Psalm 15
Lord, who can be trusted with power,
and who may act in your place?
Those with a passion for justice,
who speak the truth from their hearts;
who have let go of selfish interests
and grown beyond their own lives;
who see the wretched as their family
and the poor as their flesh and blood.
They alone are impartial
and worthy of the people's trust.
Their compassion lights up the whole earth,
and their kindness endures forever.
(A Book of Psalms, translations by Stephen Mitchell)
Fixes looks at solutions to social problems and why they work.
The benefit of writing a column about solutions is that it provides an alternative lens through which to view the world. The daily news tends to be dominated by daunting challenges (unemployment, climate change, the polarization of Congress) and flashpoint events (the killing of Osama bin Laden, the tsunami in Japan, the Penn State scandal). These stories are vital to cover. However, people often come away from the news with a lot more information about problems than about how society is dealing with them.
One of the premises of Fixes is that society is often self-correcting in ways that go under-reported. We need to be able to envision possibilities before we can act on them. Looking back at some of the stories we’ve covered over the past year or so, I’ve found that a number of groups have made substantial gains even during this tough economic period. These stories also remind me that social change doesn’t always take the form of dramatic, televised events, like the Arab Spring or the Occupy movement. Often it is through gradual, unnoticed, yet steady advancements that new ideas take hold ― like trees spreading roots.
A few examples: In our second column, late last year, I wrote about Root Capital, an organization that supplies credit to small-scale agricultural producers in poor parts of the world. In 2010, the organization disbursed $80 million in loans. This year, it disbursed $120 million: 50 percent more. It now finances farmer-owned businesses that support 220,000 producers, extending benefits to roughly a million people. In April, when I reported on Playworks, an organization that helps public schools create safe and inclusive recess and play periods, it was working in 250 schools in 15 cities. It has since expanded to 318 schools in 23 cities. In a survey of 2,591 educators, close to 90 percent said the program decreased bullying and disciplinary problems and improved students’ focus in class. Text4baby, a free service that provides informative text messages to women who are pregnant or have a baby less than a year old, has,since February, roughly doubled its subscribers to 265,000 (though it still has a way to go to reach its target of a million by the end of 2012).
Root CapitalMaraba, a coffee cooperative in Rwanda, is one many small agricultural producers that got loans from the credit organization Root Capital. Read article »In July, I covered Health Leads, which mobilizes, trains and places student volunteers in hospitals to address the social causes behind the health problems of low-income patients. They have increased the number of clients they serve annually by more than 50 percent ― from about 5,800 in 2010 to about 8,800 families this year. And the 100,000 Homes Campaign, which has set a goal of placing 100,000 chronically homeless individuals into permanent supportive housing by July 2013, is now working with 107 communities, which have housed 11,345 people. This is up from 64 communities, which had housed 6,816 people when I initially covered them last December.
In addition to growth, a number of organizations have broadened and extended their work. Two Canadian-based organizations that I wrote about have launched their work in the United States: Roots of Empathy ― which brings babies and mothers into classrooms as part of a curriculum to strengthen the development of empathy among children ―is now working in Washington State and has just started in New York City (disclosure: my wife has signed on as a volunteer instructor). And JUMP Math, a curriculum that has demonstrated significantly better results than standard math instruction in controlled studies in Canada, is being adapted to conform to the U.S. Common Core State Standards for grades one through eight. JUMP is currently accepting requests from schools on the East Coast of the United States that wish to test its materials, so that they can be studied by researchers from Johns Hopkins and the University of Texas. (The organization will provide the program free of charge.)
In May, I wrote about First Book, an organization that pioneered an online marketplace to extend access to new, high-quality, heavily discounted books to reading programs that serve only children and youth from low-income backgrounds. First Book is now working to expand its marketplace to include digital content, as well as supplies for art, music, science and math education. It is also getting ready to pilot its work in India in 2012, and evaluating expansion opportunities in Brazil, China, South Africa and Britain. This year,Youth Villages, a Tennessee-based organization that provides a home-based therapeutic model more effective than foster care, expanded into Oregon and Indiana. It’s now in 13 states, as well as the District of Columbia. The Strive partnership in and around Cincinnati released its fourth annual report card, revealing improvements along a broad range of academic measures, including particularly big gains in kindergarten readiness. More than 80 cities have expressed interest in adopting this “cradle to career” shared-accountability model.
In April, my colleague, Tina Rosenberg, reported on Benefit Corporations. These are companies that pursue not only profit, but also seek to do good for employees, their community and their environment. This week, New York became the seventh state to give legal backing to these corporations ― holding them to high standards for social impact and allowing them to pursue a bottom line that includes both financial and social returns. Tina also wrote about the emerging micro-consignment model pioneered by an organization called Soluciones Comunitarias (or Community Enterprise Solutions), which extends economic opportunities that are similar to microcredit without demanding that poor people take on the risks associated with loans. The organization will be piloting its work in Mexico, Peru and the Dominican Republic this year, and will be studying its applicability in Egypt.
While organizational expansion and growth are markers of impact, they aren’t always the most important ones. Many of the problems that these organizations are addressing are the result of systemic failures in public systems or market mechanisms. To achieve major impact, they must find ways to get their “fixes” into the water supply, so to speak.
Some appear to be moving in that direction. In May, Tina wrote astory about the importance of micro-insurance to protect small-scale farmers in Africa. Last month, as a result of the drought in Ethiopia, farmers who purchased weather insurance received their first payouts from an Oxfam America-sponsored program. The World Food Program is now picking up the idea and plans to spread it initially to three other countries. Last November, Tina also reportedon Manna Energy Limited, which had a plan to finance solar-powered water purification in Africa by tapping the market for carbon credits, based on projected reductions of carbon emissions. In June, Manna became the first water treatment project certified to do so under the United Nations Clean Water Carbon Credit Program.
In November 2010, I reported on an organization in Mexico City,Antenas Por Los Ninos, which developed a series of animated screen characters that are remarkably effective at communicating with children who have suffered traumatic experiences.
Antenas por los NinosTalking about abuse to Antenas Por Los Ninos’s animated character, Dulas, instead of an adult, has been therapeutic for some traumatized children. Read article »Now the tool has been sanctioned and adopted by the district attorney in Mexico’s Federal District as a way of gaining evidence from children in cases of sexual abuse without causing them the trauma of cross-examination.
