Saturday, June 9, 2012

David Brooks: Far too glib an analysis of debt..and far too re-assuring!

 By David Brooks, New York Times, June 4, 2012
Every generation has an incentive to borrow money from the future to spend on itself. But, until ours, no generation of Americans has done it to the same extent. Why?

A huge reason is that earlier generations were insecure. They lived without modern medicine, without modern technology and without modern welfare states. They lived one illness, one drought and one recession away from catastrophe. They developed a moral abhorrence about things like excessive debt, which would further magnify their vulnerability.
Recently, life has become better and more secure. But the aversion to debt has diminished amid the progress. Credit card companies seduced people into borrowing more. Politicians found that they could buy votes with borrowed money. People became more comfortable with red ink.
Today we are living in an era of indebtedness. Over the past several years, society has oscillated ever more wildly though three debt-fueled bubbles. First, there was the dot-com bubble. Then, in 2008, the mortgage-finance bubble. Now, we are living in the fiscal bubble.
In this country, the federal government has borrowed more than $6 trillion in the last four years alone, trying to counteract the effects of the last two bubbles. States struggle with pension promises that should never have been made. Europe is on the verge of collapse because governments there can’t figure out how to deal with their debts. Nations around the globe have debt-to-G.D.P. ratios at or approaching 90 percent — the point at which growth slows and prosperity stalls.
It all goes back to the increase in the tolerance for debt.
Democrats and Republicans argue about how quickly deficits should be brought down. But everybody knows debt has to be restrained at some point. The problem is that nobody has been able to find a political way to do it.

Recently, life has become better and more secure. But the aversion to debt has diminished amid the progress. Credit card companies seduced people into borrowing more. Politicians found that they could buy votes with borrowed money. People became more comfortable with red ink.
Let's examine Brook's premise that life has become better and more secure and one consequence is the elevation is levels of private and public debt.
While there certainly have been advances in medical treatment, leading to somewhat longer lives, and more healthy lives for those of us with "grey fringes" on our heads, there has never been less security in the face of problems that seem so intractable. Let's make a list of some of those seemingly intractable issues:
  • climate change and global warming...we all know that we are living on air that is dissipating, water that is becoming more polluted and less supportive of life in all its many forms, with political action and will being at such a low level as to be virtually absent
  • terrorism in all of its many forms, including cyberterrorism, gang-terrorism, political and corporate terrorism including both the literal and metaphoric destruction of opponents, as an increasingly potent force in the culture
  • the war against women, especially in the Muslin world, but certainly not absent from the rest of the world, that seems so intractable to insecure men with the power and levers to make a difference
  • the campaign to enlist child soldiers, or more accurately, child terrorists, under the thumbs of sociopathic gang leaders who function outside the law, all laws everywhere, with impunity
  • the continually growing trade in arms, especially as a weapon by one block of nations, including Iran, Russia, China, North Korea and Pakistan, with little or no resistance from the rest of the world community
  • micro-bugs that are proving to be increasingly resistant to drug therapy
  • political and corporate malfeasance at the highest levels, including its denial, cover-up and the absence of prosecution, thereby demonstrating the incestuous links between government and money
  • the failure of international institutions like the United Nations to effect even the most modest change on such humanitarian disasters as Syria, Ruanda, and even Serbia too late
  • the poverty and disease in the non-developed world with less and less attention being paid by governments to its relief, in the face of spikes in food costs and the resulting floods of refugees like the one currently being faced by Israel, that will only continue to grow
  • the resistance to any form of oversight by those with money and access to power, and the impotence of governments to push back in a responsible and enforceable manner, in an increasingly globalized world where money, including taxes on profit, income and capital gains are excluded from national collection and enforcement, as if the corporate world exists outside the political world of nation states
  • the impact of both 24-7 news cycles and personal technology that brings anything and everything into the "palm of our hands" within seconds of its occurence from all corners of the planet...without a corresponding education in techno-literacy, and techno-judgement and discernment, that has accompanied the centuries of art and literature criticism, thereby providing adequate filters through which to perceive the information, and contexts into which to place it
  • the non-second dimensionality of many public and private decisions, without a 1% margin of error, in our public discourse and language, in our public judgements, in our private and domestic interractions and in our workplace environments, focused as they are on mistakes and not on achievements, leading to increased insecurity on the part of all workers in all fields
  • unemployment, and the dislocation of workers in response to the dictates of that global marketplace at whose altar the world now worships, without the protection of national governments for their workers, and for the environments and the health and safety of those workers that has kept pace with these global changes, in the interests of competition
  • a serious absence of civility in all our public government, between government and the media, in the corporate world, and increasingly in our private lives, including exponential spikes in bullying as a cultural norm, for example, against gays and lesbians, the last frontier in the war for social justice. The political resistance to co-operative and collegial legislation between political opponents is one of the most threatening issues facing all countries and economies and world conflicts. By making serious conflict normal, and expected, we have let the political leaders "off the hook" for taking responsible and mature and sensible compromises on all issues, resulting in a global stalemate
  • the excavation of the equivalents of 401-K's in many countries by the financial crisis of 2008, perpetrated by the greed, cunning and absence of oversight of the financial services sector, aided and abetted by eunuch governments, emasculated by their own incest with those same financial interests
And, Mr. Brooks, you way we are MORE SECURE and therefore more immune to the anxieties of higher debt.
I would reverse Mr. Brooks' statement: I say we are much more insecure, and much more anxious than at any time in the last century, for the simple reason that forces beyond even our influence, (never mind our control) have been unleashed, including human greed and the avarice of the jungle, without what used to be considered normal checks on that avarice from stable, co-operative and collegial governments even among political opponents. Such collegiality within governments has dissipated, evaporated, and in its wake, we are left with a political and ethical vacuum and paralysis that threatens to implode taking us all with it.
And the real tragedy is that we know we are over-consuming as a way, just like the over-eatrers, of stuffing our anxiety and our pain down our throats, into our living rooms, into our garages and computer rooms, as well as into our kitchens....and the pain not only continues, but grows worse the more we consume.
No, Mr. Brooks, we are NOT more secure, but much less secure, and you ought to know better than to be so glib in your analysis.

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