I was listening to the Dodgers post-game show on the radio last Sunday. Charlie Steiner and Rick Monday were talking about how hard it is for young pitchers to make it in the Major Leagues.
“It’s not about talent,” Monday said. “Because if they didn’t have talent they wouldn't have got to the Big Leagues to begin with.”
“Right,” Steiner agreed.
“At every stage on the way up, these players face the very best hitters. From Little League to Pony League, college ball and into the minors – Single A, Double A, Triple A. At each stage, EVERY guy they’re facing is like the VERY BEST guys they faced at the stage before. “
“And they keep moving up.”
“So when they get to the Big Leagues ….”
“The best of the best.”
“Sure. But my point is, in the end, whether you succeed isn’t really about that. Are there differences in ability? Of course. And there are other factors as well – injuries and so on, but I’m not talking about that.”
“No.”
“The point is, that no matter how good you are, you can’t strike everybody out. You have to rely on your teammates. And you’re going to have bad days. And you’re going to make mistakes. Batters are going get hits and score runs and on many days, YOU ARE GOING TO LOSE."
“Baseball is a game of failure.”
“It is. Sooner or later, it comes to everyone. And the point is, you have to learn to deal with that. What I'm saying is, in the end, that’s what separates the players who make it in the big leagues from the players who don’t. You’ve got to learn how to deal with failure. And coaches need to teach young players that.”
* * *
I was listening to this, and at first I was thinking it was just another baseball platitude. But then it suddenly jumped out at me how deep and true it was.
Because when you think about it, life is a game of failure, too.
Whether you operate in the creative realm, the business realm, in government, the military, the academy, failure is a lot more common than success. And the more ambitious the things you undertake, the more likely you are to lose. So, in a sense, your ability to deal with failure is a pretty good measure of the upward limit of your success.
If this is true in worldly endeavor, it is even truer on the spiritual path.
When we enter the spiritual life, whether we know it or not, we begin a journey upstream, against the current of our habits and tendencies, even against the natural direction of our energy and attention, which is accustomed to flow outward, while we seek to direct it inside.
In the first few years, the momentum of our enthusiasm operates to overcome our habits. But those habits are not gone. They are only superseded temporarily. As the enthusiasm inevitably recedes, they begin to reassert themselves. And when this happens, we begin to wonder if our spiritual efforts have accomplished anything at all. Old ways of thinking and acting – ways we thought we had changed – are still there, impossible to ignore. The energy we were trying to redirect inside is still going outside, the same as before. When we sit to meditate, we often seem to get little or no results. In short, it appears we are failures, that our years – perhaps decades – of self-discipline have been wasted. And we have to find a way to deal with that. Because if we don’t, our spiritual life will be over. We will have defined the upward limit of our spiritual success.
So how do we deal with failure?
I don’t know about baseball, but from a spiritual perspective, what helps me is an understanding of the ROLE that failure has on the spiritual path. I remember on one occasion, I was very depressed about some failure or other, and I was pouring out my heart to God about it when I found the following thought powerfully imprinted in my mind:
“And how shall I teach you humility? Through an unbroken string of successes?”
That thought changed my life. Because when I reflected on it, I realized that success --exhilarating though it is -- has never taught me anything. It has only been through failure that I have learned. So it is failure, and not success, that is our spiritual friend. Failure teaches us the things we need to change; failure shows us our weaknesses; failure shows us the limitations inherent in egoity and physical life.
Above all, failure teaches us to surrender our will to God, because in the end, the manifestation of God's will is the very definition of success.
Thursday, May 14, 2009
Thursday, April 30, 2009
TOXIC ASSETS
In 1960, a psychologist by the name of Walter Mischel tested a group of four-year olds at Stanford University. The kids were each given a marshmallow. They were told they could eat the marshmallow right away if they wanted, or they could wait 20 minutes. If they ate it right away, that would be the end of it, but if they waited, they would get another marshmallow. As you’d expect, some of the kids ate the marshmallow right away, and some of the kids waited. The interesting thing is, the researchers followed both groups through high school. It turned out that the kids who waited to eat the marshmallows tended to be better adjusted and more dependable than the kids who ate them right away (as determined by surveys of parents and teachers). They also scored an average of 210 points higher on their Scholastic Aptitude Tests.
A baby cries when it’s hungry, fidgets when it’s uncomfortable, and urinates when pressure builds in the bladder. As it matures, it learns to control these responses. If it didn't, it would have a hard time functioning in the world. The ability to endure discomfort and delay gratification is essential for all productive endeavor – from baking a cake to buying a home to writing a book. It is a measure of our ability to exercise free will, plan for the future, act like adults. Or not.
Most who are reading this post no doubt believe in linear evolution: man has evolved in steady progression from ape to his present exalted, rational state. This belief is false – and it is a measure of our present limitations that we’re unable to realize it. According to our present belief, electricity was “discovered” 400 years ago and atomic energy only within the last century. But this belief ignores the fact that Thales of Miletus described electric phenomena 600 year before Christ, and an atomic theory far more profound than our own can be found in the Vedas thousand of years before that. A Golden Age is described in the mythology of every ancient culture. If we find no artifacts, it is because the people of that Age had no need to create them. After all, books are for those who cannot remember; computers are for those who cannot compute; roads, bridges and airports are for those who need to drag the body hither and yon.
What is true of mentality is also true of emotion. Sorry to say, in the present age, we are not emotionally mature. In fact, we are just now entering what I would call an Age of Adolescence. According to the Oxford English Dictionary, the word “teen-ager” didn’t even exist until 1941, and teenage culture didn’t really arrive until well after the end of the Second World War. In adolescence, we blithely disregard the wisdom of the ages, because we are convinced we can do things better on our own. We indulge ourselves because we can. And when the consequences of our indulgence come, we find a way to blame someone else.
Sound familiar?
Actually, as I said, the Age of Adolescence is still arriving. Some have entered it and some have not. Those who have not are still passing through an Age of Childhood. In childhood, we delay gratification not because we genuinely appreciate the benefits of self-control, but because an authority figure told us to. Unfortunately, whether the authority figure is a church, a parent, or someone else whose values we have internalized, those values are not truly our own. So we’re not really sure they’ll work for us. We’re not really sure there’s a gain in the pain; that delaying gratification will pay off. So when we see other people indulging themselves and seeming to “get away with it”, we become outraged. We want to run to Mommy and tell her, so they can be punished. We want them to suffer as we are suffering in proscriptive self-denial.
This is the source of the famous “culture wars”.
For the few who have escaped adolescence into adulthood (however tentative and precarious), the culture wars do not exist. From a personal perspective, they are content to let the adolescents do what they will because the adults are secure in their own values. Unfortunately for the adults, however, when a vast majority of the planetary inhabitants are adolescents, the world will suffer the consequences of adolescent actions, and the adults along with it.
The world functions according to laws, and that includes the laws of economics. There is a price to be paid for instant gratification. And we are now embarked upon the process of paying that price (though most of us don't yet know it).
The law is, that if we want something, we have to exert the energy and will to acquire it. In a money economy, this means we have to pay for it. Since we are unwilling to live according to this law, we have invented the institution of credit. If we want something now but can’t pay for it, we find somebody who can, and we sell ourselves into indentured servitude to get what we want. In return for the extension of credit, we agree to pay the lender not only the amount advanced, but a consideration of forbearance, called interest, which ultimately increases the amount of work we must do to get what we want.
The level of a debt in a country can be viewed as a measure of its citizens’ collective inability to delay their gratification. By that measure, we Americans have the lowest level of self-control in the world.
