One could imagine positive psychology, or a more liberal version thereof, sp.a.w.ning a movement to alter social arrangements in the direction of greater happiness-by advocating more democratically organized workplaces, to suggest just one example. Instead, positive psychology seems to have weighed in on the side of the employers, with Seligman collaborator Chris Peterson telling the Cleveland Plain Dealer Cleveland Plain Dealer in 2008 that business executives are particularly enthused about the new happiness science: "Hard-headed corporate culture is becoming interested in how to get more work out of fewer workers. They"re realizing that if their workers are happy, they will work harder and more productively. So they"re leading the charge." in 2008 that business executives are particularly enthused about the new happiness science: "Hard-headed corporate culture is becoming interested in how to get more work out of fewer workers. They"re realizing that if their workers are happy, they will work harder and more productively. So they"re leading the charge." 49 49 As for social action against societal injustice, the American Psychological a.s.sociation"s As for social action against societal injustice, the American Psychological a.s.sociation"s Monitor Monitor reported in 1998: "Seligman a.s.serts that . . . those who reproach others and side with the underdog may feel better in the short term, . . . but such good feelings are transient." reported in 1998: "Seligman a.s.serts that . . . those who reproach others and side with the underdog may feel better in the short term, . . . but such good feelings are transient." 50 50 Why social activism should produce only fleeting good feelings-compared with performing other virtuous deeds, viewing Monets, or reading Richard Russo-is not explained. Why social activism should produce only fleeting good feelings-compared with performing other virtuous deeds, viewing Monets, or reading Richard Russo-is not explained.
Like pop positive thinking, positive psychology attends almost solely to the changes a person can make internally by adjusting his or her own outlook. Seligman himself explicitly rejects social change, writing of the role of "circ.u.mstances" in determining human happiness: "The good news about circ.u.mstances is that some do change happiness for the better. The bad news is that changing these circ.u.mstances is usually impractical and expensive." 51 51 This argument-"impractical and expensive"-has of course been used against almost every progressive reform from the abolition of slavery to pay equity for women. This argument-"impractical and expensive"-has of course been used against almost every progressive reform from the abolition of slavery to pay equity for women.
Positive psychologists" more important contribution to the defense of the status quo has been to a.s.sert or "find" that circ.u.mstances play only a minor role in determining a person"s happiness. In their misbegotten equation-H = S + C + V-"C," for circ.u.mstances, is generally judged to make a small contribution to the total, only around 8 to 15 percent. 52 52 A variety of studies are usually cited in support of the inconsequence of C, finding, for example, that people who lose their jobs or who are rendered paraplegic by severe spinal-cord injuries quickly revert to their original levels of happiness. When I interviewed Seligman, he said that new evidence shows that paraplegics and the unemployed "do not go back to where they were," and he estimated that C could be as high as 25 percent, adding that "there is a lot of controversy over the size of C, since it brings up the question of whether policy matters." A variety of studies are usually cited in support of the inconsequence of C, finding, for example, that people who lose their jobs or who are rendered paraplegic by severe spinal-cord injuries quickly revert to their original levels of happiness. When I interviewed Seligman, he said that new evidence shows that paraplegics and the unemployed "do not go back to where they were," and he estimated that C could be as high as 25 percent, adding that "there is a lot of controversy over the size of C, since it brings up the question of whether policy matters."
Indeed, if circ.u.mstances play only a small role-even 25 percent-in human happiness, then policy is a marginal exercise. Why advocate for better jobs and schools, safer neighborhoods, universal health insurance, or any other liberal desideratum if these measures will do little to make people happy? Social reformers, political activists, and change-oriented elected officials can all take a much-needed rest. And since no one is talking about using gene therapy to raise "S," a person"s happiness "set point," that leaves only "V," one"s voluntary efforts, to tinker with. In the great centuries-long quest for a better world, the baton has pa.s.sed to the pract.i.tioners of "optimism training," the positive psychologists, and the purveyors of pop positive thinking.
