Crazy? Or responding sanely to an insane world?

This is the introduction to a paper I gave at Santa Fe College at the inaugural meeting of the Socratic Saints the Santa Fe philosophy and ethics club. The complete paper is available here as a .pdf.

One may very well be depressed by the majority of the news one sees on TV or the Internet. And why not? Such a reaction seems entirely appropriate. Many (if not most) of the major themes of the news stories we see are to do with catastrophe. For example, $700 billion has been taken from US taxpayers to bail out (or more euphemistically to 'rescue') the financial institutions now at the heart of the world economy. Take another example: unemployment is at record levels nationally and in Florida. Over 10% of those who want work can't find it, and many of those who do have jobs are underemployed. The lack of health insurance is a related issue. In the US, health insurance is usually had as part of a benefit package that accompanies full-time employment. If unemployment and underemployment are rising, then health insurance is sure to be a problem for the unlucky unemployed or underemployed. As a final illustration of the unending cataclysm we're told that we face, global climate change is thought to be under way and progressing faster than previously predicted. As if this problem with our environment weren't enough, many believe that the global peak of oil production has already occurred or is fast approaching. Once production has peaked, we're told, we must begin the inevitable process of economic decline.

It's saddening stuff, and stuff that shouldn't be taken lightly or disregarded if we're to believe what we see on TV and believe what we read on the Internet. In fact, if we take seriously many of the things we see and read, then we should be worried, very worried, about those vast and immane elemental forces with which we're unable to mettle but which may affect us all in very important ways.

I've tried to get your attention with the sort of stuff that would appear at the top of the local news at 11. They dictate that if it bleeds, it leads, and the biggest bleeders these days are taxpayers supporting Wall Street fat cats, rising joblessness and fast approaching environmental Armageddon. I hope I've just been every bit as dramatic and disturbing as AM talk radio or the Colbert Report.

But, as much fun as generating an uncontrollable hurricane of emotion is…. I'd like to try to give you a paper that does not continue on in the same way that Stephen Colbert, Rush Limbaugh or Keith Olbermann might. I'd like to try to give a paper in which we consider the sorts of frightening news stories I just sketched, and perhaps more importantly our reactions to those news stories, and try to think about these issues in a calm, analytical and dispassionate way.

In this short paper, I would like to do three things. First, I want to bring some issues, pressing issues I believe, to our attention. Apart from the pressing issues themselves, I'd like to focus on our reaction to those issues. Second, I will offer some analysis on why the issues that we face are in fact pressing issues. And even though these issues are pressing and serious, I believe that there is something that can be done and done by us. Finally, I'll offer a sketch for the sort of actions I believe we should take. This sketch will be too vague and indeterminate, but I hope it may point us in the right direction.

Even though I used these as part of the mock-local-news-film-at-11 send up of the introduction, I would like to return to the three main difficulties we face today. Recall that the issues were (1) the $700 billion bail-out of the financial sector, (2) increasing unemployment, underemployment and the related problem of health insurance for the unemployed and underemployed and (3) environmental damage / global climate change / dwindling resources.

[Read the rest here, complete with references, as a google document.]

I saw the Bailout fail

(I sent this to the Gainesville Sun, but I'm not sure they'll publish it. If so, I'll link.)

TARP worked but concerns remain

The Troubled Assets Relief Program of 2008 (TARP) was supposed to rescue and then stabilize the US economy after the financial services "meltdown" following the housing market crash that started in 2007. In the year since the bill became law, many have forgotten how the former president and the former Secretary of Treasury horrified us with predictions of the systemic financial collapse that would result if hundreds of billions of dollars weren't taken from the taxpayers to fix the mess that the huge banks and Wallstreet had created.

So far, it appears that a "financial Armageddon" has been avoided. I feel relieved. Since the credit markets aren't frozen up and are moving again, we should all be able to sleep better at night.

Even though we avoided the immediate catastrophe, some troubling issues remain unresolved. Of course, there's the issue over whether leaders in Washington have actually put in place reforms to make sure that megabanks can't create the same conditions that almost caused a total economic collapse. And there's the issue of whether a moral hazard was created during the course of the bailout. Will megabanks learn the wrong lesson from their almost complete destruction of our economy? Will they come to believe that they can become "too big to fail" and engage in risky, yet extremely profitable lending without regard for the consequences because they'll be bailed out again next time?

