Thursday, October 23, 2008

An allusion to the credit crisis in the wake of the mermaid's tail?

These days, signs of the credit crisis seem to be everywhere. I thought I saw it illustrated last weekend in the wake of the mermaid's tail on the blackboard in the Mermaid Cafe on Winnebago Street: In a time of collapsing asset bubbles, too many people are being dragged down because they owe too much money to too many people they can't repay.

How did we get there, and where do we go from here? Apparently tiring of experts who seem as conflicted as everyone else, the Op-Ed page of the New York Times turned away the other day from the world of finance to the world of literature for a different view. Novelist Margaret Atwood:
But we’re deluding ourselves if we assume that we can recover from the crisis of 2008 so quickly and easily simply by watching the Dow creep upward. The wounds go deeper than that. To heal them, we must repair the broken moral balance that let this chaos loose.

Debt — who owes what to whom, or to what, and how that debt gets paid — is a subject much larger than money. It has to do with our basic sense of fairness, a sense that is embedded in all of our exchanges with our fellow human beings.
Maybe as a society we're in the process of relearning one of the oldest principles of all: If something seems too good to be true, it probably is too good to be true.


ghb624 said...

Two or three weeks ago, when the "meltdown" was really getting rolling, I tried to look at it from a contrarian point of view, and put down a few thoughts from a personal angle. This is part of it:

The big unknown, clearly, is this: will it be a months-long depression, or maybe nothing more than a recession, with recovery some time next year? Or are we entering a multi-year quagmire? Countless opinions and analyses are offered, but in the end, no one can say for sure. So, my thought at the moment is to look for the silver lining. Maybe a depression could be a good thing.
What?! How could that be??
Well ... as I wrote a few years ago in my mini-autobiography, I've always envied my older siblings for the fact that they grew up and came of age in the 1930's. Their life in a quiet little town up on the prairie appears in hindsight to have been idyllic, Rockwellian. They don't recall it as a time of hardship, even though the family didn't have much, either in income or assets. Instead they came out of it with, for the most part, a wealth of good memories.
Moreover, maybe a depression could do some good by forcing a pullback from some of the ways in which we've become a nation of excess and waste. Consider just a few examples. Maybe, for instance, there would be fewer SUV's and "McMansions." Construction of more new golf courses might have to be put in abeyance. Perhaps fewer families would think every kid age 6 and up needs to have
his or her personal cell phone. Maybe, just maybe, there would be more walking and bicycling, in place of driving everywhere, all the time. It's likely fewer baby boomers would be retiring early (as I did), resulting in less crowded streets on weekdays. And overall, there should be somewhat less in the way of rampant consumerism, wastefulness, and squandering of Earth's precious resources. I, for one, would like to see all of the above -- and then some.
From another perspective, taking more of a macro-level view of history, the generation that came of age during the
1930's has been described as "the greatest generation." Its members were able to survive the rigors and the ordeal of the second world war. And not merely survive but prevail, in the face of daunting challenges. It would seem to be a reasonable presumption
that the strength and determination with which they made it through the war years was forged, in no small measure, by coming up with the grit and fortitude to be able to endure the hard times of the Great Depression.
OK, an obvious question. Could this mental exercise turn out to be a case of "be careful what you wish for, you might just get it"? Yes, possibly so. And I'm certainly not wishing for a prolonged depression, most definitely not one on the scale of "the Big One,"
which most of us have only read about in history books. I don't mind a certain level of prosperity, either. But if the tide has already turned and all-out prosperity is going to be elusive for a fair while, so be it. We might as well do whatever we can to try and make the most of it.

Dr Bud "Apple Mary" Diablo said...

I wrote a lengthy response to the previous contribution, but it wouldn't post, and I can't recapture the moment. I'll just say that the US has long indulged in an insipid, leveraged hedonism, and it has exported that lifestyle to every shore.

Most downturns have upsides, and a severe recession will be no exception. If hard times come, people will borrow library books, fish off the dock, take walks, and generally remember that life can be enjoyed without a credit card. During the Depression, people did in fact learn how to spend their time without spending their $, and that will be a positive aspect of an unfortunate event.