The next time I met Martin Seligman he was unexpectedly friendly and welcoming. The setting was the Sixth International Positive Psychology Summit, held in the majestic Gallup Organization building in downtown D.C. He invited me to sit down next to him and asked whether I had enjoyed the morning session"s "energy break." This had been a five-minute interval embedded in a presentation on teaching positive psychology at the graduate level, led by some female graduate students. The audience was instructed to stand, do a few shoulder rolls and neck stretches, shake their bodies, and then utter a big collective "Aaaah." When we were loosened up, we were treated to the pounding beat of Ricky Martin"s "Cup of Life," and the women on stage began to dance along in an awkward, ch.o.r.eographed way, while some in the audience boogied freestyle and a few of the older men stamped around as if putting out fires. I told Seligman I had liked the energy break well enough, not bothering to mention how closely it resembled the audience exercises undertaken by motivational speakers at the National Speakers a.s.sociation.
At the time of the "summit" meeting, in October 2007, positive psychology had a lot to celebrate. It was gaining ground at all levels in academia, with more than two hundred colleges and graduate schools offering courses in positive psychology, sometimes dubbed "Happiness 101," in which students reflected on their happier moments and engaged in exercises like writing "grat.i.tude letters" to people in their lives. At Harvard, the introductory positive psychology course had drawn 855 students in 2006, making it the most popular course on campus, surpa.s.sing even economics, and a similar undergraduate course at George Mason University was the subject of a New York Times Magazine New York Times Magazine article in early 2007. article in early 2007. 53 53 Graduate-level courses, like those required for the master of applied positive psychology degree at the University of Pennsylvania, were popping up all over the world. According to one summit speaker, Ilona Boniwell of the University of East London, "rapid growth" of postgrad programs could be expected in Argentina, Australia, India, Israel, Mexico, Spain, and Singapore. Graduate-level courses, like those required for the master of applied positive psychology degree at the University of Pennsylvania, were popping up all over the world. According to one summit speaker, Ilona Boniwell of the University of East London, "rapid growth" of postgrad programs could be expected in Argentina, Australia, India, Israel, Mexico, Spain, and Singapore.
Moreover, attractive careers seemed to await those who earned higher degrees in positive psychology. The University of Pennsylvania program claims as one of its alums a coauthor of the business self-help book How Full Is Your Bucket? How Full Is Your Bucket? and two other alums have founded a consulting group to bring positive psychology into the public schools, through workshops on such topics as "measuring and nurturing character strengths and virtues" and "learning tools for building optimism and resilience." and two other alums have founded a consulting group to bring positive psychology into the public schools, through workshops on such topics as "measuring and nurturing character strengths and virtues" and "learning tools for building optimism and resilience." 54 54 Another alum, David J. Pollay, is a business consultant and columnist for the Happy News Web site. Mostly, the opportunities seemed to lie in applying positive psychology to organizations and businesses, through consulting and coaching. In a breakout session so packed that many attendees had to sit on the floor, a British consultant who said that he helps clients like Wells Fargo and Microsoft create "strength-based organizations" offered a PowerPoint presentation listing the terms "natural and authentic," "energizing," "engaging," "learning and developing," "high performing," and "well-being and fulfillment." Similar lists, maddeningly nonparallel combinations of adjectives and nouns, pa.s.s for "theory" in most pop positive-thinking books directed at business audiences, making me wonder what distinguishes an academically trained positive psychology coach from the thousands of self-appointed coaches and motivators who feed off the business world. Another alum, David J. Pollay, is a business consultant and columnist for the Happy News Web site. Mostly, the opportunities seemed to lie in applying positive psychology to organizations and businesses, through consulting and coaching. In a breakout session so packed that many attendees had to sit on the floor, a British consultant who said that he helps clients like Wells Fargo and Microsoft create "strength-based organizations" offered a PowerPoint presentation listing the terms "natural and authentic," "energizing," "engaging," "learning and developing," "high performing," and "well-being and fulfillment." Similar lists, maddeningly nonparallel combinations of adjectives and nouns, pa.s.s for "theory" in most pop positive-thinking books directed at business audiences, making me wonder what distinguishes an academically trained positive psychology coach from the thousands of self-appointed coaches and motivators who feed off the business world.
Yet even at this self-congratulatory "summit," there was some anxiety about the scientific foundations of positive psychology. In her description of the "challenges" facing the master"s program in positive psychology at her London university, Ilona Boniwell had included "healthy British skepticism." This struck me as odd: Wouldn"t a physics or sociology professor be delighted to have skeptical, questioning students? When I put this query to her during a break in the proceedings, she told me: "A lot of results [in positive psychology] are presented as stronger than they are; for example, they"re correlational, not causative. The science of positive psychology has not necessarily caught up with the promise of positive psychology." The "promise" was lucrative careers in business coaching, and the science would apparently just have to catch up.
