Vail Daily column: 20/20 hindsight?
July 17, 2014
Editor’s note: This is the first of two parts.
Could or can big unfortunate or challenging happenings in our nation be predicted and/or prevented — or is it only with 20/20 hindsight that we can see things clearly? I will examine a dozen — past and present — where origins, assessments of predictability and prevention, coupled with outcomes may provide lessons learned. Part 1 will cover six items: The first history, then the last five in no particular order:
PROHIBITION, ROARING ’20s AND GREAT DEPRESSION
• Origins: It all started with the 18th Amendment enacted into law in early 1920 that created a culture of breaking the law, frivolous behavior leading up to stock market crash and the 1930s Great Depression.
• Predictable/preventable? Yes, with the bandwagon of individual states adopting their own dry laws due to pressure from Protestant churches and women’s groups.
• Outcome: National Prohibition was rescinded in 1933. To fix the economy — time, some of FDR’s New Deal actions and frankly, the start of World War II. The movement by states (Colorado and Washington now, with more sure to follow soon) to put new laws in effect legalizing marijuana is a near perfect analogy to what happened leading up to national Prohibition — except allowing vs. prohibiting.
WARS AND MILITARY INTERVENTIONS
• Origins: Every president except Clinton since World War II’s end has ordered boots on the ground for some reason.
• Predictable/preventable? Its an open question for each war and action as to whether it was predictable and preventable — the history books will likely wait for the presidents and military personnel involved to pass before being written with candor and perspective.
• Outcome: Mainly highlighting how planning a war can be so far off the eventual realities. The Iraq war cost nearly 4,500 lives in the conflict and tens of thousands injured. The original financial cost estimates for the Iraq war was pegged at approximately $200 billon and the final financial cost of the Iraq war — all things considered — will be $2.5 trillion to $3 trillion — and it’s not over yet! Afghanistan costs of lives and dollars are not yet totaled. All this in addition to tolls on families of two, three or more deployments of regular and reserve units to fight in our longest wars. In short, the “fog of war” operates at every level and phase of warfare.
• Origins: Starting in late 2008 during the George Bush administration, we had near total meltdown of the financial system and subsequent collapse of the housing market and loss of jobs. The cause was clear — a chain of weak links was built, with sub-prime, undocumented loans at the bottom and culminating with Wall Street as a frenzied, primary driver at the top. Its financial tools and products (derivatives and CDOs) turned out not to work as planned.
• Predictable/preventable? Absolutely. During the later part of the Clinton administration, Fed chairman Greenspan and key administration heads were warned of the dangers of largely unregulated financial instruments (derivatives), but to no avail. Then ignorance of an impending crisis was carried over to the next administration and highlighted by a comment made by President George Bush during a State of the Union speech that it was wonderful that home ownership was at an all-time high!
• Outcome: It’s taken time, with economists and politicians keep referring to taking longer than a “typical” recession — but it’s not typical and the best comparison is to the Great Depression that took 12 years to resolve with the start of World War II.
• Origins: Easily available loans through the government or private lenders — coupled with strong encouragement by colleges and allowing them to continue raising tuitions above the inflation rate. The problem is “the music has stopped” and even for those who completed their degree programs (many don’t), there are a limited number of seats (jobs). For perspective, the total student loans outstanding exceeds the total of all credit card debt outstanding! Beyond the issue of not enough jobs that will allow repayment, young people with large student loan debt are less likely to pursue an American dream of starting their own businesses — much less move out of their parents’ home.
• Predictable/preventable? Yes, even before the Great Recession came upon us.
• Outcome: Some things are in play including a push to rely more on less expensive community colleges and the White House’s attempt to set up guidelines for the amount of student loans granted in relationship to family income.
• Origins: Statistically, our current wealth gap is equal to or greater than just before the Oct. 29, 1929, stock market crash! Anecdotally, Warren Buffett’s secretary pays a higher rate of tax than her boss.
• Predictable/preventable? Yes, by anybody who understands human motivations in a capitalistic system which does not inherently have a moral compass. And by simple trend statistics that show over the past 50-60 years productivity has gone up two and a half times over that of wages/income.
• Outcome: Unlikely to change unless very big things happen — planned or unplanned. For example, the income gap started to really close right after World War II by happenstance and continued to close until the mid-1970s.
VIOLENCE IN OUR SOCIETY
• Origins: A quadruple whammy of, one, poverty/usual money-related — robberies, muggings, etc.; two, tribal related — racism, hate crimes, gangs, etc.; three, growing-up pains — bullying, etc., now exacerbated with social media; four, mental health related — frequently related to the growing-up process. We hear mostly about the high profile stabbings or shootings in schools, houses of worship or malls, but the vast majority go unreported in national media.
• Predictable/preventable? Given changing culture, violence in media and of course using the most lethal of guns over knives, bats or fists.
• Outcome: How do you change a culture? This author feels we as a society could use a little of the skills NFL football players are taught where you don’t go ballistic when the opposition insults their wives, girlfriends or mothers — could be role playing in school or part of gun handling training?
With the first six items:
• Can’t we at least understand history and “teachable moments” — much less using as a guide?
• Do we have to wait till our backs are against the wall before doing something about it?
Part 2 will cover Wall Street, oil/gas production, our political system, job loss, climate change and mental illness.
Paul Rondeau lives in Vail.