The Titanic: One Hundred Years Later, The Unthinkable Lives On In The Form Of Too Big To Fail
This April 15th marks the one hundred year anniversary of the most deadly and notorious disaster in maritime history. The specter of the giant ocean liner, speeding along the calm, icy waters of the north Atlantic, seemingly impervious to the threat that lied ahead of her, only to be felled by that very threat, is so indelibly etched into our collective consciousness that the ship’s very name is synonymous with tragedy.
Over the many years and countless books and movies, historians and buffs have attempted to piece together various explanations as to how the Titanic met her doom. Her rudder was too small; her construction made it awkward to steer; her officers were too inexperienced to navigate her properly; weather conditions and the fact that there was no moon played havoc with the visibility all night making it difficult to see the horizon; and now the latest theory making the rounds that the alignment of the Earth, moon and sun influenced the tides, causing icebergs to break off the Greenland glaciers at a faster than normal rate and thus drift haphazardly into the shipping lanes causing a menace to navigation. There might well be something to this latest theory. The winter of 1912 had been among the warmest in recent memory and that, coupled with the alignment issue, could have played a pivotal role in the calamity.
But while all the above reasons might explain how the ill-fated ship collided with the iceberg, none of them addresses the all-important question as to why the collision and the subsequent disaster occurred in the first place. For that, there is but one simple and undeniable explanation: hubris.
Any objective look at the facts concerning the Titanic disaster would conclude that it was sheer arrogance – nothing more, nothing less – that led to the loss of more than fifteen hundred souls on that cold April night. No less than seven ice warnings were sent to and received by the ship’s wireless crew. All but one of those warnings made its way to the bridge – the last one sent less than an hour before the collision was interrupted by the Titanic’s wireless operator who promptly and rudely told the warning vessel’s operator to “shut up.”
The officers knew full well they were in a hazardous zone, yet took no additional precautions, confident that if anything came up they could successfully avoid it. No additional lookouts were posted either on the bridge or on the bow. Even when it became obvious that visibility had been compromised by a thin haze on the horizon, no order was given by the captain or officer of the watch to reduce speed.
And who could blame them for being so self-assured? The Titanic was pronounced as virtually unsinkable by every expert in the shipbuilding community. Even if they had run into something, certainly the ship would survive. Captain Smith, only a few years earlier, had been quoted as saying, “I cannot imagine any condition which would cause a ship to founder. I cannot conceive of any vital disaster happening to this vessel. Modern shipbuilding has gone beyond that.”
Of course, Smith words would come back to haunt him. The maiden voyage of the Titanic was a text-book example of how not to operate a passenger liner. Every conceivable sin of commission had been committed and the result was a just deserts for the ages.
It is one thing to be undone by circumstances beyond your control – weather, tidal currents, construction shortcomings, ignorance – it is quite another to be the architect of your own destruction. And yet that is precisely what happened on board the Titanic that fateful night. Despite all the lame excuses concerning the how’s, what’s, where’s and when’s, had the severity of the situation been taken even a little more seriously by those in charge, the whole ghastly end could’ve been avoided. The largest ship in the world would have made it to its rightful port of call, a few hours late but unscathed, and all twenty-two hundred passengers and crew would’ve arrived at their true destination, inconvenienced but safe and sound. But, alas, recklessness and overconfidence won out over prudence and humbleness. The rest, as they say, is history.
Funny how little has changed in one hundred years. While the physical ship lies at the bottom of the ocean, a nautical footnote, the sad and painful truth is that that night keeps playing out for us in various incarnations, over and over. The spirit of the Titanic calls out to us from its watery grave issuing the same somber warning that the price for pride and arrogance is exacting. But humanity must invariably flirt with the iceberg.
The Great Recession of 2008 – the worst economic upheaval since the Great Depression of the 1930s – brought the world to the edge of the precipice. It was yet another painful reminder that not only aren’t unregulated markets rational, they can be responsible for causing untold carnage if given half a chance. Almost four years later, the U.S. economy is still digging itself out. Has the near-death experience taught us anything? Apparently not. The too big to fail players who nearly wrecked the economy are now bigger than ever.
JP Morgan, now the biggest commercial and investment bank in the country, owns $2.3 trillion in assets. Right behind it are Goldman Sachs and Wells Fargo. While the Dodd-Frank Act dealt with some of the systemic problems that led to the financial crisis, it never resolved the number one nemesis: the fact that the largest lending and investment firms in the country simply are too large for their own good and, therefore, pose the greatest threat if one or more of them were to go south.
The repeal of Glass-Steagall by the Clinton Administration in 1999 allowed banks and investment firms to merge and grow to enormous size. Since investment firms were not regulated as tightly as banks they could take greater risks. When the assets became part of the banks’ total portfolios, those banks took on much greater exposure. As the housing market began to decline, these assets, some of which were toxic, dragged down these newly formed institutions almost to the brink of insolvency, requiring billions in federal bailout funds. Rather than deal with the real 800 pound gorilla in the country – the incredible size and vulnerability of these lenders – the new regulations allowed the genie to remain outside her bottle.
The truth is we are no more safe now from a cataclysmic meltdown than we were four years ago; indeed we are probably more susceptible because the key players are larger and even more exposed. It’s as though, after having watched the Titanic sink, we allowed the same people who wrecked her to build a bigger, more unstable ship and run it even faster through the danger zone.
I’ve watched the movie A Night To Remember many times over the years and the result has always the same. The Titanic hits the berg and sinks to the bottom of the ocean, leaving fifteen hundred people to freeze to death. The temptation is always there to fixate on the instrument of destruction rather than the true cause. But sooner or later the time for blaming the iceberg must come to an end. The truth is it was never the berg’s fault to begin with. Like Brutus, we must realize that the fault was never in our stars but in ourselves.