Friday, May 20, 2011

America Is Bankrupt (But Not the Way You Think)

Frisco City, Al.
May 24, 2011

Healthcare, schools, police, tax breaks, government costs at all levels: which would you keep, slash, or cut? The axe has to swing, so where, if you were the lumberjack, would you aim it? It's the central, polarizing question in this age of austerity.
Or is it? Maybe relying on cuts to reboot prosperity is a bit like starting a diet to treat Alzheimer's: probably not going to work.

Consider an allegory: a household racking up debt not just because they have easy credit, but because they're a dysfunctional family to begin with. Meet the new Smiths': they're a little less Cleaver and little more Soprano.

Dad Smith is the CEO of Toxico, a major, blue-chip energy corporation. He's an self=made millionaire, but he's stingier than Scrooge McDuck. Though he rakes it in, he flat-out refuses to contribute much, if anything, towards basic household costs--and when the family sets up rules to make him, he quickly finds loopholes. In fact, last year, instead of contributing to the household purse, he managed to find a way get a net contribution from it.

Then there's Grandma Smith. She's not elderly by today's standards, and she's got plenty of years ahead of her. But even now, she demands nothing but the best of care, even when she might not need it. Worse, she won't hear of taking out of her own retirement account to finance it. She relies on medicare to pay for it.

The youngest boy in the family, Mike "The Phenomenon" Smith, is livin' large — but those bright-orange pecs, venti-soy-latte-mochacinnos, and mass-designer duds cost money, a lot more money than Mike earns. When Mike's not busy with "going to lunch"(GTL), he's likely to be found partying, playing Zynga or online poker, or watching other people on youtube...........

Not-so-hotshot balding fortysomething twins Dick and Lloyd Smith are the family's money managers. Or, more accurately, mismanagers. Dick has a habit of making head-slappingly bad bets — in fact, just last year, he made a bet so groan-inducingly bad, Dad had to ask the neighbors to help bail him out. Lloyd's the very opposite: he makes great bets, but they're zero-sum wagers against the family's prosperity, that create little or no net shared gain. Lloyd (much to everyone's dismay) once made a bet during hurricane season that the family's roof would blow off. And last week, given their rather dire situation, Lloyd made a bet that the Smith family might just go bankrupt. Hence, the family's investments tend to work, at worst, against them — or at least not for them. Windcreek Casino loves these two LOSERS.

Older brother Cletus' Smith is a gentler, simpler soul. After high school, he went straight to work for Dad's sprawling empire. But Dad, ever the epic miser, is reputed for turning the screws on his workers — and there's no special treatment for Cletus': he works overtime nearly every day, but his income hasn't gone up since he started working. So though Cletus' s heart might be in the right place, there's little he can contribute to the household purse. And as his own desire to start a family grows, it's harder and harder for him not to ask to draw from it.

To be sure, this is a caricature — I don't pretend it's "right." or even perfectly accurate. Think of it as a quick, rough watercolor, not a 100 gigapixel ultra-wide lens photo.

Here's the picture-frame. To be sure, nations aren't like households, because countries can raise taxes and devalue their currencies — and I'm not suggesting that a household's finance's perfectly mirror a nation's, a state's or a county's. All are composed of constituencies that are deeply, vitally interdependent. And those interdependencies matter.

You probably think of a great economic crisis a bit like your mother-in-law's Christmas fruitcake: you've got to take the pain and just finish your Nyquil-flavored cement block of a slice until it's good and gone. But it's more like an onion: layers and layers are peeled back, until the heart is revealed. And the black hole at the heart of this great crisis — no mere recession — might just be this: it's not about "them." It's about "us."

I'd like to suggest: it's our way of life — still mired in a set of industrial-age assumptions about where wealth comes from, and how it should be best seeded, nurtured, harvested, and enjoyed — that's mightily, colossally unsustainable, not just in the environmental sense, but, more deeply, and perhaps more fatally, in the sense of "we're living beyond our means, because we've forgot what 'meaning' means."

My hunch is this: we can cut, slash, and burn all we want — all the way right down deep into the black heart of austerity, until we're reduced to shivering in caves, hunting with stone axes, and singing songs by firelight. But if it's the city at the other end of the economic world we wish to reach — the shining city on a hill we once called prosperity, a conception of richness that, resonantly American, was never merely about hands grabbing at wealth, but about imagining, building, and creating lives that were authentically richer — then we might just have to get serious not merely about what it is we don't do, but what we will do differently tomorrow than we have done for the last several decades.

The Smith family isn't impoverished (yet), but it is bankrupt in a deeper way: in terms of how it conceives of prosperity, wealth, and the common good. In other words, merely spending less on the stuff in my allegory — be they perma-tans or unnecessary health tests — probably won't cut it. What the Smith family needs isn't merely new short-term agreements about spending less — but new, built-to-last arrangements that reset the incentives for everyone to make more authentically wealth-creating (and less wealth-extractive) choices.

In the real world, those arrangements are called institutions, and without innovating ours ("GDP", "corporations", "jobs", "shareholder value", "equity"), this might just be the no-future future. The Smith house is inhabited by a ghost: the spirit of yesterday's accomplishments hasn't left the building quite yet. Every day, it drifts between them, aching to remind them of who they are — and who, if together, they reached their fuller, wholer potential, they could be.

You might be wondering: "Hey! What happened to Mama Smith?". Well, the answer's simple. She's spent her life toiling to raise the kids and keep the household together — and it was never easy. But just as the industrial age contraption of GDP leaves out "voluntary" and "household" work from our so-called economy pretty much entirely, so too, in my little allegory, do Mama Smiths' contributions go largely unrecognized and unrewarded.

No comments:

Post a Comment