MURDER, POLITICS, AND THE END OF THE JAZZ AGE
by Michael Wolraich
Order today at Barnes & Noble / Amazon / Books-A-Million / Bookshop
MURDER, POLITICS, AND THE END OF THE JAZZ AGE by Michael Wolraich Order today at Barnes & Noble / Amazon / Books-A-Million / Bookshop |
This financial crisis is more than what it appears.
It is symptomatic of a society that at some point over the last 30 years lost its way by seeking not the road less traveled, but instead the quickest route.
It is the culmination of a mindset that increasingly became interested in pursuing immediate gratification at any cost.
Look around you. In every area of modern life, the shortcut has become the rule, not the exception.
In sports, we substituted medicine for athleticism as steroids offered the quickest path to success (And I cheered as Mark McGwire belted homer after homer chasing down Maris' record).
In entertainment, we substituted notoriety for talent as reality television offered the quickest path to fame (And I lapped it up as Richard Hatch 'survived' an island and dozens of out-of-control women wooed Flavor Flav).
In war, we substituted power for strategy as shock and awe offered the quickest path to victory (And I couldn't pull my eyes away as CNN aired its little war video game, the pinball-like sights and sounds of buildings being destroyed and people getting killed).
In friendship, we substituted technology for intimacy as tweets and status updates offered the quickest path to communication (And I blog away, making facile analogies as dreams of writing the Great American Novel slip away).
It goes on and on and on.
We wanted it big, we wanted it all, we wanted it now.
Cheating, if not encouraged, was at least ignored. Just pay no attention to that man behind the curtain.
So is it really any surprise that in business, too, we fell prey to the same phenomenon? In hindsight, it almost seems inevitable that we indulged in this financial alchemy, pursuing policies and practices to make the quick buck while conveniently ignoring the potential long-term negative consequences of our actions. The no-doc loans, the credit default swaps, the collateralized debt obligations belong in the same metaphorical bucket as the anabolic steroid, Omarosa and gastric bypass surgery.
The funny thing is, the issue isn't due to a disappearing work ethic. Most of the bankers who concocted these weapons of mass destruction worked insanely hard at their jobs, just as our medically enhanced athletes put in long hours at the gym, just as our most vacuous reality stars went to incredible lengths to promote themselves (and just as I am spending way too much time trying to fine-tune this post).
And I'm not about to suggest that this eagerness to seek the shortcut is an entirely new development. People have of course always found ways to cheat or exploit the system - it's just that in the past, the tools were more rudimentary and thus less dangerous (e.g. the spitball and the corked bat just can't wreak the same havoc as the human growth hormone).
We became too smart and too powerful for our own good. We acquired extraordinary knowledge and technology, but not the wisdom to use them productively, or to realize that sometimes we should refrain from using them at all.
And unfortunately, our primary solutions to this crisis so far - the stimulus plans, the bailouts, the monetary injections - offer more of the same. We are still seeking the quick, easy way out. Wanting it all, and wanting it now. Not willing to deal with the consequences of our actions.
Which of course makes perfect sense. In a world where man ultimately controls so little, including the time and manner in which he will depart it, how can we be surprised when he believes he has figured out a better way of accomplishing a goal and overplays his hand.
We have gotten what we deserved.
We have somehow lost our way.
We better find it back.
Comments
Lost our way? This is the American way.
We've substituted:
Since the sailing clipper, the telegraph, and the steam engine, Americans have always focused on doing everything faster and cheaper, and this obsession is what made us rich and powerful. Sometimes we go overboard--there were rail booms and busts that make the internet boom look like a soap bubble, with companies racing to build two railroads along the same route. It's also true that with every step forward, something is lost, and the old timers decry that the changes are ruining the country and destroying our social fabric. Nonetheless, this is what we are, this is our road, bumps and all.
by Michael Wolraich on Wed, 04/01/2009 - 4:07pm
an interesting response. certainly i agree that this compelling need to innovate we have, to do everything faster and cheaper as you put it, has provided America with an astounding amount of benefits over the years. And i do think it's easy to overpraise the past, to wax nostalgic about 'the good old days' at the expense of the truth.
But i do think somewhere along the line it all became more about smoke and mirrors than creating actual innovation or value-add. The illusion of true fame, or true riches, or true friendship, or true strength, was all that was necessary, yet these illusions are poor substitutes for the real things and often cause way more damage in the long run than the temporary benefits they may provide. Ultimately, the curtain always gets pulled back.
by Deadman on Wed, 04/01/2009 - 4:56pm
But that's the nature of any bubble. Imagination and apiration run ahead of reality, and people whitewash the flaws and overestimate values. Your diagnosis of the symptoms are valid. My point is just that rather than being an aberration from American idealism, this bubble is all too typical and comes part-and-parcel with the nation's entrepreneurial optimism and free market bias.
