House of Cards

In the den where I am writing this, I have an old bookcase that I acquired many years ago.  Recently I discovered that most of its shelves are starting to give way, with the rear supports failing so that the back of the shelves are falling down.  The overall bookcase is still standing, and none of the individual shelves have yet to fail in supporting the books that are stacked on them.  But it is clear that in the not-too-distant future, if nothing is done, then the shelves will probably collapse like a house of cards, with each falling stack of books on a higher shelf pushing the one beneath it to the breaking point, and so on until the entire bookcase collapses.

I have had the repair of this bookcase on my “To Do” list for several weeks now, with a plan to go to a local hardware store, buy a sufficient number of metal brackets and screws, and properly reinforce each of the shelves so that the impending crisis will never come to pass.  Of course, this entails, in addition to visiting the hardware store, the removal of all of the many books from all of the shelves, and then the repair effort itself.  I have concluded that I will need to set aside at least a half day on this project, and yet, it seems that whenever I have at least a half day of free time, I always find something of more immediate importance to do.  I console myself with the thought that the bookcase has continued holding the books up until now, and so an additional delay of a day, a week, or several weeks will probably not be catastrophic.  But I know that if I continue in this vein, and the inevitable catastrophe comes, I will castigate myself for not having acted in a sufficiently timely manner to fend off the disaster, which would have been so much easier to resolve if I had attended to it before the collapse.

What is particularly disquieting to me, however, is that this personal example of courting disaster through procrastination seems to be playing itself out on a grander scale, with problems of much more serious consequence.  As an economist, the larger case that comes immediately to mind is the massive accumulation of debt that has occurred in this country – and the rest of the world – over the past several decades.  The U.S. national government debt alone, as a percentage of GDP (gross domestic product – a measure of the goods and services produced in the economy) topped 100% in 2012, and continues to grow, approaching the record level of 122% that was reached right after the end of World War II.  (This wartime run-up in government debt declined in the ensuing decades, falling to below 40% by the late 1960s, and didn’t start rising again until the Reagan era in the 1980s.)  And the U.S. is not alone: most of the developed economies of the world are near the 100% mark, and Japan is currently above 250%.  What is even more sobering, however, is the ratio of total debt – public and private – to GDP, which is well over 300%: a level not seen since the years leading up to the Great Depression.  People in those days fell into a borrowing frenzy, living way beyond their means, confident in the belief that the booming stock market would continue to buoy their artificially lavish lifestyles.  Many even borrowed money to invest in the stock market.  When the Crash came, this mountain of debt collapsed, but so did the livelihood of much of the population.  There had been hopes that the Great Recession of 2007-2009 would have a similar result, and that the fact that an economic catastrophe had been narrowly averted would mean that the “cure” this time would be much less painful than the one in the 1930s.  But while private debt levels did decline somewhat (government borrowing continued to grow, to cover such things as unemployment insurance and an $800 billion stimulus program), the decline was nowhere close to the massive deleveraging that happened in the 1930s, in spite of the rash of mortgage defaults, and when the recession ended, borrowing levels resumed their upward trend.  U.S. household debt has returned to the level it was at just before the Great Recession.  Economists have been warning for decades that this pile-up of debt is unsustainable, and very dangerous, but the very fact that they have been sounding the alarm for so long have made them seem to the general populace (not to mention politicians) like the boy who cried wolf.  Like my rickety bookcase, the economy seems to be hobbling along, and so why not continue borrowing more and more – this year, and next year, and the year after that?

Of course, the real house of cards that we have been stacking as a civilization is the strain on our environment.  I will not even address the most prominent one – the accumulation of greenhouse gases that threatens to raise the temperature of our planet to an unsustainable level.  Nor will I talk about the pollution of our oceans with plastic debris, or the fact that overfishing has depleted one-third of the world’s fish stocks beyond levels at which they can replenish themselves.  Instead, I would like to call attention to the more subtle signs that we are at risk of creating irreversible damage to the ecosystem.

There is, for example, the phenomenon of habitat destruction.  In the neighborhood where I grew up, we children had merely to pass through the row of houses that were on the other side of the street where I lived to move into a tract of undisturbed nature.  There were woodlands, swamps, and extensive fields, populated with snakes, frogs, salamanders, finches, pheasants, bats, and other wildlife.  It was not uncommon to find many of these in one’s own yard, since the boundary between neighborhood and woodland was so close to us.  And the tract itself was far from diminutive in size.  I remember once trekking through those woods and fields as a child in the company of two friends, and actually reaching a neighboring city without ever having to pass through somebody’s yard.

