In a previous post, I mentioned being intrigued by the concept of no-fault society developed by Mark Jacobs. So, I went and dug up the relevant article on this (or rather, I let my excellent librarians do the work of getting the article for me, which they did, in 24 hours… pretty amazing). So, without further ado:
Mark D. Jacobs (2004), "The Culture of Savings and Loan Scandal in the No-Fault Society", in Mark D. Jacobs and Nancy Weiss Hanrahan, The Blackwell Companion to The Sociology of Culture, Blackwell Publishers (now Wiley… more publishing consolidation and conglomeration), pp. 364 – 380.
I have to say that not everything was useful in this article. For instance, the author makes a big deal of the use of the Sartrian notion of bad faith to explain scandals but it did not seem to me to bring anything really new to the discussion. I was more interested in what no-fault society aspects and to see if there were parallels between the Savings and Loan scandal and the current crisis. I’ll just extract the aspects of the article I found useful.
On general considerations of scandals, I liked the idea of scandal as "germinating" at the interstices (my word, not Jacobs’s who uses fault lines rather) of different spheres such as business and politics or within spheres, such as politics where the interstices are between public and private, between government branches, or political parties or within business between private profit and public regulation, more generally between the local and the global, etc. Scandals emerge in these cracks.
Of course, scandals also emerge at the intersection of money, power and sex, where each can be exchanged for the other.
Jacobs asserts that scandals are also more likely to emerge in deeply divided societies and states quite accurately, I think,
"Scandals can be understood, in part, as culture wars by other means." (368)
Scandals also emerge within structural and institutional conditions that promote or deter the burgeoning of scandals based on whether norms are strictly or loosely enforced within organizations, for instance.
There are also no scandals without publicity and media attention. The mass media are not just amplifiers, they are institutions with their own logic and dynamics and they also act as narrative-builders and propagators. And, of course, the media selects which "affairs" (in a broad sense) will be given the label scandal (classical social constructionist approach here).
Finally, scandals are intertextual spectacles.
"Scandals are melodramatic spectacles whose rhythms follow patterns of revelation, attempted coverup, investigation, prosecution, and apparent reform. As Lang and Lang (1983) suggest, scandals are cultural objects generated by transgression, publicized by the media, adjudged by public opinion, and kept alive by collective memory. (…) Collective memory helps form – and forms around – the comprehension of scandals not just as discrete events, but as moments in the series of scandals. That is, the narrative of understanding of scandal is intertextual: scandals are understood in relation to each other, with the interpretation of earlier ones at once helping to shape, and being reshaped by, that of later ones ." (369-70)
This last point seems very important to me.
For the author, the S&L scandal is the one that got away. It is a scandal that received much less publicity than it should have, compared to, say, Watergate or even Iran-Contra. As such, for Jacobs, it is a good illustration of the no-fault society.
The no-fault society is characterized by three structural conditions:
Constrictive individualism: deregulation is detrimental to business community focus (the S&L turned away from community developments to go for juicier investments) and fosters greater individualism. Financial instruments are created to feed the demand of these individual economic actors (and S&L was before the major impact of retirement and pension funds and 401ks).
Blurring of the public and the private: then, as now, profits were privatized, losses were socialized under the aegis of the government acting on behalf of private interests.
Laxity of the rule of law: self-explanatory.
As a result, the mechanisms of accountability are either dismantled or inoperative. Hence, the no-fault society. Very few of the major S&L participants were held accountable. Only a few individuals are held up as examples (See, Madoff, Bernie) to give the illusion of some justice. It worked something like this:
"Participants in this scandal embraced the strategies of both contentious and collaborative evasion. Legislators, lobbyists, members of oversight committees, thrifts owners, merchant bankers, junk-bond speculators, regulators, lawyers, accountants, appraisers, real-estate developers, and loan brokers all participated in an intricate web of diffused responsibility – as did, not least, racketeers. Actors contended to evade accountability through strategies of both reciprocal inculpation and mutual exculpation. The manifest content of their accounts displaced blame onto others, and sought constantly to reframe the modes of accountability." (376-7)
Fast-forward to today and we all witnessed the same people as above blaming the sub-prime mess as the fault of regulations that forced mortgage lenders to loan money to black people who could not afford these loans.
But the big question, for Jacobs, is why the scandal was not bigger (why did the dog not bark, in his words). The explanation goes like this:
"While socializing the costs of embezzlement and fraudulent financial speculation, the government privatized and deferred the costs of the bailout though the issuance of long-term bonds (Zimring and Hawkins, 1993). The bailout costs did not enter into calculations of the federal budget deficit. This strategy accords with Habermas’s analysis of the displacement of action-spheres as a way of camouflaging the legitimation crisis of the modern welfare state. In effect, through the issuance of bonds, the government found an economic solution to a political problem – after straining the political system to find a solution for an economic one." (377)
In addition, such large financial scandals do not make for good media drama. They are too complicated. Who wants to listen to complex description of financial instruments. In the end, again, a few individual cases have to do (the Keating 5, Martha Stewart, or again Bernie Madoff). Without a dramatic structure of heroes and villains, smoking guns and clean resolutions, there is not much momentum that the media can generate and hold on to. (Although, personally, I’d put Elizabeth Warren in the heroic part)
Compared to S&L, Watergate made for good drama, so did Iran-Contra with public hearings that were watched like a Perry Mason mystery. This spectacular aspect of the Iran-Contra scandal was particularly well studied by Michael Lynch and David Bogen in The Spectacle of History: Speech, Text, and Memory at the Iran-Contra Hearings.
As a general rule, scandals that can sensationalized will receive greater treatment than those who lack these components. So, extra-marital affairs by politicians become easily scripted (the leaks, the clues, the discovery, the denial, the coverup, the admission, the tearful confession, the redemption). The problem is that in the grans scheme of things, these scandals are trivial and distract from the scandals that have more structural and systemic impacts.
In the context of the culture war, it means that while we focus on the sex, money and power nexus and poke fun at disgraced politicians and their kinky business, we distract ourselves from the scandals whose serious investigations would make us question the foundations of our socio-economic-political systems and therefore have the potential to threaten social arrangements. And we can’t have that, can we? Hey, look! Over there, Sarah Palin!