Vail Daily column: Looking to the past, preparing for future
July 18, 2014
Editor’s note: This is the second 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 finish examining a dozen —past and present — where origins, assessments of predictability and prevention, coupled with outcomes, may provide lessons learned. This first part covered Prohibition and the Great Depression, wars and military interventions, the Great Recession, student loans, wealth gap and violence in our society. Part 2, starting with No. 7, includes the last six, in no particular order.
WALL STREET OPERATIONS
• Origins: Wall Street was the key link of the chain in making the Great Recession. Even Wall Street CEOs agree there will be another financial calamity given enough time — but not sure what it will be. So all we have are the issues of what’s happening today as possible symptoms of problems for tomorrow. Firstly, the largest banks are bigger than before the crash. Secondly, apparently the industry as a whole employs just 6 percent of our work force, yet earns 30 percent of all corporate profits! Thirdly, the over-the-top culture and remunerations of financial traders — how many Rolex watches do you need? Fourthly, too many of the “best and brightest” coming to Wall Street with the lure of big pay to design and program systems. Fifthly, many of the staff in the Securities & Exchange Commission are logging in just enough time to be candidates to join the more lucrative Wall Street organizations. Finally, technology gone awry? It cannot be overlooked that computerization of trading financial securities has accomplished incredibly good things including reduced costs, improved market liquidity and enabling sound financial products. However, all this at a cost of complexity that is not always understood. For example, traditional on-floor “specialists” replaced by computers, the “flash crash” of a steady Eddie, $40-$50 consumer staple stock suddenly more than doubled and then dropped to a low of one cent, and the new “cottage industry” of high frequency traders (dark pools) operating in a sub-second, highly secretive environment, with a business model described by some as similar to scalpers.
• Predictable/preventable? Probably, with a mix of money, smart people and technology.
• Outcome: Hopefully, we can see and act before the next big Wall Street fiasco.
OIL/GAS EXPLORATION and PRODUCTION
• Origins: A quadruple whammy. Firstly, there will always be spills and other environmental impacts — but we have a huge differences between the best and worst operators. Fracking is the ultimate Catch-22 where the chemical formula is a trade secret that even the fire and hazardous waste folks are not to know about, much less doctors. Secondly, fracking fluid was given an exemption in the Clean Water Act. Thirdly, fundamental fairness where close-by neighbors of oil/gas rigs have their entire way of life impacted and yet they have little or no say-so, financial compensation and recognition that there are potential health issues. Fourthly, the great unknown of the national economic impact of the USA becoming a large or world’s largest producer of gas and oil — what sounds like it’s all good news overall could well have negative unintended consequences.
• Predictable/preventable? Yes.
• Outcome: The spills and other environmental impacts can be reduced to a more acceptable level — noting Colorado is better than the other 48 and Alaska is the “best of breed” of them all — yet they still make money. The Clean Water Act can be amended to be more inclusive. A formula for recognition of impacts on neighbors of exploration rigs due to sight/air/light/noise/water pollution could be crafted. Finally, serious economic considerations and opportunities as to our becoming a net exporter of energy should be discussed beforehand — for example, part of royalties and profits going toward rebuilding our failing roads and bridges!
OUR POLITICAL SYSTEM
• Origins: A triple whammy. First, some of our career political figures act like they are part of theater. Second, we have raw ideology and much more intermingling of politics with religion. Finally, its more about getting financing to get re-elected, rather than serving the people.
• Predictable/preventable? Perhaps. It’s been a slow change from the good old days of Reagan and Tip O’Neill going at each other during the day and having a drink together at day’s end. But then the tea party came out from nowhere.
• Outcome: Unknown — it may take some national calamity to pull folks together and not sure even then.
• Origins: A triple whammy. A “new normal” is due to, one, learning how to do with less during the Great Recession; two, further globalization; and, three, technology doing more of the work of humans.
• Predictable/preventable? Probably once the Great Recession started.
• Outcome: It will take time — remember it wasn’t till the start of World War II that the Great Depression was overcome. Largely, the triple whammies will have to be overcome with growth before we get out of this — ideological one-liners won’t do it. Time and technology are required. Individual state initiatives are learning experiences — for example, why is it that apprentice programs leading to a two-year degree and an assured job are very popular in some states, but stigmatized in others?
• Origins: Climate change includes unwanted extremes of hot, cold, calm, wind/storms, wet, drought etc. — with a background of gradual heating of the planet.
• Predictable/preventable? The current situation and trend was predicted many years ago. For example, the National Center for Atmospheric Research had predicted what is happening now over 30 years ago. Then the question of what’s causing all this — human activity and/or natural cycles?
• Outcome: Climate change will continue, realizing that human activity causes may have a 50-year latency — longer than we seem to plan for anything. The only thing for sure is there are no real long-term downsides for attempts to reduce any purported humankind influences, as they will eventually pay for themselves in terms of jobs, coupled with cleaner air to boot.
• Origins: A triple whammy. Firstly, the sheer scope of increased incidence with our changing, more complex society, coupled with veterans’ battle related mental issues. Secondly, reduction of funding across the board by government and minimal coverage by insurance companies. Thirdly, little progress of altering the mindset stigma — even thought we are starting to “see” some mental illnesses via advanced imaging techniques just as we see broken bones, torn tissue, cancer tumors, etc.
• Predictable/preventable? Yes, with tight budgets, coupled with “out of sight, out of mind” attitudes.
• Outcome: With so many pressing priorities? One hope is a highly influential champion of the cause. Also words matter, such as “illness” and “disease” vs. starting to use new names such as “issues” or “conditions” and other terms being suggested by industry professionals that carry less stigma.
SUMMARY OF LESSONS LEARNED
With the 12 highlighted here and others — immigration, Social Security/Medicare trust funds, etc.:
• Can’t we at least understand history and “teachable moments” — much less using them as a guide?
• Do we have to wait till our backs are against the wall before doing something about it?
Paul Rondeau lives in Vail.