In 2005, the personal savings rate in the United States fell below zero. Since then, it’s been bumping along below 1%. In the first quarter of 2008, Americans earned a little under $12 trillion and spent pretty nearly every penny.
Given that America is a democracy, it should come as no surprise that the American government, as representative of its people, also lacks the will to curb its spending. According to the numbers commonly reported in the press, in the last half-dozen years, the government has been spending more than it takes in to the tune of several hundreds of billions a year. Unfortunately, the numbers reported in the press don’t tell the whole story.
Though most people don’t know it, the U.S. Treasury is required by law to publish annual financial statements prepared in accordance with generally accepted accounting principles (GAAP). These statements are prepared in exactly the same way publicly traded business corporations are required to prepare their statements by law. The numbers are hard to find, however, and never disclosed in press releases or other public reports.
The GAAP statements show that the federal government’s annual fiscal deficit is about TEN TIMES HIGHER than commonly reported – averaging $4.6 trillion (thousand billion) dollars each year for the six years through 2007. In fact, so out-of-control are governmental expenditures at this point, that were the government to raise taxes to 100% of all wages, salaries and corporate profits, it still wouldn’t be able to cover its expenditures on an accrual basis.
Yet somehow or other, all of this must -- and will -- be repaid.
The created universe may be conceived as a vast sphere comprised of an invisible etheric medium that radiates outward in all directions the magnetic waves of thought and action generated at each point within itself. As these waves of causation ripple from their points of origin, they necessarily encounter other waves, creating complex patterns of interference, changing their appearance and direction. Nevertheless, the sphere is a closed system. Therefore, each causative charge originating within it inevitably returns as effect to its point of origin.
In the created universe, there is no cause without effect and no effect without cause. The very notion of it is ridiculous because the cause contains the effect within it. Nevertheless, in the realm of men, we continuously think and act as though we can get away with something. We buy things on credit, then wonder why we feel stressed out. We drink and wonder why we feel hung over; we overeat and wonder why we have indigestion; we over indulge in sex and wonder why our nerves are on edge. We lie, cheat, steal, and injure our neighbors, then express outrage and amazement when the same sort of thing is done to us.
Since we don’t want to acknowledge the real cause of our problems, we take a pill and assign the whole bloody mess to subconsciousness. When the pill wears off or the side-effects kick in, we run to the doctor for a stronger pill, or perhaps we dive into another round of self-indulgence to ease the pain or temporarily forget. But as ingenious as we may be in our ignorance, we cannot fail to suffer the consequences of what we have done.
The older I get, the more I mistrust the intellect. It's not bad in itself, of course; it can be used for good or ill, like a knife. It can cut a prisoner’s bonds or it can cut his throat. In itself, the intellect has no judgment. It can be used to solve problems or sell condoms, to build bridges or prisons, to develop cures for disease or weapons that wipe out the human race. The intellect can do all of these with equal efficiency, duly noting the benefits and costs (and, in the economic realm, duly including them in Gross Domestic Product). The intellect is like a knife, and in this age, we have honed that knife to a sharp edge. Unfortunately, we have yet to develop the vision and self control to use it properly. Therefore, we will suffer.
There is a law of reciprocity embedded in the geometry of the universe. It cannot be avoided. It cannot be gamed. It cannot be spun. It cannot be danced around. Until we acknowledge the inevitability of that law, until we use our intellect in accordance with that law, our intellects are not just useless.
They’re toxic assets.
A baby cries when it’s hungry, fidgets when it’s uncomfortable, and urinates when pressure builds in the bladder. As it matures, it learns to control these responses. If it didn't, it would have a hard time functioning in the world. The ability to endure discomfort and delay gratification is essential for all productive endeavor – from baking a cake to buying a home to writing a book. It is a measure of our ability to exercise free will, plan for the future, act like adults. Or not.
Most who are reading this post no doubt believe in linear evolution: man has evolved in steady progression from ape to his present exalted, rational state. This belief is false – and it is a measure of our present limitations that we’re unable to realize it. According to our present belief, electricity was “discovered” 400 years ago and atomic energy only within the last century. But this belief ignores the fact that Thales of Miletus described electric phenomena 600 year before Christ, and an atomic theory far more profound than our own can be found in the Vedas thousand of years before that. A Golden Age is described in the mythology of every ancient culture. If we find no artifacts, it is because the people of that Age had no need to create them. After all, books are for those who cannot remember; computers are for those who cannot compute; roads, bridges and airports are for those who need to drag the body hither and yon.
What is true of mentality is also true of emotion. Sorry to say, in the present age, we are not emotionally mature. In fact, we are just now entering what I would call an Age of Adolescence. According to the Oxford English Dictionary, the word “teen-ager” didn’t even exist until 1941, and teenage culture didn’t really arrive until well after the end of the Second World War. In adolescence, we blithely disregard the wisdom of the ages, because we are convinced we can do things better on our own. We indulge ourselves because we can. And when the consequences of our indulgence come, we find a way to blame someone else.
Sound familiar?
Actually, as I said, the Age of Adolescence is still arriving. Some have entered it and some have not. Those who have not are still passing through an Age of Childhood. In childhood, we delay gratification not because we genuinely appreciate the benefits of self-control, but because an authority figure told us to. Unfortunately, whether the authority figure is a church, a parent, or someone else whose values we have internalized, those values are not truly our own. So we’re not really sure they’ll work for us. We’re not really sure there’s a gain in the pain; that delaying gratification will pay off. So when we see other people indulging themselves and seeming to “get away with it”, we become outraged. We want to run to Mommy and tell her, so they can be punished. We want them to suffer as we are suffering in proscriptive self-denial.
This is the source of the famous “culture wars”.
For the few who have escaped adolescence into adulthood (however tentative and precarious), the culture wars do not exist. From a personal perspective, they are content to let the adolescents do what they will because the adults are secure in their own values. Unfortunately for the adults, however, when a vast majority of the planetary inhabitants are adolescents, the world will suffer the consequences of adolescent actions, and the adults along with it.
The world functions according to laws, and that includes the laws of economics. There is a price to be paid for instant gratification. And we are now embarked upon the process of paying that price (though most of us don't yet know it).
The law is, that if we want something, we have to exert the energy and will to acquire it. In a money economy, this means we have to pay for it. Since we are unwilling to live according to this law, we have invented the institution of credit. If we want something now but can’t pay for it, we find somebody who can, and we sell ourselves into indentured servitude to get what we want. In return for the extension of credit, we agree to pay the lender not only the amount advanced, but a consideration of forbearance, called interest, which ultimately increases the amount of work we must do to get what we want.
The level of a debt in a country can be viewed as a measure of its citizens’ collective inability to delay their gratification. By that measure, we Americans have the lowest level of self-control in the world.
In 2005, the personal savings rate in the United States fell below zero. Since then, it’s been bumping along below 1%. In the first quarter of 2008, Americans earned a little under $12 trillion and spent pretty nearly every penny.
Given that America is a democracy, it should come as no surprise that the American government, as representative of its people, also lacks the will to curb its spending. According to the numbers commonly reported in the press, in the last half-dozen years, the government has been spending more than it takes in to the tune of several hundreds of billions a year. Unfortunately, the numbers reported in the press don’t tell the whole story.
Though most people don’t know it, the U.S. Treasury is required by law to publish annual financial statements prepared in accordance with generally accepted accounting principles (GAAP). These statements are prepared in exactly the same way publicly traded business corporations are required to prepare their statements by law. The numbers are hard to find, however, and never disclosed in press releases or other public reports.