Another organization making headway into systems is Health Leads. It’s often noted that the United States health care system is really an illness treatment system, with very little emphasis on health promotion. Hospitals regularly discharge patients, especially low-income patients, into the conditions that caused, or contributed to, their illnesses without follow-up. A national survey, sponsored by the Robert Wood Johnson Foundation, found that 85 percent of doctors say that it’s as important to address patients’ social needs (like housing or nutrition) as it is to address their medical conditions. Most doctors (76 percent) want the health system to pay the costs of doing so. But doctors and social workers are already overburdened. Who’s going to do the work?
Health Leads is demonstrating that it can be handled by corps of trained student volunteers (or other lay workers). In some of the centers where the program operates, doctors now regularly inquire about patients’ social problems and request services, a significant change. Close to two-thirds of physicians at the Children’s National Medical Center in Washington, D.C., have prescribed social services through Health Leads via electronic medical records. And at the Harlem Hospital Center, in New York City, patients whose electronic medical records show an elevated B.M.I. (body mass index) are automatically referred to Health Leads volunteers, who help them access community-based services that can help them reduce their health risks. These are initial, but critically important steps in getting preventive care into the DNA of the health system.
Another system change in the making is the Housing Placement Boot Camp developed by the 100,000 Homes Campaign, in partnership with Home for Good L.A., GOOD Magazine, the Veterans Administration and the Corporation for Supportive Housing. The boot camp is an all-day event that brings together high-level representatives from a variety of social service and veterans agencies and housing authorities. Using a game board with magnetic tiles that represent each of the many steps required to get a person housed, participants work together to re-imagine a system that is now terribly uncoordinated and unnecessarily complex, and leads to long delays for people living on the streets, particularly veterans. (A studyconducted by the campaign reported that homeless veterans remain homeless almost two years longer than non-veterans.) In New York, the boot camp helped agencies cut 60 days off the housing process for veterans. In Los Angeles, it shaved off 68 days, cutting it almost in half. If a one-day process can spark big improvements in the way cities handle housing, what other government functions could be re-imagined over Chutes and Ladders-like game boards?
Few changes carry more weight than those that modify major federal legislation, like the Social Security Act. That’s what Youth Villages, and a range of other children’s advocates, achieved this September, when their efforts led to the passage of the Child and Family Services Improvement and Innovation Act. One of the things that the law does is give states more flexibility in using federal funds to pay for community and home-based services for youth in the child welfare system. About 60 percent of the funds for these state systems come from the federal government. Previously, much of the money could be used only to pay for foster care and residential placements or services. Under the new law, states can experiment with services that can keep families together wherever this is safely possible. Youth Villages estimates that about half of the 425,000 children in foster care could be successfully reunited with parents, relatives or adoptive parents if they were provided with the right kinds of supports.
Governments can supercharge ideas like this. But they can also do great damage. The most disheartening follow-up of the year comes from Bangladesh. In March, I reported on the government’s politically-motivated (and vindictive) actions to oust the Grameen Bank’s founder, Muhammad Yunus. Unfortunately, the government won that battle and now it continues to intimidate the bank’s board members, nine of whom are village women elected by the bank’s borrowers. It also appears to be pursuing a variety of legal strategies searching for a pretext to limit the freedom of nongovernmental organizations, and take control of other Grameen-related companies ― there are 54 ― some of which are quite valuable, particularly Grameen Telecom, which owns a third of Grameen Phone, Bangladesh’s leading telecommunications service company. Governments and foundations that have supported microfinance should be aware that the threat of takeover is very real and could be enormously destructive to these institutions and the people they serve.
Finally, sometimes the biggest changes are those that are hardest to measure. One of the more modest organizations I covered this year (in terms of budget, but not vision) is the Family Independence Initiative, which creates structures in which low-income families come together to help one another solve problems and pursue goals. Earlier this year, in Boston seven of the organization’s members were honored by The Boston Foundation for their contributions to the city as resident leaders. In San Francisco, 30 families came together in lending circles, resurrecting a tradition of mutual assistance. And in New Orleans, a number of families have established community businesses to create jobs for one another and their youth. All these efforts were led by families themselves.
David Bornstein is the author of “How to Change the World,” which has been published in 20 languages, and “The Price of a Dream: The Story of the Grameen Bank,” and is co-author of “Social Entrepreneurship: What Everyone Needs to Know.” He is the founder of dowser.org, a media site that reports on social innovation.
Our planet is in peril.
That fact is slowly but surely gaining recognition, but doing enough about it in time to avoid catastrophe is far from certain. The mobilization of those determined and well enough educated to help bring about change is growing, here in the U.S. — by far the greatest source of pollution and its terrible short- and long-term consequences for the planet's health and well-being — and abroad.
But on balance, the situation as a whole isn't getting better. The International Atomic Energy Agency recently warned that the possibility of holding global warming to a limit of 3.6 degrees Farenheit was slipping away: "The door may be closing if we do not act boldly and urgently." Carbon emissions in 2010 rose by nearly 6%, a record high, to a total of more than 33 billion metric tons, and that despite the economic slow-down since 2008. A new record was also set in 2011 for billion-dollar weather disasters.
Environmental education is not yet well established as a subject in our public schools, and environmental awareness often comes with a debilitating price. Knowledge is accompanied by feelings of personal helplessness, and discomfort can dispel awareness, depriving us of the capacity to act.
Read more in one of The New Yorker's online blogs.
So it's important to know there are some fine efforts having real and measurable consequences.
One such effort is that of three small intertwined organizations working together to foster necessary and systemic changes in larger political and economic domains. These three deserve our admiration and support, and are important resources in our own education.
They work to more sharply define the problem. "Our actions combine to create more stress than ecosystems, communities, and human bodies can tolerate." And they work to bring good solutions to bear one step at a time, in local communities, in universities, law and medical schools, in states and in the federal government.
"Our vision—like yours—is that future generations will inherit a whole and healthy world. It is time to name this vision and take it very seriously. We refuse to leave our descendents a degraded, lonely planet. We can be their voice now and embrace our sacred responsibility to become good ancestors."
These are the words of Carolyn Raffensperger, Executive Director of the Science and Environmental Health Network.
"We are forging decision-making structures that focus on reducing total impacts, reducing each impact, and moving away from the system of evaluating each impact independently to see if it is justified or causes an unacceptable problem all on its own—the system that got us where we are today."
