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Commentary
Watching Meet the Press the other day, I noticed former Secretary Henry Paulson and Alan Greenspan talking about economic innovation.
"Innovation," Greenspan said, "by definition, is not forecastable."
They've got a point. Most economic forecasts are based on what has happened in the past, and what's known about what's going on at the time a prediction is being made. If something has never happened before, how can an economist or businessman predict how well it's going to do?
Which brings us to art.
Yes, art. Art, in my view, as actually a specialized form of manufacturing. We usually have either one person making an artifact, or one artifact being made by a group of people. Each artifact is different. Each one doesn't have a good precedent in the marketplace for its value.
Make something nice and try to put a price tag on it. What's it worth? It seems at first like that might be a simple matter, but after we study the problem for a while, we can see that the answer may not be so easy. The artifact is rarely worth just the sum of its materials and labor. What's worse, if it's not holding up well under scrutiny, it may actually be worth less than what it cost to make it.
They've got a point. Most economic forecasts are based on what has happened in the past, and what's known about what's going on at the time a prediction is being made. If something has never happened before, how can an economist or businessman predict how well it's going to do?
Which brings us to art.
Yes, art. Art, in my view, as actually a specialized form of manufacturing. We usually have either one person making an artifact, or one artifact being made by a group of people. Each artifact is different. Each one doesn't have a good precedent in the marketplace for its value.
Make something nice and try to put a price tag on it. What's it worth? It seems at first like that might be a simple matter, but after we study the problem for a while, we can see that the answer may not be so easy. The artifact is rarely worth just the sum of its materials and labor. What's worse, if it's not holding up well under scrutiny, it may actually be worth less than what it cost to make it.
There's an arbitrary characteristic to art pricing, but the item made is an example of traditional wealth.
Investors seemed to be hitting on this back before the housing bubble. For a while there, more and more fine art was selling well. Rich people were using them as investments. Admittedly, it was the Big Name art that was moving for outrageous prices. Yet, as a normal commodity, the value of art is somewhere between what the buyer was willing to pay and what the maker was willing to spend on it.
I mention this because we're in a slump. Big time. You may have noticed.
One of the first things "Hank" Paulson said about this in that interview was that we don't know where the innovation is going to come from.
Well, we can see where it hasn't come from so far. Let's take a look at some of that:
The Economic Stimulus Programs. Not to knock 'em, but I don't know anyone who has been hired as a result of these. I have seen one, count 'em one, job advertisement in my local area that was specifically listed as an economic stimulus package job. It's great that there's one available for somebody, but that doesn't counteract the current or past problems.
Past problems like, hundreds of people laid off before the rich people started losing money on the housing market. By rich people, I mean primarily, large investment banks which are not looking much better than upper class versions of casinos right now.
I haven't checked the odds, but at the observed rate of losses, we might have been better off playing blackjack with the money. Who knows.
The Economic Stimulus Programs. Not to knock 'em, but I don't know anyone who has been hired as a result of these. I have seen one, count 'em one, job advertisement in my local area that was specifically listed as an economic stimulus package job. It's great that there's one available for somebody, but that doesn't counteract the current or past problems.
Past problems like, hundreds of people laid off before the rich people started losing money on the housing market. By rich people, I mean primarily, large investment banks which are not looking much better than upper class versions of casinos right now.
I haven't checked the odds, but at the observed rate of losses, we might have been better off playing blackjack with the money. Who knows.
When the large investment banks started taking heavy losses, trickle down economics kicked in fast. Trickle down economics does work. It seems to be at its most efficient when it comes to passing the buck on paying the bills.
We sometimes say the trickle down effect doesn't work; but, that's primarily when we're discussing the benefit of profits at large. When it comes to losses, it's a rocket ride to the bottom floor.
The stimulus plans simply haven't been able to counteract this. They may be able to cushion it somewhat; but, if The Tooth Fairy did show up with a million bucks tomorrow, minimum wage would go up to a million and a half per hour.
