August 14, 2010 Â |
 Financial markets had just opened on a Thursday morning in mid-November, but business journalist Dylan Ratigan was nowhere near his old stomping grounds on the trading floor of the New York Stock Exchange. He was wearing a huge, ridiculous black wig, gold-rimmed aviator sunglasses, and a white broad-collared jumpsuit while attempting to wrest a purse from a gray-haired grandmother. He looked like a homeless Elvis impersonator accosting a stranger on the subway. He was hosting a news program.
The sketch was theatrical and over-the-top, but on cable news, the subject of Ratigan’s dramatization was actually a farther-flung outlier than the rhinestones on his bellbottoms. Ratigan blasted the repeal of Glass-Steagall, a Depression-era law that banned risky securities trading from the banking business. The repeal, Ratigan demonstrates, allowed boring old bankers to become risk-driven casino gamblers, taking grandma’s deposits to the capital markets craps table. Today, few deny that the Glass-Steagall repeal was at the least a major contributing factor to the financial disaster of 2008. But in November 2009, this view was restricted to a handful of economists and reform advocates – Wall Street rejected it out of hand, and mainstream liberal publications were still defending the repeal and its architects.
When the banking industry devoured itself in 2008, Ratigan emerged as one of the most cogent critics of the Wall Street establishment. He has taken on everything from complex structural regulatory issues to outrageous banker bonuses with both passion and logical clarity.
“Banking should be a $100,000 a year job!” Ratigan told me in a recent interview. “You shouldn’t get to take home billions just because you bet the right way on a bunch of credit default swaps, when you don’t even have any capital and bet with some grandmother’s savings you lying fuck!”
Yet Ratigan’s faith in capitalism borders is unshaking. It borders on religious fervor. And unlike most of his contemporaries in financial journalism and cable news, Ratigan actually believes that capitalism is supposed to accomplish something productive. “Capitalism is a competition among different ideas and investments to solve society’s problems,” Ratigan says.
Thirty years ago, this idea was not controversial. But since the Reagan era, business journalists have shifted away from a focus on good economic ideas to the raw worship of wealth and power. Today’s business anchors on cable news are not so much reporters as apologists for Wall Street’s executive class, and the notion that capitalism ought to serve the common good has been largely banished from financial discourse. On CNBC and in the editorial pages of The Wall Street Journal, greed is the only good, and profits from public destruction are as fair and reasonable as the salary paid to a surgeon to save lives. Financial commentators truck this idea out to network talk shows, presenting capitalism as a system devoted to getting rich. Solving society’s problems is for charity houses.
Ratigan insists that his basic economic worldview—one where business competition could serve a useful social function—has been with him since before he began working as a cub reporter for Bloomberg News at the age of 22. Now 38, Ratigan survived Bloomberg’s reporter-mills and a lengthy stint on CNBC to emerge as a host of one of MSNBC’s most powerful programs, a rare mainstream cable news show dedicated almost entirely to economic and financial affairs.
“For me, there was a radical break in September 2008. You couldn’t look at the system,–both its collapse and why it was collapsing– as anything that lived up to what I thought it should. It’s all predators. The economy is built around Chinese slaves, robot shareholders and bankers who gamble with taxpayer money. That doesn’t work.”
Like most of Ratigan’s catch-phrases, there’s a lot of economic policy baked into those words: a currency struggle between the U.S. and China, labor standards, offshoring incentives, the gutting of America’s manufacturing base and literally dozens of complex rules governing the banking system. It’s a rhetorical lightning bolt, but a thoughtful one.
On MSNBC, Ratigan is a boisterous and aggressive anchor. He berates politicians and business lobbyists, barks questions at reporters, shouts, sputters, pounds his fists and makes no effort to hide his policy preferences from his audience. For all its vitriol, however, The Dylan Ratigan Show is also one of the best sources of sophisticated and incisive economic policy discussions anywhere—a program that takes complicated financial issues that most cable news networks run screaming from and presents them in a format accessible to neophytes and wonks alike. The Glass-Steagall dramatization was as accurate as it was colorful.
His current role is a far cry from Ratigan’s last job, where he strolled the trading floor of the NYSE for CNBC and hosted Fast Money, “a rapid-paced, highly charged hour where four of Wall Street’s best traders debate and discuss the hot trades of the day.”