It’s all gone now, or nearly all gone.  Today, when I walk past that row of houses on the other side of the street where my childhood home is, I see – instead of a vast field bordered by patches of woodlands – a school playground, surrounded by houses.  It brings to mind another memory, back when I visited Orlando, Florida about twenty years ago.  The shuttle driver who was taking me and others back to the airport from our hotel pointed to an area in the distance, where we could see cranes and other large, mechanical equipment.  “Just a couple of years ago,” he said, “that was undisturbed wilderness.  Now it’s being leveled so that new residential neighborhoods can be built there.  This is happening all over.  The encroachment continues year after year, and there is no end in sight.”  I laugh (but not really) when I pass by the “nature preserve” near my present home in Maryland.  It is really not much larger than a public playground for children.

As undisturbed natural habitat diminishes, so does biodiversity.  The populations of species diminish in number, leaving pockets of small, isolated breeding groups.  Anecdotal news stories, such as a recent one reporting that there is only one male northern white rhinoceros remaining in the world, are only the proverbial tip of the iceberg.  Smaller populations provide more limited genetic pools that make the survivors of a species less adaptable to changes in the environment – both natural and civilization-induced.  When species of plants and animals are bred and cultivated for commercial purposes, this reduction in genetic diversity can be even more pronounced.  An extreme case was in the news recently when it was reported that a deadly fungus known as Tropical Race 4 was threatening the world’s commercial banana crops.  What makes these crops vulnerable is that nearly all of them (99%) are, literally, all copies of one banana – cloned from a plant that possessed the most appealing qualities to consumers.  With a complete absence of genetic diversity among them, if one of the banana plants succumbs to the disease, then it is a certainty that all of them will.  An earlier commercial variety of banana known as the Gros Michel nearly went extinct in the mid-20^th century – from another deadly fungus (in fact a variant of the latest one) called Panama Disease – because it was a victim of its own universal popularity.  The Irish potato famine of the mid-19^th century, too, was caused by a deadly fungus preying upon the one single variety of potato that was relied upon by Irish farmers.

Human population growth may be slowing, but it is continuing nonetheless.  And it is a simple fact that if there are more people, then more free space has to be used up to accommodate them, and more resources have to be committed to providing food for them.  In America, the growth in demand for more space exceeds the growth in population, because the average size of residential homes has been increasing over time, and there has been a general trend of de-urbanization, with migration away from concentrated urban areas into the surrounding suburbs.  Growth in population also means that there is a growth in waste products and other pollutants, which risk poisoning the reducing available habitat for the rest of the species on this planet, not to mention the humans themselves.

Ironically, the perennial argument that is made for keeping on doing what we’re doing is that it hasn’t resulted in catastrophe so far.  Last month, right around Earth Day, the American Enterprise Institute published an article entitled “18 Spectacularly Wrong Predictions Made Around the Time of the First Earth Day, 1970, Expect More This Year”.  Most of these involved predictions of various environmental catastrophes, including mass species extinctions, suffocating smog, and even a significant die-off of the human population due to widespread famine and other causes.  Articles such as this one by the American Enterprise Institute appear periodically, with the same air of smugness and confident underlying message that what made these doomsayers so foolishly wrong was their ignorance of the power of economic forces and basic human ingenuity to support the continued unchecked growth of civilization and population.  While economics and ingenuity have done much to stave off disaster, what these articles generally neglect to mention is that another very significant countermeasure has been a heightened awareness of environmental degradation, and a commitment to reduce its causes.  It was in 1970, in fact, that the U.S. Environmental Protection Agency came into being, and Congress enacted the Clean Air Act.  Subsequent legislation, along with the activities of EPA, have done much in the past half century to rein in pollution and other environmental hazards in the U.S.  The problem of acid rain, for example, which was beginning to decimate certain fish populations in North American lakes late in the 20^th century, has been neutralized as a result of legislation which targeted the main source of this pollutant: sulfur dioxide and nitrogen oxide emissions by coal-burning electric power plants.  Since 1990, sulfur dioxide emissions have decreased by nearly 90% and nitrogen oxide emissions by nearly 80%; and this in spite of the fact that total electricity generation has increased by 36% during the same time frame.

It is certainly true that the dynamism inherent in economic forces has created – time and time again – suitable incentives for innovation and adaptation that have enabled us to defy the predictions – also made around 1970 – that we would run out of vital raw materials and energy resources within a generation.  And there is no doubt that this process will continue to make us resilient as a species and as a civilization.  But for how long?

