How does that help me? - Average American

"They complained in the East,
They are paying too high.
They say that your ore ain't worth digging.
That it's much cheaper down
In the South American towns
Where the miners work almost for nothing...

"The summer is gone,
The ground's turning cold,
The stores one by one they're a-foldin'.
My children will go
As soon as they grow.
Well, there ain't nothing here now to hold them."

North Country Blues (1963)
Bob Dylan

( photo credit: spoon )

So, The New York Times had a story "Couple learn the high price of credit" by John Leland about a typical family in Ypsilanti, Michigan, and a graph of the personal savings rate of the average American. Like most of the other economic indicators, the back broke in about 1982 and it's just been plummeting ever since. The big news is that 2 years ago the rate crossed zero, and now we have a graph where the "average savings rate" of Americans is negative. I asked in economics once what that meant, and the professor said it was "dissavings." I asked again, what if the family has no savings left? Then what does it represent? He stared at me blankly, as if this concept was absurd, and went on.

The last time the personal savings rate was negative was in 1933. (Source EBRI Databook, US Department of Commerce.) The blue line on the chart is the personal savings rate, as a percentage of disposable income. The chart goes from 1930 to 2007. It is clear that whatever is going on is structural, a consistent pattern over 75 years, not just some blip that will turn around next year.



The dismal point this graph makes is that the economic pain, and the mental, medical, and social problems that this pain brings, is not going to go away anytime soon and, in fact, will probably get worse over the forseeable future.

For a serious structural trend, we'd expect to see this not just in personal data, but in national level data. What's that look like?

A similar story is in "Measuring the Moment - Innovation, National Security, and Economic Competitiveness" (Nov 2006).

US Trade Deficit (From BEA, quoted at invisibleheart. "Does the Trade Deficit Destroy American Jobs, Russell Roberts, George Mason University, Nov 2006.)



The left scale goes from +100 million per year to -900 million per year and the time from 1960 to 2005. Again, the whole picture changed about 1982, and the overall trend is accelerating downward into debt as a whole nation.

As a whole nation, we're buying way more than we can afford to pay for, and it's not getting better - in fact, it seems to be getting worse.


This raises an hypothesis that doesn't seem to be discussed much in public health - that the reason the US health care bill is skyrocketing is not only because the charges per unit of care are going up, but because we are, frankly, as a nation, getting sicker.

That is a crucial distinction, because it means that the major problem we have is not really getting more insurance to pay for damage repair, or lowering the cost per repair job.

The real problem facing public health, as we trek upstream to see where this problem is coming from, is "Why are the American people getting sicker and how can we prevent that and reverse that trend, on a personal, local, state, regional, and national level, simultaneously?" Blaming doctors or hospitals or drug companies won't fix this. Pitting individuals against corporations won't fix this. Blaming China or Japan won't fix this. It's deeper.

Part of the problem, in my model, is that so many people in corporations think that the problem is one of dividing the pie between "consumers" and "corporations", or between managment and labor, or between the rich and the poor. I don't think that's the problem at all, although it certainly is a source of conflict.

The problem is that the pie is shrinking, in any real measure. The wind has gone out of the sails of the American dream. We've lost a positive direction and now are on the decline curve instead. Squabbling over who gets the remaining food in the cupboard won't address the larger question, which I want to look at.

The key question is where does the pie come from in the first place. What creates wealth, and why isn't it working any more?

I'd say the universe (or Universe) clearly supports a wonderful overall design, whether accidental or intentional, for the hierarchy of life to evolve in ever more ways, at least on large scales and long timeframes -- but something seems to be interfering with out ability to ride that tide right now, on every level.

Surrounded by opportunity, we are failing to thrive. Surrounded by water, we are dying of thirst. With more computing power on our desktop than the entire planet had 50 years ago, we are unable to solve even basic problems of getting along and making things work. So, maybe, more technology is not the answer. We don't use 1% of what we have now.

I'm not sure where "the tracks" are, but I am pretty sure that our train has left them.

We have a "failure to thrive" problem here, a global depression that has gripped us on multiple levels simultaneously, causing despair and self-destructive behaviors on all scales.
By all our models and insights, what we're doing "should" work, but it clearly doesn't. That suggests that one of our basic, cherished assumptions is wrong.