"Do we have justification for calling ahead and canceling the reservations of the next generation just because we want to eat their lunch?"
Carl Safina, The View from Lazy Point
Carl Safina and Carolyn Raffensperger are active in this alliance, consisting of SEHN, the Collaborative on Health and the Environment, and Cumulative Impacts. Together they are a wonderful source of information and evidence of constructive change. They deserve our support and participation, perhaps beginning with a look at their helpful websites. They offer persuasive evidence that change is occurring, and needs the energy and imagination of us all. Here are four concrete examples drawn from current initiatives.
EPA sustainability decision framework
Sustainability and the US EPA: Model for sustainability decisions at US EPA. National Research Council, National Academy of Sciences, 2011. The framework, which was requested by EPA, is intended to help the agency better assess the social, environmental, and economic impacts of various options as it makes decisions. The report is available for free as a pdf.
New Jersey cumulative impacts mapping
N.J. works to map cumulative impacts of pollution in neighborhoods. Carolyn Beeler, NewsWorks (WHYY), November 22, 2011. A model ordinance is being developed in Newark that would require cities to inventory existing sources of pollution, and make companies distribute to neighbors information on what, if any, pollution their operation would add.
Water costs more for minorities
Minorities pay more for water and sewer. Michigan State University press release, November 29, 2011. A study by Stephen Gasteyer and Rachel Butts, to be published in Environmental Practice, shows how white flight leaves minority residents to bear the higher costs of maintaining aging water and sewer infrastructure, leading to tens of thousands of water shutoffs in Detroit alone.
School lunches and the food industry
Impact of Federal Commodity Programs on School Meal Nutrition. Robert Wood Johnson Foundation, September 2008. Thirty million children eat school lunches daily in the United States. An increasingly cozy alliance between companies that manufacture processed foods and companies that serve the meals is making students — a captive market — fat and sick while pulling in hundreds of millions of dollars in profits. See also How the Food Industry Eats Your Kid’s Lunch. Lucy Komisar, New York Times, December 3, 2011.
I wrote recently of my admiration for President Obama's speech on December 3. In the last few days many better-known others have weighed in, also in admiration. Having read their views and gained a richer sense of Obama's words, I am prompted to revisit the occasion and offer readers some of their clarifying and well-informed intelligence. Here, for example, is Robert Reich:
“It’s the first time [Obama] or any other president has clearly stated the long-term structural problem that’s been widening the gap between the very top and everyone else for thirty years....Here, finally, is the Barack Obama many of us thought we had elected in 2008. Hopefully Obama will carry this message through 2012 — and in his second term will take on the growing inequities and game-rigging practices that have been undermining the American economy and American democracy for years."
The context for Obama's speech is manifold — his own personal and political history, the 2008 campaign in which his intelligence and talent for eloquence became evident to so many, especially to so many among the young, the history of progressivism in American politics preceding our own Gilded Age, especially that of Theodore Roosevelt and then more potently his admiring cousin Franklin D. Roosevelt. A close friend and fine historian and philosopher wrote me today,
"Isn't it ironic that the Civil War, having required Northern industry (especially railroads and the clothing industry) to go into high gear, should then have been the prologue to our Gilded Age, i.e. capitalism at full speed, the triumph of the haves. The Progressives briefly planted Slow Down and Stop signs, but not till FDR was an effective new way of thinking brought into play."
I think we shall realize in time that Barack Obama stands firmly in that progressive tradition. Whether he shall come to remind future generations of Canute or of Moses remains to be seen. Our immediate task is to see that he is decisively re-elected in 2012, preferably with Democratic majorities in both House and Senate.
That's a very tall order and a daunting challenge. The American electorate has never been subject to greater manipulation by the dogs of Wall Street and their media minions. Tom Engelhardt recently wrote a chilling piece about the continuing compound growth of money shaping elections, largely through the mainstream media and their owners, especially TV. "It’s clear enough -- or should be by now -- that the electoral process has been occupied by the 1%; which means that what you hear in this 'campaign' is largely refracted versions of their praise, their condemnation, their slurs, their views, their needs, their fears, and their wishes. They are making money off, and electing a president via, you. Which means that you -- that all of us -- are occupied, too. So stop calling this an 'election.' Whatever it is, we need a new name for it."
The most thoughtful response to Obama's speech I've read is that of John Cassidy, brilliant New Yorker staff writer, contributor to The New York Review of Books and purveyor of lively thinking on his New Yorker blog, "Rational Irrationality."
First an admission: just before President Obama followed in the footsteps of Theodore Roosevelt and went to Osawatomie, Kansas, to deliver a populist speech about inequality and the middle class, I had prepared a post criticizing the White House for having the temerity to compare him, at least implicitly, to one of America’s truly great Presidents.
Here is part of what I had written:
From a tactical perspective, summoning the ghost of Roosevelt is a clever move. It reinforces the White House line that the Republican Party has strayed from its center-right roots and morphed into an extremist organization populated by firebrands like Ron “abolish the Fed” Paul, Michele “send illegal immigrants home” Bachmann, and Newt “put poor kids to work” Gingrich. On a broader level, though, I am not sure that invoking Teddy Roosevelt is such a wise idea for the White House. When it comes to actual achievements, as opposed to rhetoric, Obama’s record cannot seriously be compared with Roosevelt’s.
During his seven years in office (1901-1908), Roosevelt pushed through a series of reforms that largely define what historians now call “the Progressive Era.”
As a matter of history, I stand by that. But once I read Obama’s speech, I realized I had missed the point, and the news. This isn’t the President saying he deserves to be on Mount Rushmore. This is Obama seeking to define the themes he intends to run on next year, to energize his disillusioned base, and to capitalize on a big change in the political climate. Teddy Roosevelt, whose famous “New Nationalism” speech in 1910 called upon the three branches of the federal government to put the public welfare before the interests of money and property, merely provided a convenient framing device.
Whatever one thinks of Occupy Wall Street—I’m broadly supportive—it has focussed public anger and changed the terms of the political debate, elevating issues such as bankers’ pay, tax evasion by rich people, and corporate lobbying. That’s all to the good. But from the White House’s perspective, it has also had the unfortunate effect of sidelining a President vulnerable to the charge of cozying up to Wall Street and wary of giving the Republicans another cudgel to beat him with. (Think 1968, hippies/anti-war protestors, and Hubert Humphrey.)