In fact, the publicity received by positive psychology in the preceding year had been less than 100 percent positive. The 2007 New York Times Magazine New York Times Magazine article on Happiness 101 courses had complained about "the sect-like feel of positive psychology" and suggested that "the publicity about the field has gotten ahead of the science, which may be no good anyway." The article went on to report that "the idea that whatever science there is may not yet be first-cla.s.s troubles Seligman, too. "I have the same worry they do. That"s what I do at 4 in the morning," he says." article on Happiness 101 courses had complained about "the sect-like feel of positive psychology" and suggested that "the publicity about the field has gotten ahead of the science, which may be no good anyway." The article went on to report that "the idea that whatever science there is may not yet be first-cla.s.s troubles Seligman, too. "I have the same worry they do. That"s what I do at 4 in the morning," he says." 55 55 These worries finally surfaced at a late afternoon plenary session on "The Future of Positive Psychology," featuring the patriarchs of the discipline, Martin Seligman and Ed Diener. Seligman got the audience"s attention by starting off with the statement "I"ve decided my theory of positive psychology is completely wrong." Why? Because it"s about happiness, which is "scientifically unwieldy." Somehow, this problem could be corrected by throwing in the notions of "success" and "accomplishment"-which I couldn"t help noting would put the positive psychologists on the same terrain as Norman Vincent Peale and any number of success gurus. With the addition of success, Seligman went on, one was talking no longer about positive psychology psychology but about a "plural theory" embracing anthropology, political science, and economics, and this is what he would be moving on to-"positive social science." but about a "plural theory" embracing anthropology, political science, and economics, and this is what he would be moving on to-"positive social science."
Seligman"s statement created understandable consternation within the audience of several hundred positive psychologists, graduate students, and coaches. It must have felt a bit like having one"s father announce that he found his current family too narrow and limiting and would be moving on to a new one. In the Q&A session, some picked up on Seligman"s admission that the scientific basis of positive psychology is all too thin, with one asking, "How do we balance the empirical side of positive psychology with the applied stuff," like coaching? Diener responded, in part, that "people doing things that there isn"t good evidence for" are at least "meeting a need." Seligman agreed, saying that positive psychology was under pressure to produce practical results because "people want happiness." If that sometimes means that the applications, like coaching, get ahead of the science-well, "science follows from practice," he said, invoking the Wright brothers, "who flew when scientists didn"t know how birds fly."
The idea of moving on to "positive social science" provoked even more anxiety. Diener defended the phrase "positive psychology," saying, "It"s a brand." Besides, he said, he "hates" the idea of positive social science, since social science includes sociology and sociology is "weak" and notoriously underfunded. The subject seemed to have veered away from science to naked opportunism. When one audience member proposed renaming positive psychology "applied behavioral economics," because "it"s popular in business schools and goes with high salaries," n.o.body laughed.
SEVEN
How Positive Thinking Destroyed the Economy
In the middle of the first decade of the twenty-first century, positive thoughts were flowing out into the universe in unprecedented volumes, escaping the solar system, rippling through vast bodies of interstellar gas, dodging black holes, messing with the tides of distant planets. If anyone-deity or alien being-possessed the means of transforming these emanations into comprehensible form, they would have been overwhelmed by images of slimmer bodies, larger homes, quick promotions, and sudden acquisitions of great wealth.
But the universe refused to play its a.s.signed role as a "big mail order department." In complete defiance of the "law of attraction," long propounded by the gurus of positive thinking, things were getting worse for most Americans, not better. The poor, including those who sought spiritual leadership from prosperity preachers like Joel Osteen and Creflo Dollar, remained poor and even increased in numbers. Between 2002 and 2006, as the economy grew briskly, the number of officially "low-wage" families shot up to 25 percent of all families with children. 1 1 The traditional working cla.s.s, which had once overlapped with the middle cla.s.s, saw its wages decline and decent-paying jobs-in manufacturing, for example-disappear. For many, the operative word seemed to be "squeezed," as ill.u.s.trated by books like Jared Bernstein"s The traditional working cla.s.s, which had once overlapped with the middle cla.s.s, saw its wages decline and decent-paying jobs-in manufacturing, for example-disappear. For many, the operative word seemed to be "squeezed," as ill.u.s.trated by books like Jared Bernstein"s Crunch: Why Do I Feel So Squeezed? Crunch: Why Do I Feel So Squeezed? and Steven Green house"s and Steven Green house"s The Big Squeeze: Tough Times for the American Worker. The Big Squeeze: Tough Times for the American Worker.
