labels redux

there was a comment a couple of posts back on something that i made scant mention of, but knew the idea itself was at the very least intriguing. i mentioned that labels could perhaps have precipitated our current economic situation, in part. so before we all go off the deep end here, let's have some disclaimers:

1. i am no economist. i am armchair at best, really. so don't go looking for broad or sweepingly good economic theory here. i will simply put forth my ideas on what i believe led us to the current meltdown and rebuilding of our economy.
2. labels in my opinion were a small part in this, although i must admit -- the more i think about this, the more i become convinced our need to label things led to this in some way.
3. back to i am no economist -- let's remember that.
4. human nature will not be avoided and labels are apparent and necessary in our processing of the world, so i am not suggesting label nihilism.

disclaimers out of the way, let's start on this rabbit trail and see where it gets us!

first, i want to reiterate that labels are part of the way we make sense of the world around us. "tree" for example is a label. in an ancient philosophy class i took, my professor waxed very poetically about the label of the tree that was outside our classroom. the bottom line is this -- labels are categories that we construct in order to order the world. this is all fine and dandy until we run into the fact that some labels are destructive rather than constructive, and i am not suggesting this in a postmodern philosophical way. (believe me, we don't really want to go there). so while labels are necessary, they are not all ethical. if we can all agree on this minor point, ok it is major, then we can move on to the broader subject at hand. i am going to assume for my own well-humored sense of logic that if you keep reading, you agree. if you didn't you probably didn't just read that last sentence or this one.

second, what in the world did i mean when i said that labels in part led us to the current economic recession? recession -- a label mind you -- is the current word de jour. depression, down turn, crisis, idiocracy, greediness, and others are ones we have heard lately as well. in plain english let me say the following: our desire to label people led to financial decisions that seemed prudent to people who apparently graduated with business degrees but not degrees in risk assessment. so in non-vernacular let me restate that: the financial institutions in the mortgage, banking, and credit industries began to loan money to people who we would otherwise categorize as too risky for loans of the size they were receiving; or in other words, these supposed financial gurus who were running the companies such as AIG, Washington Mutual, etc. graduated with business undergrad degrees and MBA's but not with actuarial degrees, nor apparently did the people with the actuarial degrees think to actually asses the risk of giving people hundreds of thousands of dollars who could potentially go bankrupt today, tomorrow, or the next day despite that money.

third, so where do labels come into this anyway? i want to begin by saying that people seem to be labeled as financially secure or unsecure. we see this all the time with loans, credit applications, debt management, and interest rates. just go try to buy a car to figure this one out. without going too far down the subsequent rabbit trail, i think it suffices to say that banks and others decided that people who were heretofore labeled as financially unsecure, suddenly became secure in the wake of the advent of ARM's or adjustable rate mortgages or even worse -- balloon ARM's. this was a lending strategy that inflated the housing market and subsequently the credit market as well in order to consequently drive our economic "security" upwards. everyone seemed to profit...that is until the piper came to collect and well we all know what happened in the past, nearly, two years. so labels played a major role in my opinion of how we got to where we are.

is this incredibly over-simplified? YES. do i think that it is too simplified to have real and appropriate meaning? NO.

we like to label a lot of things in our country. see for example: liberal/conservative/independent; pro-life/pro-choice; black/white/brown/other; educated/uneducated; rich/poor; and i could go on, but i think i have made the point at least sufficiently. our affinity for these labels is great in that it gives us a very strict order in which to live our lives divided off from people on the other side of those labels, but the problem is that those labels really tell us nothing of who that person is. take for example the label pro-life. this is one that hits pretty closely home for me. however our conception of pro-life is that i am anti-abortion. and while this is true, i also want people to know that i am anti-death penalty, for geriatric care, and for the ethical treatment of humans and animals in what i would more closely call a whole-life stance rather than pro-life. of course i simply relabeled things, however i hope it at least gets closer to who i really am. my point is this -- a label is often times misleading and doesn't tell the whole story. the rest of the story, as paul harvey would say (let me say that if i had something to poor out for the brother, i would have just now), is actually meeting with, talking to, and developing a relationship with that person, whoever they are, and loving them for all their perceived and labeled faults. it is too easy to go through life huddled up with people who believe the same things i do and care about the same things i do. in what might be a very poignant thought, i recently read that the beauty of our diversified belief in this country allows us to see ourselves in others (i apologize that i don't remember where i saw this -- and it is paraphrased to be sure).

but if i get back to the original point at hand it is this: just because we relabel someone who is really not financially secure, financially secure, it doesn't mean that they really are. furthermore, our house of cards that we build on top of that relabeling will eventually come crashing down, and well...it has already.

fourth, we think the people who are at the head of the major corporations in our country are both financially savvy and in way more stressful positions than we are. all of this may be true, but it is no substitute for ethical action on anyone's part. just because i believe someone is smart, does not mean that they will act smartly in all situations or that they get some kind of accountability free pass for stupid decisions. we have for too long decided that people who deal shadily in business are just playing politics and that the working joe or jane on the other end of the their shady dealing are the unsmart and less shrewd individuals (just see the case of Enron or more recently the Madoff scheme if you think i am kidding). the reality it seems to me is that we have decided those at the top of these decision making rackets are labeled as faulty but not really at fault. which excuse me, but how about the guy who perhaps makes the most prudent decision of selling drugs to support his family? we lock them up for years and demand restitution, but for those in the Enron scheme or Madoff himself, we think restitution is out of the question and will give him a slap on the wrist, but this is where the rich/poor label is most evident: our justice system. i won't go on about that, but it is worth thinking about, if only for the mental exercise, but hopefully for a change one day in how people are represented.

fifth, and finally, labels in washington, and i mean D.C. not the state, have prevented us at times from moving toward what i believe are real solutions to problems. i do not believe that a dichotomous solution of republican or democrat will ever really lead us to a true solution to those social or institutional ills of our society. i suggest that the third way, or that way that recognizes that we are not always politically "right" (not in the political spectrum kind of way) must win the day in order for us to begin to move that way. our representatives must be expected to do what is best for the totality of the people they serve not the interests they serve or the lobbyists they serve either...of course that was the idealistic vision of our representative democracy anyway. but in the real world, it means that we can be happy without being always right or always served. for whatever reason our needs seem to take precedence in matters of politics. and what i mean to say in that regard is this: that even though i may care about the poor, i must be comfortable first in order to care about the poor second, for example. we are at base self-preservationists, and this seems to operate most acutely in the world of politics.

so labels are necessary but they are not always ethical, and that is the short way of saying that in the five points above, i at least have some semblance of logic that suggests labels got us to the economic situation we are in. we will never escape labels, but i certainly hope we can begin to see through them just a little bit more.