Debating a Catastrophe

For months, the business pages and political pages felt so different in tone, content and intensity that reading them was like flipping between different movies.

The business pages have been an endless saloon fight, with screaming, shouting, tables being turned over, bottles being broken over heads.

The political pages were more like something out of a period drama, with people in waistcoats and breeches trading pointed ripostes and huffily challenging each other to duels. And even when some of the characters lost their temper, the argument had nothing, nothing at all, to do with the fight in the saloon.

Well, that’s over, of course. The saloon fight has finally broken through the fake wall that separates politics and policy from their economic consequences. Cowboys are sprawled over the harpsichord. People in wigs and buckskin are beating each other with candelabras. Spittoons and snuff are flying. Fuld, McCain, A.I.G., Chris Matthews, credit default swaps, Obama—finally, it’s all one movie.

And tonight we have a presidential debate.

There may be a temptation among some journalists and others to see tonight’s debate as trivial next to the great financial calamity now unfolding all over the newspaper and to wonder whether one has much to do with the other.

The debate may seem to some to be pure political theater, especially so on the same day as the news of the largest bank failure in United States history and after recent weeks that have seen the ad hoc nationalization of a large segment of the country’s financial system—an historic, costly, unplanned policy event the consequences of which are utterly unknown. Moreover, despite the costs, risks and hardship it represents, this massive and spontaneous socialization of private sector misconduct still hasn’t been enough to restore confidence to global financial markets, hence a likely bailout the likes of which we have never, ever, seen.

But to miss the connection or underplay the debate’s importance would be to make a common mistake, one that sees the financial calamity as beyond an ordinary person’s understanding, somehow inevitable, like a natural phenomenon, or part of a business cycle, or in any way unconnected to policy decisions made by political leaders.

In fact, the more we learn about this financial crisis, the more we learn how deeply embedded its roots are in policy, the fruit of politics. And I’m not just talking about laws passed by Congress and signed by presidents—Gramm-Leach-Bliley, which helped to super-charge the financial-services sector, and the Commodity Futures Modernization Act, which blocked regulation of the instruments that sank A.I.G., although those are vitally important. It is beyond the administrative rules issued and executed by agencies, regulations promulgated, appointments made and not made, judicial philosophies, though those are important, too. It is even beyond political ideologies, but that matters most of all.

The debate is where the connection is made for all of us between the political and financial narratives. And it will be one of these two debaters who will end up as president, the only actor big enough to dictate both of them.

Like the eye at the top of the pyramid on a dollar bill, the president radiates the culture that flows through the policymaking and regulatory apparatus of the government, who sends the verbal and nonverbal cues that signals to business and government how the game is going to be played, whether the people on the taxpayer and public side of the table will feel empowered, or undermined, when facing counterparts from Wall Street and the corporate sector. The letter of the law aside: Will regulation be drama or farce?

Historians, investigators and, hopefully, prosecutors, will spend many years plumbing the record of this great financial catastrophe. What they will find is it is in the person who won past presidential debates, in 2004, 2000, and yes, 1996, 1992, and before, where the narratives came together.