The white-collar middle cla.s.s-prime market for self-help books, motivational products, and coaching services-found itself subject to the same forces of compression. Companies were cutting back or eliminating employee pensions and health benefits, a trend doc.u.mented by Jacob Hacker in The Great Risk Shift: The a.s.sault on American Jobs, Families, Health Care, and Retirement. The Great Risk Shift: The a.s.sault on American Jobs, Families, Health Care, and Retirement. Unemployment was low in the middle of the decade, but jobs were becoming increasingly short-lived as employers downsized, reorganized, outsourced, and otherwise sought to tweak their quarterly profits. In Unemployment was low in the middle of the decade, but jobs were becoming increasingly short-lived as employers downsized, reorganized, outsourced, and otherwise sought to tweak their quarterly profits. In High Wire: The Precarious Financial Lives of American Families High Wire: The Precarious Financial Lives of American Families, Peter Gosselin described how the once-secure middle cla.s.s was now being tossed about by "income volatility"-sudden downturns occasioned by layoffs, leaving families without health insurance or the means to continue their home payments. I reported on this stomach-churning situation in a 2006 book, Bait and Switch: On the (Futile) Pursuit of the American Dream Bait and Switch: On the (Futile) Pursuit of the American Dream, finding educated and experienced white-collar workers adrift in joblessness and short-term contract jobs and likely to end up in the same low-wage service jobs occupied by the chronically poor.
Not everyone was seeing their prospects diminish and lifestyle crimped. The flip side of all this poverty and insecurity was an unimaginably huge buildup of wealth at the upper extreme of the economic spectrum. In terms of wealth and income, America became the most polarized of the First World societies and even more deeply divided than it had been in the 1920s. The share of pretax income going to the top 1 percent of American house holds rose by 7 percentage points from 1979 to 2007, to 16 percent, while the share of income going to the bottom 80 percent fell by 7 percentage points. As David Leonhardt put it in the New York Times New York Times: "It"s as if every house hold in that bottom 80 percent is writing a check for $7,000 every year and sending it to the top 1 percent." 2 2 How did the top 1 percent use their ballooning wealth? On high-yield investments, of course, but also on a level of consumption that might have stunned even the robber barons of old. They traveled by Lear jet, maintained multiple homes, and hired whole staffs of personal employees, including people whose job it was to advise them on the best wines and art to invest in. Looking back from 2008, a writer in the business magazine How did the top 1 percent use their ballooning wealth? On high-yield investments, of course, but also on a level of consumption that might have stunned even the robber barons of old. They traveled by Lear jet, maintained multiple homes, and hired whole staffs of personal employees, including people whose job it was to advise them on the best wines and art to invest in. Looking back from 2008, a writer in the business magazine Portfolio Portfolio marveled at marveled at the $34,000-a-night hotel rooms, the $175 gold-dusted Richard Nouveau hamburger at the Wall Street Burger Shoppe, the Algonquin Hotel"s $10,000 martini on the rock (the rock in question: a jeweler-selected diamond): Conspicuous consumption didn"t even begin to describe the you"re-not-going-to-believe-this lifestyle and work habits of the rapacious ubercapitalists who were replicating all over the world. 3 3 On the eve of the Great Depression, in the highly polarized 1920s, there had been plenty of labor organizers and radical activists around to rail about the excesses of the rich and the misery of the poor. In the twenty-first century, a very different and more numerous breed of ideologues promulgated the opposite message-that all was well with our deeply unequal society and, for those willing to make the effort, about to get much, much better. The motivators and other purveyors of positive thinking had good news for people facing economic ruin from the constant churning of the job market: embrace "change," no matter how terrifying; grasp it as an opportunity. A 2004 business self-help book by Harvey Mackay bore the defiant t.i.tle We Got Fired! . . . And It"s the Best Thing That Ever Happened to Us. We Got Fired! . . . And It"s the Best Thing That Ever Happened to Us. As we saw in chapter 4, employers relied on positive thinking to soothe the victims of downsizings and extract ever more heroic efforts from the survivors. As we saw in chapter 4, employers relied on positive thinking to soothe the victims of downsizings and extract ever more heroic efforts from the survivors.