I might also add, with no disprespect, that angsting about the loss of our values and direction during times of economic decline is also all too typical.
by Michael Wolraich on Wed, 04/01/2009 - 5:54pm
Constructive conversation, boys. If you keep at it, you might even forge some solutions. But could you do it by eight? America's Next Top Model is on tonight and I don't want to be thinking deep thoughts while I'm trying to see all the pretty clothes.
by Orlando on Wed, 04/01/2009 - 6:54pm
Don't worry your pretty head with this stuff, darling. You'll just distract us with petty emotional trip-trap. We men will take care of you.
by Michael Wolraich on Wed, 04/01/2009 - 9:10pm
You can start with my yard.
by Orlando on Wed, 04/01/2009 - 10:27pm
no disrepect taken, but just because people often grouse about a loss of values and direction during poor economic times doesn't make those analyses automatically invalid.
my main point is that our current financial crisis - fueled by the idea that through math and complex financial instruments we could suspend the laws of economics, neutralize risk and create value out of thin air - wasn't a one-off phenomenon, a localized bubble where expectations just got out of hand, but instead the result of a slow, evolving degradation in our collective mindset and priorities, one that has permeated all aspects of life (and I suppose i'm mostly talking about americans, although i think it's probably one thing we probably exported quite successfully around the globe).
I think the fact that we have seen no less than five market bubbles in the past 10-15 years is indicative that something in the foundation has cracked.
btw, i admitted the analogy was somewhat facile, but i think if someone who had the time and a more relevant background could probably connect the dots better than I.
by Deadman on Thu, 04/02/2009 - 3:34pm
This is a story at least as old as planned obsolescence and consumer credit. We didn't just lose our way in the last three decades. We've been running a program that is fundamentally unsustainable since before the Great Depression. Our prospects for long-term recovery hinge entirely upon whether we persist in attempts to continue running the same program until the machine grinds entirely to a halt or we decide to run a different program altogether. So far, we seem to be gunning for the former option.
by DF on Thu, 04/02/2009 - 11:13pm
Holy economic miracles, dfman, we've been running an unsustainable program for a century? How long do we have before we "grind to a halt"?
by Michael Wolraich on Mon, 04/06/2009 - 10:04am
Well, I would argue that part of that process has begun right now. Judging this is highly dependent upon growth and how we decide to quantify it, but I think that we can probably agree that ideas like planned obsolescence don't represent sustainable measures in the long-term. Paired with consumer credit, Alfred P. Sloan, via GM, helped pioneer the basis of our modern consumer markets - buying things that we don't need with money that we don't have. How's that working out for GM and the old U.S. of A. right about now? Of course, the story is more complicated than these two components, both for GM and for America, but does anyone really doubt that these ideas have been a significant driving force as we lapped up credit to buy houses, boats, cars, televisions and other electronic goods without saving a dime?
My point above is that this wasn't a phenomenon that was born of the last few decades. It's deeply entrenched in the story of America during the 20th century. The name of the game has been the steady upward march of GDP and the DJIA. However, these numbers cannot grow ad infinitum unless we allow the meaning of these numbers to change as they do. Apparently, we've been quite willing to do this. To my mind, an interesting question is this: What would those numbers have looked like in absence of the falsehoods that we've now begun to reckon with? Are we looking at them now? Will we have to before this is all over?
An even more important question is: Where do we go from here? Do we try to put the old system back together or will we be ready to face the reality that things really can't come that easy forever? I have to admit that I'm growing more and more concerned that Obama et al. aren't prepared to push this thing forward. They appear to be heavily invested in trying to restart the old game, at least with respect for addressing the banking system. Maybe I'll be impressed yet, but the current outlook seems quite grim to me.
Maybe it's time to rethink what we really care about with respect for growth. We know full well that we can make the numbers look good, but do we want Enron to be the model for our nation? Many long-standing economic ideas are ripe for criticism right now.
by DF on Mon, 04/06/2009 - 11:39am
Unregulated energy markets - planned obsolescence - easy credit - struggling automakers. All problematic issues in the American market, but you haven't tied them together or explained how they represent the core flaw that will doom American growth. I'm sure that you can put together a more coherent challenge to the existing system, which I would be happy to read and discuss.
I certainly don't think that our system is perfect, but I approach apocalyptic forecasts during recessions with the same skepticism that I treat economics-defying exuberance during booms. If there is a crash for every bubble, so is there a period of overblown pessism for every period of irrational optimism.
But whatever the future holds, and whether this recession represents a fundamental flaw in the economy or just a bad cycle, there's no doubt that we could do things better, so suggest away...
by Michael Wolraich on Mon, 04/06/2009 - 3:54pm
I'm not forecasting the apocalypse, but what is your objection exactly? Is "grind to a halt" a rhetorical bridge too far? Is that not what happened to the credit system? When and if we get that system functioning again, what shape will that take? Will it represent a different course or will it more closely resemble attempts go back to back to dream land?
As the days go on, there is more and more of the outward appearance of a plutocratic oligarchy in America. There have been signs and symptoms of this sort of thing for years, but at no time in my life has it been so naked. Will these conditions persist? I see no indication from Obama, or anyone on his team, that this prospect is being taken seriously.
