Tuesday, December 16, 2008

In plain sight, part 2.....

The world just gets weirder and weirder by the minute. A friend of mine keeps sending me emails prefaced by the word "CYBTS" or "Can you believe this S***" and the litmus test could I possibly write a screenplay with the premise of what I'm reading in the news. The answer is inevitably no, but then "Law and Order" cornered the market on dramatizing the absurd. The absurdity of the moment is the Madoff, and a word escapes me, Scandal, Fraud, inanity. I have no idea what to call it. But like much of the craziness that grips us, it too was in plain sight. The SEC had ignored signs that something was amiss. I'm not going to recant all the muck of the last financial scandal and instead focus on what maybe the root causes.

Today on the radio I heard about why so many people got swindled in, and the general gist was this. You are sitting at a cocktail party and you ask your party companions how are you doing, where do you have your money? And inevitably someone says, great I'm getting great returns with Madoff. Oh really you reply, how can I get in. And in you do. (I will refrain from any jokes about teenage pregnancy and getting into college). Something about your neighbor making more money than you do seems to bug people, so you want to get in. (Of course competition can be a good motivator if its not about stuff, imagine being in the economics department at U of Chicago, well everyone's got a Nobel prize don't you?) So people get taken in, because there are two things that people feel uncomfortable about among the ambitious and that is being poor or being stupid. (Ironic that so many of those people are now both!)

In addition to focusing on the relative status of others, there is another thing that tugs at our strings. And that is the lure of "Money for nothing" we know no free lunch exists, but we want it nonetheless. Like the "Dire Straits" song "Money for Nothing"

Now look at them yo-yos thats the way you do it
You play the guitar on the mtv
That aint workin thats the way you do it
Money for nothin and chicks for free
Now that aint workin thats the way you do it
Lemme tell ya them guys aint dumb
Maybe get a blister on your little finger
Maybe get a blister on your thumb

So instead of playing the guitar on the MTV, we believed that we could play the "Bloomberg on the CNBC" Same silliness, different blister. Now as usual, I tend to meander to get to my point of how this relates to the environment and that in fixing the environmental crisis what are the "money for nothing" fixes.

1) Technology will solve everything. - We can live exactly the same way we do now, because we will come up with technologies that are more efficient. Not, even at 100% efficiency in automobiles and combustion engines. We still have to deal with the issue of deforestation.

2) Personal behavior is enough. - we like to think that we are good people. And in general we are, but because we think we are good, we tend to avoid our faults. Choices are hard under the best circumstances, we don't need more choice we need rational choice already made for us. Legislation can do that. If you disagree, look at the difference between the U.S. Mobile Phone market and the rest of the world. We had choices galore, technologies mixing and not matching and as a result we lose out. In Europe they said, this one technology is good enough. Note, I didn't say it was the best, I said it was good enough. We need to make reasonable choices now even if they are suboptimal.

So what are the environmental "Money for nothings" that confront us and how do we avoid them?


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