Nor was economic inequality a concern to positive thinkers, since anyone, anyone at all, could be catapulted into wealth at any time simply by focusing their thoughts. In the 2008 presidential campaign, Joe Wurzelbach, an Ohio man nicknamed "Joe the Plumber," achieved a moment of fame for challenging Barack Obama"s plan to raise taxes for people earning over $250,000 a year. He was planning to buy the plumbing business he worked for, he a.s.serted, and would soon be in that enviable category himself. As it turned out, he was an unlicensed plumber working in a two-man residential business that was unlikely to ever be vulnerable to the proposed tax increase. But why resent the swelling overcla.s.s-the CEOs earning an average of $11 million a year, the owners of islands and yachts-when you are aiming to join their ranks? In reality, Americans are less likely to move upward from their cla.s.s of origin than are Germans, Canadians, Finns, French people, Swedes, Norwegians, or Danes. 4 4 But the myth, fortified with bracing doses of positive thinking, persists. As two researchers at the Brookings Inst.i.tution observed, a little wryly, in 2006: "[The] strong belief in opportunity and upward mobility is the explanation that is often given for Americans" high tolerance for inequality. The majority of Americans surveyed believe that they will be above mean income in the future (even though that is a mathematical impossibility)." But the myth, fortified with bracing doses of positive thinking, persists. As two researchers at the Brookings Inst.i.tution observed, a little wryly, in 2006: "[The] strong belief in opportunity and upward mobility is the explanation that is often given for Americans" high tolerance for inequality. The majority of Americans surveyed believe that they will be above mean income in the future (even though that is a mathematical impossibility)." 5 5 Hardly anyone-economist or otherwise-predicted the financial meltdown. After all, the American economy had recovered handily from the traumas of the dot-com bust and 9/11 and was being carried to new heights by soaring housing and stock prices. Professional optimists dominated the world of economic commentary, with James Gla.s.sman, for example, a coauthor of the 1999 book Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, winning a job as a Washington Post Washington Post columnist and showing up as a frequent news show guest. Escalating housing prices were pumping up the entire economy by encouraging people to use their homes "like ATMs," as the commentators always put it-taking out home equity loans to finance surging consumption-and housing prices were believed to be permanently resistant to gravity. David Lereah, the chief economist of the National a.s.sociation of Realtors, published a book in 2006 ent.i.tled columnist and showing up as a frequent news show guest. Escalating housing prices were pumping up the entire economy by encouraging people to use their homes "like ATMs," as the commentators always put it-taking out home equity loans to finance surging consumption-and housing prices were believed to be permanently resistant to gravity. David Lereah, the chief economist of the National a.s.sociation of Realtors, published a book in 2006 ent.i.tled Why the Real Estate Boom Will Not Bust and How You Can Profit from It Why the Real Estate Boom Will Not Bust and How You Can Profit from It and became "the most widely cited housing expert in major media outlets during the peak years of the housing bubble." and became "the most widely cited housing expert in major media outlets during the peak years of the housing bubble." 6 6 Frank Nothaft, the chief economist at Freddie Mac, was a.s.suring audiences that nationwide housing prices would never fall significantly. Late in 2008, one of the rare economic pessimists, Frank Nothaft, the chief economist at Freddie Mac, was a.s.suring audiences that nationwide housing prices would never fall significantly. Late in 2008, one of the rare economic pessimists, New York Times New York Times columnist Paul Krugman, asked rhetorically why no one had seen that "the whole thing was, in effect, a giant Ponzi scheme" and offered, as an answer, "that n.o.body likes to be a party p.o.o.per." columnist Paul Krugman, asked rhetorically why no one had seen that "the whole thing was, in effect, a giant Ponzi scheme" and offered, as an answer, "that n.o.body likes to be a party p.o.o.per." 7 7 The near unanimous optimism of the experts certainly contributed to the reckless buildup of bad debt and dodgy loans, but so did the wildly upbeat outlook of many ordinary Americans. Robert Reich once observed, a bit ambivalently, that "American optimism carries over into our economy, which is one reason why we"ve always been a nation of inventors and tinkerers, of innovators and experimenters. . . . Optimism also explains why we spend so much and save so little. . . . Our willingness to go deep into debt and keep spending is intimately related to our optimism." 