We live in the Age of the Individual. Despite claims of expanding communities through computers and social networks, we are becoming a more selfish, self-absorbed society that cares less for the collective good than the good of the individual.
This has severe societal and economic impacts. In 2007-2008 the world watched as the greed of a select group plunged millions of people into unemployment and sent-off economic shockwaves around the world. These shockwaves manifested themselves on the doorsteps of "working class" people through government layoffs of teachers, companies laying off thousands of workers for short-term cost-savings and societal redistribution in Greece. The crisis and the aftermath are both the result of short-term thinking by individuals - both in government and corporations.
The forestry industry is a great parable to modern economics. In the 1970-1980s the forestry industry was clear-cutting itself into extinction. Through government and social pressure, the industry was put on a more sustainable path. This is a lesson the oil industry needs to learn, but also the financial industry.
In 2005-2007 when the mortgage bubble was being inflated by the demand for mortgage-backed securities (MBS), individuals made the decision to set aside their reservations and make money. Mortgage brokers attest to the fact that they processed paperwork they didn't feel comfortable submitting, but it was approved. Why? The mortgage broker wanted the commission, and if it was approved, it no longer was their problem, so why not be greedy? Who was doing the approvals? The person who was going to sell the mortgages to Wall Street for a nice commission, so why not be greedy?
We exist in a world where society is so far removed from our lives. Everything and everyone is so disconnected, the decisions we make are in our individual best interests, not the best interest of our community. Even "community" is transitory. If you move from the west end to the east end of Toronto everything looks and feels the same, but the people are different - but it doesn't matter. You still keep in touch with friends online.
As we move to greater short-term goals, we are more willing to do things that aren't in our own best interest. A salesman might close a deal he knows will be shutdown, only to be paid the commission this month rather than next month. The consensus is "money now is better than money later".
Three decades of failed leadership and the loss of national competition (vs. USSR) has created a political caste that is also completely self-interested. Their goal is not to accomplish something big, it is to accomplish enough to get re-elected. It is our politicians who are most to blame for failures of modern society and we need to look at ways to start over the political system.
Modern American economics is failing and without changes, the whole political system will collapse - what may follow it is unclear.
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