The GAAP statements show that the federal government’s annual fiscal deficit is about TEN TIMES HIGHER than commonly reported – averaging $4.6 trillion (thousand billion) dollars each year for the six years through 2007. In fact, so out-of-control are governmental expenditures at this point, that were the government to raise taxes to 100% of all wages, salaries and corporate profits, it still wouldn’t be able to cover its expenditures on an accrual basis.
Yet somehow or other, all of this must -- and will -- be repaid.
The created universe may be conceived as a vast sphere comprised of an invisible etheric medium that radiates outward in all directions the magnetic waves of thought and action generated at each point within itself. As these waves of causation ripple from their points of origin, they necessarily encounter other waves, creating complex patterns of interference, changing their appearance and direction. Nevertheless, the sphere is a closed system. Therefore, each causative charge originating within it inevitably returns as effect to its point of origin.
In the created universe, there is no cause without effect and no effect without cause. The very notion of it is ridiculous because the cause contains the effect within it. Nevertheless, in the realm of men, we continuously think and act as though we can get away with something. We buy things on credit, then wonder why we feel stressed out. We drink and wonder why we feel hung over; we overeat and wonder why we have indigestion; we over indulge in sex and wonder why our nerves are on edge. We lie, cheat, steal, and injure our neighbors, then express outrage and amazement when the same sort of thing is done to us.
Since we don’t want to acknowledge the real cause of our problems, we take a pill and assign the whole bloody mess to subconsciousness. When the pill wears off or the side-effects kick in, we run to the doctor for a stronger pill, or perhaps we dive into another round of self-indulgence to ease the pain or temporarily forget. But as ingenious as we may be in our ignorance, we cannot fail to suffer the consequences of what we have done.
The older I get, the more I mistrust the intellect. It's not bad in itself, of course; it can be used for good or ill, like a knife. It can cut a prisoner’s bonds or it can cut his throat. In itself, the intellect has no judgment. It can be used to solve problems or sell condoms, to build bridges or prisons, to develop cures for disease or weapons that wipe out the human race. The intellect can do all of these with equal efficiency, duly noting the benefits and costs (and, in the economic realm, duly including them in Gross Domestic Product). The intellect is like a knife, and in this age, we have honed that knife to a sharp edge. Unfortunately, we have yet to develop the vision and self control to use it properly. Therefore, we will suffer.
There is a law of reciprocity embedded in the geometry of the universe. It cannot be avoided. It cannot be gamed. It cannot be spun. It cannot be danced around. Until we acknowledge the inevitability of that law, until we use our intellect in accordance with that law, our intellects are not just useless.
They’re toxic assets.
Monday, April 13, 2009
A JOURNEY TO SAANEN
In the summer of 1971, I went to see Jiddu Krishnamurti at Saanen.
 |
| Saanen Valley, Switzerland |
Through the lens of memory, I see a train pulling into a picture postcard Swiss valley, sloping to steep grassy hills, and tree clad mountains beyond. Walking from the station through a quaint village, the afternoon is radiant, the landscape painted in vivid greens, the sky a brilliant blue, dotted with puffy clouds of the purest white.
In the campground, strolling past rows of comfortable looking tents, I find a spot by the river. There I unroll my sleeping bag and tie my humble tarpaulin to a tree – more fitting than a tent, it seems to me, for a serious seeker after truth. And that is how I see myself in these halcyon days: a seeker, a wanderer, owning nothing he does not carry on his back; one who has paid the price, renounced the world in quest of something higher. There is more than a little pride in this, though it is utterly invisible to me, safely hidden behind the wall of my identity. If it is true that a little knowledge is a dangerous thing, then I am a dangerous man.
* * *
“Shaeffer ....” A voice floats into the cluttered room. I look up.It is March, 1971, I’m sitting in the Editors’ Room at Gannett House, Harvard Law School, reading the New York Times. There is a saying at the law school in those days: “The first year they scare you to death, the second year, they work you to death, the third year they bore you to death.” The saying has come from simpler times.
“Telephone.”
In the Spring of 1971:
- Alan Shepard is hitting golf balls on the moon.
- The Manson family is on trial in sunny California.
- The Weather Underground is bombing public buildings (most recently a men’s lavatory at the U.S. Capitol).
- Nixon is trying out dirty tricks for his reelection campaign.
- Second Lieutenant William L. Calley, Jr. is on trial for the massacre of 500 civilians at My Lai Village.
I have made myself something of an expert on such things in March of 1971. My Lai is the focus of my senior thesis, dealing with chain of command responsibility for human rights violations. Not that I’ll have more than theoretical involvement with the issue myself. In the year prior, after years of successful angling for draft deferments, I crap out in the lottery. I get called in for my physical at the Boston Navy Yard where, to my shock, awe and amazement, I am found physically unfit to die for my country – leaving me free to practice law in safe and righteous indignation.
“Hank?”
“Yeah.”
“Tom Harper.” (not his real name)
"Harper?" Why on earth would Harper call me? I hardly know the guy. Yeah, he had my job at the Review a year earlier, but he's long gone ... clerking for a big time judge on the D.C. Circuit.
“Listen,” Parker goes on, “I heard you don’t have anything lined up for next year. Is that true?”
It’s common knowledge I’m not interviewing, on a sure and certain course for near term career destruction. I assume Harper knows this, so I don’t deny it.
“Here’s the thing,” he says. “The Judge finished his last interview this morning, and he’s less than underwhelmed with the material. I told him about you, and he said to get you down here.”
“You told him about me?” Again, a disconnect. Around here, I am the enfant terrible.
“Can you get on a plane this afternoon?”
“This afternoon?”
“If you're going to repeat everything I tell you, this going to take more time than I have. Yeah, this afternoon. Now or never. Look, I don’t know if anybody told you, but I’m moving over to the Court starting Fall Term and I’m already under water --”
"Court" meant the Supreme Court. “Oh, right, congratulations ....” my voice trailed off.
“Yeah, well the thing is, I can’t promise .... What I'm saying is, if get your ass down here, there’s a good chance, the job is yours.”
* * *
At the time, I wasn't interested in spiritual things at all . I was interested in psychotherapy, and particuarly the Gestalt Therapy of Fritz Perls:
My sentiments at the time, exactly.I do my thing and you do your thing.I am not in this world to live up to your expectations,And you are not in this world to live up to mine.You are you, and I am I,And if by chance we find each other, it’s beautiful.If not, it can’t be helped.
 |
| Jiddu Krishnamurti |
I had also been exposed to Rinzai Zen, with its iconoclastic meditation koans. (What is the sound of one hand clapping?) Krishnamurti was different.
A guy I knew from a therapy group gave me a book called, “Freedom from the Known”. It started out this way
"Man has always asked the question: what is it all about? Has life any meaning at all? He sees the enormous confusion of life, the brutalities, the revolt, the wars, the endless divisions of religion, ideology and nationality, and with a sense of deep abiding frustration he asks, what is one to do, what is this thing we call living, is there anything beyond it?"
- "We human beings are what we have been for millions of years – colossally greedy, envious, aggressive, jealous, anxious and despairing, with occasional flashes of joy and affection. ... There has been outward progress from the bullock cart to the jet plane but psychologically the individual has not changed at all, and the structure of society throughout the world has been created by individuals."
- "For centuries we have been spoon-fed by our teachers, by our authorities, by our books, our saints. We live on words and our life is shallow and empty. We are secondhand people. … The question of whether or not there is a God or truth or reality, or whatever you like to call it, can never be answered by books, by priests, philosophers or saviors. Nobody and nothing can answer the question but you yourself and that is why you must know yourself."
At first, “know yourself” seemed a bit hackneyed. Inscribed at Delphi, that sort of thing. But Krishnamurti gave it a meaning. As I understood it, the idea was somewhat akin to what the Buddhists called “mindfulness,” – observing the thoughts and emotions in ordinary daily activities, and doing this without any sort of naming or judgment.
