The Article: The Book of Jobs by Joseph E. Stiglitz in Vanity Fair.
The Text: It has now been almost five years since the bursting of the housing bubble, and four years since the onset of the recession. There are 6.6 million fewer jobs in the United States than there were four years ago. Some 23 million Americans who would like to work full-time cannot get a job. Almost half of those who are unemployed have been unemployed long-term. Wages are falling—the real income of a typical American household is now below the level it was in 1997.
We knew the crisis was serious back in 2008. And we thought we knew who the “bad guys” were—the nation’s big banks, which through cynical lending and reckless gambling had brought the U.S. to the brink of ruin. The Bush and Obama administrations justified a bailout on the grounds that only if the banks were handed money without limit—and without conditions—could the economy recover. We did this not because we loved the banks but because (we were told) we couldn’t do without the lending that they made possible. Many, especially in the financial sector, argued that strong, resolute, and generous action to save not just the banks but the bankers, their shareholders, and their creditors would return the economy to where it had been before the crisis. In the meantime, a short-term stimulus, moderate in size, would suffice to tide the economy over until the banks could be restored to health.
The banks got their bailout. Some of the money went to bonuses. Little of it went to lending. And the economy didn’t really recover—output is barely greater than it was before the crisis, and the job situation is bleak. The diagnosis of our condition and the prescription that followed from it were incorrect. First, it was wrong to think that the bankers would mend their ways—that they would start to lend, if only they were treated nicely enough. We were told, in effect: “Don’t put conditions on the banks to require them to restructure the mortgages or to behave more honestly in their foreclosures. Don’t force them to use the money to lend. Such conditions will upset our delicate markets.” In the end, bank managers looked out for themselves and did what they are accustomed to doing.
Even when we fully repair the banking system, we’ll still be in deep trouble—because we were already in deep trouble. That seeming golden age of 2007 was far from a paradise. Yes, America had many things about which it could be proud. Companies in the information-technology field were at the leading edge of a revolution. But incomes for most working Americans still hadn’t returned to their levels prior to the previous recession. The American standard of living was sustained only by rising debt—debt so large that the U.S. savings rate had dropped to near zero. And “zero” doesn’t really tell the story. Because the rich have always been able to save a significant percentage of their income, putting them in the positive column, an average rate of close to zero means that everyone else must be in negative numbers. (Here’s the reality: in the years leading up to the recession, according to research done by my Columbia University colleague Bruce Greenwald, the bottom 80 percent of the American population had been spending around 110 percent of its income.) What made this level of indebtedness possible was the housing bubble, which Alan Greenspan and then Ben Bernanke, chairmen of the Federal Reserve Board, helped to engineer through low interest rates and nonregulation—not even using the regulatory tools they had. As we now know, this enabled banks to lend and households to borrow on the basis of assets whose value was determined in part by mass delusion.
The fact is the economy in the years before the current crisis was fundamentally weak, with the bubble, and the unsustainable consumption to which it gave rise, acting as life support. Without these, unemployment would have been high. It was absurd to think that fixing the banking system could by itself restore the economy to health. Bringing the economy back to “where it was” does nothing to address the underlying problems.
I was lucky enough to score an extra ticket to a modern shamanism class in Los Angeles. What I knew of shamanism prior to the intro course was limited at best and while I like to be spontaneous, I also like to be prepared. I tried to research the event itself but also knew that the lower expectations that I had, the better. Luckily, there wasn’t much information on the event, so I was going rogue. My friend Julie and I talked the night before to discuss our plan of attack and the car situation so that when we walked in wearing yoga pants and leggings compared to everyone else’s Levi’s and boots, we would at least be partner pariahs. And that’s exactly what happened.
Quickly disposing of our corporate Starbucks coffee cups in fear of being judged by hemp-loving, incense-burning, damn-the-Man hippies, we walked into the Manhattan Beach Marriott. The room was markedly less Marriott than anticipated: an ambiance that consisted of a 30-chair circle and a maraca rattling, rain stick thrusting, and indigenous Amazonian drum pounding ditty awaited us.
In the car, Julie joked that it was going to be one of those, “I see your light, and I appreciate you” workshops and it seemed to be the case. For a hot second I thought I’d be a real jackass and use this as an excuse to practice my comedic repertoire on the cheap. I’d play the straight man and ask the shaman questions as if he were a World of Warcraft expert: Do you throw lightning bolts? Can you see into the world of spirits and communicate with creatures invisible to eyes of mere mortals? When did you discover this other realm? On Draenor, now shattered Outland, the orcs were shamanistic; on Azeroth, trolls and tauren were shamanistic. Though shamanism on Azeroth flourished and still continues to, shamanism on Draenor was all but extinct by the time of the great crossing of the Horde into Azeroth via the Dark Portal. Your thoughts, sir?