If This Blog Were Called “Change” . . .

May 11, 2009 at 4:17 pm (By Amba)

. . . it’d have to be illustrated with nickels, dimes, and quarters.  It turns out that if politics doesn’t go deep enough to address what ails us, only economics does.  Or not “only”:  economics is a symptom of human nature, or better yet, of the interface at which human nature collides with the laws of impersonal, if not objective, reality . . . and then what?  Either submits (with secret relief?) or tries to bend, break, or dodge them.

But here we are, about as un-“ambiancey” as you can get, mostly talking about money.  So that’s where it’s going, and that must be where it belongs.  Talking about the economy is a way of talking about everything, one that has the advantage of being embodied and concrete, practical and at the same time wildly philosophical.

OK, so apropos:  @blondaccountant, whom I’m following on Twitter, has a long rant/thread that takes off from a 1994 GAO report, “Financial Derivatives:  Actions Needed to Protect the Financial System” [PDF], that now sounds like a bureaucrat-prophet crying in the wilderness.  Attention was so not paid.

What I’m thinking about at the moment is what I’d call no-tomorrowism.  It’s our own personal end-times mindset.  We can’t bear our lack of knowledge of or control over what’s going to happen tomorrow, or the fact that we’re not going to be here one of these tomorrows (even though our children and grandchildren are), so we (a lot of us, enough to have momentum) live as if there is no tomorrow.  I sometimes wonder if the more fervent end-times believers almost wish there weren‘t a tomorrow, for some of the same human reasons:  we can’t predict or control it; we won’t be a part of it; as the Buddha said (approximately), “Everything you care about will change, fall apart, and be taken from you.”

And ironically, unavoidably, our no-tomorrowism becomes a major factor in shaping tomorrow.  Maybe making it worse, in some ways, than it has to be.  Maybe making it better, in some ways, than if we were more prudent.  What do you think?

We’re exiles in our handmade history, outcasts from the old paradise of cycles, the hundreds of thousands of years when what went around, came around, again and again.  There was the occasional natural catastrophe.  The occasional schism where members of one tribe stopped speaking to each other and became two.  The occasional destabilizing discovery.  The constant nagging fear of witchcraft and predation.  But also, the great natural world that never changed much in one person’s memory, that would always be there, per omnia saecula saeculorum, world without end, amen.

We got on a juggernaut called History, headed for the stars.



  1. PatHMV said,

    If we never stopped thinking about tomorrow, we’d never be able to enjoy today. Most generations are the “me” generation, I suspect.

    As always with documents which appear prescient, we must ask ourselves “what else was predicted at the same time?” We never lack for Cassandras, foretelling doom. Sadly, the Cassandras often contradict each other, and we mere non-prescient mortals are hard-pressed to discern which warnings are real, and which are cranks.

    There’s nothing inherently wrong with derivatives. They can and have been used responsibly to reduce risk of all sorts. But like any other legal document (and all derivatives are ultimately nothing more than specialized contracts), they suffer from the same flaw as any other human endeavor of planning. We can plan for what we know. We can even plan for what we know we don’t know . But we can’t plan for what we don’t know we don’t know. Thus, a derivative contract can be written to account for the known unknowns, like the risk that a particular company in a particular company will go bankrupt, but it cannot anticipate the unknown unknowns., like the risk that ALL companies in that industry will go bankrupt. We unthinkingly assume that the entire economy will NOT tank, and thus we (except for those Cassandras among us) never evaluate the risk that suddenly the floor will fall out, and the entire economy will tank at once.

  2. amba12 said,

    If there’s one thing we SHOULD know, it’s that everything eventually gets paid for. Energy is conserved. We repay our debt to entropy in death (and lots of other ways along the way, like breathing on plants). Pay as you go is a pretty tried-and-true principle. Credit eases the seams of that and makes it more comfortable, if used judiciously. What we did on a large scale in this last cycle is try to get a lot of stuff and make somebody else pay for it, later. “I’ll think about it tomorrow,” á la Scarlett O’Hara (a paradoxical form of no-tomorrowism). We’re (in the persons of the Obama admin) still doing that.

  3. mileslascaux said,

    And yet, if you lok at it historically, there’s never been a financial crisis, recession, crash, depression, or what have you that the United States’ economy hasn’t roared back from in a few years. During all of them there have been malicious croakers who pronounced this the end of it all.

