The scary thing about the financial melt-down is that it was totally predictable. There were probably lots of people out there looking at the data, and waving red flags a year in advance, but short of checking every financial writer, give credit to Gretchen Morgenson, the assistant business and finance editor of the New York Times, who writes a column for the paper every Sunday. She simply looked at the dollar value of the subprime mortgages being issued, and warned that they were scheduled to flip to a higher rate all at the same time. This wasn’t abstruse stuff, and since her column is usually on the first Sunday business page, it wasn’t hidden away. President John Kennedy once said “I don’t think the intelligence reports are all that hot. Some days I get more out of the New York Times.”
It would have been easy to get a bunch of people together, look at the numbers, and reach some sort of agreement to limit the rate increase on the high risk mortgages to some relatively affordable amount. Neither political party, neither private industry nor government, neither the executive nor legislative branch seems to have been concerned. It’s like two trains, racing towards each other on the same track, and the engineers saying “we’ll see what happens when we get there.”
There are more crises coming. Everybody knows, or should know, but nobody seems interested. The infrastructure crisis, marked by the collapse of Minneapolis’ Interstate 35W bridge, was a warning—but as the Los Angeles Times reported: “The sagging economy has weakened national resolve for repairs—and has depleted the gas-tax fund that would pay for them.” Still, roads and bridges deteriorate at different rates, it’s hard to predict just when the entire interstate highway system will turn into a long, long sandbox. It’s coming, but we don’t know when.
The retirement crisis, on the other hand, may turn up as early as 2011. It’s well known that the Baby Boom generation hasn’t saved enough for retirement. Fewer people are receiving fixed pensions, and the value of 401(k)s has declined with the Dow Jones. Many people trusted the equity in their houses to keep growing and replace a retirement savings plan.
Some people will be able to keep working, but as the economy declines it’s inevitable that jobs will be lost, and when businesses reorganize, one of the first things to go is the pension fund, which was probably underfunded anyway in anticipation of dramatic increases in stock prices. There hasn’t been a lot of planning being done for this, even though it’s about as predictable as the sunrise.
The education crisis is here now, but it’s not obvious, so that doesn’t count. Education costs are rising, and there’s less money available for funding education. We need more people with better educations in occupations that don’t pay all that well, but grants are being replaced by student loans. We need engineers and scientists with PhDs, but people who might have chosen those careers are headed for fields with less expensive qualifications. Still, some part of the education crisis is reliably scheduled to hit by 2015, when the health care personnel crisis becomes obvious.
The health care personnel crisis has been very well documented—there simply aren’t enough people going into the health professions, or even occupations, to meet the anticipated needs of an aging population. Every health occupation has personnel shortages, and based on the time required for training in medicine or dentistry, there’s already no hope of averting that one.
We might come under the wire on physical and occupational therapy, nursing, pharmacy and podiatry, but we’d have to start right now, and we’re otherwise occupied. Actually, that crisis might be moved up a bit, because the projections call for increased productivity from technology, and that means we need those PhDs which we don’t have because of the rise in education costs.
While we’re at it, there’s an energy crisis coming. It’s not on the calendar yet—but again, Democrats as well as Republicans, Congress as well as the executive can take credit. By lifting the ban on offshore drilling, they’re diverting resources that could be directed towards the search for renewable energy—and even if they find oil, when it’s used up, we’ll be right back where we are now.
But finding new energy resources calls for having scientists and engineers, which we don’t have because we’re not funding education, which we couldn’t do even if we wanted to because all the money is being thrown at the bank bailout which we didn’t plan for because none of the people who could have done something were reading the Sunday papers.
Simple, isn’t it?
Sam Uretsky is a writer and pharmacist living on Long Island, N.Y.
From The Progressive Populist, November 1, 2008
Subscribe to The Progressive Populist