I just finished reading this sobering account of California's municipal economic woes written by Michael Lewis--an account of a society completely unwilling to self-regulate, and on a straight path to financial and cultural bankruptcy.
credit: Marion SiegelYes, cultural... because when school funding gets cut, arts get squeezed and libraries close, our whole culture suffers. It's easy to think of big corporations as the issue--faceless and making profits at a scale we can't even imagine. What we fail to do is to point out the real problem--greed--and worse, we fail to admit how infected we *all* are by the problem.
On one hand, you can think of greed as the rich getting richer--but really, greed is more simply about consuming more than you can handle. When you think of it that way, we're all at fault.
It's not just corporate executives. It's all of us. Every credit card runup, every house purchased beyond our means--sure we can blame it on aggressive lending, but what about our obesity problem? Sure, blame it on the food companies, and yes, they're undoubtedly using underhanded marketing tactics to sell us, but who is doing that? It's some marketing exec getting paid to do that--why? Because they need a bigger house, better car, and a bigger television.
At some point, doesn't the buck stop with us? Aren't we at least party to blame for our obsession with consumption? We are, but as it turns out, the problem is with how we're wired.
The Lewis article argues...
"...human beings are neurologically ill-designed to be modern Americans. The human brain evolved over hundreds of thousands of years in an environment defined by scarcity. It was not designed, at least originally, for an environment of extreme abundance. ...We are set up to acquire as much as we can of things we perceive as scarce, particularly sex, safety, and food.” Even a person on a diet who sensibly avoids coming face-to-face with a piece of chocolate cake will find it hard to control himself if the chocolate cake somehow finds him. Every pastry chef in America understands this, and now neuroscience does, too. “When faced with abundance, the brain’s ancient reward pathways are difficult to suppress,” says Whybrow...
...The succession of financial bubbles, and the amassing of personal and public debt, Whybrow views as simply an expression of the lizard-brained way of life. A color-coded map of American personal indebtedness could be laid on top of the Centers for Disease Control’s color-coded map that illustrates the fantastic rise in rates of obesity across the United States since 1985 without disturbing the general pattern. The boom in trading activity in individual stock portfolios; the spread of legalized gambling; the rise of drug and alcohol addiction—it is all of a piece. Everywhere you turn you see Americans sacrifice their long-term interests for short-term rewards.
Want a great example of how people behave irrationally as a group--sacrificing the future? Look no further than public sector employees and their unions. A report was just released that shows New York City average fire department pensions are nearing $90,000.
AVERAGE.
How many of the #occupywallst crowd is making that... or will ever hope to make that in a year? But yet, what politician wants to be the one to point out that this figure has gone up 43% since 9/11? Are firemen amazing? Yes. Are they heros? Yes... I know that personally because my dad was a NYC fireman for 20 years. Unfortunately, because he retired in 1983, he doesn't get enough to survive on, so he's still working at almost 72--while many of his accounting clients are retiring at 50 making six digits a year in pension. Is it unfair that he's working? Not really. He's fine... likes his little tax practice, likes dealing with people and continuing to be productive. Would he rather kick it with 90k a year? I'm sure. He'd also like to win the lottery. At least lotteries are financially solvant.
Firemen alone in 2010 cost the city nearly a billion dollars in pension payouts, and those numbers only reflect worstening numbers across the board. If public sector pension plans earn 8% on their investments, four states - Illinois, New Jersey, Connecticut and Indiana - are predicted will run out of assets to pay retirees by the end of the decade.
Good luck trying to reform it, too. What politician is going to get elected on a "We're going to cut union pensions" platform?
But like I said.. it's not about pensions. It's about greed--not about evil greed personified by the Bernie Madoff's of the world. It's about living beyond our means. A lot more of us are guilty of that than 1%. Anyone who cannot say that they have lived within their means shouldn't be marching anywhere.
When I see the signs downtown about having 100k in college debt, I think to myself, "Why did you go to a school you couldn't afford?" When I applied to college, my parents told me that I was going to go to whichever school we could afford. I made NYU, but it was beyond that number, so I didn't go. I went to Fordham because they gave me a scholarship. If I didn't make Fordham, I was going to a SUNY school, even though I had a 1520 SAT score. I could have taken out 80k in loans, but I didn't.
Does everyone deserve to go to NYU? Should everone have a shot? It would be nice to live in a pretend little world where everyone could get anything they want, but reality just doesn't work that way. We live in a world of scarce resources.
Besides, I had an amazing time at Fordham and it was a better fit for me.
Same with my apartment. After the foreclosure crisis, I felt a little silly--having purchased a house I could afford. I should have bought something huge, because the public felt like we should bailout homeowners. Someone else should have paid my mortgage because I wanted to live in Manhattan.
Is there a problem in our country? Yes, there absolutely is. Poverty numbers are through the roof and we need to do a lot more to empower the people at the bottom and help them survive. But let's be clear. The fault isn't just with the top 1%. In the last ten years, the people in the middle have done just as much damage to the system as the top has--but what bothers me more is that they are taking absolutely none of the responsibility. Undoubtedly, I will get irrational comments to this post from people who simply can't answer where all the dollars are supposed to come from.
No one wants to give anything up.
Public sector employees fight for their already bloated pensions and benefits when lots of other people don't even get a pension at all--or healthcare. If you look at any of these numbers, you cannot argue that while Exxon should probably pay more tax to help clean up the environment, the garbageman down the street from you probably shouldn't be making more in pension at 52 than you do in a year.
That's the part of the broken system that no one likes to talk about. No one likes to be told no. It's easy to imagine a world where you just break open Bank of America, hand the money out to the poor and all of our problems are solved. It's a lot harder to admit that maybe you need to live in a smaller house, scrimp on the Twinkies, and maybe not go to an Ivy League private school.
Unfortunately, it's really our only way out of this financial mess. Bringing down banks and big companies only creates more unemployed--or did you not think of what happens to the employees of all these companies after you bring them down with your marches?