Today, Obama gave his first considered response to O.W.S., and it was surprisingly positive. He even adopted some of the protestors’ language, saying:
“I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, and when everyone plays by the same rules. Those aren’t Democratic or Republican values; 1% values or 99% values. They’re American values, and we have to reclaim them.”
Of course, Obama has talked before about rising inequality and falling tax burdens on the rich. (In the summer of 2010, he made a futile effort to rally support in Congress for ending the Bush tax cuts.) But what was new about today’s speech was the acuteness and depth of Obama’s analysis, and the way he turned it on the Republicans. Rising inequality isn’t only morally repugnant, he said, it is economically inefficient and damaging to the country.
In what was a long speech, here are what I consider to be the six nut grafs:
“Look at the statistics. In the last few decades, the average income of the top one percent has gone up by more than 250%, to $1.2 million per year. For the top one hundredth of one percent, the average income is now $27 million per year. The typical CEO who used to earn about 30 times more than his or her workers now earns 110 times more. And yet, over the last decade, the incomes of most Americans have actually fallen by about six percent.
“This kind of inequality—a level we haven’t seen since the Great Depression—hurts us all. When middle-class families can no longer afford to buy the goods and services that businesses are selling, it drags down the entire economy, from top to bottom. America was built on the idea of broad-based prosperity—that’s why a CEO like Henry Ford made it his mission to pay his workers enough so that they could buy the cars they made. It’s also why a recent study showed that countries with less inequality tend to have stronger and steadier economic growth over the long run.
“Inequality also distorts our democracy. It gives an outsized voice to the few who can afford high-priced lobbyists and unlimited campaign contributions, and runs the risk of selling out our democracy to the highest bidder. And it leaves everyone else rightly suspicious that the system in Washington is rigged against them—that our elected representatives aren’t looking out for the interests of most Americans.
“More fundamentally, this kind of gaping inequality gives lie to the promise at the very heart of America: that this is the place where you can make it if you try. We tell people that in this country, even if you’re born with nothing, hard work can get you into the middle class; and that your children will have the chance to do even better than you. That’s why immigrants from around the world flocked to our shores.
“And yet, over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. A few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance fell to around 40%. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a 1 in 3 chance of making it to the middle class.
“It’s heartbreaking enough that there are millions of working families in this country who are now forced to take their children to food banks for a decent meal. But the idea that those children might not have a chance to climb out of that situation and back into the middle class, no matter how hard they work? That’s inexcusable. It’s wrong. It flies in the face of everything we stand for.”
Maybe I’m wrong. But to me that seems like strong and cogent stuff. Doubtless, the Republicans will dismiss it as “class warfare.” That is largely because they don’t have anything more convincing to say. And anyway, Obama has already anticipated their response:
“It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay a higher tax rate than somebody pulling in $50 million. It is wrong for Warren Buffett’s secretary to pay a higher tax rate than Warren Buffett. And he agrees with me….
“This isn’t about class warfare. This is about the nation’s welfare. It’s about making choices that benefit not just the people who’ve done fantastically well over the last few decades, but that benefits the middle class, and those fighting to get to the middle class, and the economy as a whole.”
Like many people who voted for Obama in 2008, I have been critical of some of his actions and inactions. What has bothered me most has not been any one thing in particular, but his overall failure to articulate and defend the vision of an activist government tackling market failures and protecting the public interest, which Teddy Roosevelt helped to create. Yes, the President has done some positive things and made some good speeches, and, yes too, he has faced enormous difficulties, but all too often his heart hasn’t seemed to be in the fight.
Today, at last, he found his voice, or Teddy Roosevelt’s voice—or, as some are suggesting, Elizabeth Warren’s voice. Anyway, it was a big improvement.
"Good night and good luck." It was his sign-off phrase. I shiver when I remember his distinctive voice saying those words when he closed his radio and later his television report of the news. He was a man of integrity unafraid to speak truth to power. He should be an exemplary presence in American journalism today.
Joshua, I thought of you when I read an Orion blog posting by an unlikely Miami denizen, Karen Russell, author of two books for children with intriguing titles: a book of short stories called St. Lucy's Home for Girls Raised by Wolves, and the novel Swamplandia!
Ms. Russell quotes a great poet and an even greater novelist, both women, both memorably creative and of highly distinctive voice, whose words evoked my memory of your sermon about the number of poems we don't understand on the way to the one we do. First, the brilliant Flannery O’Connor, who said, “The truth is not distorted here, but rather a distortion is used to get at truth.” And then Marianne Moore calls poets "literalists of the imagination" and poems themselves "imaginary gardens with real toads in them." Marianne Moore in turn brings to mind a thought apropos of your sermon. Like William Carlos Williams, she had a second vocation, like being a rabbi, that served household economy, social justice and the nourishment of her art. After her graduation from Bryn Mawr in 1909 she taught at the Carlisle Indian Industrial School in Carlisle, Pennsylvania, until 1915, when she began to publish her poetry. Afterward she served as editor of the literary and cultural journal The Dial.
Marianne Moore
Karen Russell is the author of the book of short stories St. Lucy’s Home for Girls Raised by Wolves and the novel Swamplandia! , reviewed recently in the May/June 2011 issue of Orion. We asked Karen a few questions about the intersecting roles of place and fantasy in her writing.
Whenever I’m asked about the ratio of the real to the fantastic in my work, I will shamelessly plagiarize Flannery O’Connor, who said, “The truth is not distorted here, but rather a distortion is used to get at truth.” Another quote that comes to mind comes from the poet Marianne Moore, who calls poets “literalists of the imagination” and poems themselves “imaginary gardens / with real toads in them.”
When I first started writing stories, eons before I ever did any reflecting on “craft” or “process,” I would just sort of naturally begin with setting, usually an aqueous or a densely wooded one, a literal, concrete place that I could see in my mind’s eye. In St. Lucy’s Home for Girls Raised by Wolves, the story “The Stargazer’s Log” I imagined as being set on a sleepy beach like Marco Island, on Florida’s Gulf coast; “Ava Wrestles the Alligator” was set on a failing alligator park in a kind of haunted version of the Everglades; and “Z.Z.‘s Sleepaway Camp for Disordered Dreamers” was a camp on an island of pines where it seemed always to be twilight or midnight, aMidsummer’s Night Dream of a woods.