8 8 It"s in the spirit of optimism that a person blithely builds up credit card debt on optional expenditures, takes out a second mortgage, or agrees to a mortgage with an interest rate that will escalate over time. And the ideology of positive thinking eagerly fanned this optimism and the sense of ent.i.tlement that went with it. A It"s in the spirit of optimism that a person blithely builds up credit card debt on optional expenditures, takes out a second mortgage, or agrees to a mortgage with an interest rate that will escalate over time. And the ideology of positive thinking eagerly fanned this optimism and the sense of ent.i.tlement that went with it. A Los Angeles Times Los Angeles Times reporter wrote of the effect of reporter wrote of the effect of The Secret The Secret on her sister: "When my sister arrived from New York over the holidays, she plopped a hand-tooled leather satchel on my piano bench and said, "See the beautiful bag I manifested for myself?" " The DVD of on her sister: "When my sister arrived from New York over the holidays, she plopped a hand-tooled leather satchel on my piano bench and said, "See the beautiful bag I manifested for myself?" " The DVD of The Secret The Secret had encouraged her to believe that she deserved this object, that it was hers for the taking, so she had charged it on her Amex card. had encouraged her to believe that she deserved this object, that it was hers for the taking, so she had charged it on her Amex card. 9 9 While secular positive-thinking texts encouraged people to "manifest" their material desires, pastors like Osteen and Dollar were insisting that G.o.d wants wants you to have the all good things in life, including a beautiful home. In you to have the all good things in life, including a beautiful home. In Your Best Life Now, Your Best Life Now, Joel Osteen had written about his initial resistance to his wife"s pleadings that they upgrade to a large and "elegant" house: "Over the next several months, she kept speaking words of faith and victory, and she finally talked me into it. . . . I don"t believe it would have happened if Victoria had not talked me into enlarging my vision. G.o.d has so much more in store for you, too." Joel Osteen had written about his initial resistance to his wife"s pleadings that they upgrade to a large and "elegant" house: "Over the next several months, she kept speaking words of faith and victory, and she finally talked me into it. . . . I don"t believe it would have happened if Victoria had not talked me into enlarging my vision. G.o.d has so much more in store for you, too." 10 10 A 2008 article in A 2008 article in Time Time, provocatively t.i.tled "Maybe We Should Blame G.o.d for the Subprime Mortgage Mess," cited the suspicions of several experts on American religion about the role of prosperity preachers in fomenting the financial meltdown. Jonathan Walton, a religion professor at the University of California at Riverside, argued that pastors like Osteen rea.s.sured low-income people with subprime mortgages by getting them to believe that "G.o.d caused the bank to ignore my credit score and bless me with my first house." Anthea Butler, an expert on Pentecostalism, added: "The pastor"s not gonna say, "Go down to Wachovia and get a loan," but I have heard, "Even if you have a poor credit rating, G.o.d can still bless you-if you put some faith out there [that is, make a big donation to the church], you"ll get that house or that car or that apartment." " 11 11 To Kevin Phillips, the connection between positive thinking and the subprime crisis seems obvious. In To Kevin Phillips, the connection between positive thinking and the subprime crisis seems obvious. In Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, he indicts prosperity preachers Osteen, T. D. Jakes, and Creflo Dollar, along with he indicts prosperity preachers Osteen, T. D. Jakes, and Creflo Dollar, along with The Secret The Secret author Rhonda Byrne. author Rhonda Byrne. 12 12 To many people who had long been denied credit on account of their race or income, the easy mortgages of the middle of the decade must have indeed come as a miracle from G.o.d. Dean Baker, one of the few economists who foresaw the bursting of the housing bubble, reports that in 2006 the dicey subprime and Alt-A categories of mortgages had expanded to 40 percent of total mortgages-many of them requiring little or no income doc.u.mentation or down payment. 13 13 No wonder that within a year more and more Americans were finding themselves in over their heads. Household debt hit a record 133 percent of household income, for an absolute amount of about $14 trillion. No wonder that within a year more and more Americans were finding themselves in over their heads. Household debt hit a record 133 percent of household income, for an absolute amount of about $14 trillion. 14 14 Personal bankruptcy filings jumped by 40 percent in the course of 2007 alone. Personal bankruptcy filings jumped by 40 percent in the course of 2007 alone. 15 15 People who were unprepared for their adjustable mortgages" rate increases started defaulting, often moving out in the dead of night to avoid their neighbors" stares. People who were unprepared for their adjustable mortgages" rate increases started defaulting, often moving out in the dead of night to avoid their neighbors" stares.