And, it's not only wrong, but it's blinded us to a reality that is all around us, but we're incapable of perceiving it -- the myth is so strong that it squelches out all contrary evidence. The myth, after all, in my model, is itself alive and seeking to survive, and doing a good job of it.

Which myth? Which assumption?

Well, my model suggests that our concept of "individuality" is seriously wrong. We do not exist independently of the world around us, but are actually dependent on the world around us to survive and, in fact, we are an inseparable part of the world around us.

This is one of those ideas that varies by what size the observer is.

Darwin and others observed that individuals battled and the fittest survived, and perceived that as a global truth and a model for how humans, corporations, and nations should treat each other, basically saying "It's us or them, Jake, and there ain't room on this planet for both of us!"

However, that's poor observing, because the competition is really only local. On a larger scale, the wolf species and the deer species get along just fine. The wolves kill off the weakest deer, which, net, strengthens the deer herd. On the scale of many years and the size of species, deer and wolves cooperate and get along and help form a stable ecosystem.

That's the part of the model that seems to have gotten lost, as we try to make both corporate America and international America a one-horse show, take no prisoners. I think most CEO"s spend more time building alliances than they do attacking enemies, and many of them would rather get along and play golf than compete fiercely in a winner-take-all contest.

It may be hard to grasp at the corporate level, but the survival of corporations depends on the survival of the people who make them up. And, judging from the charts and graphs above, the people are getting very near running out of steam here.

It's not Al Qaida that's destroying us, it's our concept that the only way to structure life is as a competition, between nations, between cultures, between corporations, and between corporations and the people who make them up, unaffectionately known as "labor."

Because of the interlocking feedback loops and distant effects, there are indeed two choices - there's "win-win" and "lose-lose." Corporations, individuals, and public health can figure out how to co-exist and thrive together, which is a thought starting to emerge at the Ross School of Management, or they can go on fighting with the results shown above., and the population dying of obesity, diabetes, asthma, stress, and rampant infections.

Competition is not an "invariant". A single counter example can prove that, and here it is: The cells in our body do not spend all day with each one trying to be the "king cell" that rules all the others. They manage to cooperate, and thrive.

It's a good model. We should consider it. It's a model that does scale up, and then no one has to lose -- except the purveyors of the old myth that someone has to lose.

"Economic competitiveness" is the wrong term touse. "Ability to thrive while allowing others to thrive as well" or "jointly thriving" are better terms. Failure to thrive is a problem of the spirit, of our interest in and willingness to work together to ride the available tide of innovation, growth, and life that is all around us.

I'm unabashedly a Baha'i, and the Baha'i's believe in "spiritual solutions to economic problems"
which that link can explain better. This means, in my mind, more that the answer is in greater willingness to stop fighting and cooperate than in simply praying that things should get better while continuing our daily habits that make them worse.

A strong dose of humility can get thrown in as well, which doesn't mean walking around glum, but does mean not thinking we know it all without at least checking around first for contrary evidence, for any sign that maybe our model is wrong. As Karl Weick has pointed out in secular high-reliability organization literature, that kind of "mindfulness" doesn't come easy, but brings great rewards when it can be achieved.

Here's a tiny look at how drenched we are in this concept. People laugh at guys who would drive around for hours rather than stop and ask for directions -- although if it's a pilot and not asking directions results in using the wrong runway, this is no longer funny. Today, many families, like the one described by the Times article, are in deep debt and at risk of losing their house. Yet, if I were to suggest to them that maybe two familes could live in one house and share the mortgage costs, they'd think I was crazy.

Why is that, exactly? People would rather get lost than ask for directions? People would rather lose their home than share it with others, who, apparently, they think they would surely hate?
I'm glad I don't like ice cream because, if I liked it, I might eat it, and I hate it?

This idea that each family should have their own home and car has co-evolved with the idea that the purpose of money is so we don't have to learn how to get along with each other.

Now that the money has gone away, maybe we should revisit the idea of getting along with each other, instead of losing our homes. THAT's what I mean a "spiritual" solution - one that simply requires a change in heart, and suddenly, a new door opens where there was just disaster before.