Sunday, March 08, 2009

Thomas Friedman: The Great Disruption

Today's op-ed by Thomas Friedman in the New York Times addresses the unsustainable economy the U.S. and other countries have been holding up for the past decade - and how it cannot continue. He asks the very pertinent question:

"What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: 'No more.'"

The article ties together the unsustainable economy with our unsustainable rape of the environment. Some people don't realize that these two things are inextricably connected. We can't just keep building more stores to sell more junk to more people without using up everything the earth has to offer and leaving it a wasteland.

"Over a billion people today suffer from water scarcity; deforestation in the tropics destroys an area the size of Greece every year — more than 25 million acres; more than half of the world’s fisheries are over-fished or fished at their limit.

'Just as a few lonely economists warned us we were living beyond our financial means and overdrawing our financial assets, scientists are warning us that we’re living beyond our ecological means and overdrawing our natural assets,' argues Glenn Prickett, senior vice president at Conservation International. But, he cautioned, as environmentalists have pointed out: 'Mother Nature doesn’t do bailouts.'"

Continuing to go on pretending that there will always be more oil in the ground is unrealistic. Continuing to chop down forests and replace farmland with more and more strip malls and Wal-Marts is also an unsustainable plan. It is time to really change our ways and use this opportunity to do something new. We may not have a choice.

Frank Rich also discusses the debacle that the policies of the last couple of decades have perpetrated. Discussing Thornton Wilder's classic play, "Our Town," which was first produced in 1938, Rich says:

"Wilder was not a nostalgic, sentimental or jingoistic writer. Grover’s Corners isn’t populated by saints but by regular people, some frivolous and some ignorant and at least one suicidal. But when the narrator evokes a common national good and purpose — unfurling our country’s full name in the rhetorical manner also favored by our current president — you feel the graveyard’s chill wind. It’s a trace memory of an American faith we soiled and buried with all our own nonsense in the first decade of our new century.

Retrieving that faith now requires extraordinary patience and optimism. We’re still working our way through the aftershocks of the orgy of irresponsibility and greed that brought America to this nadir."

He goes on to say...

"The simplest explanation for why America’s reality got so distorted is the economic imbalance that Barack Obama now wants to remedy with policies that his critics deride as “socialist” (“fascist” can’t be far behind): the obscene widening of income inequality between the very rich and everyone else since the 1970s."

No one looking at the stock market trend I posted last week could think, in retrospect, that there was a real reason behind the sudden growth that started a couple of decades ago; it should have been obvious there was something wrong. It wasn't just that there was greater productivity due to a burst of technology; technology had been improving throughout the 20th century. No, it was something more sinister: a change in the purpose of stocks, from investments to gambling chips.

Here is in interesting chart that was done before the crash of 08 - the trend was heading toward the high 5000s, while the "real" market was up to almost 14,000.

Rich points out that in one way, the crash of 2008 has been useful:

"Seen in the cold light of our long hangover, they remind us that it was the America of the bubble that was aberrant and perverse, creating a new normal that wasn’t normal at all."

If we can take this opportunity to retool our country, focus on new renewable energy sources, re-evaluate our priorities, and start working together again, America can survive and become stronger. But if the current atmosphere of divisiveness that the GOP and the Rush Limbaugh minions are trying to perpetuate is allowed to dominate the conversation then this may be the beginning of the end of the United States as a world power.


Distributorcap said...

thomas friedman - always too little too late to the party - he makes a lot of sense and is a very smart guy - but he was a bush cheerleader way too long for my taste

so i am glad you read him so i dont have to

but he is dead on about the environment - what he fails to mention is that most americans dont see a problem with anything until it smacks them in the face - and to most americans - climate/environment is not an immediate problem

short term thinking - it is dooming the economy and it will doom the environment

Mauigirl said...

DCap, I agree - I don't always agree with Friedman. Today he was on target.

You are right - most Americans still don't see the long-term picture.

Ruth Hull Chatlien said...

I really wish some reputable and prestigious economists would go out on a limb and say, "Look, you want to know what a sustainable economy looks like? Here is the model we should be pursuing." I wish someone would say in words that non-economist Americans could understand, "THis is what it means for your life. Your home will appreciate only 0.5% (insert appropriate number) a year, and your raises will be 0.5% a year, and you can't expect to keep buying new appliances every four years . . . and for God's sake, stop watching the Home & Garden channel and hearing the message that your lifestyle is pathetic if you don't have granite counter and marble floors."

I want someone to tell me reasonable and appropriate economic goals for my life, but so far, I don't hear anyone very prominent doing so. Oh, I know there are books by fringe figures, but how many average Americans are going to take the trouble to read those?

Mauigirl said...

I agree, Ruth. People tend to believe they have to have everything they want, not what they need. For instance, people buy a nicely kept up mid-century house and think they have to gut the whole kitchen because it's "out of date." Never mind that it might have perfectly serviceable cabinets and maybe just need a new stove or something. (And a new stove can cost about $400 - it doesn't have to be a $5000 Viking stove!).

I wonder if Suze Orman tells people how to live within their means? I've heard of her but haven't really watched her show.

Annette said...

I don't care for Suze Orman.. I haven't ever watched her show..just seen her on others and can't stand just that little bit of don't think I could watch the entire thing.

This was a great post. He does have some good ideas, I have read his Op-Ed's before and agree with them most of the time. Like DCap says..he leaned a little too far right for too long though..but then most of them did..till now. Now it seems they all want to jump on the O wagon..

