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Social Construction & Culture in Recent Bailouts

An excellent example of paper 2 by Katrina Weener, Fall 2009.

Situations that are defined as real are real according to Berger and Luckman. If we believe or are told by a trusted authority that the "value of bailing out financial institutions" is real, then it is real and we/they set about objectifying the, "value of bailing out financial institutions," so that it takes on a life of its own and it becomes part of an objective reality. "Letting banks fail, would ruin the economy," "If Wall Street falls, we all fall," "Why our country has to bail out GM." Finally, when we hear on Fox News that congress is rallying around the Wall Street, Banks and GM to save the economy, we are not surprised; in fact, we think it's the right thing to do. We have done it in the past a couple times; during the Great Depression and the S&L failures in the 1980s. Bailing out financial institutions has become an internalized, shared, and accepted social, "fact," and a Trillion dollars sounds OK.

In the first step of this process, we are presented with and idea, value or concept, that is external from the individual. In this example, the concept that the, "tax payer," should shoulder the responsibility of a bank's (i.e. financial institutions - there are so many I, I won't list them all) lack of integrity (financial and otherwise) was outside the expectation and value norms many tax payers had. Tax payers as individuals have to balance their checkbooks every month. Fiscal responsibility is a hallmark value of the, "the average tax payer." Now the average tax payer was being told that bailing out these irresponsible financial institutions, that did not adhere to their fiscal values, had to be the primary value to preserve their own.

Politicians, bankers and CEOs understand this process VERY well (they should, the revolving door between Wall Street, the Federal Reserve and Financial CEOs has left them well practiced at covering each other's dirty laundry-Representative Marcy Kaptur of Ohio on the Bill Moyers Journal,2009). This new concept needed to be presented to the public just right. And so..., a wave of information, disinformation, and marketing, began to fill the air. We began to become familiar with new terminology, company names; pundits filled the airwaves and TV. What was once vague or completely unknown began to have a face and a vocabulary and a ready-made solution.

This is where the slight of hand becomes boggling and we move into the next stage of social construction. As the public faces of an economic fix began to glow with a solution, they moved the tax payer into a level of objectification that made, "bailing out the financial institutions," take on a life of its own and morphed the concept of a bailout to an objective reality. Here, politicians, investigative boards, and the free press could have begun to point out fallacies in reasoning, the revolving door between Washington and Wall Street, shown earnings that belied the crisis consensus. But that didn't happen. Instead, the bailout became the reality through a combination of deliberate deception, believable authorities (of course that could be questioned now), and the marketing of fear by politicians and broadcast news. The marketing of fear cinched the deal. We heard over and over about the Great Depression and that if we didn't fix this problem quickly we would slide right back into another one. The average tax payer came to believe that the crisis was real and the bailout was a necessary, what else could we do? We can't let the banks and other financial institutions fail, it would destroy our way of life.

Finally we have made it to the last step of social construction, internalization. Now the American public, the average tax payer, country-wide shared the conviction that bailing out the banks was the only solution to saving the country and keeping us from descending into another depression. There was some objection, but not in the mainstream newscasts, and it was made to sound pro forma or, even worse, the way of staunching the financial bloodletting. The bailout solution had become an objective reality. Whatever the cost, we were now ready to let congress and the President spend trillions and do the bailout.

Why? In watching multiple interviews with Bill Moyers, guest after guest came on and told some shocking truth about the "real" story behind the bailout. Stories told by Simon Johnston, a professor of Global Economy and Management at MIT's Sloan School of Management, that the CEO of Bank of America told his stock holders, they had the best year ever. What? Stories form William Black former Director for the Institute for Fraud Prevention, now a professor at the University of Kansas, that the head of these institutions knew what would happen, knew they could push the bill for the bailout onto the taxpayer and there was only one reason to do it; it paid. Why would they do that? Information given by Representative Marcy Kaptur of Ohio who points out the like revolving door between Washington DC, Wall Street and the Finance Committee - we just keep recycling the same people with obvious conflict of interest into the top decision-making jobs.

If what they say is true, the average American taxpayer has been duped. I think the "why?" is a very good question; it says a lot about what allowed such a miscarriage of public faith and finance. When the whole financial mess is looked at though a cultural lenses, it begins to make sense. The values and norms of the Uber rich and powerful are not the same as, "the average American taxpayer." We are two different cultures co-existing in the same geographic space with extremely different values and standards. In the Uber rich and powerful culture, the average taxpayer's money is theirs. Money and power are their birth-right; there is no guilt on their part because this is just business as usual. To be among this elite, there is no place for "American" values like honesty, integrity, or responsibility to American taxpayers; their standards of right and wrong, good and bad are not the same- at all. Frankly, while the power brokers of America understand this and use it to manipulate, we, the taxpayers never seem to really be able to wrap our heads around it. It is just so far from our values and standards; so over and over we are unable to believe that such a financial crisis could be perpetrated deliberately; and over and over we vote for big bailouts. As I listened to Bill Moyer ask his guests over and over, "why?" and all the guests could answer with was another story of even more egregious behavior, I realized, they don't know. They cannot say, "Because, we don't really matter to them." They don't care if we lose our homes. They don't care if we lose our retirements. THEY DON'T CARE. Not only do our values not matter to them, we don't matter to them, because we are not a part of their culture. Paraphrased from William Black on the Bill Moyer show and his book, The Best Way to Rob a Bank is to Own One, fraud is at the heart of most bank and financial institution meltdowns. Mr. Black lays the corruption out and does not shy from saying that the CEOs and politicians don't care. But he still calls it fraud. My point is; that the average American meaning of fraud with all its moral and legal connotations does not exist for those in power. They don't think they have done anything wrong - it's a different culture. Here is another way to look at it; with all these credentialed people crying out foul, writing books that cry foul, lecturing at universities and crying foul- there is no mass movement or outcry by the majority of Americans to remove any of the CEOs, politicians or committee members that are up to their eyeballs in this. None.

Ever wonder what it feels like to live in a, "third world country," at the bottom of the world economic structure? Well, this is it. Just as we don't care about what's going on half way around the world because it doesn't affect our daily lives and they are not part of our culture; the Uber rich and powerful of American don't care about the rest of us. We are as good as half a world away to them.

Bibliography
1-Henslin, James. 2005. The Essentials of Sociology. Pearson: New Jersey.
2-Bill Moyer Journal, 2009. Interview of Representative Marcy Kaptur of Ohio and Simon Johnson, professor of Global Economics and Management at MIT's Sloan School of Management.
3- Bill Moyer Journal, 2009. Interview of William Black in CSI bailout. Former Director of the Institute for Fraud Prevention and author of, The Best Way to Rob a Bank is To Own One.