What do we do now, oh great Zen master? "When you get to a fork in the road, take it," replies the wise one, Yogi Berra, greatest Yankee catcher of all time. His sage advice to economists, politicians and investors everywhere: "The future ain't what it used to be. We made too many wrong mistakes. You've got to be very careful if you don't know where you're going, because you might not get there."
Paul B. FarrellGrowth, capitalism's most sacred commandment -- "Grow or die" -- may itself be on death row. With us since 1776, it's being challenged by a new reality that's flashing relentless warnings of an emerging new command from critics, contrarians and eco-economists: "Grow and die." Yes, you heard right.
- Grow or die. Traditional economists say we need 3% GDP growth to support 100 million new Americans in the 21st century. Drill, baby, drill. New jobs to fuel slow recovery. Worse, exploding growth demands as the rest of the world adds 2.9 billion new humans all chasing their unique American Dream.
- Grow and die. New eco-economists see Big Oil's destruction of our coastal economies, the rape of West Virginia's coal mountains, the unintended consequences of uncontrolled carbon emissions, and they ask: "When will economists, politicians and corporate leaders stop pretending world's resources are infinitely renewable?" Unfortunately, even the new eco-economists fail to factor population growth, the big 800-pound gorilla, into the equation.
Put a face on this dilemma: Governor Bobby Jindal. Louisiana's greatest economic and ecological assets -- marshlands, coastal fisheries -- are being destroyed by capitalism run amok, Big Oil's greed. Yet Jindal's already telling the President to forget the oil drilling moratorium, forget new studies, forget regulations, forget restraining the Big Oil greed machine that got us here. Drill baby drill, now!
Yes, we're at the crossroads. This politician's a perfect example of the no-win scenario confronting all politicians, economists and citizens. He's on the horns of a very sharp no-win dilemma: We're damned if we grow. Damned if we don't.
Ultimate sin: Turning a blind eye, failing to seek real solutions
"When you get to a fork in the road ... take it." But which fork? Flip a coin? Same result either way: Heads you lose, tails you lose. A no-win situation. Not just Jindal, Obama and America, but Greece, Brazil and China. All politicians, all economies, all trapped in capitalism's most sacred, rarely challenged, commandment: Growth or die. Growth has achieved biblical reverence, blinding us to its toxic collateral damage.
The difference between the mindset of traditional economists and the new eco-economists is actually simple: Traditional economists think short-term, react short-term, pursue short-term goals. New eco-economists think long-term. Initially this may seem overly simplistic, but it fits perfectly. Here's why:
- Short-term thinkers: Traditional economists are highly-paid employees and consultants in organizations with short-term horizons -- banks, institutional investors, big corporations, think-tanks, government. Quarterly earnings, tax season, election cycles are more important than what happens a decade in the future. If they can't survive the next budget cycle, "long term" is irrelevant.
- Long-term thinkers: New eco-economists see, think and plan for the long-term. They understand Yogi: "If you don't know where you're going, you might not get there." They know short-term thinkers are setting America up for more and bigger catastrophes than the gulf oil spill. The hit film Avatar is a perfect metaphor: By 2154, Earth's resources are exhausted, forcing us to invade distant planets searching for new energy resources. Critics warn it'll happen earlier: United Nations and Pentagon studies predict population increases that will create unsustainable new natural resources demands by 2050.
The decision is yours. So sit back for a few minutes, take this little test. Read each of the following 11 news items from my clip files, edited for length. Several are hot off the press. A couple are from the winter months. The rest from earlier reports about growth, the 800-pound gorilla hiding in every nation's living room in every quarterly economic report, in the expectations that will make-or-break your own retirement plans.
Here's how to keep score
If you think the message of one of these edited news items supports long-term growth, give it three points. Two points if it's neutral. And if it favors short-term growth plus has faith that technology and the American Spirit will take care of the long-term, add one point. Your total score will be between 33 and 11.
- - - - -1. "Most new jobs temporary ... unemployment high," Peter Morici report, June 2010. "The economy added 431,000 jobs in May but 411,000 were temporary Census jobs. ... Forecasters had expected 540,000 new jobs ... the big challenge is to keep GDP growing at least 3% to pull down unemployment."