In Florida, fantasy is our big industry, so I think it’s natural that in my writing I keep returning to settings where the boundary between the real and the fantastic, the natural and the artificial, gets effaced. I was very influenced by the theme parks that surrounded me as a kid in South Florida, these artificial worlds like the Miami Seaquarium that fronted the real ocean, or the Gatorland park in Orlando where you walk through a gaping, cartoon-green archway built to look like an alligator’s jaws in order to see the real thing. Here’s a creature that hasn’t changed in millions of years, and who survived its ancestors, the dinosaurs. It’s like a splinter of time. And while this Mesozoic monster is swimming around an artificial lagoon, children are wandering around the park with balloons, and infants are sucking on rubber pacifiers in their strollers while their dads push them, talking on cell phones.
Flannery O'Connor at the age of 39, well before publication of her mature works of fiction in the 1950s and 1960s.
I think the geography of my childhood conditioned me to be drawn to fiction that was elastic enough to contain multiple universes, to juggle many worlds at once. Because that was daily life in my homestate. That collision of different kinds of time and natures and realities. For example, it took us forty minutes to drive from the Dadeland Mall, with its frenzied music and Food Court and zillions of people from every country you can imagine, and the “Hurry! Hurry! Buy! Buy!” vertigo of all malls, down the Dixie to the Everglades National Park, which felt dizzying in a very different way. I was an anxious kid, and somehow going to the Everglades could cure me of that shallow-breathing feeling. There is so much sky. And green spots of color on the horizon, these hammocks, tree islands, that appear to be floating in a sea of dark yellow grass. Even as a nearsighted child with a short attention span, I think I realized the sublimity of a sky that huge, of birds and trees as comically strange as the pelican, the royal palm. The Everglades, compared to the high-speed, honkadelic retail at Dadeland Mall, felt like a timeless, mythic setting: palm trees and gumbo limbo, big flame-red poinciana, mangroves and sawgrass, white ibis and great blue heron, anhingas frozen on pylons, turtles, manatees, and the grinning alligators, of course.
As a reader, I’ve always been attracted to books with settings that feel both wholly real and wholly other. Siamese-twin universes, where the daylit world we know is connected to an underworld or alternative reality. When I was a kid, so many of my favorite books seemed to simultaneously occur in a world that I recognized and some alternate zone—a bunch of anemic, pink-eyed British kids walking through their closet door to become the heroes of Narnia, say. Or siblings tesseracted through space to a different dimension, explorers plummeted in a submarine to an alien, liquid realm. A Midsummer’s Night Dream is set in both a real woodland and an enchanted fairyland where all ordinary laws are suspended.
So long as you have a human character interacting with a landscape, all those dreams zipped up in a skinsuit, I think you’re going to end up with an amalgam of fantasy and reality. Every tree and rock is filtered through that particular human’s eye. Any physical setting, in whatever book you take down off the shelf, whether it’s Venice or a Martian bear cave, reveals these other dimensions: the fantastic, subjective, invisible dimensions of the material world.
In Swamplandia!, I often found the physical settings through which Ava and Kiwi and Ossie travel to be analogous to their emotional states—when Ava has to escape from the swamp, for example, I pictured her trip across the vast floodplain as the literalization of what it feels like to move through grief. Similarly, when Kiwi gets “swallowed” by the Leviathan slide at the mainland World of Darkness theme park, I thought of that as symbolic of what it feels like to be digested by an impersonal institution: to become anonymous. Setting for me almost always operates on both a literal and a figurative plane, but only over the course of drafting does it become sort of shockingly obvious to me. Grief in a swamp, you don’t say? I’m always the last to know!
I discovered a lot of the places that ended up seeping into my fiction between the ages of ten and fifteen, when I would go on these long bike rides. I was a little bit of a loner, and I’d ride my bike to Matheson Hammock almost every day after school—it’s one of the last remaining hammocks in Miami, and right in the heart of the city, a really quiet oasis where I liked to pedal fast through this truly eerie mangrove tunnel. Sometimes I’d be the only one there and I’d see this beautiful heron that I swear looked as tall as me, just standing stock-still in the water. James Merrill has that beautiful line: “the world beneath the world is brightening.” Whenever I saw that great blue heron, that’s exactly how I felt—like some mystery was drawing closer to the surface, where you could almost glimpse it. And I think that’s the power of the richest settings in fiction—they take you to where the world beneath the world begins to brighten.
Karen Russell, a native of Miami, received the 5 Under 35 award from the National Book Foundation in 2009. Her novel Swamplandia! was published in February 2011 by Alfred A. Knopf.
Return to the figure above. Note that it's 99.9%, not 99%.
Paul Krugman, in the important New York Times essay reprinted below, says "We are the 99%" is an admirable slogan that nonetheless aims too low. It should be altered to specify the considerably higher figure of 99.9%, nine-tenths of 1% higher. That is not an insignificant difference, nor does that difference represent a small number of us. About 2,814,000, give or take a few.
Put another way, Krugman demonstrates with reliable data that 0.1% of the American population, about 312,000 people today, have accumulated, possess and show no measurable intent to relinquish, 99.9% of "our" nation's wealth. After taxes. That is economic inequality — and the stuff of oligarchy rather than genuine democracy — on a scale unequaled in American history.
"We are the 99.9%" is not as catchy a slogan as "We are the 99%," but it makes a helluva difference in the quality of a lot of Americans' lives, measured in material well-being and access to government, education and health care. It also suggests that democracy in the United States is largely a fiction, a fig leaf imposed upon a working oligarchy. Does it mean that elections are meaningless, that freedom of expression and freedom of religion are non-existent? No, it does not.
It does — or should — raise serious concern that the third and fourth freedoms Franklin D. Roosevelt described and advocated 70 years ago for the United States and "everywhere in the world," freedom from want and freedom from fear, are deeply endangered species right here at home and indeed everywhere in the world. We must disenthrall ourselves, devote ourselves to their protection and nourishment for the 100%.
The Occupy Wall Street movement represents something new in America, even while it bears some similarity to earlier Gilded Ages. It's not surprising that we don't yet understand it well. The analogies ready at hand in the media don't apply. Our ready responses, pro or con, approving or hostile, are inapplicable, or only very partially applicable. The movement may fail. The most recent news of its birthing ground in Zuccoti Park is not encouraging. The movement may succeed. If it does, some of the credit, ironically, should go to the Republican party, which, as John Feffer of the Institute for Policy Studies writes, "has been so extreme in its defense of the 1 percent – actually the 0.1 percent, as Paul Krugman points out – that it has effectively seceded from the country to create a confederacy of cupidity."