It's just human nature. It's the negative side of what should be, in a balanced market, a healthy form of greed and progress. Greed can be good; it can keep us going. Who doesn't like reward? Too much of it, or too little of it, can be destructive. A stimulus plan won't help us if it's not joined to the concept of noblesse oblige.
The wealthy can help. They can do good, and be noble. Right now, though, many of them look like they are disregarding the whole situation, or are scared, or are interested in exploiting their workers by pressuring them even more. Overall, no big life preserver on the horizon from the upper classes of politics or finance.
I recognize this point strongly because I have received patronage from an important local arts grant program. However, I can't reasonably suppose that such a program, in and of itself, could be effectively mimicked on a wide scale. We'd need such help on a wide scale. Like, lots of cash falling from the sky.
The Existing Surviving Businesses. God help anyone who has kept their day job through all this because have a look at what kind of anxiety just got hitched to the pressure people were under before. They were already doing quite a bit of work as it was; now, many appear to be afraid to lose that work that they have.
Just how anxious? Look at their behavior. It's socio-pathic. I know that's strong: yet, have a look at it. Need an example? Brace for impact. Here it comes:
"Thank you for choosing ___ [Business Name]."
We have otherwise intelligent, full-grown adults who will say this to us every time we walk into that room. Give it a test. See how many retail outlets in your area make their employees do this.
It's crazy behavior.
The Existing Surviving Businesses. God help anyone who has kept their day job through all this because have a look at what kind of anxiety just got hitched to the pressure people were under before. They were already doing quite a bit of work as it was; now, many appear to be afraid to lose that work that they have.
Just how anxious? Look at their behavior. It's socio-pathic. I know that's strong: yet, have a look at it. Need an example? Brace for impact. Here it comes:
"Thank you for choosing ___ [Business Name]."
We have otherwise intelligent, full-grown adults who will say this to us every time we walk into that room. Give it a test. See how many retail outlets in your area make their employees do this.
It's crazy behavior.
It's a widespread crazy behavior, which implies we've got a lot of people who think it's now normal to parrot platitudes as part of normal commerce. 95% of the speakers are probably just saying whatever they have to say to keep their jobs. Yet, who is the financial whiz who believes that polite platitudes figure into economic success, when applied with this breadth and intensity?
We've got the Law of Supply and Demand. Is there a Law of Polite Platitudes to Profit? If there is, we may be inching up on one of its limiting factors: it makes people look crazy and anxious.
Keep in mind, I don't mean someone who says this as a part of normal conversation. Someone somewhere might genuinely mean it. Okay. More power to them.
Thank You for Choosing Insanity
I mean we've got people saying this 200 times a day, even when no speaking at all would be a normal part of human interactions.
Thank you for choosing ____. Thank you for choosing ____. Thank you for choosing ____.
It's corrosive to normal social relationships, and if it happened in any other setting for any other reason, you would probably think that person was crazy.
If you had a roommate who told you, "Thank you for choosing Apartment B-12," every time you walked through the den, after about six hours, you'd want to evict the guy. What kind of crazy person acts this way? And does obsessive amounts of work? People afraid to lose their jobs.
Okay, now, it's not just the craziness of the anxiety that these people are manifesting which makes them an unlikely source of economic recovery. It's the nature of the work that they're doing. Namely: assumption of social stress.
That's right. We don't labor much anymore, do we? We do have some people who labor for a living. We do have some people who refine goods and provide services for a living. Yet, even among those who provide services, and increasingly large portion of the population is not concentrating on the material matter of providing the good or service. Instead, they are employed, at least in part, for the assumption of social stress associated with making that sale.
These people are getting paid to be punching bags.
This doesn't mean that they're getting actively beat up or abused on a day-to-day basis. It does happen, but most of the social stress they're assuming is not a direct assault on them, most of the time. Instead, what they're having to do a lot of is disguise the sale.
