As anybody who reads this or knows me is acutely aware, I’m an eternal optimist. So, even though our financial system is collapsing around us, I see this as a potentially positive development for America.
It is only when things are bleak that people are sufficiently motivated to change. We saw that last Tuesday, as red states turned blue with anger over the direction of the country. More importantly, I think we’re seeing the beginning of something even more productive than the electing of a figurehead for change. The magnitude of the crisis seems to be finally waking people up to the fact that our issues are not just due to one feckless moron who was elected president, but are systemic and of a magnitude that defy simplistic partisan finger pointing.
As depressing as this crisis is, the resulting national depression is–at last–our first rational act as a population in a long time. We should be depressed, but at least take comfort in that it is the first step of the recovery. I’m sorry to succumb to the overused addict metaphors in describing our country’s borrowing and economic discipline, but I do think that one absolutely valid similarity is that sometimes you just need to hit bottom in order to see the truth and take responsibility for yourself.
Well, America, as we sit weeping in $7 trillion of our own vomit, with the Chinese holding back our hair and telling us “Keep borrowing, you’ll feel better,” I think it’s safe to say: Congratulations, fellow citizens, we’ve hit rock bottom. Now, it’s tempting to try to escape back into the bottle (and congress is trying desperately to help us with that) but sometimes when the mind fails the body has a wisdom of its own. We just can’t keep any more credit down, no matter what we try, even the really good stuff from the Fed’s acronymic stash. So, we do what any good problem drinker does who is trying desperately to stretch the metaphor, and drunk dial an ex-girlfriend at 2 am. Except, as these things go, all our friends are junkies, too, and they’re all worse off than we are. All we get is a message from their Swiss roomate that they’re in rehab in Reykjavik and can’t hang around with us any more. We’re on our own.
So there’s nothing to do but buck up and change our ways, and the first place to start is with more cliches. “The night is always darkest before the dawn.” I’m not sure who first uttered that phrase, or what terrible situation prompted them to try to cheer somebody up with it, but it should come with a disclaimer: Dawn not guaranteed in the case of nuclear winter. Rock bottom is really only a call you can make in retrospect. It could, after all, just be the beginning of the dying process. We can use the troubles of the day as a motivation to finally clean up our collective act, or we can use it as a springboard for a spiral into degeneracy and looting. We can tighten our belts and sacrifice, or we can pass off our problems to future generations in the form of further debt, unsustainable bubble economics, or confiscatory taxes on decreasing pockets of wealth. We can chant “Yes we can” or we can quietly do.
What other revelations has the clarity of desperation brought? For one, that while we may have always been capitalists, and always will be, we’ve recently become merciless and stupid capitalists. Unfortunately, capitalism, even at its best, says nothing more than that markets find equilibrium subject to their constraints. We’ve forgotten that the constraints are in our control. If we consider it fair game to freely trade with countries that essentially allow slavery, then our free markets will eventually price labor at slave wages. Capitalism is a ruthless optimizer; it is brutally efficient at pricing but not so good at valuing. I think we may finally see that.
What gives me hope that we’ll choose the right path is that, as hokey as this might sound, Americans are often at their best when the going is toughest. We saw it briefly after 9/11, before our government went insane and declared martial law; we saw it, believe it or not, during Katrina, as Americans donated $2.6 billion of their own money while FEMA squandered their taxes, and over a million volunteers later moved in to supplement an incompetent federal response. There’s not a single country in the world whose citizens are more voluntarily generous than Americans. The common theme is that we are at our best when we depend on ourselves, not politicians. A culture of letting the government take care of us is slowly supplanting a culture of taking care of each other and ourselves; I hope part of hitting rock bottom is that we quit letting politicians be our enabler, and start taking care of ourselves. As Obama says, I am my brother’s keeper.
I’d like to see GM bailed out by Americans buying their shitty cars, not by Federal loans. I’d like to see inner city poverty decreased not by welfare but because enterprising Americans start factories in Detroit to employ the unemployed, and other Americans buy the overpriced goods from those factories because they say “Made in the USA.” I’d like to see us start putting some effort into paying attention to the actions and ethics of those we do business and bank with, and not foolishly expect some government drone to be effective at doing so in our stead. I’d like to see Americans able to afford homes because we bear the temporary pain of letting their prices fall, not because congress bails out a few homeowners in 2009 at the expense of homeowners in the years 2010-2040. I hope we make healthcare truly more affordable by suing doctors less and using resources more wisely (coverage for Viagra?) not by falling for the false and unsustainable affordability of simply having somebody else pay for it.
You can criticize me for being naive in trusting citizen action over government fiat, but I think the greater naivete is thinking we can solve our problems without it.
