Walter Sobchak: Were you listening to The Dude’s story, Donny?
The Dude: Walter…
Walter Sobchak: Were you listening to The Dude’s story?
Donny: I was bowling.
Walter Sobchak: So you have no frame of reference here, Donny. You’re like a child who wanders into the middle of a movie and wants to know…
The Dude: (interrupting) Walter, Walter, what’s the point, man?
Walter Sobchak: There’s no reason – here’s my point, dude, there’s no fucking reason why these two…
Donny: Yeah, Walter, what’s your point?
— The Big Lebowski (1998)
I pity taxpayers wandering into the credit crisis story at this point. It is absurdly complex, and centers on a subject that most people neither care about nor understand. And the last time they looked in they were told this was about subprime and housing, which it no longer is — at least not in large part.
Instead, it is a costly and complex saga involving the unwinding of global credit markets, overlayed with debt syndication, new derivatives, the collapse of the investment banking business, the changing nature of leverage, flawed risk models, structured finance, greed, the housing bacchanalia, savings, paranoia about prior credit crises, and the paradox of thrift. Don’t forget, of course, populist political pandering in an election year.
Is it any wonder that most of even the most well-intentioned commentary on the current crisis sounds clueless, unhelpful and mildly dangerous?