SUBHEAD: As a way of life, it's borrowing against our children’s future
By Sharon Astyk on 19 December 2008 SharonAstyk.com -
(http://sharonastyk.com/2008/12/19/the-ponzi-scheme-as-way-of-life/)
I’m sorry, I’m having a bit of trouble getting all outraged about Bernie Madoff and his ponzi scheme. Yes, I’m shocked. Shocked and appalled. You mean, someone was offering a scheme in which you pay present day participants with the funds of those who come in later, and then it fell apart.
Gosh, that seems so unprecedented. Yeah, I feel bad for those who were taken in, particularly for charities that lost their funds. But no worse than for those who lost their 401Ks or their pension funds on the stock market, for cities and states that can’t sell municipal bonds, and I feel far worse for the poor, who never had a glimmer of getting to participate in the get-rich-quick ponzi scheme that was a stockmarket that everyone said could have perpetual growth forever.
Madoff may be a criminal, but he’s a criminal in large part because he’s engaging in a particular form of ponzi scheme that we look down upon, one small enough to be called illegal. In general, we’re pretty comfortable with ponzi models -we live, quite happily, in a ponzi economy, one in which the concept of perpetual economic growth is sold, divvied up again and resold.
We live in a Ponzi ecology where we borrow constantly against the future to pay for our present affluence. Most of us have been putting our money into 401Ks and Mutual funds, and now that money is disappearing - and it is disappearing again, because we live in a Ponzi economy, one in which new funds can, for a while, conceal the bankruptcy of a society that draws down its natural resources and leverages both its ecology and economy past bearing. Thus we get the mantra, as
The stock market game is rigged against the average small investor. With the way accounting rules and etc are these days, there are lots of ways that corporations can hide important information. Just ask some of the Lehman’s stockholders about that. Lie the Fourth: Buy and hold is the smart strategy. Over time, the stock market always goes up. Reality: That’s not the way the rich make their money in the stock market. They buy stocks when they are cheap and sell them when they are expensive. The “always goes up” comment is usually coupled with a comparison of two dates and the stock market index values on those dates.
Compared to the history of economics, there is no way that we can say with total truth that the market over time will always go up. Where are the investments in the stock exchanges of the Roman Empire these days? And a rise in a stock market index may have nothing to do with the performance of individual stocks or mutual funds. Ask the stockholders of Enron about that.
Or the stockholders of corporations that made horse-drawn carriages.” I don’t blame people who were constantly told that they’d need X million dollars to keep living into their old age, and if they didn’t have it, would find themselves freezing and starving for believing this, but it is how the Ponzi economy works. It relies on the idea that you are doing something good by feeding your dollars into corporate coffers, and that your money is still really yours.
Those are both false truths. And they are built on ponzi model they pay out to the earliest investors (why, for example, wealth is increasingly concentrated in the hands of older folks) while offering nothing to those unlucky enough to get in late. I had one of those “duh” moments yesterday as I was doing a radio show - I made a point I’ve made many times before - that growth capitalism in general and the real estate bubble in particular depended heavily on the idea that we can’t live together, that everyone has to own their own seperate household. So the rise in average material living space from 250 square feet in 1950 to 850 square feet in 2000 was in part a product of the constant message that living together with one’s family or friends was a measure of failure.
This point I’ve written about a number of times - but somehow I’d never quite fully grasped the corrollary point, which I found myself articulating on the fly - that the Ponzi economy depends on an endless supply of laborers, laborers who wouldn’t quit because they can’t. And that means that the cost of living - of basic needs like housing, food and transportation have to be kept high - because otherwise people might notice that serving corporate masters isn’t the best or only way to live their lives.
Those 850 square feet, and the costs associated with them, and the problems of housing the ordinary stuff we “require” for daily life in 250 square feet means that the cost of housing for ordinary people is dramatically high - so high that we must devote most our time to the corporate economy, so high we then have no time to do work in the informal economy, so high that we can never, ever think about whether there are any better choices out there.
We’re going to try and rescue the economy with another Ponzi scheme - with borrowing against our children’s future wealth to protect financial institutions and invest in some good things and some bad ones. This, of course, is the oldest ponzi scheme of all, and you can make the argument that some human societies have been playing this game for a very long time.
We’ve been doing it with natural resources and are continuing to do so, and we’re also expanding the share of our children’s wealth we’re willing to borrow against. After all, what have future generations ever done for us? They might as well serve some purpose - to pay off our debt. And of course we’ve got the best possible reason for this - we’re in a crisis.