    But it’s so hard to not see this as “different.” And it’s hard to put a finger on the difference. Globalization? That goes back 300 years.

    We can shift back from spending to saving, but that won’t drive a recovery. Somebody out there has to be buying stuff or no one will bother making stuff.

  4. amba12 said,

    It’s hard to imagine we’ve suffered nearly enough to break the happy habit of giving in to the impulse to buy stuff. I guess it’s happening, though: so much of that was done on credit, and now people can’t get credit, or their credit’s maxed out. And they’re going, “Do I need it? Or do I just want it?”

  5. mileslascaux said,

    Economics are the new politics. Economics are what we have to finally sit down and learn about, after having ignored them all these years. Like Islam was in 2002. Like Iraq was in 2004.

    Like this:

    “Many of these mortgages—approved by bribed FHA inspectors—were way beyond the buyers’ means. And many buyers simply weren’t prepared for becoming homeowners. Some didn’t realize that they were buying properties for two to three times the going rate in their neighborhoods, or even that they’d be responsible for paying for utilities, property taxes, and maintenance. In some markets, like Philadelphia and Detroit, more than 20 percent of the mortgages went to single mothers on welfare. And why not, the government reasoned—they enjoyed a steady stream of government income, didn’t they? This naive view ignored the growing evidence that such households suffered from family breakdown and social disorder, which made them less than ideal borrowers. Journalists also found numerous buyers who couldn’t read English and had no idea what their sales contracts said.”

    Which describes not 2008, but 1968.

  6. Ennui said,

    Yeah, I know it’s a different case, but I can’t help be reminded of Thucydides:

    “When the news was brought to Athens, for a long while they disbelieved even the most respectable of the soldiers who had themselves escaped from the scene of action and clearly reported the matter, a destruction so complete not being thought credible. When the conviction was forced upon them, they were angry with the orators who had joined in promoting the expedition, just as if they had not themselves voted it, and were enraged also with the reciters of oracles and soothsayers, and all other omen-mongers of the time who had encouraged them to hope that they should conquer Sicily. Already distressed at all points and in all quarters, after what had now happened, they were seized by a fear and consternation quite without example. It was grievous enough for the state and for every man in his proper person to lose so many heavy infantry, cavalry, and able-bodied troops, and to see none left to replace them; but when they saw, also, that they had not sufficient ships in their docks, or money in the treasury, or crews for the ships, they began to despair of salvation. They thought that their enemies in Sicily would immediately sail with their fleet against Piraeus, inflamed by so signal a victory; while their adversaries at home, redoubling all their preparations, would vigorously attack them by sea and land at once, aided by their own revolted confederates. Nevertheless, with such means as they had, it was determined to resist to the last, and to provide timber and money, and to equip a fleet as they best could, to take steps to secure their confederates and above all Euboea, to reform things in the city upon a more economical footing, and to elect a board of elders to advise upon the state of affairs as occasion should arise. In short, as is the way of a democracy, in the panic of the moment they were ready to be as prudent as possible.”

  7. amba12 said,

    In short, as is the way of a democracy, in the panic of the moment they were ready to be as prudent as possible.

    Even those who know history are condemned to repeat it anyway. *sigh*

  8. wj said,

    The current crisis, like the current boom before it, is different from all the rest in just this: this time we’re living thru it. And since most people know little about history and care less, that means most people only know how today differs from the times that they personally remember. (And even those memories fade pretty fast.)

    A little knowledge would reduce the emotional whipsaw the nation keeps going thru. But that would require some changes (major philosophical changes) in the way we do education. Like, focusing on learning rather than “validation” — which means that someone (teachers?) would have to make actual judgments about what each child had managed to accomplish. And that would require accepting the fact that different individuals have different strengths and weaknesses. Not everybody gets a prize every time.

  9. Maxwell said,

    But here we are, about as un-”ambiancey” as you can get, mostly talking about money.

    Well. It cuts both ways, I think. One of the things that has often frustrated me, as someone both interested in business/economics and in writing, is the extent to which the combination of the two is frequently deadly. Either tedious technocratese, or crass and narcissistic puff pieces. It doesn’t seem to me that it should have to be that way, though.

  10. amba said,

    Well, here you are, doing something about it! I hope you’ll have time to continue to expand on that, and that we’ll gradually invite more people over to read and participate.

  11. Maxwell said,

    Yes, that’s my hope too.

  12. Randy said,

    The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

    – H.L. Mencken

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