Of this only we may be sure: We are watching — or seeking ways to nourish or undermine — something of potentially great consequence.
Krugman does his best to suggest some reasons why the movement should succeed. Your attention will be repaid.
Paul Krugman
And while Democrats, by and large, want that super-elite to make at least some contribution to long-term deficit reduction, Republicans want to cut the super-elite’s taxes even as they slash Social Security, Medicare and Medicaid in the name of fiscal discipline.
Before I get to those policy disputes, here are a few numbers.
The recent Congressional Budget Office report on inequality didn’t look inside the top 1 percent, but an earlier report, which only went up to 2005, did. According to that report, between 1979 and 2005 the inflation-adjusted, after-tax income of Americans in the middle of the income distribution rose 21 percent. The equivalent number for the richest 0.1 percent rose 400 percent.
For the most part, these huge gains reflected a dramatic rise in the super-elite’s share of pretax income. But there were also large tax cuts favoring the wealthy. In particular, taxes on capital gains are much lower than they were in 1979 — and the richest one-thousandth of Americans account for half of all income from capital gains.
Given this history, why do Republicans advocate further tax cuts for the very rich even as they warn about deficits and demand drastic cuts in social insurance programs?
Well, aside from shouts of “class warfare!” whenever such questions are raised, the usual answer is that the super-elite are “job creators” — that is, that they make a special contribution to the economy. So what you need to know is that this is bad economics. In fact, it would be bad economics even if America had the idealized, perfect market economy of conservative fantasies.
After all, in an idealized market economy each worker would be paid exactly what he or she contributes to the economy by choosing to work, no more and no less. And this would be equally true for workers making $30,000 a year and executives making $30 million a year. There would be no reason to consider the contributions of the $30 million folks as deserving of special treatment.
But, you say, the rich pay taxes! Indeed, they do. And they could — and should, from the point of view of the 99.9 percent — be paying substantially more in taxes, not offered even more tax breaks, despite the alleged budget crisis, because of the wonderful things they supposedly do.
Still, don’t some of the very rich get that way by producing innovations that are worth far more to the world than the income they receive? Sure, but if you look at who really makes up the 0.1 percent, it’s hard to avoid the conclusion that, by and large, the members of the super-elite are overpaid, not underpaid, for what they do.
For who are the 0.1 percent? Very few of them are Steve Jobs-type innovators; most of them are corporate bigwigs and financial wheeler-dealers. One recent analysis found that 43 percent of the super-elite are executives at nonfinancial companies, 18 percent are in finance and another 12 percent are lawyers or in real estate. And these are not, to put it mildly, professions in which there is a clear relationship between someone’s income and his economic contribution.
Executive pay, which has skyrocketed over the past generation, is famously set by boards of directors appointed by the very people whose pay they determine; poorly performing C.E.O.’s still get lavish paychecks, and even failed and fired executives often receive millions as they go out the door.
Meanwhile, the economic crisis showed that much of the apparent value created by modern finance was a mirage. As the Bank of England’s director for financial stability recently put it, seemingly high returns before the crisis simply reflected increased risk-taking — risk that was mostly borne not by the wheeler-dealers themselves but either by naïve investors or by taxpayers, who ended up holding the bag when it all went wrong. And as he waspishly noted, “If risk-making were a value-adding activity, Russian roulette players would contribute disproportionately to global welfare.”
So should the 99.9 percent hate the 0.1 percent? No, not at all. But they should ignore all the propaganda about “job creators” and demand that the super-elite pay substantially more in taxes.
President Franklin D. Roosevelt's State of the Union Address to Congress on 6 January 1941 deserves renewed attention today.
It became known thereafter as one of his most eloquent and important speeches. FDR proposed four essential human freedoms people throughout the world should enjoy, and went on to say more concretly what they imply for any of us.
We might begin by reading and reflecting upon his own words, and listening, as we still can, to his resonant clarion voice.
More important, we have both reason and opportunity to read and listen as if we heard the same words spoken today, for Roosevelt evoked values and needs, fear and thanksgiving, deeply of this day as well as his own.
He spoke of freedoms grounded in the U.S. Constitution — freedom of speech and expression, freedom of worship. Then Roosevelt added two more, drawn from his New Deal for an American people suffering from the Depression:
Norman Rockwell's painting of Freedom from Fear
In the autumn of 2011, this nation — 99% of us — know too little economic security, and have reason to fear, with others of this world, the political and military policies of our own American government, a corporate and military oligarchy as much as or more than a democracy.
We need the energy, transparency, clarity and leadership represented by Franklin Roosevelt as deeply as did the nation he addressed in the war-shadowed and war-torn year of 1941, seventy years ago.
It is valuable, then, to assess the relevance of the four freedoms to this earth's and its people's well-being.
In the next few days and weeks, I hope to do that, and I welcome response from others.
The Occupy movement is at a crossroads; we must not let it wither in the face of oligarchic opposition and suppression.
Below are the critical moments in FDR's address. (Emphases are mine, added to draw out for the reader unfulfilled needs in our own time.)
Eleanor Roosevelt, in her own right one of the most admired people of the 20th century, was an important voice in her husband's conception of the four freedoms. She went on, after his death in April 1945, to serve their accomplishment — everywhere in the world — for the remaining years of her life, until her death on November 7, 1962.
The nation takes great satisfaction and much strength from the things which have been done to make its people conscious of their individual stake in the preservation of democratic life in America. Those things have toughened the fiber of our people, have renewed their faith and strengthened their devotion to the institutions we make ready to protect.
Certainly this is no time for any of us to stop thinking about the social and economic problems which are the root cause of the social revolution which is today a supreme factor in the world. For there is nothing mysterious about the foundations of a healthy and strong democracy.
The basic things expected by our people of their political and economic systems are simple. They are:
These are the simple, the basic things that must never be lost sight of in the turmoil and unbelievable complexity of our modern world. The inner and abiding strength of our economic and political systems is dependent upon the degree to which they fulfill these expectations.
Many subjects connected with our social economy call for immediate improvement. As examples:
I have called for personal sacrifice, and I am assured of the willingness of almost all Americans to respond to that call. A part of the sacrifice means the payment of more money in taxes. In my budget message I will recommend that a greater portion of this great defense program be paid for from taxation than we are paying for today. No person should try, or be allowed to get rich out of the program, and
should be constantly before our eyes to guide our legislation.