There’s always a good reason for taking just a little more of what belongs to the future - to bring people out of poverty, to resolve this or that crisis. Of course, the crisis was caused by borrowing against our children’s inheritence of natural resources, but more of the same is now necessary. A good Ponzi scheme always needs new investors - and if none are going to volunteer, well, let’s volunteer them. We’ll use the to prop up the stock market and today’s version of the Roman chariot business.
Our ecology and our economy all fundamentally are built on a Ponzi scheme in which we can never make enough to keep up - we are always losing ground, always having to steal from further down the line of our posterity. At the same time, we justify their forcible participation in this speculation by saying that we are protecting them - we have to protect them from a Depression, so it is worth risking their future. But, of course, if you actually care about your children and grandchildren, you don’t ask them to make sacrifices you aren’t prepared to make.
Fundamentally, we’re covering our own asses, and asking our kids to do it for us. And that’s, well, evil, to put it bluntly. It is precisely the opposite of what parents are supposed to do for their children, and what present generations are supposed to do for the future.
As David Orr observes in his superb essay “Loving Children: A Design Problem”
living in a world in which we do not act as though we love our children (despite our endless assertions that we do) does them deep, moral harm. It lessens us, but more importantly, it doesn’t just physically impoverish our children, it morally impoverishes them too.
By Sharon Astyk on 19 December 2008 SharonAstyk.com -
(http://sharonastyk.com/2008/12/19/the-ponzi-scheme-as-way-of-life/)
Gosh, that seems so unprecedented. Yeah, I feel bad for those who were taken in, particularly for charities that lost their funds. But no worse than for those who lost their 401Ks or their pension funds on the stock market, for cities and states that can’t sell municipal bonds, and I feel far worse for the poor, who never had a glimmer of getting to participate in the get-rich-quick ponzi scheme that was a stockmarket that everyone said could have perpetual growth forever.
Madoff may be a criminal, but he’s a criminal in large part because he’s engaging in a particular form of ponzi scheme that we look down upon, one small enough to be called illegal. In general, we’re pretty comfortable with ponzi models -we live, quite happily, in a ponzi economy, one in which the concept of perpetual economic growth is sold, divvied up again and resold.
We live in a Ponzi ecology where we borrow constantly against the future to pay for our present affluence. Most of us have been putting our money into 401Ks and Mutual funds, and now that money is disappearing - and it is disappearing again, because we live in a Ponzi economy, one in which new funds can, for a while, conceal the bankruptcy of a society that draws down its natural resources and leverages both its ecology and economy past bearing. Thus we get the mantra, as
“Lie the First: Money in the stock market is “savings”.Reality: Money in the stock market is “speculation”. You buy a stock on the speculation that it will go up and you will sell it later at a profit and in the meantime, maybe get a regular dividend. It can also be considered casino gambling. It is not savings as we generally define the term, since it can be here today and gone five minutes later.
Lies the Second and Third: Everyone should be in the stock market. You can’t afford to NOT be in the stock market.Reality: The stock market is only for people with money to gamble. People with debts and small savings should not be in the stock market. The former should pay the debts, including their mortgages first. The latter should wait until they have substantial savings before they decide to risk a small amount of their assets in the stock market.
The stock market game is rigged against the average small investor. With the way accounting rules and etc are these days, there are lots of ways that corporations can hide important information. Just ask some of the Lehman’s stockholders about that. Lie the Fourth: Buy and hold is the smart strategy. Over time, the stock market always goes up. Reality: That’s not the way the rich make their money in the stock market. They buy stocks when they are cheap and sell them when they are expensive. The “always goes up” comment is usually coupled with a comparison of two dates and the stock market index values on those dates.
Compared to the history of economics, there is no way that we can say with total truth that the market over time will always go up. Where are the investments in the stock exchanges of the Roman Empire these days? And a rise in a stock market index may have nothing to do with the performance of individual stocks or mutual funds. Ask the stockholders of Enron about that.
Or the stockholders of corporations that made horse-drawn carriages.” I don’t blame people who were constantly told that they’d need X million dollars to keep living into their old age, and if they didn’t have it, would find themselves freezing and starving for believing this, but it is how the Ponzi economy works. It relies on the idea that you are doing something good by feeding your dollars into corporate coffers, and that your money is still really yours.