"Most of us walk through life inattentively, reacting unthinkingly according to the environment in which we have been brought up, and such reactions create only further bondage, further conditioning, but the moment you give your total attention to your conditioning you will see that you are free from the past completely, that it falls away from you naturally."
Freedom from conditioning – freedom from family, education, culture; freedom from authority, freedom from professors, from precedent, from the establishment; freedom from conflict, freedom from conformity, freedom from fear. Looking back, I am not so much struck by the word, “freedom” as the word, “from”. I was young, I suppose, and more concerned with what I was NOT than what I WAS. I didn’t know how I was going to live my life, but I did know what I was NOT going to do. I was NOT going to wind up like that Wall Street lawyer, looking back on my time at the Law Review as the best years of my life.
I began to form a vague idea in my mind that after graduation I could visit Krishnamurti in Saanen, but it was only when Harper called that day and I saw a fork in the road, that I realized I was actually going to do it.
* * *
- “You say that you are seeking? But who is seeking? You say you are seeking freedom from the self. But who is the seeker if not the self? Whatever you are doing to free yourself from the self is the self. How can I make you understand this simple thing?”
Silence.
“Then what … what is the way? How can we ….?”
“How can we do it? What is the ‘way’? What is the ‘method’? The hows, the ways, the methods, these things are the ideas, the divisions that separate you from life. And they will remain as long as you think that there can be answers given by others – by me, by Buddha, by Jiddu Krishnamurti. But these are not answers; if they were answers, they would destroy the questions, yet the questions remain. And why do they remain? They remain because you are the question. Because you are the seeker. And the seeker must have a quest. He must have questions or he will cease to exist. But the seeker wants to seek, wants to exist. The questions are nothing but your self. Self-realization – if there is such a thing – can only be the perception that there is, in fact, no self to be realized.”
- “Jiddu Krishnamurti says that by watching the process of thought, the thinking will come to an end, and in that process there is a freedom ….”
He laughs. “So thought divides itself? The thought that is 'you' watches the thought that 'you' are thinking? Really, are there two thoughts, or one thought? And what creates the apparent division between 'you' and your thought? Is not the division created by thought itself? The thought of mortality creates the thought of immortality. The thought of the known creates the thought of the unknown. The thought of time creates the timeless. The thought of thought creates the thoughtless.”
“Then what are we to do?”
“You are asking me what you are to do?” U.G. laughs again, this time as though this was the funniest thing he has ever heard. “Please! Anything I say will only add to your misery. Go home, please! Stop listening! You only add more misery to the misery you already have by listening to me.”
He shakes his head. “You see, my motive for talking is not what you think. I am not eager to help you understand. Not at all. I am only interested in making it crystal clear that there is nothing you can get from me. Only if you reject all the paths can you discover the path which is your own path. You are not ready to accept the fact that you have to give up – a complete and total surrender. You must arrive at a state of hopelessness in which there is no way out, nowhere to go .... You must realize that any movement in any direction, on any dimension, at any level, only takes you away from yourself...”
He points to a tree, where the leaves are rustling in the breeze, catching the light of the late afternoon sun. “All you want, any of you here, is to tremble like the leaf on that tree. Who can give that to you? Can I give it to you? Can anyone?”
I am gazing at the leaves on that tree.
Then, for a moment, I look at U.G.
And I am gone ....
* * *
Thank God, no more.
U.G. was right. Seeking, striving, the guru, the journey, the path, even the truth -- are unreal. Just as the mind itself, is unreal. Just as time and space -- and the particles of individual existence -- are unreal. But once individual existence is accepted, they're all, also equally real.
U.G. went the way of wisdom. And wisdom must deny the reality of creation from the start. But I had not the fortitude for that. When the rains came, I needed the sun.
Yet luckily for me, there is another way: a way that proceeds through creation, down a path created along with the world itself, and as real, and unreal, as the world is. This is the path of seeking and striving, the guru, the journey, and yes, the truth. This is the path that expands the heart before dissolving it. Through family and community, through nationality and humanity, through the husband and the wife and the parents and the children and the dog, finally, through the guru. This is the path that reaches detachment not through a blinding flash of intuition, but through daily tests and trials and disillusionments.
This is the Journey to Saanen; indeed, the journey to anywhere. As real and unreal, as you are, and --
I am.
Thursday, March 12, 2009
THE EVOLUTION OF MORALITY
All created beings face a fundamentally untenable situation. They arrive, more or less helpless, in a hostile world, teeming with creatures – plants, animals, bacterial and viral microorganisms – struggling to survive, at times symbiotically, but more often at each others’ expense. Somehow, through a series of harrowing and precarcious experiences, they gradually improve the skills they need to survive, until at last they arrive at maturity. Then, regardless of how skillful they have become at survival, they reach the predefined terminus of their existence, at which point they die (often after a debilitating final illness).
I would emphasize that this is the fate of ALL created beings, not just humans. But humans have the additional characteristic that they are able to perceive, ponder and fret about their existential situation. This ability allows them to anticipate and alter to some extent the natural course of events, thereby averting an occasional disaster, but it also adds a serious potential for anxiety and frustration. After all, if the human condition is fundamentally untenable, we cannot expect the human reaction to it to be altogether positive.
In fact, given the appearance of the human situation, it’s surprising that mankind as a whole has not embraced a philosophy of egotism, conflict, sensory indulgence, abject despair, or some combination of the foregoing. But while there have been periodic forays in these directions, the overwhelming philosophical response has been quite the reverse. Whether it is the categorical imperative of Immanuel Kant, the Four Noble States of the Buddha, or “Love thy neighbor as thyself” as taught by Jesus Christ, the dominant morality of mankind has always been one of unselfishness. Against the apparent odds, mankind has embraced, almost without exception, a morality of love, compassion and self-sacrifice, even though a majority has rarely been able to turn this philosophy into action.
Of course, there is a reason for all this, as readers of this blog will already surmise. Neither mankind’s untenable situation nor the content of his morality is a result of chance, nor is either a product of the human mind. Rather, both are parts of the drama through which consciousness evolves from identification with the particular (i.e., each of the various particles of creation) to the universal (i.e., the universe, creation as a whole). Egotism, conflict, selfishness and despair all express the viewpoint of the particular which is born, grows, changes and dies. Unselfishness, love, compassion, and patience express the viewpoint of the universal, which is changeless and eternal. That these find themselves in conflict is no accident, as the struggle of consciousness to lift itself from the individual to the universal is the fundamental drama of creation.
Another of creation’s dramas is, of course, the cycles by which mental capacity is elevated and debased as the planets revolve around their stars, stars revolve around each other, and their galaxies revolve around the grand center of the universe (known in Sanskrit as vishnunabhi – the energetic source of the created worlds). In ascending ages (like the present one) as our earth approaches the grand center, the mental power of man gradually increases. He discovers new materials, new sources of energy, new technologies. Of course, none of these is really new. The materials and energies and ideas have been there all along. The only thing that has changed is man’s ability to cognize and utilize them.
As the mental capacity increases, the power to effect change increases along with it – and this can be good or bad. You can make a heart valve or a Big Gulp out of plastic. An internal combustion engine can run a battle tank or an irrigation pump. You can use atomic energy to light a city or to blow it up. It is only the evolution of morality that can keep the abuse of mental capacity in check. If morality does not keep pace with mental power, what results is rampant selfishness, sexual indulgence, drug abuse, disintegration of the family, political and social conflict, war, environmental degradation, increasing disparity of wealth, decreasing quality of life. In other words … the world we see today.
