Is the Crisis Your Fault? or, Epochal Events On the Easy Credit Plan
Josh Marshall links to a piece by Fareed Zakaria which begins this way:
Some of us--especially those under 60--have always wondered what it would be like to live through the kind of epochal event one reads about in books. Well, this is it. We're now living history, suffering one of the greatest financial panics of all time.
I'm under 60 and I don't understand the age reference. What happened during the ten years between 1948 and 1958 (for example) that's more historic than the Cuban missile crisis, the Vietnam war, the 1968 uprisings, the fall of the Soviet Empire, the invention of the Internet, or our first forays into space - just to name a few events?
On the other hand, I fully understand these comments :
This crisis has--dramatically, vengefully--forced the United States to confront the bad habits it has developed over the past few decades. If we can kick those habits, today's pain will translate into gains in the long run. Since the 1980s, Americans have consumed more than they produced--and they have made up the difference by borrowing.
I agree ... basically. Where I differ is when he goes on to castigate consumers - us - for their (our) inherent greed and superficiality. Zakaria writes: "If we wanted a bigger house, a better TV or a faster car, and we didn't actually have the money to pay for it, no problem. We put it on a credit card, took out a massive mortgage and financed our fantasies."
I think the blame lies elsewhere: in the media, in our political leadership, and in the culture itself.
Those things didn't happen in a vacuum, nor were they as premeditated as that kind of language suggests. Americans didn't wake up one morning and decide to be fiscally irresponsible. They were actively encouraged to do it. What's more, they were told that this kind of consumption wasn't irresponsible at all. Many of the people entrusted with keeping them informed - journalists, politicians, and other persuaders - told them instead that they were merely fortunate. They were led to believe they lived in a time of endlessly expanding personal net worth, fueled by a long-term and open-ended boom in real estate values.
Don't blame me, said the American consumer. Like the Dylan song says: "I can't help it if I'm lucky." And society's leaders nodded their heads in agreement as they hummed along.
Now it seems as if everybody's lecturing the same beleaguered consumer. Maybe I'm being a little too harsh on Mr. Zakaria as a result. But where were the major-media voices telling people not to buy houses or take out loans? Where were the 'trusted names in news' telling people that we were an overly materialistic, consumer-oriented culture? Sure, scattered words of concern were heard here and there. But nobody sounded a clear warning bell for the huddled masses.
Fareed Zakaria writes for Newsweek and has his own CNN show. The voices that were condemning our borrow-and-spend consumer culture weren't particularly welcome at places like CNN or Newsweek while all this was happening. There were no major-media gigs for Paul Hawken or Bill McKibben.
The root problem runs deeper than excessive personal debt. The problem lies in a value system that measures our human worth according to our net worth. The "fantasies" Mr. Zakaria describes didn't appear unbidden from the unbridled core of the American Id. They were put there - by advertisers, business leaders, pop stars, moviemakers, and the features editors in a hundred thousand news outlets.
As a result, we care too much about our houses, our cars, our entertainment systems, and our clothes. But it's uncomfortable to hear those things, or even to say them. It's too cliched, too hippieish, too filled with dewdrops and idealism. Yet we're now able to quantify the results of the Culture of Consumption in clear, economic terms. Yes, there were some Cassandras and a Paul Revere or two. But they weren't getting much airtime. The sponsors might not have liked it.
Nobody was crying "small is beautiful" from the steps of the Treasury building or in the halls of Congress, either. Our government leaders were too busy encouraging all this borrowing and spending. The outgoing President famously told Americans to "shop" in response to 9/11. And his predecessor hired Robert Rubin, one of the architects of this collapsing economy. Where were the political leaders of either party who suggested we dial down on all the consumption, or warning us that trouble was on the way?
Fareed Zakaria is right to suggest that there may be a silver lining to this crisis. But I think he's wrong to adopt the currently-popular condemnatory tone against consuming Americans. They were only doing what they were told, after all. They were reflecting the values transmitted to them 24/7 by politicians, entertainers, advertisers, and ... yes ... pundits.