2. "OECD raises forecast for economic growth," The Wall Street Journal, May 2010. The Organization for Economic Cooperation and Development, the Paris-based think tank, "cited strong growth in developing economies and the rapid rebound in world trade to predict that the organization's 31 members will see their combined gross domestic product increase 2.7% this year and 2.8% next year. ... U.S. economy is expected to grow 3.2%" in each of those years."
3. "Geithner rallies Europe on growth," Ian Talley, The Wall Street Journal, May 2010. Geithner's "growth" pitch is a fight to minimize change and preserve the status quo for American banks: "We all understand that part of recovery, part of growth, is to make sure that we make clear and credible commitments to restore gravity to our fiscal positions over time ... But we're also working to make sure our economies are growing."
4. "Economic outlook: Slow growth at best," Gary Shilling's Insight Report, June 2010. "Our forecasts of slow U.S. growth through 2011 may prove overly optimistic ... Most investors believe 2008 was simply a bad dream from which they've now awoken. We're returning to the world they knew and loved, with free-spending consumers supporting rapid economic growth, fueled by ample credit and backstopped by governments."
5. "The new normal," Pimco's Bill Gross, InvestmentNews Conference, Dec. 2009. "Investors will never again see the returns and profits of a few years ago. 'New normal' returns are half what we have grown used to over the past 10 to 25 years."
6. "Stiglitz urges end to GDP fetish," Bloomberg News Report, Sept. 2009. "The Nobel Prize-winning economist urged world leaders to drop the obsession with GDP and focus more on broader measures of prosperity." Many things important to individuals are not included in GDP. But will short-term thinkers agree?
7. "Numbers racket," Kevin Phillips, Harper's Magazine, May 2008. "The use of deceptive statistics has played a vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it really is." Corruption taints CPI, GDP, unemployment stats. How bad is it? The real numbers are a face full of cold water. "Economic growth since the recession of 2001 has been mediocre, despite a surge in wealth and incomes of the super-rich."
8. "A darker future for us," Robert Samuelson, economist, in Newsweek, Nov. 2008. "We Americans are progress junkies. We think that today should be better than yesterday and that tomorrow should be better than today. Compared with most other peoples, we place more faith in 'opportunity' and 'getting ahead.' We may now be on the cusp of a new era that frustrates these widespread expectations. ... Americans do not have a divine right to rapid economic growth."
9. "How a new jobless era will transform America," Don Peck, The Atlantic, March 2010. "The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come."
10. "Faustian economics," Wendell Berry, Harper's Magazine, May 2008. "The general reaction to the apparent end of the era of cheap fossil fuel, as to other readily foreseeable curtailments, has been to delay any sort of reckoning ... The dominant response, in short, is a dogged belief that what we call the American Way of Life will prove somehow indestructible. We will keep on consuming, spending, wasting, and driving, at any cost to anything and everybody but ourselves."
11. "What's so good about growth?" Michael Mandel, BusinessWeek book review, Nov. 2005. Ben Friedman's The Moral Consequences of Economic Growth "has scored a dead-center hit on the critical question: Why do we value economic growth? The usual argument is that a bigger GDP -- more goods and services -- leads to happier, more satisfied citizens ... [But] as the average income in a country goes up, so do expectations. As a result, the level of GDP per person in a country, taken alone, doesn't necessarily say much about the level of happiness. The lack of a direct link between personal satisfaction and the level of GDP per person seems to undercut the purely economic arguments in favor of growth."
- - - - -Add it up
So what's your total score? Folks in the "grow and die" crowd (long-term thinkers and eco-economists) will score above 22. Anyone in the "grow or die" crowd (short-term thinkers and traditional economists) will score under 22.
Me? I'm still at the plate talking to Yogi about that fork in the road, about Avatar in 2154, about why God let that bad umpire's call kill a perfect game. Yes, still asking the wisest of all Zen masters which way to go. And after he repeats his answer for the umpteenth time, he pauses, then silently shakes his head, turns away and walks off the field and into the dugout. He caught a perfect game, and scored 33 points.
*****See more Paul B. Farrell articles in MarketWatch, Wikipedia on Ecological Economics; Tom Prugh of Worldwatch, Seven key concepts of Green Economics; Robert Constanza et al., Introduction to Eco-Economics in Encyclopedia of Earth. Many other eco-ecologists are quoted in previous blog posts tagged EE.