But once again, this is the drama. Man has free choice. He can control himself or not; he can compete, he can cheat, he can fight, or he can cooperate for the common good.
And on the brighter side, everything in the universe is ultimately self-regulating. If man does not choose to control himself, he will kill himself – or at least, kill a sufficient number of his species that its effects on the system will be reduced to manageable proportions. It’s important to note that it is not the universal intelligence that will destroy mankind. It is mankind that will do it. The universal intelligence is infinitely patient, kind, compassionate and loving. These are the qualities that uphold the universe. But it is the universe they uphold. They do not uphold any species that chooses to ignore them.
I would emphasize that this is the fate of ALL created beings, not just humans. But humans have the additional characteristic that they are able to perceive, ponder and fret about their existential situation. This ability allows them to anticipate and alter to some extent the natural course of events, thereby averting an occasional disaster, but it also adds a serious potential for anxiety and frustration. After all, if the human condition is fundamentally untenable, we cannot expect the human reaction to it to be altogether positive.
In fact, given the appearance of the human situation, it’s surprising that mankind as a whole has not embraced a philosophy of egotism, conflict, sensory indulgence, abject despair, or some combination of the foregoing. But while there have been periodic forays in these directions, the overwhelming philosophical response has been quite the reverse. Whether it is the categorical imperative of Immanuel Kant, the Four Noble States of the Buddha, or “Love thy neighbor as thyself” as taught by Jesus Christ, the dominant morality of mankind has always been one of unselfishness. Against the apparent odds, mankind has embraced, almost without exception, a morality of love, compassion and self-sacrifice, even though a majority has rarely been able to turn this philosophy into action.
Of course, there is a reason for all this, as readers of this blog will already surmise. Neither mankind’s untenable situation nor the content of his morality is a result of chance, nor is either a product of the human mind. Rather, both are parts of the drama through which consciousness evolves from identification with the particular (i.e., each of the various particles of creation) to the universal (i.e., the universe, creation as a whole). Egotism, conflict, selfishness and despair all express the viewpoint of the particular which is born, grows, changes and dies. Unselfishness, love, compassion, and patience express the viewpoint of the universal, which is changeless and eternal. That these find themselves in conflict is no accident, as the struggle of consciousness to lift itself from the individual to the universal is the fundamental drama of creation.
Another of creation’s dramas is, of course, the cycles by which mental capacity is elevated and debased as the planets revolve around their stars, stars revolve around each other, and their galaxies revolve around the grand center of the universe (known in Sanskrit as vishnunabhi – the energetic source of the created worlds). In ascending ages (like the present one) as our earth approaches the grand center, the mental power of man gradually increases. He discovers new materials, new sources of energy, new technologies. Of course, none of these is really new. The materials and energies and ideas have been there all along. The only thing that has changed is man’s ability to cognize and utilize them.
As the mental capacity increases, the power to effect change increases along with it – and this can be good or bad. You can make a heart valve or a Big Gulp out of plastic. An internal combustion engine can run a battle tank or an irrigation pump. You can use atomic energy to light a city or to blow it up. It is only the evolution of morality that can keep the abuse of mental capacity in check. If morality does not keep pace with mental power, what results is rampant selfishness, sexual indulgence, drug abuse, disintegration of the family, political and social conflict, war, environmental degradation, increasing disparity of wealth, decreasing quality of life. In other words … the world we see today.
But once again, this is the drama. Man has free choice. He can control himself or not; he can compete, he can cheat, he can fight, or he can cooperate for the common good.
And on the brighter side, everything in the universe is ultimately self-regulating. If man does not choose to control himself, he will kill himself – or at least, kill a sufficient number of his species that its effects on the system will be reduced to manageable proportions. It’s important to note that it is not the universal intelligence that will destroy mankind. It is mankind that will do it. The universal intelligence is infinitely patient, kind, compassionate and loving. These are the qualities that uphold the universe. But it is the universe they uphold. They do not uphold any species that chooses to ignore them.
Thursday, March 5, 2009
THE REAL YOU
You were alone. You had been alone. You would be alone always.
Because there was no one else, nothing else. You were all that existed, all that would ever exist.
And you knew it.
There was no time. No change by which to measure it. Nothing to change, no past or future within which change could happen. Only the present.
And there was no space. No separation between and no things to be separated.
And there was no motion. Nothing to move, no dimensions, no acceleration, no velocity.
There was nothing but — you.
You alone. Formless. Complete. Eternal.
Beyond words or thoughts. Beyond concepts, beyond qualities, beyond everything except
Consciousness.
You were conscious. Aware of your existence and your consciousness.
Aware of your immeasurable, unassailable, immaculate, immortal existence. And in that awareness – that perfect clarity, purity, transparency and completeness – you were at peace, utterly content and secure . . . and alone.
It was indescribable, this state of yours. Perfection. It went on forever, and you knew it. Unlimited, unconditioned existence.
For you, no desire, no grasping, no striving. Nothing to attain, or avoid, nothing to want or need or fear. There was only satisfaction, a contentment, a causeless, wholesome, happiness.
You experienced an eternal fulfillment that within the contemplation of itself became a self-renewing, ever-expanding joy ….
And from that joy, something emerged – and eternally emerges – a desireless desire, a selfless urge to share your bounty, your beauty, your limitless, expanding joy. A desire to create a multiplicity of beings to enjoy what you enjoyed.
And so it was that Creation emerged – and emerges forever – from what Hindus call Parambrahma, Christians call Eternal Spirit, and Buddhists call, the Void. And so it is that this little life you think you are living emerges from the vastness, the causeless, featureless essence, that you will eventually discover.
That is the real you.
Because there was no one else, nothing else. You were all that existed, all that would ever exist.
And you knew it.
There was no time. No change by which to measure it. Nothing to change, no past or future within which change could happen. Only the present.
And there was no space. No separation between and no things to be separated.
And there was no motion. Nothing to move, no dimensions, no acceleration, no velocity.
There was nothing but — you.
You alone. Formless. Complete. Eternal.
Beyond words or thoughts. Beyond concepts, beyond qualities, beyond everything except
Consciousness.
You were conscious. Aware of your existence and your consciousness.
Aware of your immeasurable, unassailable, immaculate, immortal existence. And in that awareness – that perfect clarity, purity, transparency and completeness – you were at peace, utterly content and secure . . . and alone.
It was indescribable, this state of yours. Perfection. It went on forever, and you knew it. Unlimited, unconditioned existence.
For you, no desire, no grasping, no striving. Nothing to attain, or avoid, nothing to want or need or fear. There was only satisfaction, a contentment, a causeless, wholesome, happiness.
You experienced an eternal fulfillment that within the contemplation of itself became a self-renewing, ever-expanding joy ….
And from that joy, something emerged – and eternally emerges – a desireless desire, a selfless urge to share your bounty, your beauty, your limitless, expanding joy. A desire to create a multiplicity of beings to enjoy what you enjoyed.
And so it was that Creation emerged – and emerges forever – from what Hindus call Parambrahma, Christians call Eternal Spirit, and Buddhists call, the Void. And so it is that this little life you think you are living emerges from the vastness, the causeless, featureless essence, that you will eventually discover.
That is the real you.
Tuesday, October 21, 2008
AUTHENTICITY
When we have achieved the ability to see ourselves as we are – which is to say, when we have integrated our attachment to being this or that and our fear that we may never achieve it – we no longer need to seek our identity in the mirrors of others peoples' eyes. We KNOW what we are. And when we KNOW what we are, we also know that what other people THINK we are cannot possibly change it. At this point the perceptions of others are reduced to what they really are – the perceptions of others. They are not our SELVES, and they cannot in any way define us. At this point we become authentic. Authenticity leads to peace of mind.