But the gullibility and optimism of ordinary individuals go only so far in explaining the financial crisis. Someone Someone was offering tricky mortgages to people of dubious means, someone was bundling up those mortgage debts and selling them as securities to investors throughout the world-someone who was expecting to make sizable profits by doing so. As was offering tricky mortgages to people of dubious means, someone was bundling up those mortgage debts and selling them as securities to investors throughout the world-someone who was expecting to make sizable profits by doing so. As Washington Post Washington Post columnist Steven Pearlstein has written: "At the heart of any economic or financial mania is an epidemic of self-delusion that infects not only large numbers of unsophisticated investors but also many of the smartest, most experienced and sophisticated executives and bankers." columnist Steven Pearlstein has written: "At the heart of any economic or financial mania is an epidemic of self-delusion that infects not only large numbers of unsophisticated investors but also many of the smartest, most experienced and sophisticated executives and bankers." 16 16 In fact, the recklessness of the borrowers was far exceeded by that of the lenders, with some finance companies involved in subprimes undertaking debt-to-a.s.set ratios of 30 to 1. In fact, the recklessness of the borrowers was far exceeded by that of the lenders, with some finance companies involved in subprimes undertaking debt-to-a.s.set ratios of 30 to 1. 17 17 Recall that American corporate culture had long since abandoned the dreary rationality of professional management for the emotional thrills of mysticism, charisma, and sudden intuitions. Pumped up by paid motivators and divinely inspired CEOs, American business entered the midyears of the decade at a manic peak of delusional expectations, extending to the highest levels of leadership. Recall that American corporate culture had long since abandoned the dreary rationality of professional management for the emotional thrills of mysticism, charisma, and sudden intuitions. Pumped up by paid motivators and divinely inspired CEOs, American business entered the midyears of the decade at a manic peak of delusional expectations, extending to the highest levels of leadership.
One exemplar of the fashionable nonrational approach to management was Joe Gregory, former president of the former investment company Lehman Brothers. According to a 2008 article in New York New York magazine, Gregory was known as a "warm and fuzzy" person, a good golf companion, and, as Gregory himself put it, a "Feeler" with a capital F. Not for him the tedium of detailed risk a.n.a.lysis. "He was Mr. Instinct," in the words of another Lehman executive. "Trusting your instincts, trusting your judgment, believing in yourself . . . and making decisions on the back of that trust is a remarkably powerful thing," Gregory had said in a speech to one group, even when that instinct contradicted rational a.n.a.lysis. Sometimes, Gregory"s hunches would lead Lehman to "decide that we should be doing the exact opposite of what the a.n.a.lysis said," according to one a.n.a.lyst. magazine, Gregory was known as a "warm and fuzzy" person, a good golf companion, and, as Gregory himself put it, a "Feeler" with a capital F. Not for him the tedium of detailed risk a.n.a.lysis. "He was Mr. Instinct," in the words of another Lehman executive. "Trusting your instincts, trusting your judgment, believing in yourself . . . and making decisions on the back of that trust is a remarkably powerful thing," Gregory had said in a speech to one group, even when that instinct contradicted rational a.n.a.lysis. Sometimes, Gregory"s hunches would lead Lehman to "decide that we should be doing the exact opposite of what the a.n.a.lysis said," according to one a.n.a.lyst. 18 18 In April 2008, I interviewed one of the few dissenters from the prevailing positive-thinking consensus. Eric Dezenhall is a Washington, D.C., "crisis manager"-someone companies call in when faced with a potential public relations disaster. A short, blunt, intense man with an impeccable Republican background (he was an intern in the Reagan administration), Dezenhall has often found himself at odds with his own clients: "A lot of corporate types don"t want to hear what I have to tell them." In fact, he said, it can be a "career ender" to be the bearer of bad news. However dire the situation, "corporate America desperately wants to believe there"s a positive outcome and message." When called in by companies to deal with a crisis, he starts by telling them, "I"m going to tell you something you"re not going to like: "A crisis is not not an opportunity." " I asked him whether he thought corporate decision makers went so far as to embrace the "law of attraction," or the idea that you can control the world with your thoughts, and he replied that this way of thinking was "viral" in corporate America. "They believe this stuff. Corporations can be ruthless about making money, but when it comes to being realistic . . ." an opportunity." " I asked him whether he thought corporate decision makers went so far as to embrace the "law of attraction," or the idea that you can control the world with your thoughts, and he replied that this way of thinking was "viral" in corporate America. "They believe this stuff. Corporations can be ruthless about making money, but when it comes to being realistic . . ."
