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 wasnt abstruse stuff, and since her column is usually on the first Sunday business page, it wasnt hidden away. President John Kennedy once said I dont 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. Its like two trains, racing towards each other on the same track, and the engineers saying well 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 warningbut as the Los Angeles Times reported: The sagging economy has weakened national resolve for repairsand has depleted the gas-tax fund that would pay for them. Still, roads and bridges deteriorate at different rates, its hard to predict just when the entire interstate highway system will turn into a long, long sandbox. Its coming, but we dont know when.
The retirement crisis, on the other hand, may turn up as early as 2011. Its well known that the Baby Boom generation hasnt 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 its 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 hasnt been a lot of planning being done for this, even though its about as predictable as the sunrise.
The education crisis is here now, but its not obvious, so that doesnt count. Education costs are rising, and theres less money available for funding education. We need more people with better educations in occupations that dont 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 documentedthere simply arent 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, theres already no hope of averting that one.
We might come under the wire on physical and occupational therapy, nursing, pharmacy and podiatry, but wed have to start right now, and were 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 dont have because of the rise in education costs.
While were at it, theres an energy crisis coming. Its not on the calendar yetbut again, Democrats as well as Republicans, Congress as well as the executive can take credit. By lifting the ban on offshore drilling, theyre diverting resources that could be directed towards the search for renewable energyand even if they find oil, when its used up, well be right back where we are now.
But finding new energy resources calls for having scientists and engineers, which we dont have because were not funding education, which we couldnt do even if we wanted to because all the money is being thrown at the bank bailout which we didnt plan for because none of the people who could have done something were reading the Sunday papers.
Simple, isnt it?
Sam Uretsky is a writer and pharmacist living on Long Island, N.Y.
From The Progressive Populist, November 1, 2008
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