|Jan/Feb 2009 Nonfiction|
For many years the political shtick went something like this: by indulging in debt-fueled consumption today, we were mortgaging the futures of our children and grandchildren. Invariably we would cluck our tongues before heading off to explore the efficacies of "an interest-only, payment skipping, minimum payment option enabled, negatively amortizing, no-money-down, no documentation, pre-payment penalizing, three-month LIBOR 40-year adjustable-rate mortgage with a balloon." Actually this beast was a tongue-in-cheek construct that appeared recently on MSN Money. As we've learned, the truth was not a whole lot stranger than the fiction.
Stretching financial jargon to a sardonic extreme, we effectively discounted future cash-flows with cavalier abandon in order to plump up present value. This present value bias was due to an overweighting of the pronouns me, myself and I. Each of us was eating for three—and I have the obesity trend lines to prove it.
There is a corollary in the mythological record. When Tantalus was discovered serving his dismembered son Pelops to the gods, his punishment was an eternal lesson in need and unmet desire. Every time he reached for the fruit tree just above his head, the wind would sweep the branches out of reach. As he bent to drink from the neck-deep pool, the water would recede. There was nothing capricious about the Greeks' meting out of punishment. As Fretag's Triangle elucidates (a derivation of Aristotle's six elements of tragedy), the rising action must be fully offset by the falling action before authentic resolution arrives; i.e., the nadir of the hangover must retrace the apogee of the party. Thus we should note (with appropriate gnashing teeth) that the fate reserved for a parent who robs his child to curry favor with the gods is about as steep and unforgiving a denouement as a triangle can allow. Talk about righteous right angles.
The current macroeconomic debate has swung decisively in recent weeks to a discussion of just how deep the ensuing recession—if not depression—will be. If one subscribes to the sublime wisdom of Greek mythology, the darker prognostications deserve our close attention.
At the risk of belaboring parental avarice, I am reminded also of Goya's Saturn, the very portrait of mindless consumption as he dines on his own child, one of whom it was prophesied would usurp him (as Zeus ultimately did). For the offense of cannibalistic infanticide, he languishes in chains beneath our feet.
Alas, there are many ways to eat a child, or certainly his future. But perhaps there is no better way to gauge a society's moral tenor than to examine the steps it takes to safeguard the welfare of future generations. For us, this is a very timely question as our society's future seems to have suddenly crashed into the present—and with a swift, retributive vengeance.
Watching the current turmoil in financial markets, it is clear to me that we are now reaping what we have for so long sown: our profound crisis in values is finally reverberating outwards into the metrics of traditional asset valuations. The markets are not "broken" as some have alleged. On the contrary they are flashing a deep-seated, existential crisis. What is a market after all but the expression of the personal, writ large in the aggregate? Like a bad horror film where every corridor seems to house a lurking monster, there is no safe harbor—no rest for the wicked, a tiresome moralist might say. Not stocks, not bonds, not commodities, not real estate. Perhaps the crisis lies not in the stars (or the plummeting charts) but in ourselves. We are speechless for want of value to impart. Like Tantalus, nothing bends to our reach. Like Saturn, the future has finally caught up to us.
In short, the dilemma is moral before it is financial. No vessel will accept our offerings until we ourselves know what it is exactly we wish to decant and why. The externalized receptacles of what we hold dear will continue to bedevil us until we can with assurance identify what it is we hold dear. Profound confusion cannot be warehoused. We stalk lightning with a bottle when we attempt to transact fear and loathing between similarly stricken parties.
I've decided Jesus' rage in the temple was not triggered by sanctimony or procedural offense. He knew that commerce was the ultimate substitution effect—for authentic self-listening. Lost souls gravitate toward the false-solidity of material possessions. Denial is the currency of the worldly realm within which the temple is our sole respite—a precious trade-free zone where gnosis, inward-out knowledge, can be ushered forth unguardedly. Markets are all about studying the competition. Temples abet the process of knowing thyself.
It is to the starving man alone that Maslow's hierarchy of needs appears for what it is: a daunting edifice. Pitiable bottom-dweller though he may be, his starvation clarifies his vision. As for you and I, well, we need our Internet, we need our MTV, and yes, a little food would be nice, too. Sated by a lifetime of relative comfort, we inhabit a flatland fog of indistinction brought on by the fearsome efficiency of that needs-satisfaction (not to mention needs-creation) factory, the thoroughly-modern economy.
But what happens if the modern economy should irrevocably break down? The hierarchic structure of need would reassert with the onset of hunger (or an equally authentic unmet need such as inadequate shelter). Hunger reestablishes its primacy in short order. Alienation evaporates like a bourgeoisie daydream. My father, in periods of his life, knew hunger. I never have. To my son, a hunger pang is a sure sign something has gone horribly awry. Dinner is late! Am I a good father for barricading him from the sacred murmurs in his stomach? Faced, perhaps for the first time, with choosing between an Internet connection or a re-stocked pantry, our value-system would sharpen in short order. The availability of so many things for so long has dulled us to the exigencies of existence.
Moreover a lifetime of comfort puts us at a tactical disadvantage to those who have negotiated the rigors of deprivation as a normal course. In this way, the poor stand to re-inherit the earth. While our future lot may amount to a lengthy denouement punctuated by denial, anger, and finally—for those few who successfully navigate the Eye of the Needle—a rapprochement with the real. Indeed the poor may be on their way to becoming comparatively less poor as a salutary wealth distribution effect ensues. Intrepid blogger London Banker says this:
The crash of global financial markets therefore will have a disproportionate effect on the elites, impoverishing them to a far greater extent, although it will be felt throughout society as employment, pensions, investments and public services contract.
Though he may seem, on systematic grounds, a strange bedfellow, I am drawing closer to a Baudrillardian interpretation of the current value-confusion, particularly the interplay between his functional and exchange value processes. Our frenetic interrogation of exchange value mechanisms betrays a functional value crisis. How can we hope to enter a transactional dialogue if no one can explain the functional value of a Credit Default Swap (CDS)?
What's more, our alienation is so complete that we have lost sight of our needs. Or to couch this dilemma in John Kenneth Galbraith's terms (from The Affluent Society, 1958), we can no longer differentiate our psychological needs from our physiological ones. It's as though we've been blessed right into a gilded cage of profound incoherence. In the words of Columbia philosophy professor Douglas Kellner:
...Baudrillard also describes a situation where alienation is so total that it cannot be surpassed because "it is the very structure of market society" (1998: 190). His argument is that in a society where everything is a commodity that can be bought and sold, alienation is total. Indeed, the term "alienation" originally signified "to sale," and in a totally commodified society where everything is a commodity, alienation is ubiquitous. Moreover, Baudrillard posits "the end of transcendence" (a phrase borrowed from Marcuse) where individuals can neither perceive their own true needs or another way of life (1998: 190ff).
Alienation has become our edifice, God help us. We have arranged our society on the "foundation" of a $513 trillion derivatives complex. More insubstantial even than sand, this kingdom traverses the ether every second of every day just above our heads. In typical lopsided fashion, the ephemeralities of Wall Street threaten to devour the very real sweat and toil of Main Street.
Our foundation thus mortgaged to the clouds, the world has been turned on its head. Hubris has overwhelmed wisdom—for a time. However, as the great tragedians showed time and again, hubris never prevails. Unity of action now requires lusis, a great unraveling equal in measure to the remarkable ascent. Only after denouement can a fresh narrative arrive.