Friday, April 23, 2010

New York State of Mind

Sorry for the blogging hiatus!

Last week I spent almost a week in New York. It was the first time I'd been back for a more extended stay since I was there more than 6 months ago. At that time I visited with friends, stopped by the near-empty office building that was supposed to house a major media company, and walked the streets of Manhattan looking for signs of life. They were few and far between. The mood then was bleak. Wall Street layoffs were in full force. The New York Times was shedding reporters--not just back office employees, but hard news people. Remember the old neutron bomb--the one that was developed to kill people and leave buildings intact? That was the general situation in mid-town Manhattan back then.

Things have changed. There may not be a national recovery. There may be record unemployment, disastrous state and local budget deficits, staggering mortgage defaults on homes, and desperate personal bankruptcies. But in the heart of New York City things are looking up.

That's the good news.

And the bad news.

Because the down side of the up side is that already too many of the people I met with and talked to have forgotten the near-death experience of 2008-2009.

Imagine a grotesquely obese person suffering a nearly fatal heart attack.

Almost against his will he's dragged to the hospital where massive intervention--some of it unprecedented and highly experimental--saves his life. Barely. This time. And just for now.

When he comes to in the ICU he starts to make all kinds of promises.

To lose weight. To eat right. To exercise. To stop the risky behavior that nearly cost him his life.

He's forced to stay in the ICU for weeks, and weeks turn into months. That's how severe his case in.

Finally the vital signs begin to revive.

The hospital releases him. He leaves full of heart-felt thanks and still promising to mend his errant ways.

But I'm sure you can see where this parable is going.

Having been spared this time, our patient quickly loses track of the promises he made.

As he starts to feel healthier he laughs about the things that landed him in the hospital.

True, some things change. He isn't quite as profligate or spendthrift; at the same time, he's a lot less generous than he used to be.

But as his health improves his old habits start to reemerge. Why change? Obviously he leads a charmed life. No need to modify old habits of mind or behavior.

That's the down side of the up side.

The bottom fell out of the financial barrel, not because of a few bad apples. The whole barrel was rotten. This was a system failure, not an isolated instance of criminal behavior, Wall Street gone rogue, or pockets of fraud.

So a New York State of Mind says there's nothing better than recovery. It sure beats near-death.

But a recovery with any serious reconsideration of what really caused the crisis is only a temporary reprieve.

The disconnects between our economic philosophy and our economic behavior are so deep, it'll take a lot more than an Obama bill to reign in Wall Street to keep us out of the ICU.

It's time for a national commitment to remedy these deep disconnects and make the system right again.

All Rights Reserved 2009 (c) Alan Webber, Rules Of Thumb