real people, real pain

With Wall Street grabbing all the headlines we often forget how the turmoil in the financial markets hurts real life people. Take Annette Pucci, a New York retail manager, for example. We read in the WSJ today that Mrs. Pucci had planned a $15,000 face lift for her 50th birthday. She had to settle for a $1,200 botox treatment instead. "It was a very big disappointment," Mrs. Pucci is quoted as saying.

Or take Mr. Provost, 53, who lost his job and will have to foreclose on his $2.5 million villa with its own boat dock in Sarasota, FL. "A foreclosure would be devastating," he says. "My wife and I would have to start from scratch."

Our heart goes out to these unfortunate victims of tragedy. To those who will have to forgo caviar, face lifts, nose jobs, servants, expensive vacations, hummers, and suffer endless unimaginable hardships. These innocent victims of a crisis deserve our sympathy. And they are not alone. Their pain will spread to hard working retailers selling luxury yachts, SUVs, Rolexes, Prada shoes, and other vital necessities of life.

I guess the world is just too unfair.

depression

Most recently, on August 4th, I reminded everyone of the long slowdown that was yet to come. It now appears even I may have been too optimistic. At the time, my estimate was about 12-18 months of downturn. Now I would say it looks more like 3-5 years. Yes, years. You are not reading that wrong. And even that estimate could be way off. Because we haven't seen the end of the credit crisis yet. Not to mention that some people may actually be exacerbating it right now by short selling and other devious tricks.

One thing Mr. McCain said is very true. It was driven by greed. Greed all across the board. From the top to the bottom. And that is one thing Mr. Obama has a hard time admitting. It is easy to point to the rich, but this time everyone played along. The "regular" people had a very active role in all this. Of course, the damage they did was limited by their limited resources, but given that there are so many of them, their contribution cannot be ignored.

Before we give these candidates too much credit though, it behooves us to point out that stating the obvious is easy, however painful it may be to admit to it. Doing something about it is a different matter. And here is a crisis that was decades in the making. How to undo that is not trivial. It all started with Ronald Reagan's de-regulation mantra. Yes, it does go that far back. The anti-government stance that killed regulatory oversight is the root of it all.

Remember in the late 80's when books started appearing warning us of the great slowdown of the 90's? The new great depression. By the mid 90's you may even have joined in with the chorus of nay sayers who welcomed another doomsday prediction gone bad. But chances are you forgot all about it. Or it got lost in the fake scare of Y2K. Remember that one? That was an obvious hoax.

But the coming depression was not. It was merely postponed by a series of bubbles. Things like that happen. Money and paper gains just moved around from one bubble to the next, until they ended up in housing units that are emptily bleaching in the desert sun. Or nearly-paid-off units that were refinanced so their owners could upgrade their kitchens, bathrooms, pools, and SUVs. Now all these gadgets are sitting pretty in foreclosed properties.

During those bubble years we did nothing to make matters better. Quite to the contrary, we exacerbated the problems by venturing into Iraq. By giving tax cuts to the very rich. By further de-regulating and privatizing organizations.

Our war games have made matters much worse. It doesn't so much matter whether we win or lose, whether we leave with honor or not. What matters is that we have sunk inordinate amounts of money we don't have into a hopeless endeavor, whose only "saving grace" is that it made some people incredibly rich.

The money is gone and we have little to show for it. Sure we can pat ourselves on the back and say:"we turned a corner," but in doing so we left our hard-earned cash behind.

As for de-regulation and privatization, has it occurred to you that our government is now taking over the bulk of the financial and insurance industries? Freddie and Fanny, AIG, the list will get longer, rest assured. We are "nationalizing" industries. Hopefully we will be smart enough to regulate them as well. It would be foolish just to pay the bills without reprimanding the offenders. But then again, foolish things seem to be the rule these days.

how to become a (real) environmentalist

I pointed out in my latest post that anyone can call themselves "an environmentalist." It is a feel-good label, like saying I am a "moral" person. I care about the environment we all live in. But what does it really take to become an environmentalist? Do you need to recycle? Do you have to buy a new fuel-efficient car? Do you throw out those old-fashioned incandescent lights? Do you bring your own bags to the grocery store?

Unfortunately my friends it takes a lot more than that to really help save the environment. And many of the things people view as environmentally responsible are not. For example, you are not an environmentalist when you consume like the average American does. Buying new anything is a big no-no. Buying new stuff to replace old stuff that is in good working condition is the number one capital sin against the environment. Never throw out something that works well, ever.

You see there is a good reason why business types hate the environmental movement. They, unlike many idealistic promoters, realize that it will cost them revenues. It will shrink the economy. Actually, the very best we could do for the environment would be to shrink our economy. By about 85-90% or so.

Business people are very smart though. They understand that you cannot contradict the public's wishes. They also understand that it is much easier and much better to pervert the public's wishes. That is what the green movement is all about. If consumers want green items, sell them green items. Always give the consumer what they want, even when they want something that cannot exist. Always sell new items, even if doing so is the most un-green thing to do. We all have to survive don't we?

You can't call yourself an environmentalist if you live in a big house in suburbia. No matter how clean your neighborhood is, and how much recycling, composting, and other "good" things you do, living large is not a sound thing to do. Driving, the inevitable suburban activity is not green. Not even in a hybrid or electric car. Lighting up your house at night is not green. Using 100 gallons of water per person per day is not green. Having a clothes dryer and using it is not green. Maintaining a lawn or a pool is not green. 

I think you get the picture. The only cure for being destructive to the environment is to change your life-style. Fat chance you say. I don't want to give up my wonderful life-style. My happiness that comes from shopping and consuming. Never mind that depression is rampant across the country. We are happy even if it takes Prozac to prove it.

And speaking of fat, fat is the right word. Because obesity, the inevitable by-product of our environment-unfriendly way of life, will ultimately take its toll. So will asthma and COPD triggered by air pollution, and other ills. And if those things don't help to set us on the right path, then the inevitable collision with an uninhabitable planet will. Sooner or later we will all become environmentally responsible, whether we like it or not. 

Just take a look at what is happening to the high-flyers on Wall Street today. Those guys who told you greed is good. That the party would never end. That things would only get better. Today is a day of reckoning. Unfortunately there are many more to come.