Where did the bailout money go?

As important as these two are, an even more pressing question remains. Someone should ask, "Where did all the bailout money go?" And political leaders and financial elites should be required to answer.

So where did all the bailout money go? Before last week, I, like many others, assumed that the money went into the hand of experts to shore up some important part of the financial system in dire need of repair. I had a the vague idea that the money was supposed to go to banks so that they could keep credit flowing, or so I'd heard back in the panicked days of October 2008.

Requesting for a "bailout" for my neighborhood

Last week, I began to reconsider TARP and how it was supposed to help out. Like many Gainesvillians, I live in condominium complex. It's not a new complex. In fact, it's relatively modest, but it is a place that owners and board have recently been trying to make better. The board wanted to replace old wood siding with composite that would better resist the Florida heat and moisture, paint the buildings and replace old roofs and do some landscaping ahead of the 2010 hurricane season. A majority of owners in the complex agreed that these upgrades seemed like a good idea.

So almost a year ago, our board of directors began the process of applying for a loan so that this work could be done relatively quickly instead of being done piecemeal and paid for by increased association dues or by special assessments. There are twenty buildings in the complex with over 100 owners; the loan sought was for $370,000 over a period of ten years. Every bank the board approached – five altogether – turned us down. No one wants to lend the one hundred condominium owners this relatively small sum (less than the price of Haile Plantation "dream home", correct?) to make our neighborhood better and more attractive.

The board and the property manager did their due diligence. The amount of the loan and the terms were reasonable. I believe it could have been paid back without incident. I had thought that a loan like this was exactly the sort of the thing at which the TARP money was to be aimed.

So much for bailout money trickling down to us.

Concerns over banks hoarding money

One thing that some economic commentators worry over is whether the $700 billion of TARP will actually make it into the hands of those individuals and communities who can use it. These commentators are concerned that, instead of lending and "getting credit moving again", banks may simply hoard the money given to them as a security against future defaults and tough financial times. I'm sure that banks have financially rational reasons for things they do, and unfortunately, hoarding may be the smartest thing for them to do given our current situation.

Perhaps this sort of hoarding is one reason that my complex couldn't get the relatively modest sum we wanted for our improvements.

Of course, there's a general lesson to be learned from the bailout of '08 and its consequences.

By passing TARP, we have avoided complete financial catastrophe, but in doing so, we have essentially rewarded banks for risky behavior that brought dire consequences. No meaningful regulations have been put in place to prevent the conditions that made the near-meltdown possible. And some of the richest among us, those who earn exorbitant bonuses at bank holding companies and financial services companies like Goldman Sachs and Bank of America continue, despite the fact that their shortsightedness and greed helped cause this crisis, to receive outlandish compensation even as their organizations have accepted bailout money.

Financial elites benefit when the system must be rescued

We face a serious problem that few people can or will talk about. Financial elites, with the help of government leaders, have created an unstable economic system in which, as we've seen, catastrophe is possible. Moreover, the system is such that if a "rescue" is required as it was last year, those at the top benefit handsomely from the measures taken to save the economy.

While US taxpayers are sending money to Washington to make sure that the house of cards built by the elites doesn't come crashing down, those very elites pocket a disproportionate share of the money used in the rescue. All to often, as I believe I just witnessed when my condominium complex didn't qualify for a loan, little of the money that was necessary for the rescue is invested in local communities.

We must demand accountability and a departure from business as usual from our political leaders. They have made it the case that financial elites are rewarded for their greedy gaming of the system and that people who desperately need money to improve their lives have less access to credit.

Why 'Out Your Front Door'?

Introduction: what is Out Your Front Door? How can scaling down be good?

Out Your Front Door is guided by the notion that there is a benefit to be had from public environments which ar human-sized. Since so many of the environments we find ourselves in seem larger than this, to get the benefit (if there is one to be had -- and we hope we can convince you that there is) from human-sized environments we must begin to measure our environments by what we we can see out our front doors.

So what is human-sized, you ask. Some examples help to illustrate. A human-sized journey is one that can be made on foot or on a bike. A human-sized market is one in which all the goods can be touched. A human-sized neighborhood is one that can be easily walked.

 Here at Out Your Front Door we think that human-sized public environments are good both for those who live, work, shop and enjoy recreation in them but also for the environment of which these human-size public environments are a part. This isn't to say that human-sized environments are the only ones for which there is a benefit, but it is to say that spending time in human-sized environments is good for psychological health and good for the health of the natural world.