Those are both false truths. And they are built on ponzi model they pay out to the earliest investors (why, for example, wealth is increasingly concentrated in the hands of older folks) while offering nothing to those unlucky enough to get in late. I had one of those “duh” moments yesterday as I was doing a radio show - I made a point I’ve made many times before - that growth capitalism in general and the real estate bubble in particular depended heavily on the idea that we can’t live together, that everyone has to own their own seperate household. So the rise in average material living space from 250 square feet in 1950 to 850 square feet in 2000 was in part a product of the constant message that living together with one’s family or friends was a measure of failure.
This point I’ve written about a number of times - but somehow I’d never quite fully grasped the corrollary point, which I found myself articulating on the fly - that the Ponzi economy depends on an endless supply of laborers, laborers who wouldn’t quit because they can’t. And that means that the cost of living - of basic needs like housing, food and transportation have to be kept high - because otherwise people might notice that serving corporate masters isn’t the best or only way to live their lives.
Those 850 square feet, and the costs associated with them, and the problems of housing the ordinary stuff we “require” for daily life in 250 square feet means that the cost of housing for ordinary people is dramatically high - so high that we must devote most our time to the corporate economy, so high we then have no time to do work in the informal economy, so high that we can never, ever think about whether there are any better choices out there.
We’re going to try and rescue the economy with another Ponzi scheme - with borrowing against our children’s future wealth to protect financial institutions and invest in some good things and some bad ones. This, of course, is the oldest ponzi scheme of all, and you can make the argument that some human societies have been playing this game for a very long time.
We’ve been doing it with natural resources and are continuing to do so, and we’re also expanding the share of our children’s wealth we’re willing to borrow against. After all, what have future generations ever done for us? They might as well serve some purpose - to pay off our debt. And of course we’ve got the best possible reason for this - we’re in a crisis.
There’s always a good reason for taking just a little more of what belongs to the future - to bring people out of poverty, to resolve this or that crisis. Of course, the crisis was caused by borrowing against our children’s inheritence of natural resources, but more of the same is now necessary. A good Ponzi scheme always needs new investors - and if none are going to volunteer, well, let’s volunteer them. We’ll use the to prop up the stock market and today’s version of the Roman chariot business.
Our ecology and our economy all fundamentally are built on a Ponzi scheme in which we can never make enough to keep up - we are always losing ground, always having to steal from further down the line of our posterity. At the same time, we justify their forcible participation in this speculation by saying that we are protecting them - we have to protect them from a Depression, so it is worth risking their future. But, of course, if you actually care about your children and grandchildren, you don’t ask them to make sacrifices you aren’t prepared to make.
Fundamentally, we’re covering our own asses, and asking our kids to do it for us. And that’s, well, evil, to put it bluntly. It is precisely the opposite of what parents are supposed to do for their children, and what present generations are supposed to do for the future.
As David Orr observes in his superb essay “Loving Children: A Design Problem”
living in a world in which we do not act as though we love our children (despite our endless assertions that we do) does them deep, moral harm. It lessens us, but more importantly, it doesn’t just physically impoverish our children, it morally impoverishes them too.