We need to re-think our assumptions on a variety of levels, starting with the economic, the cultural, and the personal. We won't get that done by being judgmental. We'll do it by educating people. And by educating ourselves. The values of the past are inadequate to face the challenges of the future.
"He who dies with the most toys wins." Remember that bumper sticker? A lot of people looked down on it. But they reflected it, too, in their culturally programmed yearning for whatever gave them the best buzz -- whether it was a bigger TV, a few more vintage guitars, or the ecstatic rush brought on by new-car smell.
A lot of people fell for that greed buzz sometimes, including many who consider themselves rational and not particularly materialistic. I know I did. Maybe you did, too. It's in our collective DNA -- and now we need gene therapy. We need to evolve from a consumer society to a rational resource society.
If that happens, then we under-60's really will have lived through an epochal event. Maybe the biggest in our history, come to think of it: the end of the Age of Consumption and the birth of a humane and sustainable society. That would be an event to remember.
RJ Eskow blogs when he can at Night Light and The Sentinel Effect: Healthcare Blog
Follow RJ Eskow on Twitter: www.twitter.com/rjeskow
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This is partially true...how
“I think the blame lies elsewhere: in the media, in our political leadership, and in the culture itself.”
Yes, but this misses the deeper explanation of cause. Daniel Henniger in his “WonderLand” column in opinion section of the WSJ, wrote about the missing American qualities of responsibility, restraint and remorse. He indicates the secularizing and insistent effort at de-religioning of America as a potential root cause. These are moral sentiments and products of conscience that are taught and handed down to new generations. America has no cultural mythology and religion has become so passé, so these concepts are more and more foreign in our lives of ever-growing progressive excesses. Add this to the high speed at which business information flows and the slowness of government, and there we have it.
Even today, home owners with enough cash on hand are walking away from their mortgage to purchase their same model home across that had foreclosed for 50%... leaving their bank with their old worthless mortgage. Today many would say that is just good business. 20 years ago most would say it was irresponsible and immoral.
I do not trust that government can ever keep up with enterprising individuals trying to make a buck. It sets up a cat-and-mouse game that the mouse always wins. The solution is less government and a greater social expectation for responsible, restrained and moral behavior. The first step, go back to church.
Socialmisf
It seems to me that what actually happened is that religion itself (American conservative Christianity in particular) has lost its way. Too many religious leaders in this country, especially the conservatives, bought right into the whole enchilada of capitalist excess.
Create a need and fill it!
How many people do you see even in the President-elect's ads when talking about the current situation that are two parent families, one child and they are in angst about losing their four or five bedroom, three bath, bonus room, media room, three car garage etc, etc....hou
The President elect seems to have much sympathy for them. But I've yet to hear a word out of his mouth about the real Joe, not plumber, who is just trying to hold his family and his two bedroom, one bath house together. Often these struggling working poor are the ones who fall in the credit card never ending and never winning loop. In this country you are considered above the poverty level if you earn more than 21K for a family of four. I'm not sure 21k can support a single person in most places in this country.
A very sad situation indeed!
Your right, $21,000 won't keep a single going. It won't pay all
the bills and the rent and allow for any emergency funds. In my
area, that's the average. I moved from a bigger market in jobs
to get away from crime, back to a more home-town atmosphere,
and found a market that has me struggling to make it. Sad.
I guess we could all sit down in a big circle and randomly point the finger of blame at one another. Or we could cut through the hyperbole and shoulder some, if not all, of the blame. No one said we had to buy on credit. Credit is not a bottomless pit where we satisfy all of our fancies. Wow! All those credit cards. Lets's just keep buying and buying because the concept is sort of surreal. I mean the money doesn't come out of our pocket at the time of puchase. We just sign and walk away with our newest toy. It doesn't hurt at all. And a credit line allows us to purchase items that are bigger, newer and fancier than we knew we could ever afford. Besides, if we can't pay the bill, who cares? It wasn't our money to begin with. Credit is nothing more than trust. To witness the catastrophic firestorm the credit industry is in, because of people not paying for what they puchased, is appalling. I've heard an awful lot of rhetoric, over the years , about consumer confidence and how much we were spending. But very little detailing how much, of what we purchased, we actually paid for. It is of little wonder the credit industry doesn't want to lend out money.