I suspect people in public life have an especially difficult time with authenticity. After all, the very phrase “public life” means, “life in the public eye,” which is another way of saying, “life in the public perception.” People who seek a life in public perception tend not to be very introspective, and it is introspection that leads to authenticity.
This is not an introspective age and we Americans, in particular, aren’t very introspective. We live in the world of matter. We believe in science, the quantifiable, the “objective” – by which we mean, the external. We want our achievements and abilities graded: batting averages, football rankings, opinion polls, report cards, achievement tests, IQs, SAT scores.
Interestingly, this obsession with the external “objective” is the flip side of an internal myopia. The need to see ourselves mirrored in other people’s judgments of our abilities and achievements masks our inability to see the abilities and achievements themselves. Having abandoned our inner life, we have exiled ourselves to worrying about what OTHER people are thinking, rather than what WE are thinking. We spend our lives trying to manage OTHER peoples’ perceptions and expectations, rather than taking time to discover and enjoy the unique, idiosyncratic being WE are EXPRESSING. Make no mistake: inauthenticity is not a respecter of identities. Slavery to the opinions of others manifests equally in the aspiration to be a high school politician, a cheerleader, a bad-boy or a clown. If we are trying to manage other peoples' perceptions, we have not achieved authenticity.
One interesting thing about authenticity is that if we have it, we immediately recognize and appreciate it in others, and if we don’t have it, we don’t recognize or appreciate it at all. That’s because when we are authentic, we see other people as they are. When we are inauthentic, we are so busy trying to figure out what we SHOULD be thinking (because of what OTHER people might think of others and what other people might think of US if we think this or that about others) that we cannot possibly see anyone as they really are. What's possibly even worse, we can't trust what other people tell us, because we aren't sure that if we were in their place we would say something truthful ourselves.
It has become something of a national pass-time among Americans to disparage politicians. Yet the undeniable fact is, America is a democracy and every single politician in America was elected. So sorry as I am to say it, if we Americans want our politicians to be more authentic, we're just going to have to become more authentic ourselves.
I suspect people in public life have an especially difficult time with authenticity. After all, the very phrase “public life” means, “life in the public eye,” which is another way of saying, “life in the public perception.” People who seek a life in public perception tend not to be very introspective, and it is introspection that leads to authenticity.
This is not an introspective age and we Americans, in particular, aren’t very introspective. We live in the world of matter. We believe in science, the quantifiable, the “objective” – by which we mean, the external. We want our achievements and abilities graded: batting averages, football rankings, opinion polls, report cards, achievement tests, IQs, SAT scores.
Interestingly, this obsession with the external “objective” is the flip side of an internal myopia. The need to see ourselves mirrored in other people’s judgments of our abilities and achievements masks our inability to see the abilities and achievements themselves. Having abandoned our inner life, we have exiled ourselves to worrying about what OTHER people are thinking, rather than what WE are thinking. We spend our lives trying to manage OTHER peoples’ perceptions and expectations, rather than taking time to discover and enjoy the unique, idiosyncratic being WE are EXPRESSING. Make no mistake: inauthenticity is not a respecter of identities. Slavery to the opinions of others manifests equally in the aspiration to be a high school politician, a cheerleader, a bad-boy or a clown. If we are trying to manage other peoples' perceptions, we have not achieved authenticity.
One interesting thing about authenticity is that if we have it, we immediately recognize and appreciate it in others, and if we don’t have it, we don’t recognize or appreciate it at all. That’s because when we are authentic, we see other people as they are. When we are inauthentic, we are so busy trying to figure out what we SHOULD be thinking (because of what OTHER people might think of others and what other people might think of US if we think this or that about others) that we cannot possibly see anyone as they really are. What's possibly even worse, we can't trust what other people tell us, because we aren't sure that if we were in their place we would say something truthful ourselves.
It has become something of a national pass-time among Americans to disparage politicians. Yet the undeniable fact is, America is a democracy and every single politician in America was elected. So sorry as I am to say it, if we Americans want our politicians to be more authentic, we're just going to have to become more authentic ourselves.
Friday, October 17, 2008
THE ECONOMIC CRISIS AS METAPHOR
First, the economic truth. The mainstream formulation that lays responsibility for the current economic crisis on excessive debt, or leverage, is only half right, because that debt could not exist without excessive global savings and the misguided government activities that have facilitated and perpetuated it.
Here’s the formula:
— Concentrations of wealth and export driven government policies result in savings that cannot be productively invested
— Savings that cannot be productively invested are unproductively invested , resulting in asset bubbles
— Unproductive investments fail, asset bubbles burst
— Financial intermediaries whose capital is tied up in overpriced assets are threatened with collapse
— Governments intervene to shore up financial intermediaries and purchase overpriced assets
— Assets are reflated, preserving wealth concentrations and excessive savings
— Excessive savings result in new, uneconomic investments
— New asset bubbles inflates, and so on
As noted above, most commentators blame the current situation on excessive debt, and there is a grain of truth in this. If human beings – particularly in the United States – did not want to consume more than can afford, we would not be facing the current problem. Advertising driven consumerism is an inherent aspect of modern American culture. And the apparent inability or unwillingness of many Americans to delay gratification has created an ever-increasing demand for consumer credit. But consumer credit is only a small part of the problem.
It is common knowledge that the United States has become a debtor nation. As widely reported, on September 30, 2008 the federal budget deficit crossed the $10 trillion threshold. But this number doesn’t include Social Security, Medicare, Medicaid and other unfunded obligations. If these unfunded obligations are included – as they are in the Government’s audited statements (which are well hidden, but nevertheless available on the Treasury’s website) the accumulated negative net worth of the federal government is now $59.1 trillion, or about $516,000 per household. Compared with this, the additional $112,000 per household for mortgages, car loans and credit card debt looks small! Nevertheless, all in, the average household debt of $628,000 is more than twelve times median household income ($50,233 as reported by the Census Bureau for 2007).
But this debt could not exist unless someone was willing to lend the money, for the undeniable fact is, every dollar of debt represents a dollar of savings. To the person who borrowed it, it's a debt, but to the person who lent it, it's an asset. And it is actually these assets, and their relentless pursuit of an economic return, that has created the situation in which we find ourselves.
According to the Federal Reserve’s most recent Survey of Consumer Finances, the richest one percent of families in the United States own 34.3% of the nation's net wealth (equivalent to accumulated savings). The top 10% of families own 71%. And the bottom 40% have virtually no savings at all (2/10s of 1% of total wealth to be exact). Concentrations of savings like this have not been seen since in the U.S. since just before the Great Depression.
But dislocation of savings is even more pronounced on an international level. In 2005, Ben Bernanke gave a speech in which he discussed the steep upward trajectory of the U.S. balance of payments deficit (from 1.5% of GDP in 2000 to 5 3/4 % in 2004). He asked the question, “Why is the United States, with the world's largest economy, borrowing heavily on international capital markets – rather than lending, as would seem more natural?” Although most commentators had ascribed the external borrowing to a low domestic savings rate and accompanying U.S. budget deficits, Bernanke didn’t buy it, pointing out that the U.S. current account deficit continued expanding during Clinton’s second term, when the U.S. budget was actually running an aggregate surplus of $300 billion. So if a low savings rate wasn’t the answer, what was? Bernanke’s answer was interesting:
"Although domestic developments have certainly played a role … over the past decade a combination of diverse forces has created a significant increase in the global supply of saving – a global saving glut – which helps to explain both the increase in the U.S. current account deficit and the relatively low level of long-term real interest rates in the world today. … [A]n important source of the global saving glut has been a remarkable reversal in the flows of credit to developing and emerging-market economies, a shift that has transformed those economies from borrowers on international capital markets to large net lenders."
