IN THE REPUBLIC OF STORIES
Locked inside an expensive
and Depressing story
Up
until October of 2008, the big story was the US Presidential
elections.
Obama or McCain,
Change or more of the same?
Then Wall Street
refused to be ignored and decided to collapse, and companies
that were once the unshakeable pillars of the financial world came
tumbling down like a scene from a disaster movie.
Candidates could be forgiven for believing that this might not be
such a bad election to lose, because there seemed no easy outs, no
simple or instant solutions. No expert knew exactly how we had got
ourselves into this mess, and no Candidate had any plan to get us
out of it, save for the assurance that if you vote for him you could
at least enjoy a temporary catharsis.
Congress and Presidents,
past and present, have determined that regardless of the cause, the
one necessary solution was ACTION- broad, swift and decisive action
by the Government injecting a multi-billion dollar cash infusion
into the banking system to get credit moving again. That is the
story that Bush told us then, and Obama is still telling us now. Yet it all has
a makeshift quality about it that is hardly reassuring, because
clearly, they are making it up as they go along. “Trust me” the
President is asking us, “even if none of us knows exactly what we are
doing or if it is going to work.”
Crisis usually brings
out all the old war stories-the old half remembered solutions to
half forgotten problems that we thought we had solved for good way
back. The President
and other commentators keep saying, “This is the worst crisis since the
Great Depression,” as if most of us hearing that know what the Great Depression
was. But unless you are in your 80’s, you have no first hand
experience of that defining financial collapse 79 years ago.
Instead, what we have is
‘a story of the Depression,’ a constructed memory, a film, a novel,
a “Grapes of Wrath” kind of fiction. Hence the story we are using to
inform our response is one that is beyond living memory. Ben
Bernanke, Chairman of the Federal Reserve is an esteemed academic
who has spent his life studying Wall Street in the tumultuous 1930’s
and so, to him, the question seems obvious, ‘How do we solve this
Depression?” By default, we find ourselves in a 1929 Depression Redux with all
its attendant chorus for reform. If the Bush years gave us Neocons,
now we witness the revival of the Keynesians who advocate swift and
massive government intervention. Our response makes sense if we
determine we are back in that same 1929 story. But are we? Have we
so quickly overthrown the once infallible dogma of the primacy of the
marketplace?
The market, until only
yesterday it seems, was the best self-correcting thermostat for an
overheated economy. The only regulation it needed was the Fed and
Alan Greenspan
to adjust the interest rates. Are we now rolling back the years?
Instead of government being the problem, government is now going to
be the redeemer, literally, the one to buy back the lost and
devalued assets, to take the toxic debt off the books, free up the
flow of credit? It makes mockery of President Reagan’s much loved
story about the most disturbing message any citizen can hear, “We
are from the Government and we are here to help.” That is Obama’s
election promise. How did a joke suddenly morph into serious public
policy?
What
we the public are being treated to is a theatre of the absurd. Though no one knows for sure how we got here, we are being asked to
trust the government to lead us out. We are taking actions that are
over-informed by stories of past economic crises that may or may not
have any resemblance to this one. If this is indeed the same old
problem, then why all the panic about how to address it? We’ve been
here before, right? But then, the experts reply that this is really
different, unprecedented even. Go figure. Enslavement to old stories discourages any new
quest to detect what were the determining causes of this collapse
and how it might be different? Surely globalization has made
it more precipitously complex, and reducing financial risk to the
pseudo science of an alogarithm surely makes October 2008 worthy of
its own story, and one the media should go looking for.
But instead, the media are treating
us to a veritable orgy of ‘Economy Tragics,’ grateful for a
catastrophe that is blessing them with more bad news than they have
had since Katrina. And the gloom and doom will make for great human
interest stories. Who has lost their job this week? All the while,
no one seems to be able to snap out of this bubble of panic and
Depression hysteria
that has us trapped inside our own anxiety. We are acting out of
unexamined stories of the Great Depression, and these seem to be driving
the strategy of recovery as well as making us all feel depressed. As
FDR warned us, "Men are not prisoners
of fate, but only prisoners of
their own minds."
A more honest accounting
might be to level with the American public and to confess that we
don’t have a handle on this yet, because the jury is still out on
its root causes, because we may still be a long way from bottom, and
because we are still gathering evidence. We need to be warned of
jumping to hasty conclusions, or pursuing a populist blame game
before we even know who was in the game, and what the game was. The
CEOs that we once canonized for their ability to game the market for
our gain, are now accused of gaming it for their own greed. Suddenly
it’s all about them and
not about us. But then it never is about us. We are all innocent victims,
with only an accidental resemblance to all those crazy amateur
investors who helped inflate the housing market in the first place. We begin
to sound a lot like a pack of sore losers.
It might even be healthy
and honest for our leaders to confess that we are going to have to
experiment, that we are going to do what any doctor does when he is
faced with a mystery illness, that we are going to attack it with a
number of drugs and assess whether they have any effect on the
symptoms. And what we need to display is greater flexibility, an
ability to change course quickly, and be extra vigilant lest we be
trapped again in any ideology or old story that shapes decisions detached
from reality or divorced from results. Enough of supply side
economics, and goodbye trickle down growth. If ever there was a time for
the resurgence of good old fashioned American pragmatism, the
William James psychology of “truth is what works,” it is now, where
we will know what is right once we know what works.
As FDR told the American
people in the wake of that other Depression, (that scarey story again)
"It is common
sense to take a method and try it.
If it fails, admit it frankly and
try another. But above all, try
something."
The only way to test an
uncertain reality is to act on and in it and weigh the results
against the ending anticipated by our informing story. If the facts don't
fit, we need to find a better story. Stories
decisively inform our choices, because every decision we take
grows out of one story or another. One of the key
decisions before we act is deciding what story to act out of,
and after we have acted, we need to be able to ditch the story if
clearly it no longer has a purchase on present reality. To keep
mindlessly repeating the mantra, "Worst since the Great Depression"
is one thing, but one can already safely predict that the Depression
of 2009 is going to be a whole other story from the Depression of
1929. The sooner we look for that story, the sooner we will innovate
our way out of our financial drama.
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