If the Congress maintains these principles the voters, putting patriotism ahead pocketbooks, will give you their applause.
In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms.
That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our own time and generation.
That kind of world is the very antithesis of the so-called “new order” of tyranny which the dictators seek to create with the crash of a bomb.
To that new order we oppose the greater conception -- the moral order. A good society is able to face schemes of world domination and foreign revolutions alike without fear.
Since the beginning of our American history we have been engaged in change, in a perpetual, peaceful revolution, a revolution which goes on steadily, quietly, adjusting itself to changing conditions without the concentration camp or the quicklime in the ditch. The world order which we seek is the cooperation of free countries, working together in a friendly, civilized society.
This nation has placed its destiny in the hands and heads and hearts of its millions of free men and women, and its faith in freedom under the guidance of God.
Freedom means the supremacy of human rights everywhere.
Our support goes to those who struggle to gain those rights and keep them. Our strength is our unity of purpose.
Blueberries and granite, photo by John R. Boettiger
Reckonings is a journal focused on human and cultural change, and justice in its range of interactive dimension - personal, social, economic, environmental.
Attention to such themes is typically expository and analytic. But true reckonings include imagery and story, drama, dance, poetry and song, the world of our dreams, shadow as well as light. Wall off or ignore any of these and our exploration of lives and their character risks desiccation and superficiality.
Justice, hope and history: so inevitably issues of
The word reckoning is rich in implication, suggesting the most careful regard, seeking true direction, and (as in "day of reckoning") the consequences of our lives and the mysteries of forgiveness. Our tools and the ways of our work are those common to writer and artist: attention, contemplation, patience, persistence, imagination, conversation, crafting one's learning with as much clarity, truth and grace as may be found or given.
The subtitle and theme of Reckonings are drawn from Seamus Heaney's The Cure at Troy, a version of Sophocles' play Philoctetes. It has become an obscure play, but Heaney's version, while little performed, has rescued it for continued reflection, and I've written about it here. (See the post "Wounding and Cure.")
The pages of Reckonings change frequently, more in keeping with kairos than chronos. They are linear only in the sense that one follows another from day to day, but it may just as well be said they are circular. Subjects appear, metamorphose, fade, reappear in response to discovery, learning and revision; and in response to that which most needs attention -- the love and wisdom, the neglect and cruelty of those who bear responsibility for the lives of others -- ways the first can be nourished, the second transformed and redeemed.
Comments, conversation, sharing, subscription: I welcome communication with anyone who feels a kinship with one or more of the themes of Reckonings. Offer comments on individual posts, or write me directly, john@reckonings.net. Click on "Comments" at the end of any post to leave a comment. Click on "ShareThis" to share a post with friends via email or networking sites. Subscribe to Reckonings by clicking one of the subscription options in the column on the right. (I trust needless to say, your email address will never be shared with anyone.)
Frank
Rich does all of us a service in the following NY Times op-ed article today, as he seeks to identify
the sources and character of a minority but significant populist libertarian
opposition to - approaching hatred of - Barack Obama, an opposition
that is palpably racist but isn't only fueled by racism.
Obama inherited the worst economic downturn since the Great Depression, one that continues to frighten and anger ordinary Americans, who continue to lose jobs, health care and homes, and he hasn't demonstrably succeeded in
his goal of making American lives more secure. I'm convinced that is
his goal, but it's hard to see it in the context of gutted health care
reform, absence of Wall Street regulation, and terrible ongoing - now
seemingly endless - war.
It's easier to see that the United States continues to have a government that is functionally more oligarchic than democratic, severely constrained if not thoroughly dominated by wealthy corporate elites with powerful vested interests in a deeply inequitable status quo.
______________________
IF only it were just about the color of his skin.
With all due respect to Jimmy Carter, the racist component of Obama-hatred has been undeniable since the summer of 2008, when Sarah Palin rallied all-white mobs to the defense of the “real America.” Joe Wilson may or may not be in that camp, but, either way, that’s not the news. As we watched and rewatched the South Carolina congressman’s star turn, what grabbed us was the act itself.
What made the lone, piercing cry of “You lie!” shocking was that it breached a previously secure barrier. It was the first time that the violent rage surging in town-hall meetings all summer blasted into the same room as the president. Wilson’s televised shout was tantamount to yelling “Fire!” in a crowded theater. When he later explained that his behavior was “spontaneous” rather than premeditated, that was even more disturbing. It’s not good for the country that a lawmaker can’t control his anger at Barack Obama. It gives permission to crazy people.
The White House was right not to second Carter’s motion and cue another “national conversation about race.” No matter how many teachable moments we have, some people won’t be taught. (Though how satisfying it would have been for Obama to dismiss Wilson, like the boorish Kanye West, as a “jackass.”) But there is a national conversation we must have right now — the one about what, in addition to race, is driving this anger and what can be done about it. We are kidding ourselves if we think it’s only about bigotry, or health care, or even Obama. The growing minority that feels disenfranchised by Washington can’t be so easily ghettoized and dismissed.
Many of those Americans may hate Obama, but they don’t love the Republican establishment either. Michael Steele, who was declared persona non grata at one of the mad “tea parties” in April, was not invited to that right-wing 9/12 March on Washington last weekend. There were no public encomiums for McCain or Bush. No Senate leader spoke to the gathering, and perhaps only Palin and Ron Paul would have been welcome from the ranks of what passes for G.O.P. presidential timber. If there was a real hero to this crowd, it was the protest’s most prominent promoter, the radio and TV talker Glenn Beck.
Time put Beck on its cover this week. Man of the Year may not be far behind. Beck is not, as many liberals assume, merely the latest incarnation of Rush Limbaugh. He is something different. That’s why he is gaining on his antecedents — and gaining traction in the country’s angrier precincts.
Though Beck’s daily Fox News show is in the sleepy slot of 5 p.m., his ratings are increasingly neck and neck with the prime-time tag team of Bill O’Reilly and Sean Hannity, and he has beaten them in the prized 25-to-54 demographic. It’s not just because he is younger (45). This self-described “rodeo clown,” who wells up with tears for dramatic effect, doesn’t come across as cranky or pompous, like Limbaugh and O’Reilly. A fervent Mormon convert and proselytizer, he is untainted by association with the old Dobson-Robertson-Reed religious right. Unlike Limbaugh, he bonds with his fallible listeners by openly and repeatedly owning up to his own mistakes, including his history of drug and alcohol abuse. Unlike Hannity, he is not a Republican apparatchik.