Disguising the problems of the sale, even if it is passively disguising it, may make for a happier customer, but it does not increase wealth. At least not when a majority of the economic system involved is about the disguising, the assumption of social stress related to the transactions.
The traditional wealth of the community is still made the same old way: refinement or making of goods and the providing of services.
The disguise jobs are about refining the provision of services. It's another degree removed from traditional wealth. It can help a company that's doing okay do better. Yet, it cannot make something out of nothing.
Making something out of nothing is a point worth concentrating on right now because we don't have a whole lot of cards in our hand. We're low on options. We have to make some options.
Best way to make some options is to make some stuff. Art.
From the perspective of traditional wealth generation, the gambling that Wall Street was doing doesn't make any wealth. It doesn't create anything. It may inflate the cost of something or devalue spending power, but in and of itself, it doesn't make any goods or provide any services. At best, it may refine the providing of services, but that's back to the disguise jobs.
It's our own fault. We let them do whatever they wanted for a long time. Things got out of balance. They went crazy with it; and, we let 'em. Now we have a big crash, and there's an imbalance problem.
What to do about it? Make art.
Economic Leaders Quibbling With Us
Meanwhile, Mister Greenspan went on to say that the recession is over.
Okay, I checked right away. I noticed immediately that nothing seemed to radically improve as he spoke those words. I looked around; I had the same problems I had before he started talking.
If Mr. Greenspan is right, and the recession is over, why aren't things better?
Brace for impact, because here it comes again:
Greenspan was quibbling. Quibbling? That sounds somewhat diminutive. What's quibbling?
Quibbling is when someone tells you a selective truth. Particularly, when someone tells such a narrowly limited, specific, truth for the purpose of skewing an overall judgement and persuading others.
Meanwhile, Mister Greenspan went on to say that the recession is over.
Okay, I checked right away. I noticed immediately that nothing seemed to radically improve as he spoke those words. I looked around; I had the same problems I had before he started talking.
If Mr. Greenspan is right, and the recession is over, why aren't things better?
Brace for impact, because here it comes again:
Greenspan was quibbling. Quibbling? That sounds somewhat diminutive. What's quibbling?
Quibbling is when someone tells you a selective truth. Particularly, when someone tells such a narrowly limited, specific, truth for the purpose of skewing an overall judgement and persuading others.
Army Officers have been admonished to avoid quibbling ever since General MacArthur took control of West Point. While I'm not a big MacArthur fan, he was right about quibbling. In military occupations, quibbling can cause some catastrophic failures; in business it happens all the time, and is normally only an inconvenience.
Yet, Mr. Greenspan's quibbling on Meet the Press is actually some really, really bad news.
The Recession, to people like Mr. Greenspan, is a recess. It's a break in activity; normally, profitable activity. They stopped making profits, so they think, and were eventually forced to admit, that we were in a recession.
A Great Recession, judging by its social impact. We have yet to have anyone adequately explain to us where all these evicted and foreclosed-upon people have gone. After about six hours, they're going to start to want access to another building.
I didn't hear about a big Free Foreclosed-upon Hotel for these people to move into. I imagine it would be about the size of Nebraska, if it existed.
Yet, Mr. Greenspan's quibbling on Meet the Press is actually some really, really bad news.
The Recession, to people like Mr. Greenspan, is a recess. It's a break in activity; normally, profitable activity. They stopped making profits, so they think, and were eventually forced to admit, that we were in a recession.
A Great Recession, judging by its social impact. We have yet to have anyone adequately explain to us where all these evicted and foreclosed-upon people have gone. After about six hours, they're going to start to want access to another building.
I didn't hear about a big Free Foreclosed-upon Hotel for these people to move into. I imagine it would be about the size of Nebraska, if it existed.
