Are we the terrorists now?

So, back in 2001, we were well aware that there are interests diametrically opposed to everything we stand for as a country and they were out to destroy us. They wanted to destroy our spirit and our economic system. Well, they didn't. We have done it ourselves.

Isn't there some idea that capitalism sows the seeds of its own destruction? I'm not sure I would go that far, but definitely I'm in agreement with the idea of capitalism as creative destruction--i.e. one necessarily expects firms to compete in the market and either be forced out by the competition or retool themselves to find that market sweet spot where they can thrive for a bit longer before again the competition revs up and forces them to change or get out of the market. In all, the idea presupposes a great deal of change in markets, that status quo is never forever, but rather change is the real status quo. So, when we see certain companies failing, as in the dot com bust of a few years back, we initially feel a lot of fear but then as the dust settles we see new companies emerging that then become leaders in new fields or subsets of previously established fields. hell0--google? while at the same time we see giants fall and either scale back or revert to dust (what happened to the power and pervasiveness of AOL, for instance.) So, the idea of boom and bust cycles aren't so scary, given the lessons of capitalistic history.

But today, we have a whole new phenomenon. It's not firms, per se, that have been run out of the market by competition, but worse--credit has been frightened out of the market. Without credit to grease the wheels of the economy, things start to shut down, so it's not the normal boom/bust cycle, but something quite different. In this new realm, we see companies failing not because of any big mistakes or wrong decisions, even, but perhaps due to the perception of possible mistakes or risk associated with it. Not only this, but companies are cutting back because the lack of credit not only affects the ability of business to function, but also the ability of consumers to purchase. So buyers aren't buying, retailers aren't ordering more to refill their shelves, manufacturers don't order more from their supply chains and the economy starts to fold like a house of cards.

The worst part is that it's not just our country, but this is affecting the entire world. As the production process has expanded across borders, continents and oceans through the processes of globalisation so has the credit crunch. This is bad news for developing countries, particularly those who are using export-driven economic growth strategies. This has serious potential to drive back gains made against poverty across the developing world that have been achieved in recent decades.

So, back to my original question: Since we have done what the terrorists were unable to do, does this mean we are the terrorists now? Not only have we devastated our own economy, but the economies of countries around the world, rich and poor, affecting the livelihoods of too many people to count. Ouch.

Creating these crazy, complex derivatives, risky investment schemes and overblown housing markets has backfired tremendously. We have neighbors, friends and families losing their homes, jobs and investments. We have leveraged ourselves to the point that there is nothing left to leverage and now we are reaping the consequences of our insatiable appetite for stuff. No doubt about it, this sucks. We have created the circumstances of our own demise, and no doubt the terrorist cells hoping to do just this are sitting back and relaxing since we have done their work for them. I keep thinking back to the SNL sketch from Fall 2008 where Kenan Thompson portrays the financial analyst on Weekend Update who keeps saying,"we need to fix it!" He doesn't provide a plan or a way out, but just the emphatic idea that it's got to be fixed.

Unfortunately, it seems that most of our country's economic and financial leaders agree, but have no clear solution to get us out of this mess. Without getting too preachy, I hope this causes us to do another re-evaluation of our lives and brings about a sense of gratitude for all the benefits we have in our lives, sorta like what we saw happen after 9/11. I also hope that this crisis puts the emphasis back on character, responsibility and accountability particularly among financial corporations, banks and the like, rather than seeming to run on greed, avarice and the belief in massive consumption--as if more=better.

A friend of mine is starting a website soon: have less, love more. It's a great idea and I hope it will gain tremendous traction, not just in these lean months, but even in the fat months in the (currently) distant future.