In other words, rather than investing their savings at home, rich people in emerging-market countries were investing them in the United States. And in fact, their governments were facilitating the process by issuing debt and using the proceeds to buy U.S. Treasury securities and other assets “Effectively, governments have acted as financial intermediaries,” according to Bernanke, “channeling domestic saving away from local uses and into international capital markets.” From a governmental perspective, this was done, at least in part, to build up foreign exchange reserves to protect against possible capital outflows. But the fact is, it would not have been done to the extent it was if the power elites in those countries had not wanted to protect their savings.
In any given society at any given time, there are a limited number of investments that will yield an economic return. Exactly what those investments are will depend on the state of economic and technological development in that society at that time, as well as the distribution of wealth and income. When the demand for economic investments (determined by the level of saving) exceeds the supply, the prices of investments are bid up to a point where they no longer yield an economic return. When that happens, savings begin to flow into uneconomic investments.
While this sounds theoretical, if we take a look at what happened in the recent housing bubble, we can clearly see the process at work. As the bubble reached its zenith, the supply of savings flowing into collateralized mortgage obligations had become so great that economic returns could not be provided based on the current incomes of prospective borrowers at all. Rather, loans could be justified only on the assumption that the borrower’s income would increase in the future (so-called Alt A loans) or that the future savings of the borrower – measured in terms of increased asset values – would be depleted to make the payments. This was clearly an extreme situation.
In a free market economy, excess savings are automatically drained out of the system through asset deflation, as investments that do not provide an economic return decline in value. But we do not have a free market economy in the United States. Rather, what we have seen in recent decades is a pattern of government intervention on behalf of certain preferred groups – primarily well-to-do American and foreign citizens and foreign central banks – designed to prevent asset deflation, preserve excess savings and protect existing concentrations of wealth.
Whatever the problem has been – the Savings and Loan Crisis of the 1980s, the Dot-Com Bubble of the 1990s, or the Housing Bubble of the early 2000s – the cause has always been the same: excess savings that drove down the cost of capital and encouraged uneconomic investment. And the “remedy” has always been the same as well: reflation of asset values through the injection of money borrowed by the public sector. Actually, this “remedy” has not only protected existing concentrations of wealth, it has tended to concentrate domestic wealth further, because, as deficits were increased, taxes were decreased on those with high marginal rates of saving (i.e., the rich) while the increase in public sector debt forced cuts in expenditures favoring those with high marginal rates of consumption (i.e., the poor), further reducing their savings.
As stated above, the quantity and character of investments that will yield an economic return at a given point in time depends to some extent on the state of economic and technological development in a society. But I would argue that it also depends on the distribution of wealth. People who have not yet met their basic needs spend all of their income to meet those needs, while people who have already met their basic needs don’t have to. And while savings are necessary to finance capital investment, consumption is necessary to provide investment opportunity as well. There is a story that Henry Ford decided to give his workers a half day off on Saturdays. Asked why he did it, Ford replied that if his workers had no time off, they would also have no use for his cars. In other words, he recognized that his employees were also his customers, and it was their consumption that provided him with an economic investment opportunity. This way of thinking is notably lacking today – in the United States, and in emerging-market economies.
As noted, concentration of wealth and excess savings is not just a problem in America. The so called “export driven” model in emerging-market economies – based on keeping domestic wages low in order to capture an ever-increasing share of foreign markets – has resulted in excess savings in the form of foreign exchange surpluses. Invested in dollar denominated obligations, these savings have served to keep U.S. interest rates artificially low, encouraging uneconomic investments, whether in technology, consumer industries, or housing. The savings of emerging-market nations should be used to build infrastructure and raise wages at home, thereby increasing domestic demand. They should not be squandered on nonproductive foreign assets. And if they are, the U.S. government should certainly not intervene to perpetuate the misallocation of assets at the expense of future generations.
Debt is often reviled, and legitimately so – it enables irresponsibility, promotes anxiety and culminates in guilt. But make no mistake, debt cannot exist without savings to fuel it. And when excessive concentration of wealth drains resources away from what is needed to finance basic expenditures, it creates dislocations.
As people acquire wealth, they also acquire power. If they do not embrace philanthropy, they seek out ways to justify inequality. They buy media outlets; they endow chairs at universities; they finance think-tanks that promote their way of seeing the world. If their efforts are successful, they can wholly or partially define the universe of discourse within a society. This is also what we have seen in America.
Tax cuts, deregulation and free market economics have been mantras in the Unites States since the 1980s. But tax cuts have not been accompanied by decreases in public sector spending. And when unwise economic decisions have resulted in market crashes, free market principles have been cast to the winds, with governments borrowing money helter-skelter to protect existing wealth concentrations against loss at the expense of the general public – nearly half of whom do not even have appreciable savings.
Here’s the formula:
— Concentrations of wealth and export driven government policies result in savings that cannot be productively invested
— Savings that cannot be productively invested are unproductively invested , resulting in asset bubbles
— Unproductive investments fail, asset bubbles burst
— Financial intermediaries whose capital is tied up in overpriced assets are threatened with collapse
— Governments intervene to shore up financial intermediaries and purchase overpriced assets
— Assets are reflated, preserving wealth concentrations and excessive savings
— Excessive savings result in new, uneconomic investments
— New asset bubbles inflates, and so on
As noted above, most commentators blame the current situation on excessive debt, and there is a grain of truth in this. If human beings – particularly in the United States – did not want to consume more than can afford, we would not be facing the current problem. Advertising driven consumerism is an inherent aspect of modern American culture. And the apparent inability or unwillingness of many Americans to delay gratification has created an ever-increasing demand for consumer credit. But consumer credit is only a small part of the problem.
It is common knowledge that the United States has become a debtor nation. As widely reported, on September 30, 2008 the federal budget deficit crossed the $10 trillion threshold. But this number doesn’t include Social Security, Medicare, Medicaid and other unfunded obligations. If these unfunded obligations are included – as they are in the Government’s audited statements (which are well hidden, but nevertheless available on the Treasury’s website) the accumulated negative net worth of the federal government is now $59.1 trillion, or about $516,000 per household. Compared with this, the additional $112,000 per household for mortgages, car loans and credit card debt looks small! Nevertheless, all in, the average household debt of $628,000 is more than twelve times median household income ($50,233 as reported by the Census Bureau for 2007).
But this debt could not exist unless someone was willing to lend the money, for the undeniable fact is, every dollar of debt represents a dollar of savings. To the person who borrowed it, it's a debt, but to the person who lent it, it's an asset. And it is actually these assets, and their relentless pursuit of an economic return, that has created the situation in which we find ourselves.
According to the Federal Reserve’s most recent Survey of Consumer Finances, the richest one percent of families in the United States own 34.3% of the nation's net wealth (equivalent to accumulated savings). The top 10% of families own 71%. And the bottom 40% have virtually no savings at all (2/10s of 1% of total wealth to be exact). Concentrations of savings like this have not been seen since in the U.S. since just before the Great Depression.
