people who’d taken on unaffordable home mortgages, we weren’t about to feel real sorrow for the rich people at the top of the same collapsing pyramid, even though we personally know more of the latter than the former. Is that callous? Sure, and thus morally symmetrical, I’m-okay-Jack selfishness in reaction to others’ selfishness coming a cropper. And at first, the sense of panic and urgency among the grown-ups—the palpably terrified financial and political Establishment lunging as one toward radical, half-baked Latin Americanesque solutions—was as interesting as it was terrifying.
But then, of course, the wildfires reached the rest of us, when the stock market started plummeting three weeks ago—that is, began its series of sickeningly steep plummets punctuated by herky-jerky one- and two-day-long recoveries, each of which made the next long dive a little more dreadful and nightmarish. Those of us who own stocks—that is, most of us—are suddenly 25 percent poorer. So far.
Why are we shocked? Well, because one channel of the national discourse has been devoted for so long now to a sort of recession pregame show—is it coming? Has it started? How bad will it be?—it had become background noise. And for us New Yorkers, the big economic bad-news story of the last two years, the bursting of the housing bubble and subprime-mortgage crisis, was something happening elsewhere: Our chronic New York exceptionalism was nicely affirmed by the fact that our super-prime housing wasn’t losing value.
Of course, the special X factor inflating our real-estate bubble was all those Wall Streeters’ wealth; the $33 billion in bonuses that New York financial firms paid out last year did indeed trickle down to many of the rest of us, by making our apartments and houses remain ridiculously, uniquely valuable even as the rest of mortgaged-up Americans had become un-rich. And for those of us closer to the top of the economic heap than the bottom, the 30 percent rise in the stock market during 2006 and 2007 was like an intravenous Paxil drip that very effectively suppressed anxiety about any looming recessionary pain.