Blame George Clooney

Every three years during the Bush administration, America was presented with the slickest and most appealing of Hollywood fare: the Ocean's Eleven series. In 2001, and then again in 2004 and 2007, we were treated to lots of attractive, famous people in fancy clothing surrounded by colorful lights and engaging in witty banter... while stealing unfathomable sums of money. The films, as all heist films do, relied on the simple lie inherent to the genre: the thieves are the good guys. And everyone watched eagerly as they siphoned off millions for themselves.

It is almost as if these movies were designed to enforce a decision made on Capitol Hill two years prior to the first installment: the passage of the Graham-Leach-Bliley Act. Let's set the scene:

* * * * *

The year was 1999, and, just as in the Ocean's movies (those to come and the original of long ago), the story featured a bunch of Rich Men in Nice Suits who wanted to be richer. They came into town looking for the largest casino they could find, hoping to score big.

Now, in the films, Andy Garcia runs the casino, and he at least tries to, you know, stop the thieves from thieving. Similarly, for the last seventy years, the gatekeepers of the nation had stood firmly in the way, upholding regulations such as the Glass-Steagall Act which essentially insured that the casinos of American finance would stay manageable in scope: if one did get robbed, the Strip would not disintegrate into a starry memory overnight.

For some reason, though, Congress, in 1999, did not get this gatekeeping memo. They had no interest in playing the Andy Garcia role, assuming that nobody likes a party-pooper, and managing casinos is boring, not to mention the fact that everyone wants to be Frank Sinatra/George Clooney, or if they can't, they at least want to be his friend, or if they can't, they at least want him to like them. So, our trusty representatives not only welcomed these Rich Men in Nice Suits, but they said, "hey, you know what, let's get rid of that old Act and pass a new one, because, you know, we know what you guys need: a bigger casino. Here, take America."

And they did.

And they had a field day.

The Rich Men in Nice Suits took and took and took, and gambled and gambled and gambled. Now, a lot of the suspense was gone, since there were no guards to fool, no cameras to disable, no, you know, security to, you know, stand in their way.

And everyone got rich.

It was very glamorous.

And it seemed to be working. And lots of people thought they were doing pretty well for a good, long while.

And George Clooney kept coming into their movie theatres and showing them how sexy it was to gamble. And they loved it.

The thieves were the good guys.

There were lots of thieves.

* * * * *

The problem, of course, as we now know, was that people weren't really getting rich. Some were: those who were consistently cashing out and stashing their winnings. But a lot of people were just raking in the chips, and putting those on the line, and then raking in more. They came up with fancy names, like "credit default swaps," which were when a lot of people were borrowing chips from other people, who in turn were borrowing chips from other people, to cover their own lending, without ever discerning whether they could be paid back. Chips were borrowed so many times over that everyone lost track of everything. Another fun thing they did was construct "collateralized debt obligations" out of "sub-prime mortgages," which is a fancy way of saying that chips were loaned out to millions of people who could not afford them, and then other people decided that they would invest in the future paying-back of those chips.

All of America was a giant casino, full of noise and life and color and lots and lots and lots of chips.

Not money. Just chips.

Chips, of course, are not money. And eventually, it turned out that the country, as a whole, was not well-suited to be a casino. All of a sudden, people went to cash in their chips, and found out that they weren't worth anything at all. Too many people had found too many ways to get too many chips, which was absurdly easy, because their were no rules.

The chips had no value.

The casino shut down overnight.

Now, in hindsight, we realize that these people on Capitol Hill had a very, very bad idea. We also realize that George Clooney's movie was a movie, not a lesson. (He does make movies that are lessons, for example, Good Night, and Good Luck, but these are largely ignored by the decision makers.)

So, here we are, duped by the Rich Men in Nice Suits. America spent ten years thinking it was the star of a heist movie; in this movie, thieves became good guys, and everyone was happy.

Nobody stopped to think about the fact that movies end.