2008: Year of Hope, Year of Fear. Essay 11

After a year of shattered illusions, are we just growing a new crop?

2008 was a year of shattered illusions coupled with newly created ones that await a shattering of their own. What was once a given is now gone, some givens are en route to going, and new givens will eventually get up and go.

Let'ꀙs start with the shattered illusions:

• The value of your house isn'ꀙt perpetually on an up tick.  The inexorable force of markets says that if you blow too much air into a balloon, it bursts.  When it does, it makes a loud noise and stuff flies all over the place, which describes the current housing market. (I know. I just sold mine for lots less than what it would have brought 18-months ago.)
• Because good times and check kiting can'ꀙt go on forever, Washington state government is hung over.  On a spending binge over the past four years worthy of the best efforts of the worst drunk, Olympia has a colossal headache. This bodes ill for most in state government while boding well for us told-you-sos. (I mean, didn'ꀙt us limited-government types tell you this would happen?)
• The Washington Federation of State Employees, joined by the Service Employees International Union, are doing their best to poke a sharp stick in the public'ꀙs collective eye with lawsuits against Gov. Christine Gregoire for not funding negotiated wage increases in her budget for the next biennium.  Any notions that public sector unions have the public interest at heart have been smashed to smithereens. The Marie Antoinette 'ꀜLet them eat cake'ꀝ award goes to the PR geniuses in WFSE and SEIU.
• Seattle doesn'ꀙt work.  As Mossback adroitly noted, 'ꀜThe city can'ꀙt be counted on when it comes to the nitty gritty details.'ꀝ The reason? 'ꀜSeattleites'ꀦare easily distracted by the trivial and the symbolic.'ꀝ  Whether it's city government, the Seattle School Board, or whatever, feel-goodism trumps fixing potholes, educational excellence, or keeping the city functioning during a snowstorm. No other citizenry in the United States would tolerate these shenanigans for a second — city government would have been run out of town on a rail.  But locals think of themselves as special and above the hoi polloi in other cities, which they'ꀙre not.  Instead, they end up being national laughing stocks. Witness the atheist sign fiasco in Olympia and the eternal homeless-encampment shell game that is SHARE/WHEEL, Tent Cities 3 and 4, and Pepto-Bismol-colored Nickelsville. (Charlie Chong, where are you now that we need you?)
• Yes, Virginia, there are still crooks — sadly, they run banks and investment houses.  In the superiority of free markets over excessive government control, we forgot that we are all yet sinners.  Free markets aren'ꀙt perfect markets, especially when they'ꀙre rigged. Adam Smith'ꀙs invisible hand works best when the pickpocket'ꀙs hand isn'ꀙt also at work. Exhibit A is Ponzi practitioner, Bernie Madoff, who was all for government regulation just so long as he was consulted about the regulations. Local honorable mention goes to WaMu'ꀙs former binge-lender, Kerry Killinger — no friend of the family was he.
• If something doesn'ꀙt make business sense, jiggling the tax code (or other law) as you would a toilet handle doesn'ꀙt cause that to change despite dollars and cents you finagle out of the deal.  Sub-prime loans are stupid — period!  The Community Reinvestment Act, which creates them, needs to be repealed yesterday. (By the way, Franklin Raines of Fannie-Mae-abuse fame is local and, with me, a 1967-vintage Boys'ꀙ Stater. Any wonder the new Obama administration doesn'ꀙt include anybody from around here?)

That these illusions were believed is mind-boggling.  Inflated-value pyramid schemes and investment scandals are as old, or older, as the South Sea Bubble.  As economist Robert Samuelson has noted, we committed economic faux pas after economic faux pas, all on the order of stuff our parents told us were stupid, but we did them any way.

But that'ꀙs not all.  A recent Seattle Weekly article on the growth of Seattle'ꀙs Trident Seafoods started out like a Horatio Alger story, but quickly descended into tales of political intrigue and high-level Congressional lobbying.  At Crosscut a few weeks ago, Daniel Jack Chasan dissected the corpse of the Pacific Northwest timber industry determining that the cause of death was an overdose of tax-benefit-parasites known as real estate investment trusts.

Obama has also bred a host of hopeful illusions and magical thinking about some of our deepest problems such as global climate change. But there is nothing new under the sun (Ecclesiastes 1:9), even though we continue to act as if everything is of first instance: the new attitude, the new youth movement in politics, the new spirit of hope.  Pardon my cynicism, but there'ꀙs nothing new about it. It'ꀙs transitory, and in one to four years we'ꀙll be surprised at how gullible we were.  P.T. Barnum, who said, 'ꀜThere'ꀙs a sucker born every minute,'ꀝ would have loved this town.