Even if the oligarchy could be broken and even if we can piece together a way to properly regulate the financial system going forward, there are other fundamental questions that remain. The Austrians/Libertarians/Ron Paul set are having a bit of a field day, delighting as their favored targets fail in much the way that they predict as inevitable. Though I don't agree with them, it's a valid question to ask what the meaning of money is when it's backed only by debt. It should be obvious that there are limits that must be placed on such a system. Perhaps the only thing that Tim Geithner has said of late that makes any sense is what he had to say about the necessity of capital reserves.
But what about growth? Exponential growth is not infinitely sustainable when it is predicated on finite inputs. If that's what we require of our national economy, then I don't see how it can be called "sustainable". We might put it back together well enough to cruise along for a while, but sooner or later we'll have to reckon with reality. Is there a single policy or set of policies that will fix this? I don't think so. Much of our collective desire for unlimited growth is cultural. I know of no way to mandate that culture change. Maybe what's required is not policy, but for people to evolve their values. What will motivate them to do this? I don't think anyone can say for sure, but perhaps we're about to go through an economic "time out" that will allow us to ponder basic questions like, "What do I really need?"
by DF on Mon, 04/06/2009 - 5:21pm
Fundamental changes are inevitable, but right now we need a down-and-dirty fix to minimize the harm to real people. I think Obama and other world leaders see this. However, damage control comes first.
It's a global problem, not just an American one. And it's significant that the countries that have got the most mileage out of the unending-economic-growth model are those that have tempered population growth correspondingly. First, the Europeans and North Americans, and more recently (by government fiat) the Chinese.
A finite planet cannot support infinite population growth. We are running out of non-renewable energy, arable land and water. And accelerating global warming is about to make the latter resource the crucial one. It's one thing to drown our coastal cities (and countries like Holland and Bangladesh). But once you've melted all the high-altitude glaciers, entire continents and subcontinents die. Hundreds of millions either starve or try to migrate. And where they move to, millions more starve.
On the bright side, once that catastrophe occurs, the concept of maintaining Earth's population at a lower, sustainable level will become axiomatic. (Even the pope will accept the imperative of birth control.)
We do need attitudes to change, and a global consciousness to emerge. The "time of troubles" we are entering is, unfortunately, what we need to get us to that point.
by acanuck on Mon, 04/06/2009 - 5:11pm
egads!! 'time of troubles'? Hundreds of millions starving and dying of thirst?? Entire continents dying? And even worse, DF saying we may need an economic timeout to think about 'what we really need??'
you guys are beginning to sound more pessimistic than me.
obviously, genghis thinks we're just gnashing our teeth. negative nattering nabobs, no better than the ebullient bulls who party hard when the markets are roaring.
He may be right, perhaps this will be nothing more than something not much worse than your run-of-the-mill recession, one that we can will away with a few trillion in well-placed, or perhaps not-so-well-placed, government outlays.
hell, i hope he's right, cuz the alternatives don't sound like much fun, but to my untrained, unscientific eye the data I've looked at, such as those debt-to-GDP charts I have linked to in the past (which don't begin to account for our true level of obligations, not to mention the trillions of dollars in additional derviative bets and insurance placed on that debt) strain the suggestion that this is a mere bump in the road that can be fixed with some simple Keynesian morphine.
by Deadman on Mon, 04/06/2009 - 6:47pm
It's not pessimism to conclude the financial meltdown is just the economic manifestation of the problem you point out: losing our bearings about what our place is on this Earth.
Since we needed the wake-up call, maybe it's best that it has come merely at the cost of paper wealth. It's only fair that current generations, who have been living highest on the bubble, take the major economic hit. There's a big debt load being carried forward, but that's fungible.
We've got interrelated problems: a stalled global economy, imminent resource depletion and runaway global warming. The quickest way to address all three is an immediate freeze on population growth. It will still take a generation for the benefits to kick in, but there's nothing else we can do that's anywhere near as efficient.
by acanuck on Tue, 04/07/2009 - 1:31am
Whoa, that sounds almost as improbable as McCain's proposed spending freeze. How do we accomplish that feat?
by DF on Tue, 04/07/2009 - 1:48am
You're quite right. I should have distinguished between what is the only efficient response and what has any practical political possibility. The Netherlands will probably disappear from the map, and the Indus and Ganges run dry, before world leaders summon the necessary courage to act.
by acanuck on Tue, 04/07/2009 - 2:20am
I don't disagree that population growth drives many problems, but implementing policies to control population size seems rather difficult. There's some indication that population growth slows down in post-industrial societies, particularly when accompanied by education and health care. If there is a relationship here, then maybe it offers a way forward. Then again, perhaps this natural slowing of population growth may take too long on its own.
Way to get all Malthusian on us.
by DF on Tue, 04/07/2009 - 2:37am
Hey, Malthus got a bad rap. Just like Hobbes and Jonathan Swift.
by acanuck on Tue, 04/07/2009 - 3:20am