Tag Archives: finance

Race You To The Water

The other day I expressed some misgivings over the word that Earthworks chose to apply to water in the first sentence of its report, Polluting the Future: their characterization of water as an “asset,” I said, made me uneasy. The water flowing from springs and brooks, the water of rivers, lakes and streams, the raindrops that fall from the sky and the dew on the morning grass, the water in our bodies, in plants and trees, the water in dogs, flowers, bugs, fish, elephants, walruses and caterpillars, the water in everything that is alive on earth — water is and will always be something greater, more wondrous and something other than a mere entry in the accounting ledgers of some grand business enterprise, which is all that the word “asset” conjures for me.

greatlakesoilI came across the word again today as I was reading an editorial in The Detroit Free Press. I am in complete sympathy with the position it takes against plans to build a huge network of oil pipelines carrying diluted bitumen (or dilbit) across the Great Lakes region, and to transport crude oil by barge across Lake Superior. These are reckless, irresponsible ideas. The threat they pose to the integrity of the Lakes and the life the Lakes sustain is only made worse when you consider a couple of salient facts. First (and it is curious that the editorial does not mention this), the new mining around Lake Superior — as I’ve noted repeatedly — is already going to put pressure on Lake Superior and the Lake Superior watershed; the shipping of oil by barge would bring even more industrialization and greatly heighten the risk of environmental catastrophe. Second, the company building and running the pipeline (the Canadian company Enbridge) has already been responsible for an environmental disaster in Kalamazoo, Michigan — the worst inland oil spill in US history, in fact.

The editorial takes the position that these plans betray a “deep misunderstanding of the true value of the lakes,” but when the editors try to say what that value is, they run into trouble:

It’s easy to wax poetic about the value of the Great Lakes to Michigan and the other states they border. The beauty of the lakes, the wildlife and fish that dwell in and around the lakes, the environmental benefits the lakes present — they’re incalculable.

But let’s get practical: Clean freshwater is one of the scarcest commodities there is. And it’s only going to get worse. Clean water will be an asset that’s worth far more than oil. Jeopardizing the Great Lakes isn’t just morally and ethically wrong. It’s financially foolish, as well.

It’s interesting how the argument here moves, in just a couple of short paragraphs, from the “incalculable” to the crudest of calculations — the “worth” of clean water. This is tantamount to arguing that what is “morally and ethically” right should take second place to what is financially sound — as if finance should have more claim on the imagination and intellect (and the heart) than morality, and monetary value should be privileged over moral and ethical considerations.

I suppose that’s the way it goes nowadays, and I just need to get real. Still, there’s a great swirl of confusion in these two paragraphs, and I have a number of questions about the concept of morality being invoked here, how we’re to distinguish it from ethics, and why those things don’t seem to figure into what are called “practical” considerations. Practice and finance here are unmoored from and unrestricted by moral and ethical concerns; it’s precisely that kind of thinking that got us into the precarious situation we’re now in.

One remedy for all this confusion may lie in the perspective that holds water to be a basic human right — a perspective I also found missing from the Earthworks report. But even then we need to go beyond talking about assets and recognize the limitations of the argument that “clean freshwater is one of the scarcest commodities.” Why? Follow the link from The Detroit Free Press editorial to the National Geographic site on the “Freshwater Crisis.” There you enter a Malthusian world:

While the amount of freshwater on the planet has remained fairly constant over time—continually recycled through the atmosphere and back into our cups—the population has exploded. This means that every year competition for a clean, copious supply of water for drinking, cooking, bathing, and sustaining life intensifies.

bilquaszwaterchildHere, all of humanity is engaged in a contest or race. More and more people enter every year to compete for the same, limited resources. This is one reason why it’s imperative to recognize freshwater as a human right. Otherwise, history becomes a death match, or a big, global reality TV show: intensifying “competition” over this scarce “commodity” means that there will be winners and losers in the water game. The winners are fully vested with their rights; the losers struggle to survive in arid, toxic regions, or simply die of thirst.

Ancient Honor Is Not Dead

A old friend — we were best friends in high school, but since then we’ve drifted apart — emailed me last night to tell me he’d been laid off. He’d worked for the same company for twenty-three years.

He tells me the news in the passive voice: he was notified; his job was eliminated. This is perfectly appropriate, I suppose. A turn of events like this makes one feel deprived of all agency, a patient, not an agent, suffering the slings and arrows of outrageous fortune, caught in the undertow, run aground or cast adrift as a huge economic wave breaks. Those twenty-three years, arguably the best years of a man’s life, don’t count for much these days; loyalty affords no blind, break or refuge.

