This episode of PBS’ Frontline, “The Warning,” runs an hour, yet bears attentive viewing. Aired in 2009, as we only began to comprehend the 2008 financial meltdown, the producers spotlight Brooksley Born, an insightful official who anticipated the crash a decade in advance. But I flashed on one statement, buried around 18:30, that—as early as 1996—financial regulators already had let major financial markets drift into complete obscurity.
When we think of black markets, we often imagine drugs and guns, or peasants outwitting Communist oppressors. Yet white-shirt bankers in New York’s shiniest corner offices established an entire parallel economy operating in the dark. Our economy was jeopardized, and ultimately pushed to the brink of catastrophe, by financiers who danced the razor’s edge in secret. All this passed muster under the veneer of “free markets.”
Secrecy is the prime domain of terrorists, Mafiosi, and adulterers. While secrets may serve altruistic purposes, like planning surprise parties or conducting undercover law enforcement, these occasions happen infrequently, usually on an ad hoc basis. Secrecy always entails unequal distribution of information, and especially when stakes escalate, as happened on Wall Street during the go-go Clinton/Bush years, inequality is a licence to rob banks.
That goes double when you own the bank.
Joshua Holland, author of The Fifteen Biggest Lies about the Economy, claims that free markets absolutely rely on honest transparency. Workers cannot negotiate honest wages if they don’t know their employer’s income, parity margin, and what comparable workers with comparable experience make in comparable jobs. That’s why the government bans securities trading on insider information. To conceal is to lie.
We could take that even further. Consider secret activities we’ve accepted in our society: papal elections. CIA Cold War atrocities. Supreme Court deliberations. Now consider the consequences of such secrecy: a man with a history of concealing clergy sex abuse elected leader of humankind’s largest religion. The death of Patrice Lumumba. The Citizens United decision. Secrecy has a poor track record.
Remember when Barack Obama promised, back in 2008, to bring greater transparency to the White House? He has successfully incorporated more information distribution and swifter press notification onto the White House website. But this didn’t stop both Obama and Hillary Clinton from angrily denouncing WikiLeaks and Julian Assange when he took them at their word and published American documents and position papers online.
Disclosing troop movements that jeopardize American soldiers would be irresponsible; but Assange’s information wasn’t nearly so extreme. Instead, he’s published footage of Baghdad air strikes, friendly fire and civilian casualty numbers in Afghanistan, and old diplomatic cables from Washington and London. Yet apparently these embarass the administration enough that Hillary Clinton has used the word “treason” in association with Assange.
Not all secrets are malign. TV networks conceal their fall lineup, and software designers keep new video games under lock and key, in a harmless attempt to make mundane products seem scarce and valuable. JK Rowling withheld Harry Potter and the Deathly Hallows so readers worldwide could enjoy the big reveal together. To avoid a fruitless value conflict, my mother doesn’t need to know how often I have a beer with the fellas.
But notice how little is at stake in these examples. Rowling writes uplifting children’s fantasy, not the key to Mideast peace. If she withheld that, even for magnanimous reasons, people would feel justly offended. And I drink so infrequently that mine is a minor secret. Were I a chronic abusive drunk, concealing frequent daytime beer runs, my mother should intrude upon my secrets and shine the light of day on my habits.
Despite nearly a century of evidence that financiers who do dealings unseen are up to no good, an appalling number of American legislators, regulators, and voters have pushed to let banks continue conducting occult transactions with no oversight. Significant government business still occurs off the books. People responsible for our health, security, and spiritual well-being think we needn’t know how they do business.
My parents taught me early that “friends don’t keep secrets and secrets don’t keep friends.” French historian and theologian Jacques Ellul put it more eloquently when he said: “Propaganda begins when dialogue ends.” When people in power do not listen to us, communicate with us, or make their dealings known, their intentions are almost always pernicious. We must refuse such treatment.
Because, as Brooksley Born warns on Frontline, conditions exist for another catastrophic meltdown. And if it happens again, we’ll have no one to blame this time but ourselves.