“The Skymall catalogue, conveniently available to bored airplane passengers, recently offered an item that spoke volumes about our approach to raising children. For a price of several hundred dollars, parents could order a device that could be attached to a television set that would control access to the television. Each child would be given a kind of credit card, programmed to limit the hours he or she could watch TV. The child so disciplined, would presumably benefit by imbibing fewer hours of mind numbing junk. They might also benefit from the perverse challenge to discover the many exciting and ingenious ways to subvert the technology and the intention behind it, including a flank attack on parental rules and public decency via the internet. My parents had a rather different approach to the problem. It was the judicious and authoritative use of the word “no.” It cost nothing. My brother, sister, and I knew what it meant and the consequences for ignoring it. Still, I sometimes acted otherwise. It was a way to test the boundaries of freedom and parental love and the relation between the two. The Skymall device and the word “no” both represent concern for the welfare of the child, but they are fundamentally different design approaches to the problem of raising children and they have very different effects on the child. The device approach to discipline is driven by three factors that are new to parenting in the postmodern world. It is a product of a commercial culture in which we’ve come to believe that high-tech gadgetry can fix human problems, including that of teaching discipline and self-control to children. Moreover, the device is intended mostly for parents who are absent from the home for much of the day because they must (or think they must) work to make an expanding number of ends meet. And, all of our verbal assurances of love notwithstanding, it is a product of a society that does not love its children competently enough to teach them self-discipline. The device approach to parenting is merely emblematic of a larger problem that has to do with the situation of childhood within an increasingly dysfunctional society absorbed with things, economic growth, and self. We claim to love our children, and I believe that most of us do. But we have, sheep like, acquiesced in the design of a society that dilutes the expression of genuine love. The result is a growing mistrust of our children that easily turns to fear and dislike. In a recent survey, for example, only one-third of adults believed that today’s young people “will eventually make this country a better place” (Applebome, 1997). Instead, we find them “rude” and “irresponsible.” And often they are. We find them overly materialistic and unconcerned about politics, values, and improving society. And many are too materialistic and detached from large issues (Bronner, 1998). Not infrequently they are verbally and physically violent, fully adapted to a society that is saturated with drugs and violence. A few kill and rape other children. Why are the very children that we profess to cherish becoming less than likable and sometimes less than human? Some will argue that nothing of the sort is happening and that every generation believes that its children are going to Hell. Eventually, however, things work out. Such views are, I think, fatuous because they ignore the sharp divide imposed between the hyper-consumerism of the post-modern world and the needs of children for extended nurturing, mentoring, and imagining. It’s the economy that we love, not our children. The symptoms are all around us. We spend 40% less time with our children than we did in 1965. We spend, on average, 6 hours per week shopping, but only 40 minutes playing with our children (Suzuki, 23). It can no longer be taken for granted that this civilization can pass on its highest values to enough of its children to survive. Without intending to do so, we have created a society that cannot love its children, indeed one in which the expression of real love is increasingly difficult.” Our love for our economy leads us to seek any path out of the crisis we are now facing - whether it will work or not, whether it does harm or good. We say we are doing it for our children - but much of what we have done mean that their own Depressions will be deeper and they will be poorer. The Ponzi scheme is coming to an end - we have drawn in generations at a huge remove from us. 500 years from now, when no one remembers our names, our descendents will still be living with the consequences of climate change, will still be paying the debt from our overdrawn ecology. It may well be the case that we will have to borrow against both resources and wealth to adapt our infrastructure - but we shouldn’t put a penny of borrowed money into anything that won’t serve the next generation, as well as us or better. That means not a cent for Detroit to keep building gas guzzlers and personal cars. Not a penny for highways that they won’t be driving on anyway. We cannot afford to waste what’s left of their inheritance - we need to leave our children buildings worth occupying, that will last long enough to house them, and energy resources that will serve them, and some accessible oil in the ground for the things they may not be able to produce without it. I was born in 1972. By the time I was six or seven, it was well known that we desperately needed to take action to address future needs for energy, economic and climate stability. In 1979, Jimmy Carter’s Year 2000 report identified Global Warming as a major threat, and the need for growth in renewable energy as a primary national project. Some nations, including Sweden, took their posterity as a priority and began seriously investing in alternative energies. And in the US, we had morning in America, and the decision to offer some temporary prosperity at the price that my generation, coming of age, with children on our knee, would face the coalescing problems passed down to us. I don’t blame the baby boomers as a unit - many I know did their damnedest to make it happen, but they were not the majority. I admire and respect all of those who fought the good fight to keep priorities straight. But that said, our parents and grandparents failed us, they passed the problem down to my peers, and those younger than us. And those same people (because most of the powerful are baby boomers still) are planning on passing the problem down to the children we hold at breast or watch play at our knees. They will impoverish their grandchildren to keep the Ponzi scheme going. The question is whether we, and the baby boomers and older folk who had it right from the beginning, actually love our children and grandchildren enough to stop the buck here? I don’t minimize how difficult that is - and I don’t doubt that trying to live on a fair share, and get through the necessary economic crisis so we can start better next time will be difficult for children as well as adults. And yet, passing the buck again ensures them a darker, warmer, more bitter world with fewer natural resources, and a crushing economic debt. Sometimes when there are no easy answers, one has to move to “what is right.” The burden of addressing our world-wide Ponzi scheme falls, I fear upon all of us who are adult enough to demand it stop, to refuse to participate to the extent we can, to work to end it, and most of all, to shield with our bodies the children and grandchildren we do love, and in whom we must reposit our hopes, our endurance and our courage. .
No comments :
Post a Comment