My friend writes that he’s been soul searching; we’ve all been soul searching. The nation as whole is suffering from what one wag calls “free-floating economic anxiety.” It sounds very clever, but you have to wonder why anyone would want to be clever about all that’s happening around us. I suppose being witty is one way to keep your wits about you, especially if the alernative is to plug into the round the clock economic hysteria.

I was never a very good sleeper – maybe I’ve spent too much time searching the darker corners of my own soul to ever find my ease – and I couldn’t sleep last night thinking about that email from my friend, and what this layoff could mean for him and for his family, and what it might mean for me: the decisions I may have to face if things get worse, the decisions we all may have to face. I am not sure we are ready, or equipped, or willing to face them together. At four o’clock this morning, I was looking at news from the Nikkei.

Clarence Thomas in his remarks yesterday said we have grown self-indulgent and soft, ignorant of the constitution and used to feeling entitled to things our ancestors would have considered privileges. He’s probably right. Now I am all for asking what I can do for my country, but I am pretty sure I’m not ready for the prescription Justice Thomas wants to write to cure our social ills or strengthen our political will. Besides, our forebears were not necessarily cut from better cloth, as if the very genetic material from which Americans are made has degenerated and declined over the past fifty years of post-war prosperity. But it seems like bad form to argue the point.

Our grandparents and great-grandparents knew hardships — all their lives — we have never known. They didn’t feel entitled. And they didn’t hope for as much out of life. But loyalty counted more in those days, and – we’ve been told — a company man was a company man, until the day he got his gold watch and pension. Unless, of course, you weren’t a company man: in which case you just worked hard all your life and took what few pleasures came your way.

So the story goes. But I’m not sure how exactly that story illuminates our current situation. I am not even sure that we are very close to knowing the truth about our current situation. John Stewart excoriates Jim Cramer on national television and America chalks one up for the good guys; but Cramer and company were just along for the ride, singing for their supper, flattering the princes who hired them for jest. (And I couldn’t help but feel that Stewart came off as a scold playing for easy applause.)

It may be fun to hate the big, fat greedy cigar-chomping AIG executives who took the bonuses; but cartoons are not reality, and most of us would demand compensation we’d been promised and contracted for. No, it wasn’t right; no, it didn’t look right: but considering AIG currently still has 1.6 trillion in outstanding derivatives exposure, we need to clean up that mess and do that in an orderly fashion. Litigation over bonuses won’t help accomplish that. So maybe Ron Shelp’s piece in today’s Wall Street Journal has it right: “the bonuses stick in my craw,” writes Shelp, but the bonuses may be “justifiable… because the executives in the financial unit are trying to undo and wind down very difficult agreements. It is in everybody’s interest, AIG’s and the government’s, to get them cleaned up and to close down the unit.”

New York Attorney General Andrew Cuomo is taking issue with that view now. But when Senator Charles Grassley of Iowa suggests the executives at AIG should all commit Seppuku, he’s not taking a stand for ancient honor; he’s just feeding populist rage, and he’s not helping anyone figure out the trouble we are in, the trouble we need to face.

Indeed, I wonder if all the theatrics around AIG and the catastrophic failures of the past six months or so aren’t doing more to obscure the problem we have than to illuminate it. There’s good reason to believe, isn’t there, that the “systemic” and structural problems we are facing now are not exactly new, but new and dreadful manifestations of problems kept from view by the housing bubble from 2003-2006 and by the Internet or dot.com bubble that burst in 2000.

In those days, we used to celebrate systemic and catastrophic structural change as “creative destruction”; the more mild-mannered among us would talk about the the emergence of a “new economy,” the shift from manufacturing to information services. Whole industries and supply chains would be “disintermediated”; once American industry had given up the ghost, or just moved offshore, the military industrial complex would evolve, yes, evolve into a new information economy.

Evolution, though, is brutal sport. I’ve noticed that it’s a word business-people like to use when they want to avoid the word revolution. But you don’t need Naomi Klein to know that capitalists are revolutionaries, and revel in catastrophe and the overturning of old orders. Some will emerge from the ashes triumphant. Others will not survive. It’s not really a question of who is made of better stuff. It’s a question of whether we can master the forces we ourselves have unleashed on the world, and turn them to our good.