The Decade of the Double Zeroes
How will the current decade be described in history books?
- The domain of foreign policy aside, the way in which the U.S. elites' feeling of superiority manifested itself was
their hedge fund.
- When I first moved to the United States in the 1980s, Americans were genuinely concerned about their nation's future.
- When a country's elite stops being concerned about the long term, something crucial has been lost.
In hindsight, I should have known all along. But in real life, it took me quite a while to figure it out.
There were these occasional phone calls from American friends and acquaintances, who turned the conversation to handicapping the financial markets. "With all your contacts in the financial world, when do you think is the time to dump all my dollar assets? Will you give me a call when the time comes?" they would ask.
What puzzled me was not so much their assumption that I had any special insight to offer in what is widely known as one of the most fickle markets — exchange rate movements.
Rather, it was the fact that these people were, in effect, asking me nothing else than when they should bail out of their country. That was a stunning contrast to the 1980s, when I had first moved to the United States.
Things weren't going swimmingly back then, but people were genuinely concerned about the future of the United States. Faced with a steep competitive challenge from Japan, there was a vigorous national debate about how the United States needed to change in order to be able to compete at home and abroad.
Not so after the turn to the 21st century. Washington, D.C. — and the United States as a whole — was taken with self-congratulatory talk about being the world's only superpower.
The domain of foreign policy aside, the way in which the elites' feeling of superiority manifested itself was… their hedge fund.
There may have been disagreement between Democrats and Republicans about George Bush and the wisdom of his international policies. Not to worry too much, though. As long as one’s hedge fund, or collection of hedge funds, was performing well, making everybody who had the funds to invest in such elite investment vehicles 15-20% richer each year, everything was alright.
After all, what better proof could one use for the magic powers of America? The world outside may fall apart, yet the United States — as measured by the hedge fund returns — was surely in a class by itself. In short, self-satisfaction reigned supreme.
Then, the U.S. economy all of a sudden was in tatters. That turn of events was not just very painful — after all the hype being spouted about for so long, it also came as quite a surprise.
In hindsight, the writing has been on the wall all along. When a country's elite stops being concerned about the long term — in the sense of what must be accomplished now in order to ensure the economy's future success — something crucial has been lost.
Worrying about the future is, in fact, a vital function of elites. Even — and especially if — one feels on top of the entire universe, the question that needs to be asked, and answered rigorously, is what it is that may endanger that elevated position.
During the Bush years, virtually all reasons for concern were fixated on the sphere of national security, while the U.S. economy was deemed to be in good shape.
In the United States, any notion of “utilitarian pessimism” is by and large considered an un-American virtue. It is more readily associated with the doubt-ridden cultures of Germany or Japan.
And yet, for all the talk about American optimism, in the country's past there were plenty of periods that were full of constructive self-doubt. That readiness to question one's established ways and seek better ones, if possible, was a key ingredient in moving forward.
The fact of the matter, though, is that any nation needs for its elites to engage in this kind of self-doubtful thinking in order to be prepared for the future.
Absent that mindset, the current turn of events becomes easily understandable. The presumed boom was really built on a shallow foundation. Stock market gains have just evaporated. Retirement funds are decimated. Companies, including some entire industries, are failing.
All of which is why we may end up calling, and remembering, the current decade, which is soon coming to a close, as the decade of the "booming 00's" — as in double zeroes.
For all the presumed worship of heroes, and the media space given to them, when it comes to the economic and financial dimension that ultimately is so important in determining the lives of so many, it's really — and regrettably — been a "Decade of the Zeroes."