Sunday, September 28, 2008

All about greed?

"The essence of this crisis is lack of knowledge, including the inability to know who owes what to whom, and where risk resides." (George Will).

There, finally, someone has said it. It's not likely to get anyone as pumped up as those pointing the finger at all those terrible, greedy people on Wall Street and in government, including usually thoughtful people like Cokie Roberts, who said, "I'd like to see the CEOs of these companies marched down Wall Street in sackcloth and ashes," and similar remarks from the Archbishops of Canterbury and York and Jim Wallis. Yet in the end, this is what needs to be addressed -- the nuts and bolts of the crisis.

Don't get me wrong. I have no doubt that there are plenty of bad actors involved in the mess -- people who fraudulently obtained and sold mortgages, those who engaged in all sorts of sharp trading and leveraging to maximize personal wealth and/or to bail themselves out before the markets collapse. But this persistent notion that the financial crisis is simply the result of Those Other People, the evil, greedy ones, taking advantage of all of us poor innocents, is, dare I say it, ridiculously naive. Even for those not well versed in economics, it should be clear that the reason why this crisis is hurting all of us and may yet do much worse damage is because our lives, our jobs, our wages, our spending, and our choices are all inextricably intertwined with both the financial markets and all the economic activity they represent -- activity, which on good days, they may even facilitate. We have benefited, as well as suffered, from the markets, and we cannot simply walk away from them and pretend we can live as we have without them.

Yes, those who have committed fraud and other crimes should be caught, prosecuted, and punished. But it is telling that much of the angry response from so-called "Main Street" is not only lashing out at anyone they think they can blame but also a flat-out refusal to consider this a community problem that requires hard work and sacrifice from everyone. People want and expect someone else to suffer, so catching the bad guys, removing them from power, stripping of them of wealth, will somehow make things all better, or at least make us feel good.

What is missing in all this is the recognition that a big part of the problem is due to the lack of knowledge among seller and buyers of the real risks involved in their trading, the lack of information about or security for what they were selling, and the lack of a mindset that asks tough questions, looks beneath the surface, and can grasp complex connections. Instead of demanding that the people in charge of our economy get smarter about what has happened and about what needs to be done to both mitigate our present losses and prevent future ones, we just want to keep shouting "off with their heads" while we, like many Republican Congressmen, put ours in the sand.

Unfortunately, "smart" does not sell well. While the allure and charm of Palin has faded with her recent stumbles, there still is a great deal of sentiment for the quick fix and disarming the bad guys. And it is not just on the political right. Now we have even the left-leaning religious folks and pundits moralizing as well, as if suddenly we are going to close down Wall Street and live happily ever after, consuming only what we need and buying and selling those tangible necessities while looking people straight in the eye -- all of which will happen if only we can get the terrible, greedy others to stop doing whatever it is that they do that we don't fully understand.

These folks seem not to have heard of Original Sin. Human beings generally act out of self interest, even though at times they can be taught to see that their self-interest requires sacrifice, deferral of gratification, and working together with others -- at least as long as they can see that there are controls, laws or regulations, that will help curb the excesses of those who want to jump ahead and accumulate all for themselves. And it's not just Them who are afflicted, it's all of us.

We are not going to solve the current financial crisis by finding and stringing up the bad guys or by rejecting all advice or knowledge from those who were involved in managing large corporations, buying and selling assets, and officials were supposedly regulating these activities. We are not going to solve the oil crisis or our problems with foreign countries by pretending that we do not have to make changes in our own lives and make sacrifices, even when we can justifiably point to others to blame for part of our problems.

Instead, I think we have to first start getting smart and valuing those who are smarter and more knowledgeable than we are. That does not mean bowing to the experts, but rather seeking out those with both intellectual and moral integrity, those willing to admit wrong and to learn from their mistakes, as well as those of others. Knowledge and critical thinking must be valued, not denigrated, and the quick-draw, shoot without thinking or blinking, McGraws set aside.

Commonsense is needed, as well, but not at the expense of knowledge and real expertise. Commonsense should help us put aside ideologies and the moralizing that goes with them, Left and Right. Good, carefully targeted regulation is wise -- excessive, burdensome, and mindless bureaucratic regulation is not -- and it is very difficult to know what the difference is without trial and error, openness and a free flow of information.

Maybe some of these goals are unrealistic, as well. But as long as the public keeps cheering and booing, from all sides of the political spectrum, seeking to identify and destroy their own brands of demons and witches, we have no hope of getting beyond this crisis and instead may find ourselves lost in turning against each other.

Although I agree that the church is and has been largely irrelevant in all this, I do not think it is helpful for its leaders to now brandish their own ignorance about the workings of the market economy, while, in the meantime, many live off investments and endowments and some do a poor job of managing their day-to-day financial operations. Instead of scorched earth sermons against greed, why don't we hear more about truth, integrity, humility, and knowledge? Instead of mapping out and locating the demons on Wall Street, why don't we look at some of the demons within ourselves, the ones that do not want to give up our cars and the oil that currently runs them, the ones that do not want to pay more for locally grown foods or services, do not want government regulation when it affects our own backyards, and do not want to suffer or sacrifice in any way as long as we can find others who can suffer for us? Church physicians and moralists, heal thyselves. Meanwhile, let's get to the hard, practical work of gathering the best information, fixing what we can and planning for the future accordingly.

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