I think maybe Jeffery Sachs is probably the closest economist I have seen to one who will say middle class.. or Robert Reichs.. either of them are pretty good about it..

Mnmom said...

I've been thinking exactly the same things. It's time to get back to gardening for food, not fun. It's time to trash all those Home and Garden magazines that make Americans feel inadequate. Time to reward folks who drive their cars into the ground before buying again. Time to dump all these cheap, short term baubles for something real. There just might be a silver lining in this for all of us.

Except of course the uber-rich. They will always be wasteful assholes.

splord said...

I was gonna comment, but Those Who Got Here Before Me covered everything -- that you hadn't already covered.

I'll be shocked if your final paragraph "If" comes to pass.

Anonymous said...

Yep...good's wake up time...

We need to figure out a different way to build our ecomony besides buying stuff....

Don't bother watching Suze Orman...My bet is that you can find more productive use of your time...!

Anonymous said...

Suzi Orman has an annoying presentation, but her advice is generally sound, and fairly conventional advice. She is not a get rich quick schemer by any means. Her voice does grate my nerves, though.

Nice post, I think that Frank Rich is almost always on target; Friedman is a horse's ass. But like the proverbial broken clock, even he can be right now and again. In spite of himself, that is.



Anonymous said...

I've been off the "growth is good" model for some time. The fact is we have limits to resources. We all have to learn to do with less and recycle the heck out of stuff. Thanks for a great post Maui

Fran said...

I've only caught Orman when channel surfing, but she ticked off all kinds of recession tips yesterday that was impressive...

things I can remember--

Now recommended to have 8 months cash in the bank rather than the former 6 months formula. Harder times call for deeper savings.

She talked about the stim refi options.

Said COBRA used to be 102% the total ins rate, can only be used for 9 months, but the stim will cover 60% of the rate.

Always pay more on a credit card debt to get out of it sooner.

Anyway she was not addressing pie in the sky financials, more of a survival in hard times tips and pointers.... more grounded & down to earth.
I did surf in during the middle of it, and it ended shortly thereafter, so I don;t know if she just had that segment covering hard time finances or what...

She seems to present real life, bottom line financial advice- even though her persona is uppity.

Loved the "Mother Nature does not do bailouts" quote.

Thankfully, the Drill Baby Drill & NUkes are good people are not at the helm!

Dave Dubya said...

Americans are beginning to understand the Karmic Wheel at last.

What comes around, goes around.

Now we must learn to roll with it or be rolled over.

Tom Harper said...

That was an excellent Thomas Friedman column. I just read it earlier today. I was thinking of doing a post about it, but I've already seen two blog posts on it (yours is the 2nd).

Even if Friedman is a little late getting on the bandwagon, I'm glad he's finally spelling it out bluntly.

Utah Savage said...

This is a great post and I'm going to direct my readers to it. I agree with Dcap the only commenter I stopped to read. I'm not a big fan of Freidman, but I do think he finally has it right. Good Job of putting this piece together.

Fran said...

Brilliant post Mauigirl, sobering but brilliant. I love how you wove the Friedman and Rich pieces together.

I also admire your own optimism, even in the face of so much despair.

Beach Bum said...

I agree with DCap as well but there is one aspect here that throws yet another monkey wrench into the matter. While we appear to have met the end of such unsustainable growth both China and India are moving heaven and earth to get to where we are. And China is increasingly showing signs they don't give a damn about who they disturb to get it.
Not only could we fall from world power status but the planet itself will collapse from such abuse.

susan said...

Excellent post. The people who scare me these days are the ones who know there's a problem but refuse to acknowledge it.

The Crow said...

Very good, thought-provoking post.

I'm glad Mother pointed us to your post.


Nan said...

Nice post.

Friedman's always late to the party. Bill Greider, Paul Krugman, and others have been saying this for years but no one wanted to hear it. Everyone preferred to fantasize that natural resources are infinite, treating paper assets as if they were the real thing would make everyone rich, and that what happened half a world away didn't affect us here in the U.S. Now we're being hit with a massive reality check, and way too many people are going to end up suffering due to the greed of a few.

Dr. Zaius said...

Obama will fix it. And then there will be ice cream!

Dorothy said...

As usual you've done a great job with your thoughts and I agree..however correction or not does the punishment to us fit the crimes of our past politicians and do they suffer...probably not..

Lets pray and hope for more positive media coverage..anything hopeful will help the feelings we Americans are wrestling through..

Dorothy from grammology

lisahgolden said...

This is a great post, Maui. It's reasonable to hope that the Republicans could see that this is important enough to let go of their failed policies and ideology, but so far that doesn't seem the case.

Mauigirl said...

Hi all, thanks for all your comments. I really appreciate it and am glad Utah sent everybody over! Thanks Utah!

I've been really crazed at work so haven't had a chance to reply until now!

Anonymous said...

American intelligence officials are seriously discussing the obvious similarities between our own situation now and that of the USSR in the late 1980s. Not me (who has been saying it for years,) Not Ahnold Schwarzenegger, not a little town in Vermont. The people who were surprised by how quickly the USSR unraveled believe that there's a chance that we can come apart with the same speed.

I don't think there's a chance. I think that, if anything, there's only a chance that we WON'T fall apart the same way. If you're a liberal in Dixie, it might be time to look at living in a colder climate.

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