BE glad that you’re greedy; the national economy would collapse if you weren’t.
American author Mignon McLaughlin outlined the key to capitalism’s success in 1966.
The greed creed was captured best in Oliver Stone’s 1987 film, Wall Street, where corporate raider Gordon Gekko proclaimed: “Greed is good. Greed is right. Greed works.”
It was a mentality, pushing an endless growth mantra, which would reach its zenith in the late 2000s, when the excesses of Wall Street and its high-risk lending practices crashed and burned.
People with bad credit were being encouraged to take out larger loans to fuel a United States financial boom that would collapse like a house of cards, triggering a global financial crisis in 2008.
The US property bubble burst and so did the illusion that people could take on unprecedented levels of debt without any consequences. A lot of people found that out the hard way.
Governments are now grappling with the same problems. Having stepped in with huge stimulus packages to lessen the damage by the GFC — including bailing out numerous industries — they are ironically now in the same position; hurtling headlong into crisis as their own debt levels soar.
In the US, the $14 trillion national debt now outweighs the size of the economy. The last time that happened it was 1947.
Congress’ response to the chaos and to avoid defaulting on its obligations was to raise its debt ceiling; a figure which will be incrementally increased in the coming 18 months.
The moral of the way the issue has been handled seems to be: when you reach the limits of your excess, it’s best to just revise your limits.
The US is not alone — countries such as Italy, Greece, Germany and Japan are also counting the costs of bloated debt levels and are being forced to cut spending and raise taxes to contain it.
There are widespread fears the bottom hasn’t been reached yet, with stockmarkets tumbling again yesterday on predictions of a new wave of global recession.
Three years ago, governments bailed out the corporate sector. Now the burning question is: who will bail out the governments?
Unlike the post-World War II period, no great “Golden Age” is seemingly on the horizon to rescue us from this economic crisis.
Huge innovative leaps in technology that led to mass job creation are not being seen on the same scale.
Most advances in the past 20 years have been incremental and are for the private, not public, good.
The last major development — the World Wide Web — has driven a social and cultural revolution but has not yet had the same impact industrially.
The impacts of climate change and challenges in securing energy, food and water supplies will only make continual growth that much harder.
Growth, for growth’s sake, should only be a goal and not the be-all and end-all.
If our income was more closely tied to corporate success, then it would be a more lucrative ideal for the majority.
However, most people care little for the concept, because they’ve seen the ‘‘boom’’ years pass with little increase to their real wages and all the spoils go to the few sitting atop the pyramid.
An OECD report — issued in 2008, coincidentally — showed the gap between rich and poor and the number of people below the poverty line had both grown over the previous two decades.
After all that, economists say it is up to us consumers to march us down the yellow brick road to growth again. The call to arms is failing because we are learning the lessons.
Discretionary retail spending is down and credit cards are being paid off quicker. We know there is no inexhaustible market; like everything, it is finite.
We know that problems of debt can’t be fixed by more debt and we don’t want to be exposed if it all comes crashing down here. We know we cannot keep living beyond our means.
We’ve revised our expectations, and now economists and governments need to scale back their own.
For a start, a new measurement of wellbeing is needed; one that gets away from gross domestic product as the only barometer of success.
One that redefines affluence to count people who aren’t living in McMansions with large 4WDs, boats and jet skis. One that sees us give up trying to keep up with the imaginary Joneses.
As Fight Club protagonist Tyler Durden says: “You are not your job. You are not how much money you have in the bank. You are not the car you drive. You are not the contents of your wallet.”
Email a friend