But dislocation of savings is even more pronounced on an international level. In 2005, Ben Bernanke gave a speech in which he discussed the steep upward trajectory of the U.S. balance of payments deficit (from 1.5% of GDP in 2000 to 5 3/4 % in 2004). He asked the question, “Why is the United States, with the world's largest economy, borrowing heavily on international capital markets – rather than lending, as would seem more natural?” Although most commentators had ascribed the external borrowing to a low domestic savings rate and accompanying U.S. budget deficits, Bernanke didn’t buy it, pointing out that the U.S. current account deficit continued expanding during Clinton’s second term, when the U.S. budget was actually running an aggregate surplus of $300 billion. So if a low savings rate wasn’t the answer, what was? Bernanke’s answer was interesting:
"Although domestic developments have certainly played a role … over the past decade a combination of diverse forces has created a significant increase in the global supply of saving – a global saving glut – which helps to explain both the increase in the U.S. current account deficit and the relatively low level of long-term real interest rates in the world today. … [A]n important source of the global saving glut has been a remarkable reversal in the flows of credit to developing and emerging-market economies, a shift that has transformed those economies from borrowers on international capital markets to large net lenders."
In other words, rather than investing their savings at home, rich people in emerging-market countries were investing them in the United States. And in fact, their governments were facilitating the process by issuing debt and using the proceeds to buy U.S. Treasury securities and other assets “Effectively, governments have acted as financial intermediaries,” according to Bernanke, “channeling domestic saving away from local uses and into international capital markets.” From a governmental perspective, this was done, at least in part, to build up foreign exchange reserves to protect against possible capital outflows. But the fact is, it would not have been done to the extent it was if the power elites in those countries had not wanted to protect their savings.
In any given society at any given time, there are a limited number of investments that will yield an economic return. Exactly what those investments are will depend on the state of economic and technological development in that society at that time, as well as the distribution of wealth and income. When the demand for economic investments (determined by the level of saving) exceeds the supply, the prices of investments are bid up to a point where they no longer yield an economic return. When that happens, savings begin to flow into uneconomic investments.
While this sounds theoretical, if we take a look at what happened in the recent housing bubble, we can clearly see the process at work. As the bubble reached its zenith, the supply of savings flowing into collateralized mortgage obligations had become so great that economic returns could not be provided based on the current incomes of prospective borrowers at all. Rather, loans could be justified only on the assumption that the borrower’s income would increase in the future (so-called Alt A loans) or that the future savings of the borrower – measured in terms of increased asset values – would be depleted to make the payments. This was clearly an extreme situation.
In a free market economy, excess savings are automatically drained out of the system through asset deflation, as investments that do not provide an economic return decline in value. But we do not have a free market economy in the United States. Rather, what we have seen in recent decades is a pattern of government intervention on behalf of certain preferred groups – primarily well-to-do American and foreign citizens and foreign central banks – designed to prevent asset deflation, preserve excess savings and protect existing concentrations of wealth.
Whatever the problem has been – the Savings and Loan Crisis of the 1980s, the Dot-Com Bubble of the 1990s, or the Housing Bubble of the early 2000s – the cause has always been the same: excess savings that drove down the cost of capital and encouraged uneconomic investment. And the “remedy” has always been the same as well: reflation of asset values through the injection of money borrowed by the public sector. Actually, this “remedy” has not only protected existing concentrations of wealth, it has tended to concentrate domestic wealth further, because, as deficits were increased, taxes were decreased on those with high marginal rates of saving (i.e., the rich) while the increase in public sector debt forced cuts in expenditures favoring those with high marginal rates of consumption (i.e., the poor), further reducing their savings.
As stated above, the quantity and character of investments that will yield an economic return at a given point in time depends to some extent on the state of economic and technological development in a society. But I would argue that it also depends on the distribution of wealth. People who have not yet met their basic needs spend all of their income to meet those needs, while people who have already met their basic needs don’t have to. And while savings are necessary to finance capital investment, consumption is necessary to provide investment opportunity as well. There is a story that Henry Ford decided to give his workers a half day off on Saturdays. Asked why he did it, Ford replied that if his workers had no time off, they would also have no use for his cars. In other words, he recognized that his employees were also his customers, and it was their consumption that provided him with an economic investment opportunity. This way of thinking is notably lacking today – in the United States, and in emerging-market economies.
As noted, concentration of wealth and excess savings is not just a problem in America. The so called “export driven” model in emerging-market economies – based on keeping domestic wages low in order to capture an ever-increasing share of foreign markets – has resulted in excess savings in the form of foreign exchange surpluses. Invested in dollar denominated obligations, these savings have served to keep U.S. interest rates artificially low, encouraging uneconomic investments, whether in technology, consumer industries, or housing. The savings of emerging-market nations should be used to build infrastructure and raise wages at home, thereby increasing domestic demand. They should not be squandered on nonproductive foreign assets. And if they are, the U.S. government should certainly not intervene to perpetuate the misallocation of assets at the expense of future generations.
Debt is often reviled, and legitimately so – it enables irresponsibility, promotes anxiety and culminates in guilt. But make no mistake, debt cannot exist without savings to fuel it. And when excessive concentration of wealth drains resources away from what is needed to finance basic expenditures, it creates dislocations.
As people acquire wealth, they also acquire power. If they do not embrace philanthropy, they seek out ways to justify inequality. They buy media outlets; they endow chairs at universities; they finance think-tanks that promote their way of seeing the world. If their efforts are successful, they can wholly or partially define the universe of discourse within a society. This is also what we have seen in America.
Tax cuts, deregulation and free market economics have been mantras in the Unites States since the 1980s. But tax cuts have not been accompanied by decreases in public sector spending. And when unwise economic decisions have resulted in market crashes, free market principles have been cast to the winds, with governments borrowing money helter-skelter to protect existing wealth concentrations against loss at the expense of the general public – nearly half of whom do not even have appreciable savings.
If we were to take all the assets and all the liabilities in the world at any given time and put them on a spreadsheet, they would cancel each other out. It does not matter who owns and who owes. In good times and bad times, prosperity and depression, booms and busts, the same economic resources exist on earth. And except in times of war and natural disaster, there is always enough to provide the essentials. Luxuries, perhaps not.
So the problem is never one of resources. It is one of trust. Regardless of why or how savings become concentrated, why and how liabilities are created, when the distribution of wealth becomes sufficiently unbalanced that debtors can or will no longer meet their obligations, trust is lost.
If we step back and view the last decades as metaphor, it is not a pretty picture. Grasping, striving, manipulation, abuse, ever-deepening anxiety, ever-increasing greed – a veritable gumbo of unholy emotions. It is easy to see the dark side. But what’s the point of it all?
From a spiritual perspective, the point is to let it go. The point is to turn away from this Halloween show and realize that what is gained on this earth is left on this earth, and what is lost on this earth can never be a loss to our souls. We arrived here with nothing and nothing is what we will take when we leave. Our relationships with loved ones and most important, our relationship with God -- that is what matters. And until we realize it, we will suffer the nightmare of gain and loss.
In this world, Mother no one can love me
In this world, they do not know how to love me
Where is there pure loving love?
Where is there truly loving me?
There my soul longs to be
There my soul longs to be
-- Paramahansa Yogananda
If we step back and view the last decades as metaphor, it is not a pretty picture. Grasping, striving, manipulation, abuse, ever-deepening anxiety, ever-increasing greed – a veritable gumbo of unholy emotions. It is easy to see the dark side. But what’s the point of it all?
From a spiritual perspective, the point is to let it go. The point is to turn away from this Halloween show and realize that what is gained on this earth is left on this earth, and what is lost on this earth can never be a loss to our souls. We arrived here with nothing and nothing is what we will take when we leave. Our relationships with loved ones and most important, our relationship with God -- that is what matters. And until we realize it, we will suffer the nightmare of gain and loss.
In this world, Mother no one can love me
In this world, they do not know how to love me
Where is there pure loving love?
Where is there truly loving me?
There my soul longs to be
There my soul longs to be
-- Paramahansa Yogananda
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