Background, part 1: philosophy

So why are human-sized spaces psychologically beneficial for those who inhabit them? We here at Out Your Front Door wish we had arguments for this, but all we can offer are reports about how we feel in such spaces and invite you to think about whether you share these feelings.

Going to the farmer's market week after week and buying eggs, milk, vegetables, fruit (and the occasional turkey) from the same people who grow it all just up the road gives us a feeling of being connected to them and the place in which we live. It's corny and catch-wordy, but it gives us the feeling that we're connected to what we consume.

Being able to walk or bike to the market makes it even better. If I can ride my bike there, I know exactly what it takes for dinner to brought to the table. Every link in the chain is perfectly observable and comprehensible. We feel some measure of control over what we're eating.

 Of course, here at Out Your Front Door we do more than just eat and make preparations for eating. We think, talk, run around the woods and work (when we have to). Of course, one thinks about all sort of things not to do with the immediate environment whether it's human-sized or not, but we believe that such thinking is easier to do in an environment that is human-sized. As for talking and running in the woods, I believe human-sized environments turn our thoughts toward the immediate here and now and make us more attentive and receptive to our interlocuters, and running through the woods is much different than being on a treadmill staring at 15 flashing screens. We would assert that taking the fresh air is better. As for work, we can only guess what it would mean to work in a human-sized environment, but if it's anything like what else can be done there it seems that it might be immensely more rewarding if it could be.

Background, part 2: at 3% growth/year, there's a doubling of the economy every 23 years

At the very end of George Monbiot's What is Progress?, he claims that "The crisis we face demands a profound philosophical discussion, a reappraisal of who we are and what progress means." The implication being that we can't think of progress as we have for the last 50 (100?) years, as that idea of progress has brought us to where we are now -- an economic and environmental precipice over which we seem sure to topple if we pursue our present course. This bit of Monbiot's thesis rings true to me, even though I have only rudimentary formal training in economics and environmental science. This bit of the thesis is also shocking because the thought of changing our collective (unsustainable) manner of behavior leads immediately to the seemingly unanswerable questions that demand answers: "What will we do?", "How will we live?"

Of course, he's suggested the prerequisite we must satisfy to be able to begin to answer these questions. We must have a profound philosophical discussion about and reappraisal of who we are. Now I do have some training in philosophy (perhaps not in the profound variety), and as a philosopher I've learned that there are really no answers to be had from philosophizing, only the raising of more, and hopefully better, questions.

Before I take my first stab at raising more, and hopefully better, questions, I'll briefly rehearse the high points of Monbiot's argument to try to convince those who are skeptical about the unsustainability of the economy based on growth. Actually, I may cheat a bit and bolster my own version of the situation with a visual aid. In Money as Debt, Paul Grignon asserts that an economy based on fiat money must be ever expanding in order to function. And whether or not he's right about that, it's beyond dispute that economic institutions such as the Federal Reserve have a keen interest to keep the economy growing rather than in recession. There must be something important at stake regarding the economy's expansion.

Economic activity (especially in a global economy) is energy intensive. For example, goods are shipped to be traded, and shipping requires energy. If our methods of shipping were to remain exactly as they are now, but economic activity doubled (say for the sake of argument that shipping activity doubled also), then the energy to transport those goods would increase. Naively, it seems to me that the energy needed in an economy twice its present size would be roughly twice what is currently used.

Since nonrenewable fossil fuels supply most of the energy for the transport of goods, it should be obvious that something about the present system of perpetual economic growth must change or the system must end. Either we find an energy source for the transport of goods that can increase geometrically (we can't rely on fossil fuels because our supply of these will not increase geometrically -- it will eventually decrease) or the economy will have to become such that it's not underwritten by constant growth. The inexorable choice that faces us doesn't loom at a comfortably remote distance -- it's nearing with an exponentially increasing speed.

Regardless of environmental worries over side effects of burning fossil fuels, there's an economic crisis that must soon be dealt with.

Al Gore's Nobel acceptance speech from 2007 offers an eloquent summary of the issues we face and what might be done to head in the direction of sustainability and at the same time in the direction of community.

Is everything here to do with Human-Sized Environments?

No, it's our hope that there will be all manner of content here. But we feel that our positive views of human-sized environments will be something that is consistent with all that content.