Beck has notoriously defamed Obama as a “racist,” but the race card is just one in his deck. His ideology, if it can be called that, mixes idolatrous Ayn Rand libertarianism with bumper-sticker slogans about “freedom,” self-help homilies and lunatic conspiracy theories. (He fanned Internet rumors that FEMA was establishing concentration camps before tardily beating a retreat.) It’s the same crazy-quilt cosmology that could be found in last weekend’s Washington protest, where the marchers variously called Obama a fascist, a communist and a socialist, likening him to Hitler, Stalin, Castro and Pol Pot. They may not know that some of these libels are mutually exclusive. But what they do know is that they need a scapegoat for what ails them, and there is no one handier than a liberal, all-powerful president (who just happens to be black).
Beck captures this crowd’s common emotional denominator — with appropriately overheated capital letters — in his best-selling book portraying himself as a latter-day Tom Paine, “Glenn Beck’s Common Sense.” Americans “know that SOMETHING JUST DOESN’T FEEL RIGHT,” he writes, “but they don’t know how to describe it or, more importantly, how to stop it.” This is right-wing populism in the classic American style, as inchoate and paranoid as that hawked by Father Coughlin during the Great Depression and George Wallace in the late 1960s. Wallace is most remembered for his racism, but he, like Beck, also played on the class and cultural resentment of those sharing his view that there wasn’t “a dime’s worth of difference” between the two parties.
Now, as then, a Dixie-oriented movement like this won’t remotely capture the White House. Now, unlike then, it is a catastrophe for the Republicans. The old G.O.P. Southern strategy is gone with the wind. The more the party is identified with nasty name-calling, freak-show protestors, immigrant-bashing (the proximate cause of Wilson’s outburst at Obama) and, yes, racism, the faster it will commit demographic suicide as America becomes ever younger and more diverse. But Democrats shouldn’t be cocky. Over the short term, the real economic grievances lurking beneath the extremism of the Beck brigades can do damage to both parties. A stopped clock is right twice a day. The recession-spawned anger that Beck has tapped into on the right could yet find a more mainstream outlet in a populist revolt from the left and center.
“Wall Street owns our government,” Beck declared in one rant this July. “Our government and these gigantic corporations have merged.” He drew a chart to dramatize the revolving door between Washington and Goldman Sachs in both the Hank Paulson and Timothy Geithner Treasury departments. A couple of weeks later, Beck mockingly replaced the stars on the American flag with the logos of corporate giants like G.E., General Motors, Wal-Mart and Citigroup (as well as the right’s usual nemesis, the Service Employees International Union). Little of it would be out of place in a Matt Taibbi article in Rolling Stone. Or, we can assume, in Michael Moore’s coming film, “Capitalism: A Love Story,” which reportedly takes on Goldman and the Obama economic team along with conservative targets.
Unlike liberal critics of capitalist inequities, of course, Beck and his claque are driven by an over-the-top detestation of government. Washington is always the enemy, stealing their hard-earned money to redistribute it to the undeserving and shiftless poor (some of whom just happen to be immigrants or black). Though there is nothing Obama can do to stop racists from being racist, he could help stanch the economic piece of this by demonstrating how a reformed government can at times actually make Americans’ lives better. That’s what F.D.R. did, and that’s the promise Obama made, swaying some Republicans and even some racists, during the campaign.
Too many Americans are impatiently waiting for results. It’s hard to argue that the stimulus package reviled by big government-loathers is a success when unemployment continues to rise and most Americans feel none of the incipient “recovery” spotted by Ben Bernanke. The potential dividends to be gained at the end of the protracted health care debate also remain, for now, an abstraction to many who have lost and are continuing to lose their jobs, their savings and their homes.
Nor has Obama succeeded in persuading critics on the left or right that he will do as much for those Americans who are suffering as he has for the corporations his administration and his predecessor’s rushed to rescue. To mark the anniversary of Lehman’s fall, the president gave a speech on Wall Street last Monday again vowing reform. But everyone’s back to business as usual: The Wall Street Journal reported that not a single C.E.O. from a top bank attended. The speech sank with scant notice because there has been so little action to back it up and because its conciliatory stance was tone-deaf to the anger beyond the financial district.
That same day a United States District Court judge in New York, Jed S. Rakoff, scathingly condemned the Obama Securities and Exchange Commission for letting Bank of America skate away with what Rakoff called an immoral and unjust wrist tap to settle charges that it covered up $3.6 billion paid out in bonuses when it purchased Merrill Lynch. How is this S.E.C. a change from the Clinton-Bush S.E.C. that ignored all the red flags on Bernie Madoff?
Beck frequently strikes the pose of an apocalyptic prophet, even insisting that he predicted 9/11. This summer he also started warning of domestic terrorism in the form of a new Timothy McVeigh. On this, one fears he knows whereof he speaks. For all our nation’s unfinished business on race, racism is not Obama’s biggest challenge during our unfinished Great Recession. He — and our political system — are being seriously tested by a rage that is no less real for being shouted by a demagogue from Fox and a backbencher from South Carolina.
A lot of people personally, and a
lot of charitable and philanthropic organizations, are asking "What
happened to our money?" I think Paul Krugman has nailed a pretty good
answer. The task - challenge to the Obama administration - is how to remedy the corruption Krugman identifies, which starts in the financial industry but is far more pervasive. For a more detailed account in the NYTimes, see here.
New York Times
The Madoff Economy
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.
The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.
Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.
But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.
Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.
O.K., maybe my example wasn’t hypothetical after all.
So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.
We’re talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America’s G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing — and it probably was — we’re talking about $400 billion a year in waste, fraud and abuse.
But the costs of America’s Ponzi era surely went beyond the direct waste of dollars and cents.
At the crudest level, Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials like Christopher Cox, chairman of the Securities and Exchange Commission, who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms (hello, Senator Schumer), politicians have walked when money talked.
Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?
Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.
Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.
After all, that’s why so many people trusted Mr. Madoff.
Now, as we survey the wreckage and try to understand how things can have gone so wrong, so fast, the answer is actually quite simple: What we’re looking at now are the consequences of a world gone Madoff.