Here are the voices I heard: my depression era grandparents, my the mills went south and left our town and family broke parents (so dad got a job as a janitor until he could find a better one) JFK asking me to ask not what my country would for me, but what would I do for my country. I joined the Peace Corps.
You can see ads on TV and print press for joining the Peace Corps and for $4000 TVs. EACH PERSON makes his or her own choice!
Jerry Brown as Gov of California said Small is Beautiful and for at least the part ten years there have been tons of books on simpliflying lives.
You can listen to and admire Rush L or Bill Moyers. One can not blame media or selected leaders for personal choices.
We are seeing the resilts of the many who did.
It is a basic mindset thing. When I first came across the Atlantic, many years ago - it was to Canada not the US, but in this respect they are similar - I remember how truly startled I was when someone in a debate in the Canadian parliament said, of an opponent, "Who want to listen to someone who only makes $10,000 a year?" (say $30,000 in today's money). It was such a fundamentally ridiculous statement. Then as years went by, recalling it, I found myself not sensing the same shock! And I moved to the States and saw the extreme over-the-top respect accorded to doctors, largely because they make so much (too much) money.
To European or British eyes, America was always seen as crassly commercial, everything reduced to its dollar value, high consumption levels imposed by peer pressure. Someone once was talking about new arrivals and said 'they find their old lifestyle is not acceptable here..." Not acceptable!
But things may be changing..
We saw chickens today!! My daughter and I were walking around our old neighborhood for the heck of it and saw what we thought at first were funny looking cats. A woman was raising chickens in her backyard. We had to shoo them out of the way of an oncoming UPS truck.
They were just a cluckin' and a peckin'. Fortunately, that town has loose zoning laws. In most US towns, you're not allowed to raise barnyard animals in your back yard. It ruins property values. So much for that.
The whole snobbishness of worrying about a neighbor's panties blowing in the breeze on a clothesline, fixing your car in your carport or raising your own food is a big part of why we're in this mess. It's all about appearances. In some towns, families live in huge homes with no furniture and go to food banks (in other towns) just to keep up appearances. A co-worker thought she would damage her child's self-esteem if she didn't buy him $200 shoes.
I think those chickens were coming home to roost.
Excellent. Everything you say is absolutely right on. I think we might learn something from the poverty-stricken Mexican families in our neighborhoods who don't understand our social neighborhood standards but have a deeper understanding of how to live.
Nobody mentioned college student loans here. My son is up to his eyeballs. He determined that the only way to pay it off in his lifetime was to go for more and get a masters degree. Of course, he chose a school from which to network in his field. Time will tell.
I paid off my student loan 5 years ago (it took 15 years). I wanted to celebrate with my family. However, at that point, I had a job that could not pay for a celebration.
Unless it's a requirement for his field, he should not get a Masters yet--unless of course, he really has nothing better to do. A better tactic would be to get employed in his chosen field & have the company pay for the Masters (if they still do that). As a person with a master's right after a BA, I found myself "priced out of the market." I was overeducated & inexperienced.
Good luck to your son. The best tactic is to be open-minded and very flexible.
I believe that employers should not be permitted to require degrees which have no bearing on the ability to perform a job. Now that we are starting to see jobs for which training takes about one work day require college degrees, while college costs are skyrocketing, I think it's time that the American worker is permitted to work again right out of high school for many jobs.
But if the blame lies "in the media, in our political leadership, and in the culture itself", isn't that just another way of saying "us". Shouldn't those individuals of this generation that over consumed and over borrowed accept individual responsibility for pursuing their own happiness to the point of potentially denying it to the next several generations.