There is one macabre fact about economics as we practice it.  Our entire system of economic growth is premised on the fact that the population will – or rather, must – continue to grow.  Economists regard declining population growth as problematic, and an actual decline in population as an economic crisis.  A large part of the reason for this is that as the working age population becomes a smaller share of the general population, it is called upon to support a proportionately larger share of the population that has retired from the workforce.  In the U.S., the main cause of the projected unsustainable expansion in national debt over the next few decades is the growing cost of Social Security and Medicaid.  A growing share of the population will be drawing upon these services while a shrinking share of the population will be available to pay for them.  That the U.S. government is paying for them instead by simply borrowing more money is not solving the problem, of course, but postponing a calamity that becomes only more serious with every year that it is not addressed.

And that is exactly the same general behavior that is playing itself out along several dimensions.  We continue practices which we know must be unsustainable in the long run, but convince ourselves that “the long run” is very far into our future.  And, we tell ourselves, weren’t we able to rise up to crises in the past that had been the result of an extended period of ignorant behavior, and ultimately resolve them?  Didn’t this happen with the Great Depression?  And didn’t this happen in England when, after years of ignoring the growing Nazi menace, under Winston Churchill’s dynamic leadership the nation was able to re-arm itself and ultimately defeat the Nazis?  Isn’t it, after all, a crisis that often brings out the best in human resolve and ingenuity?

Perhaps.  But I have an uneasy sense that the crises which are now looming before us due to our collective apathy are much, much more serious than any we have contended with in the past.  I fear that these may be beyond the capabilities of human resolve and ingenuity to overcome them.  And, what is particularly troublesome is that if my pessimistic fears come to pass, then these particular crises may be severe enough to bring down the entire global economy, if not human civilization, or even the human species.  But such things are unpleasant for us to ponder, and so we continue on our way, with a tentative resolve to give these problems more serious consideration at some undetermined future date, when circumstances are more accommodating to do so.

As I finish this entry, it is on the third day of a three-day holiday weekend.  It was just such a day that I had hoped I might be able to devote to repairing my teetering bookcase.  But I frittered away most of the day on distractions and easier chores, and left the bookcase ignored.  Meanwhile, the shelves continue to buckle, and I only take consolation in the fact that they have held out so far, and so maybe they will hold out until the next time that I have a free day to consider devoting to the bookcase’s repair.  But I know that with each passing day that I procrastinate, the looming disaster grows larger.  And I can only hope that before it happens, I actually do find the time and the dedication to prevent its occurrence.  As for that larger house of cards, I can only hope that we find the leadership and/or the collective will to stave off its catastrophic collapse before it’s too late.


Postscript (February 28, 2018):

After posting this blog, at the end of May 2017, I continued to manage avoiding the task of fixing my bookcase - always finding something more important and definitely more interesting to do on my days off - until finally, during an extended holiday vacation at the end of the year, I addressed myself to making the necessary repairs.  The result was catastrophic: the more I tried to repair certain shelves, the more rickety and unstable the bookcase seemed to become, until finally it literally collapsed into a pile of boards.  My first reaction was to throw up my hands in despair.  I immediately started shopping on Amazon.com for a new bookcase, but couldn't find any as large as the one I had, and the ones that came close were very expensive.  Meanwhile I dreaded having to arrange to have the pile of wood littering my room hauled away as garbage.  But then, when I looked a little closer at what used to be the shelves of the old bookcase, I realized that they had actually been individually quite sturdy: they showed none of the telltale signs of bowing that happens when the shelves are made of inferior material.  And so I resolved to rebuild the bookcase from scratch.  It was a slow and arduous process at first, as I shopped around for the right tools and metal brackets to put the thing together, and then tried to construct a sturdy frame.  But once I managed to accomplish this, things got progressively easier.  I even added some enhancements to make the new bookcase superior to the old one, such as putting on a plywood back to the bookcase to cover the flimsy cardboard one that had originally been the sole means of stabilizing the frame.  And now, today, two months after I started, I finally put the last shelf in place.  The bookcase hardly looks like new: it bears many visible scars from its prior incarnation.  But it is sturdy now, and I suspect that it will actually outlast me.  As I was going through this restoration effort, I couldn't help but imagine that this, too, is a metaphor for the "house of cards" phenomenon, because often when a long-festering problem is finally addressed, the full measure of its toxicity is finally exposed, and a greater crisis occurs.  This, for example, is what happened after England and France had ignored the military buildup of Nazi Germany for many years.  When war was finally declared, France fell to the Nazi invaders, and England was on the brink of succumbing to the same fate.  But with Churchill's persistent tenacity in facing and then contending with the problem, slowly, but surely, the menace was halted and eventually overcome.  If and when the longstanding problems that I referred to in this blog finally do erupt into full-blown crises, I will look to my bookcase experience as a source of optimism that the darkest hour, if faced with courage and tenacity, will also give way to a better, sounder future.