"Our national gloom is real enough, but it isn't a matter of insufficient funds. It's a matter of insufficient certainty. Americans have been perfectly happy with far less wealth than most of us have now, and we could quickly become those Americans again -- if only we knew we had to." --Daniel Gilbert, New York Times op-ed
I have a different take on the source of our national gloom: Wall Street crashed the economy. It gambled away our jobs and pensions by creating and trading highly risky, yet profitable, financial instruments that turned out to be junk. Banks and other financial institutions found their books, and their off-book entities, loaded with toxic assets. They became insolvent or nearly so. So the credit system froze pushing us towards the next Great Depression. To save the system, we opened the US Treasury vault and shifted more than a trillion dollars of resources into financial sector. When you add up TARP funds, loan guarantees, no-interest loans and the like you're talking trillions. Meanwhile, what would normally have been a reasonably mild recession turned into economic free-fall when the real economy became starved for lack of credit. Millions of jobs were lost, social services slashed and states had to face crippling deficits. And you wonder why we're not happy campers?
I fear that Professor Gilbert's nuanced account of why we crave certainty will contribute to the growing zeitgeist that we must lower our expectations -- that we'd be a lot happier if we simply accepted our lot. We should get used to living with less. And the sooner we get used to that idea, the happier we will be. We shouldn't worry ourselves with things we can't really control or change - like Wall Street looting the economy. We should not worry about crisis-prone financial markets. And we certainly should not worry about the outrageous salaries and bonuses that Wall Streeters got, are getting right now, and will continue to get while we pour public funds into their institutions. No, we should stop whining and accept the new realities.....and then we'll be happy.
No thank you.
Gilbert, in fact, undercuts this fatalistic argument by reporting on research that suggests basic economic security contributes mightily to our sense of happiness. Of course, you can be economically secure and still be unhappy, but the research he cites implies that economic insecurity undercuts your well-being. He writes that "happiness is greatly enhanced by a few quaint assets, like shelter, sustenance and security." I'll buy that. In fact, I spend nearly all of my time and energy trying to provide that for my family. Clearly, we don't need more boom-bust economic turbulence. Casino capitalism, even at its best, provides economic security only to the super rich.
However, in the spirit of Gilbert's focus on happiness, let's look at the brighter side of the crash. Here's a happy thought: Wall Street's debacle proves that our nation has more than enough resources to provide each and every one of us with basic economic security. Instead of allowing lavish profits to accumulate for those who bought and sold fantasy finance derivatives, we could easily finance free higher education at all public colleges and universities (about $50 billion per year.) Had we not been forced to pour trillions into the collapsed financial sector, we could make an enormous down payment on universal health care. Were we willing to shift resources from the bloated financial sector to the real economy, we could provide income maintenance and education for every worker who suffers through layoffs and plant closings. And if we had the courage to put a very small tax on each and every Wall Street financial transaction (see my proposal in Looting of America), we would generate more than enough funds to wean ourselves from fossil fuels, promote alternative energy, create green jobs and finally slow down global warming.
I don't know about you, but if my kids could go to college without accumulating massive debts, be assured access to decent health care, not worry that globalization would continually undermine their livelihoods, and finally see the waning of global warming, I'd be one happy Dad.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions and Prosperity, and What We Can Do About It. (Chelsea Green Publishing, June 2009)