| | Because nidan and I were talking about this problem on his weblog, and I referred to this unpublished SearchingForAlethia post. Right now, I don't feel now is the right time to publish this over there, but since it was a topic of discussion between myself and nidan, I decided to copy it here. So here goes.
According to Generational Dynamics -- back in the 1950's, there was no doubt in anybody's mind in what caused the Great Depression. Everyone knew. And believe it or not, it could be summed up in one word.
Greed.
In the Great Depression, a whole generation learned the value of saving, the value of working for a living, and the value of living within your means. Those with thousands of credit card debt were in the minority. It actually used to be that you saved 20 to 25 years just to buy a house. In the Great Depression, people moved into the same house together, lived in cramped quarters by today's standards.
Problem is...that generation is now senior citizens or dead. They are no longer running our country. Today, we have baby boomers and their offsprings, the generation X-ers. And we think we know it all. Where is the humility, and respect for our elders?
Today's generation took risks -- they let their greed get the best of them. This is true at pretty much every level in society. Let's start from the top and go down.
1. Wealthy people got greedy.
A: Never before have we seen CEO's making 500 times what the average workers earn. Yeah, even when they run businesses down into the ground, they still walk away wealthy. Accountability is out the window. I think I remember reading in one of Robert Stearn's book that Winston Churchill wrote two letters to the head of England in the midst of a major war in World War II. One of the letter was his resignation letter for a failed military action. The second one was to praise the troops for a task well done. They were successful, so the resignation letter got discarded. But the point is: Winston was fully prepared to resign if his military strategy failed. Do we see that kind of attribute today?
B: They invented ever more complicated, and oftentimes unregulated economic instruments. Like credit default swaps -- which basically lets companies say "if I fail to pay my debt obligation, then you have to cover for it". That is kind of like life insurance for companies. Except...it was abused.
Let me step back a bit -- how could it be abused? Problem is if you sell CDS, you are basically insuring someone else's debt. But if you buy CDS, you get paid when that person defaults. Back to life insurance: it is illegal to buy life insurance on someone else. Why? Because if I buy life insurance on somebody else, then run them over with a car, I get paid (ignoring the legal consequences, that is). Now, this is almost exactly the type of entangled web the financial world has gotten itself in. There is trillions of dollars in this interlocking system where people bet on another company not being able to pay its obligation, sometimes the "bet" involves more money than the debt itself!
C: If a competitor comes up that might be viable, lobby the Congress, shower them with money (some politicians did get greedy here) so that they will pass laws that will help MY business, and help me kill the other guy's business.
D: More recently "Hey, I'm too big to fail, bail me out!"
2. The middle class got greedy.
Admit it: many people have lived beyond their means, running up credit card debt. They also bought house not for the sole purpose of living, but also out of hope that it will continue to increase in price. Yes, even if they couldn't afford the actual mortgage, they listened to the greedy lenders who got commissions on the bigger price tag house. Yes, the real estate brokers and lender brokers were greedy since by selling the house, they get a hefty commission. There was nothing in the system to make them accountable if that loan was to fail! So lot of them made loans that they knew was destined to fail.
3. The poor got greedy.
First, and this is probably part of the politics blame wars -- but out of desire to "help" the poor people get into good houses, the Clinton administration set up a law that required lenders to approve those who cannot afford the loan.
Second, there is plenty of attitude of "entitlement" among the poor that "poor me, I don't have a job, so you have to pay my bills". Seriously, I see it in some deaf friends (love them anyways) that are on SSI and don't see a point in getting a job!
4. Government got greedy
Our elected representatives have jobs too. Their job is to make laws on our behalf. Their job is to represent us. If you are a politician, the last thing you want is an economic collapse on your watch. Little thought is given to the long-term viability. Especially if it is election year this year. You know, if there was anything unique about George W. Bush -- he is the first president in many years for which we were in a recession each time there is an election coming around! Most politicians usually do what they can to be sure the economy is doing well when their job is up to the election.
Nevertheless, what did this lead to? This led to the mindset that the government is responsible for the economy. The politician's job, for better or worse, is often to make sure that if there is the slightest bit of hiccup in the economy, they need to do something to stop it. The stock market actually perpetrated this short-sightedness since businesses and stock owners increasingly focused on short term. Since when does earning 15 cents per share make such a big difference because it doesn't match the "analyst's" 17 cents per share! Show me a business that has stable earnings that grows at 10% every year! That simply isn't realistic, and I don't care if my business earns 10 cents one quarter, then 20 cents the next, then 15 cents the one after that. Lumpiness is how real business is. Enough about that, short term focus is also where Federal Reserve came in. Anytime there was a hint of a hiccup, they had an idea: lower interest rate to pump money into the economy and all will be well. Except...they did that in 2003-2004 with the interest rate at 1% for a year in a time when housing prices were shooting into the stratosphere. Oops. I think Greenspan and Bernanke ought to get on the news network and publicly apologize for their serious lapse in judgment.
That is strike 1. Strike 2 is I suspect that there are businesses that are pouring money into some representatives so that they will vote for issues that interests them. If you decide not to vote for those interests -- they will find someone else who will, pump money into their campaign, and convince the rest of the citizens that the guy they don't like is no good. Remember that those corporations control the media -- so don't believe everything you read or see on TV.
Strike 3: This has been going on for too long. But since when is it a religion that once you are hired as a government employee, you are free to stay a government employee the rest of your life. I'm thankful that lately we see SOME layoffs and cost cutting, but that isn't normal for the government. Especially Federal government. I'd also like to add another one: if you are a government employee, you are shielded from inflation. They automatically raise your salary with inflation, even when the rest of the business world is suffering and people are making cost cutting moves and lifestyle changes in order to deal with their reduced buying power.
Wrapping it up
Yes, sometimes greed, and desires that we have as human can help drive us to improve our life, and the situation around us. The problem is that it is counterproductive when it propels us to do things that we know we cannot afford to do. There is also a somewhat prevailing attitude among today's generation to give a few examples:
1. If he doesn't take care of himself, too bad, tough luck.
Problem with that mindset is that is a bit harsh. That is not conductive to having people work together, and being generous with each other. We need to learn to love one another.
2. I want to do it myself, I don't need anybody else's help.
Look: human need social interaction, we need each other. I see this more often among the disabled who feel entitled to living independent whereas there might be a time coming shortly where it simply is not economically viable to provide the expensive equipments to make such an endeavor possible.
3. There's a program to help that guy, let him get help there, I don't need to do anything.
Seriously, people do think that way, even if only subconsciously. It is hard to see this attitude in our own society, but it is more obvious when you look in another culture. South Korea to the rescue:
Blind masseurs in South Korea
Think through that example. *IF* there was no law saying that all masseurs shall be blind...would you think that this attitude would be prevalent in South Korea that massaging people is the only thing blind people can do? See how laws affect attitude: when there are laws that helps the disabled, people start assuming that the law defines the person's capability, and worse yet that it takes care of ALL their needs. Sorry, but that isn't true.
I'll close with a good story I heard at Flying Hands of Faith. There was this precious brother in Christ who routinely helps deaf people, and advocates for rights of the handicapped. One day, he was at DC for a protest for handicap rights. It was hot and sunny outside, and there was a long line. There was a lady in front of him in a wheelchair that couldn't really move her head or something. He saw a place selling hat on the street side, went in, bought a hat to block the sun, and put it on her head. She was quite grateful that he took care to make sure that her head didn't get sunburned. Let's learn this type of human decency -- it is every one of our responsibility. |
| | Posted 11/10/2008 6:22 PM - 101 Views - 6 eProps - 16 comments
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