Fast Money was and remains a public poison. Even for financial journalists sympathetic to the Wall Street greed-machine, Fast Money‘s cadre of tanned, flashy stock traders shouting about what stock was up and what stock was down on a given day can be a grueling psychological affair. Ratigan insists that Fast Money was conceived with a public purpose in mind. Capitalism, he says, can’t work without a robust and vibrant debate about which investments can further society’s interests. But if this was indeed the intent behind Fast Money, the show never lived up to it. Fast Money is business commentary at its most shallow and pointless, a celebration of shiny ties and hair gel devoid of serious policy discussion or any recognition of the effects that companies have on society at large. It’s just as vapid as Jim Cramer, but instead of clown sounds, Fast Money features screaming Wall Street elites. Even the show’s fans celebrate empty quotes like this from the show’s traders:
“I can’t help myself, I like value; I’m just a value kind of gal.”
and “Dylan, today they took this stock out behind the woodshed and beat it like red-headed stepchild!”
In 2007, few would have predicted that Ratigan, the ringleader of these money-crazed douchebags, would soon emerge as the public’s educator-in-chief for financial corruption. But the Dylan Ratigan of 2010 sees no sacred cows in the financial system. “Bankers aren’t heroes, they’re middlemen,” Ratigan says. “The heroes of capitalism are the entrepreneurs, the people with good ideas who risk everything they’ve got to make them work. Bankers just take a piece of the pie, and they feed on taxpayers to get it.”
While the consensus on the causes of the crisis has shifted Ratigan’s way, most televised discussions of policy responses are still presented as debates between Republicans and Democrats. We’ve all heard the Wall Street reform bill described as a triumphant victory for President Obama and a crushing defeat for Senate Republicans. This dynamic infuriates Ratigan, who notes that both parties have been thoroughly corrupted by Wall Street money. President Bill Clinton oversaw the dismantling of the most important New Deal-era banking reforms by a Republican Congress, which only a handful of Senators even tried to stop.
Nevertheless, he remains optimistic about the prospects for both financial journalism and Wall Street reform. The financial crisis made status quo business writers seem silly and naïve, and he believes many reporters have already learned that a meaningful career will require a more aggressive and critical perspective than what was offered in the years leading up to the crash. He celebrates Bloomberg’s coverage of the crisis and its aftermath, has kind words for New York Times reporter-columnist Gretchen Morgenson, and views deep structural financial reform as a long but inevitable process. His own job, he says, is to carry a message to the public: the financial system is fundamentally corrupt, both political parties are in on the game, and ordinary citizens are paying the price with their jobs, their credit card bills, their homes and their retirement accounts every single day. Making the connection between banker excess and economic fallout for the rest of us is what Ratigan believes to be the most pressing task for business journalists in today’s economy.
Needless to say, attacking Wall Street bonuses and detailing regulatory malpractice were not exactly a popular activities among Ratigan’s former CNBC colleagues, who launched a public defense of bailout barons when bonus outrage first boiled over in February 2009, dismissing it as populist envy. By contrast, Ratigan sees deep structural problems associated with bloated banker pay. The Glass-Steagall repeal allowed banks to score big trading profits with taxpayer perks that were previously reserved for safe, productive lending operations that just happened to be less profitable. Those profits, in turn, were converted into bonuses. Deregulation had allowed bankers to enrich themselves with taxpayer money, a phenomenon that grew more grotesque when bonuses continued to be paid after monstrous bailouts.
To Ratigan, the IPOs of large investment banks like Goldman Sachs in the 1990s were equally devastating. Investment banks used to be structured as partnerships, where all of the top managers were partners in the enterprise. If the bank lost money, so did the partners. As public companies, Goldman and its brethren have a different set of incentives. If the firm gets into trouble, shareholders and bondholders will have to pay the price—the bank’s managers just pack up their bonuses and hit the Hamptons. This dynamic grew even more perverse as the investment banks exploded in size, eventually reaching a scope where the economic price of their failure would have been devastating.
A devout capitalist, Ratigan is also a realist. He believes the government had no choice but to shield big banks from losses with massive bailouts. But he emphasizes that policymakers didn’t have to reward the executives who got rich driving their companies and the economy off a cliff. Shareholders should have been wiped out, executives should have been given the boot, and pay packages should have been clawed back. These are precisely the policy prescriptions presented by Nobel-prize winning liberal economists Paul Krugman and Joseph Stiglitz as the Bush era transitioned to the early months of the Obama administration. They were ignored.
Rejecting that advice came with a heavy economic price tag. Nearly two years later, unemployment remains at epic levels with no significant decline in sight. Banks aren’t lending, and an anemic recovery is now dangerously close to a double-dip recession. Ratigan sees little hope for the economy in the near-term, but senses an opportunity in the social unrest created by monstrous unemployment levels.
“There are no jobs, my man! Where are the jobs? People won’t stand for this forever.”
Here’s hoping he’s right.