I would rather place the blame on individual decisions, no matter how cleverly tempted by our culture, than to deny all the ability to pursue happiness to the extent and in the manner they can afford.
I do, however, agree with the authors points on our misplace value system. To me, a nobel physicists is worth a 1,000 Wall Street "masters of the universe."
I've never been big on shopping and spending till you drop or until all the credit cards are maxed out. I made a pledge two years ago to a group called the compact. That pledge was to buy nothing new, except medicine, food and such necessities for a year. I adhered to that pledge, even through the holiday season.
To me, it was not that big of deal. But having done that a year still makes me more aware and to ask myself with each little purchase if I can do without it or find a subsitiure I have on hand, get it use or barter for it.
It was good for my bank balance and it was good for me. Everyone should try it once even if you tell yourself you'll do it for a month, then another month.....
Most people work jobs they can barely tolerate for wages on which they can barely live. Those nice homes, big screen TVs and other big ticket items bought on credit are comfort items in a world that is growing less secure. It's either run up our credit or revolt and we both know what option the wealthy would prefer (think French Revolution). A long time ago, people were paid wages that actually allowed them to live COMFORTABLE lives without credit... try doing that now. Most people have the choice of living within their means and waiting until they are over 65 years old to enjoy their lives or use credit and get some of that enjoyment right now. Most choose the latter. I think its hypocrisy for people who make good money writing about real life to criticize people who have to actually live it everyday on a fraction of the dollars for using credit. That's like Bill Gates criticizing me for overdrafting my checking account.
Everybody bears some responsibility in this. No one 'needs' a 60-inch television. No one "needs" a McMansion.
But if you believe that television has no influence on the way people perceive themselves, that it has no effect on shaping desire and behavior, I have a bridge for sale, cheap.
There's nothing wrong with 'hippie' values. If you look in the bible, you'll find most of 'em there, under Matt, Mark, Luke, & John... and I'm not religious, I just think Jesus had a pretty balanced set of values when it comes to possession versus caring for each other.
The problem is greed and stupidity. Everyone's got some of each--but like diapers, they are things we can grow out of. Our culture has been rewarding these two characteristics as though they are things to be admired and it's about time we grew up.
Most of you people read and believe in some kind of religion.I believe that religion was invented to explain the unexplaina
David Suzuli did a documentary on excess consumption in 2005 I recently saw on Link TV. The mortgage industry and home builders who got out in time just made a killing. That money went somewhere, and were encouraged to borrow. Ronald Reagan was the first "borrow and spend" president, and the Bushs finished the job.
Your thesis is quite correct. We have become a nation of debtors, encouraged by media, marketeers, and our need to keep up with everyone else. Our capitalistic greed is both our greatest strength and our greatest weakness.
But here is the catch. If we all started to save say 10% of our net income, the economy would be thrown into a major recession. That is partly why Dubya told us to shop after 911, bless his little brain.
We need a reset for the whole economy, a paradigm shift in the way we value ourselves and our property. Homes are no longer ATM machines used to finance our bloated lifestyles. College funds and 401ks have lost much of their (inflated) value. Boomers dreaming of ontime retirement will likely have to work another N years before they can relax.
Green energy and the promotion of a lifestyle not so dependent on fossil fuels seems a good strategy, good for us, good for the planet. Now is the time to seek the change we need!
Why do parents have to give their kids the lastest what-ever
every year for Christmas, spend themselves into bigger debt,
for stuff that's outdated a year later? Why do parents, even those
earning in the higher range not spend time rather than money?
Why are we talking about our past piddling spending habits? We're finally going big time. No more borrowing from the Arabs or the Chinese. We're just printing the stuff. In November 1923 it took 726,000,000,000 German Marks to buy what one mark bought in July 1914. Invest in any company that manufactures wheelbarrows. We're all going to need them.
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