Time magazine on “era of excess”

The cover story of Time magazine’s American edition seamlessly moves from blaming bankers to placing responsibility on everyone for the economic downturn. In its view it is a crisis of generalised excess.

The starting point of the piece by Kurt Andersen, a novelist and former Time columnist, is the Reagan era of the 1980s. In Andersen’s telling the free marketer president irresponsibly allowed people’s desires to run amok:

“In the early 1980s, around the time Ronald Reagan became President and Wall Street’s great modern bull market began, we started gambling (and winning!) and thinking magically. From 1980 to 2007, the median price of a new American home quadrupled. The Dow Jones industrial average climbed from 803 in the summer of 1982 to 14,165 in the fall of 2007. From the beginning of the ’80s through 2007, the share of disposable income that each household spent servicing its mortgage and consumer debt increased 35%. Back in 1982, the average household saved 11% of its disposable income. By 2007 that number was less than 1%.”

For Andersen the Reagan era led not just to financial but to economic and environmental excess. We are now suffering as a result. The solution proposed by Time is that we should cure our “addiction” by consuming less:

“Given that we’ve brought on the current crises through a quarter-century of self-destructive financial excess and overdependence on debt and fossil fuels, during the same quarter-century we’ve all become familiar with a way of thinking about self-destructive excess and dependence. The vocabulary of addiction recovery could come in handy just now. We are like substance abusers coming off a long bender, hitting bottom (we can only hope) and taking the messes we’ve made as a sobering wake-up call. I’ve always thought many of the 12 Steps were superfluous, so here is a streamlined, secularized Three-Step Program for America — Bubbleholics Anonymous? — to start getting back on track:

“• Admit that we are powerless over addiction to easy money and cheap fossil fuel and living large — that our lives had become unmanageable.

“• Believe that we can, individually and collectively, restore ourselves to sanity and normal living.

“• Make a searching and fearless moral inventory of ourselves and be entirely ready to remove our defects of character.

“Of course, when addicts finally quit, it feels awful for a while, and that’s where we are right now. The recession, provoked by the sudden, essentially cold-turkey abandonment of spending, lending and borrowing, is something like our national equivalent of the jitters, sweats and seizures that addicts experience right after they give up the junk. Actually, the applicable addiction trope is more like food (or sex) than drugs or booze, since as economic creatures, we can’t quit; we just have to teach ourselves to buy and borrow in moderate, healthier ways. The new America must be about financial temperance, not abstinence.”

Evidently the story is a little more muted in the European edition but the message is the same.