Monday, March 9, 2009

A Bedside Moment with Thomas Friedman

Last night I had something akin to what NPR calls a "driveway moment"; only, living in a high-rise apartment building in Brooklyn, I have no driveway. Instead, it was more like a bedside moment, involving not a car radio but the New York Times app on my iPhone, which I had just opened up one last time before climbing into bed. I'm not proud of this, but there I was in the dark, sitting at the edge of my mattress, squinting into the bluish light of the screen, amazed at what I was reading.

In Sunday's New York Times--on the "most-emailed" list no less--was this:
Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”
Granted, Thomas Friedman, the author of the article and the man with whom I was sharing this bedside moment, was writing as an op-ed columnist, not as a "true" journalist. But still, there those words were; the "whole growth model" was being questioned in the nation's newspaper of record.

Riveted, I read on. Friedman quotes physicist and climate expert Joseph Romm, author of the excellent book Hell and High Water and creator of the Climate Progress blog. Romm compares our current growth-centered approach to a Ponzi scheme, in which we are (or until recently, were) getting rich at the expense of future generations by depleting our natural stocks of fish, farmland, forests, petroleum, and just about everything else, wreaking havoc on the climate in the process.

Friedman goes on:
Over a billion people today suffer from water scarcity; deforestation in the tropics destroys an area the size of Greece every year — more than 25 million acres; more than half of the world’s fisheries are over-fished or fished at their limit.
As I understood it, Friedman's point so far was that the growth model is not only unsustainable from an economic point of view (he mentions our propensity to borrow from abroad to finance our insatiable appetite for foreign-manufactured consumer goods), but that this entire system of growth, even if it were to keep on "working," depletes our limited resources too fast and takes too much of an ecological toll to be desirable. He quotes Paul Guilding: “We are taking a system operating past its capacity and driving it faster and harder. . . . No matter how wonderful the system is, the laws of physics and biology still apply.”

Right on, I thought.

But then Friedman makes a jarring mid-paragraph transition. His very next sentence is "We must have growth," which he qualifies by writing, "but we must grow in a different way."

Wait a second! Didn't he just finish suggesting that our growth paradigm is flawed, unsustainable, as doomed to eventual collapse as Madoff's empire? Why this U-turn? And what is this "different way" he says we ought to grow?

"For starters," Friedman writes, "economies need to transition to the concept of net-zero, whereby buildings, cars, factories and homes are designed not only to generate as much energy as they use but to be infinitely recyclable in as many parts as possible."

Really? "Cars . . . that generate as much energy as they use"? Really? The "Mr. Fusion"-powered flying Delorean from Back to the Future II notwithstanding, it seems pretty unlikely that such an invention will ever exist.

Sadly, despite any efforts to make economic growth less resource intensive and emit less carbon, such efforts can do nothing more than slow down the rate of destruction. Without tackling the growth model itself, such nominal gains in efficiency merely lead to a bit less carbon emitted per unit of GDP growth.

Even if we were to get to the point where factories had enough solar panels (or whatever) on the roof to run the machines, there is still no such thing as "net-zero" growth if our economy continues to depend on more factories sprouting up each year. If we were to somehow apply today's most energy-efficient technologies to all the world's factories, homes, and cars, ecological collapse would be slower to arrive, but it would be no less inevitable.

That is because economic growth, as we pursue it, is exponential. Even at a modest rate of growth, say 2.5% per year, a country's GDP will double after just twenty-eight years. At 8%, a growth rate not unheard of in parts of Asia in recent years, GDP doubles in a mere nine years. Plot a country's annual rate of GDP growth, even a modest one, and you get what looks like a hockey stick. Sooner or later, the line heads almost straight for the sky, and so do rates of resource depletion and levels of carbon emissions.

When anyone (even an environmentalist such as Tom Friedman) argues that "We need growth," think of the hockey stick and reply, "Nonsense!" Will a baby born today need twice as many goods and services when she reaches the age of twenty-eight as we enjoy now? Of course not. Would holding steady at, say, our current level of economic output ($14.2 trillion in the United States in 2008) mean life would get worse or that economic activity would have to cease or that we would have to become socialists? Absolutely not.

In fact, diverging from this harmful path of exponential growth is the only way to ensure that our children and grandchildren inherit a planet as habitable as the one we enjoy now ourselves. Even if we believe that scientists will come up with brilliant technological solutions to our energy and ecological problems, wouldn't it be prudent to avoid runaway growth for the time being, at least until such technologies are implemented?

I respect Friedman's opinions and commend him for daring to question growth--that universal panacea of our age. It's just a shame that he seems to have come up with the wrong answers.

Monday, March 2, 2009

Bad Bank

A reader forwarded me a link to a recent This American Life episode in which Alex Blumberg and Adam Davidson . . .
tackle a very tough subject: trying to explain exactly what a bank is and does. They talk to a number of experts about what has gone wrong in banking, but not before bringing us all up to speed on some banking basics, like understanding a bank balance sheet, and a bank’s assets and liabilities, and the squishy business of what banks say about their balance sheets compared to what they are.

Alex and Adam walk us step by step through the complications of the US government buying up bad assets from banks, and explain why, when it comes to footing the bill, the government might just prefer to not be in charge of the very banks it is having taxpayers bailout. From a dollhouse, to a hypothetical bank worth tens of dollars, to the trillions of dollars being spent to keep banks afloat, Alex and Adam talk economy, and where we might be headed. (39 minutes)
Listen to the episode for free here.

Does Wall Street Need to Be Replaced?

David Korten of Yes! Magazine says yes.

He writes,
We have been in thrall to a pervasive cultural story, continuously reinforced by academics, government officials, and corporate media, which led us to believe our economy was functioning splendidly even when it was quite literally killing us.

“Economic growth, as measured by Gross Domestic Product, creates the wealth needed to provide material abundance for all, increase human happiness, end poverty, and heal the environment. The faster we consume, the faster the economy grows and the wealthier we become as the rising tide lifts all boats.”

The logical conclusion from this story is that the faster we convert useful resources to toxic garbage, the richer we are. The only true beneficiaries of this obviously stupid idea are a few very rich people who reap financial gains from every economic transaction—whether the transaction cures a disease or clearcuts a rainforest. It is a system that deifies money and dilutes wealth.

Read the complete article here or watch this three-part interview on Democracy Now.

Recession Leads Americans Back to Home Gardening

"Hard economic times are acting like instant fertilizer on an industry that had been growing slowly: home vegetable gardening," USA Today reports. For Americans squeezed by the recession and interested in a healthier alternative to store-bought produce, now is a great time to start planting.

Read the full story here.