The End of Excess Not the End of the World

timemagI enjoy reading in general, but really enjoy it when I read something I really appreciate.  Kurt Anderson’s article in the  6 April 2009 edition of TIME magazine, The End of Excess: Is this Crisis Good for America?, I found particularly enjoyable.   I liked the style and the content, the seriousness and the humor, the wonderful use of metaphors and imagery,  besides which there are so many lines worth quoting.   Anderson’s look at America’s economy compares the last quarter century’s years of self destructive and unsustainable economic behavior to an addiction.  He proposes the formation of a “Bubbleholics Anonymous” to get us back on the right track.  BA would have a three-step program:

  • Admit that we are powerless over addiction to easy money and cheap fossil fuel and living large – that our lives had become unmanageable.
  • Believe that we can, individually and collectively, restore ourselves to sanity and normal living.
  • Make a searching and fearless moral inventory of ourselves and be entirely ready to remove our defects of character.

A call to repentance for sure, but Anderson also says: “The new America must be about financial temperance not abstinence.”  The solution is not in excess in the opposite extreme but in moderation, something Americans have forgotten about in the last 30 years.

reaganobamaAnderson sees the excess as having begun with the Reagan era.   Back then, I favored a balanced budget, but many conservative Republicans kept telling me a balanced budget was neither necessary nor a good thing.   Reaganomics claimed debt was a good thing to keep the economy growing which a balanced budget would not do.   Now, in the midst of economic collapse I read that a balanced budget is the wrong thing, we need to increase the national debt and to keep spending to get the economy going.   The economy goes up and down but a balanced budget is never in vogue – so how can we ever have limited government?

Anderson cites some statistics reviewing the past 25 years:

From 1980 to 2007, the median price of a new American home quadrupled; meanwhile the median household income has been on a steady decline for about 10 years.   

The Dow Jones industrial average soared from 803 in 1982 to 14,165 in 2007.

Americans spent ever increasing amounts of their disposable income to service their debts – climbing 35% in this time period.  In 1982, Americans saved 11% of their disposable income, by 2007 it was less than 1%.   But who cared as Americans saw their 401(k)s and their homes ballooning in value? 

Meanwhile in this same time period adult Americans became on the average 20 pounds heavier today than their same age counterparts of 30 years ago.

Anderson notes each of the decades since the 1960′s have been given a name, and he asks what should the 00′s be called – the aughts?  Considering his statistics, probably they should become known as the “ought nots.”  We turned the decade into decadence. 

The past thirty years became a time of entitlement thinking in America.   And while conservatives fault liberals for fostering this thinking (socialism!), the reality is prosperous Americans embraced entitlement thinking themselves:  excess of every kind was an entitlement – they were entitled to spend as much as they want, to earn as much as they want, to waste as much as they want, to create as much waste as they want.   These were entitlements – bigger cars and bigger debts and riskier investments.   No one cared how their excesses impacted anyone else.  Think about Eve in the garden eyeing the forbidden fruit. “So when the woman saw that the tree was good for food, and that it was a delight to the eyes, and that the tree was to be desired to make one wise, she took of its fruit and ate, and she also gave some to her husband who was with her, and he ate” (Genesis 3:6).   It all looked good to her and for her; she forgot only that everything she did affected everyone else around her in addition to her relationship with Adam and God.  That is the same entitlement thinking that has led to destructive, greedy and self centered entitlement thinking in America.

Some today fear that our current effort to correct the excesses of the past 30 years is the imposition of big government and socialism on America.   They claim the proposed policies are a rejection of living by personal responsibility.  But where was that personal responsibility in the age of excess which led to the collapse of the economy?   So many embraced soaring profits, skyrocketing housing prices, investment bubbles and unprecedented investment gains as entitlements.     How many politicians and financial professionals truly advocated personal responsibility and have come forward and taken responsibility for the economic collapse and their role in it?   Now when accountability is proposed, none want to be accountable and take personal responsibility for what happened.  The time of excess has ended.  Will we be wise enough to embrace moderation as the norm for economic policy and recovery?

Anderson remains optimistic:  “This is the end of the world as we’ve known it.  But it isn’t the end of the world.”  He sees an America that does many things incredibly well, and though the new world order which is emerging will be different, Americans are adaptable and entrepreneurial.   If we sober up and don’t return to our entitlement thinking, we will have a saner society.

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