Will our society recover from this?

Jared Diamond wrote a book in 2005 called Collapse: How Societies Choose to Fail or Succeed, in which he examined a number of societies under stress and tried to figure out why some survived and some didn’t. He was interviewed briefly last night on a TV show, and was asked what he thought would determine if a society weathered a great crisis or not.

His answer, I thought, was quite provocative. He said he thought the single biggest factor determining whether a society weathered a crisis or not was whether the ruling elite, the wealthy and the leaders of the society – those who made the decisions -- felt they were impacted by the crisis or not. He pointed out, for example, that the Dutch take good care of their dikes because if they fail, the rich and the political leaders will be drowned just as quickly as the rest of the population, so they have a strong incentive to do the right things.

If, on the other hand, the ruling elites and the wealthy feel that they won’t be much affected by the crisis, then they will not be motivated to make the hard choices and take the difficult, expensive, or unpopular steps that are really needed. He pointed to New Orleans as a classic example. The wealthy and the community leaders all live on high ground, and so were not motivated to be sure the levees were really adequate.

Now think about our present crisis. Are the ruling elites, the wealthy and the politicians and the CEOs really at risk here? Members of Congress aren’t going to lose their jobs or their perks, at least not soon, and if they do finally lose an election, most can go down to K Street and get a lobbying job at twice their current pay and still keep their generous Congressional pensions. CEOs, even when they lose their jobs, seem to leave with multi-million dollar payoffs and bonuses, so they may be unemployed as they sit on their yachts, but they are hardly hurting. The truly wealthy, except perhaps for those who invested with Bernard Madoff, are still wealthy, if a little less so on paper.

Looking at the way the recent stimulus package was crafted, and at the administration’s unwillingness to take the hard steps with the insolvent banks, I don’t get the sense that the politicians involved feel any real personal urgency about this crisis – the sort of urgency they might feel if their own home was foreclosed or their own paycheck stopped or their own savings disappeared. Yes, they trot out all the right clichés before the microphones, but in fact their actions look like partisan Washington politics as usual, not like true urgency about the crisis.