For normal people, "The Recession" as a phrase means bankrupt, economic hell. To businessmen, a recession means a state of taking a break from profits. Uh-oh. We're not speaking the same language. And, the leaders of business are not speaking a language that even begins to imply that they have any interest in doing anything but making profits for themselves. We've got to get the whole town out of the slump. Making profits for the leaders is not, by itself, good enough.
So, Recess is over, for our investment gamblers. What does that mean?
Well, dramatic ethical overhaul didn't seem to be on the top of their to-do list before, and it doesn't seem to be now. So, if their recess is over, and their profits have resumed, and there have been no major changes, just what are they up to?
The same stuff that got us in this mess, all over again.
In which case Mr. Greenspan's statement, "The recession is over," is not real good news. It is, instead, a dramatic and horrifying warning that we are making the situation worse, not better. If we are doing the same bad stuff that we were doing before, and all of that just got lots of people thrown out of their jobs and evicted, doing more of that is some real bad news!
Companies are profitable again, right? All of those laid off people didn't get brought back, did they? No. They're still out of work. Those foreclosed properties did not magically fill up overnight with successful and strong businesses.
So, we have the same set of aggressive and negative conditions, but we're forcing profit out of it again. This is real bad news. It implies fragility. It's like a broken beam that was pressed before, but which is now being stretched: some of the flavor of the force might have changed, but it's still a broken part that's being used under great strain.
So, Recess is over, for our investment gamblers. What does that mean?
Well, dramatic ethical overhaul didn't seem to be on the top of their to-do list before, and it doesn't seem to be now. So, if their recess is over, and their profits have resumed, and there have been no major changes, just what are they up to?
The same stuff that got us in this mess, all over again.
In which case Mr. Greenspan's statement, "The recession is over," is not real good news. It is, instead, a dramatic and horrifying warning that we are making the situation worse, not better. If we are doing the same bad stuff that we were doing before, and all of that just got lots of people thrown out of their jobs and evicted, doing more of that is some real bad news!
Companies are profitable again, right? All of those laid off people didn't get brought back, did they? No. They're still out of work. Those foreclosed properties did not magically fill up overnight with successful and strong businesses.
So, we have the same set of aggressive and negative conditions, but we're forcing profit out of it again. This is real bad news. It implies fragility. It's like a broken beam that was pressed before, but which is now being stretched: some of the flavor of the force might have changed, but it's still a broken part that's being used under great strain.
Yet, We Have the Tools to Save Ourselves
Meanwhile, we don't see any increase in the good stuff that will help us to power through the tough times.
You can tell me all about invest in this or invest in that, but artists know: we've got two main tools at our disposal: the toolbox and small savings. That's it.
Everyone's willing to help us if we have another $1000 to spend. Not much to blame about there, but that only goes so far: like, until you run out of thousands. What's left is the toolbox.
And, okay, here's the blessing:
Using the toolbox is something you can do without Wall Street's blessing.
You don't need someone big to descend from the heavens and fix all of your problems if there is something you can fix or do yourself. Chances are, there's something you can do or make with what you have already on hand which is just as good as what anyone else would do or make. Maybe better.
Do that. Make that.
You yourself won't save your community this way. Look around. How many other people are just like yourself, with respect to those making capabilities? Everyone has their own talents, of course; but, look at who can make something. Pretty much everyone can.
It's not going to turn Chairman Mao's Cultural Revolution into a good idea for America, but it could sustain an arts revolution in your hometown which can keep something moving.
What looked worthless before, that starving artist's work, is traditional wealth. Nationally, we need to build up that traditional wealth base as much as possible as part of fixing our way out of this mess.
You don't have to be a fine artist. You don't have to be a great artist. If you are a doer or a maker, you are an artist. Create some traditional wealth. Make something. Sell something. Buy local art. Sell local art. Don't wait on a rescue.
If you'll excuse me, I have to fix up some photo fixer.
If you'll excuse me, I have to fix up some photo fixer.
# # #
References:
Meet the Press Transcript: http://www.msnbc.msn.com/id/35270673/ns/meet_the_press/page/3/
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