The once sober finance sector was not immune to the "virus" of positive thinking. Finance companies hired motivational speakers and coaches like Tony Robbins, who boasted to Larry King in 2008 that he"d "had the privilege of coaching one of the top 10 financial traders in the world for 16 years" and was currently consulting to a group of traders including "the smartest minds around." 19 19 Some finance companies even generated their own motivational speakers. Chris Gardner, for example, whose account of his rise from homelessness to a top-earning position at Bear Stearns- Some finance companies even generated their own motivational speakers. Chris Gardner, for example, whose account of his rise from homelessness to a top-earning position at Bear Stearns-The Pursuit of Happyness-became a best seller and a Hollywood movie, is a popular motivational speaker. Another motivational speaker, Chuck Mills, spent several years with Bear Stearns as a trader for a $300 million portfolio before going on to found his own financial services firm and speaking business. So profound was the optimism of the finance sector that, when the crisis. .h.i.t in 2008, Merrill Lynch suddenly found itself having to "temper the Pollyannas in its ranks" and force its a.n.a.lysts to occasionally say the word "sell." 20 20 Or consider the somewhat tipsy case of Countrywide Mortgage, the company whose rash lending practices almost singlehandedly set off the subprime crisis that preceded the global credit meltdown. In 2004, Countrywide"s CEO, Angelo Mozilo, ever smiling through his bright orange tan, had been the recipient of the Horatio Alger Award as "an individual who has emerged from humble beginnings to prove that hard work, determination and positive thinking are key to successfully achieving the American dream." 21 21 Even as his company"s stock plummeted in early 2008, the press consistently found him "optimistic" and "upbeat." Bruce C. N. Greenwald, a finance professor at Columbia Business School, said of Mozilo: "People who get themselves in trouble are good at self-hypnosis. That is why they are such good salesmen-they convince themselves about the story. . . . And he had lived in a world where there had been no defaults for so long that he didn"t believe they could happen." Even as his company"s stock plummeted in early 2008, the press consistently found him "optimistic" and "upbeat." Bruce C. N. Greenwald, a finance professor at Columbia Business School, said of Mozilo: "People who get themselves in trouble are good at self-hypnosis. That is why they are such good salesmen-they convince themselves about the story. . . . And he had lived in a world where there had been no defaults for so long that he didn"t believe they could happen." 22 22 The same happy conviction prevailed throughout the company during its years of glad-handed lending. In a tell-all book about his time as a senior vice president at Countrywide, Adam Michaelson describes the "marginally cultish behavior" at the company, characterized by what he calls a "woo" culture of high fives, motivational speakers, and loud "woo" cheers. When, in 2004, he questioned the a.s.sumption of ever-rising housing prices, he was told, "You know what? You worry too much." Even as the subprime mortgage market imploded, he writes, the woo culture prevailed: "These are the times when that one person who might respond with a negative comment or a cautious appraisal might be the first to be ostracized. There is a great risk in noncomformity in any feverishly frothy environment like that." 23 23 Interestingly, among the motivational speakers I could find listing Countrywide as a client was Buford P. Fuddwhacker (actually the fictional alter ego of the real motivational speaker Roger Reece), who is described as "a down-home motivational speaker who brings the fervor and energy of a fired-up country preacher to the platform. When you unleash Buford on your audience, get ready for music, laughter, kazoos, karaoke, and outrageous audience partic.i.p.ation." Interestingly, among the motivational speakers I could find listing Countrywide as a client was Buford P. Fuddwhacker (actually the fictional alter ego of the real motivational speaker Roger Reece), who is described as "a down-home motivational speaker who brings the fervor and energy of a fired-up country preacher to the platform. When you unleash Buford on your audience, get ready for music, laughter, kazoos, karaoke, and outrageous audience partic.i.p.ation."
In a remarkable essay ent.i.tled "The End of Wall Street"s Boom," business writer Michael Lewis provides a glimpse into how positive thinking turned toxic on Wall Street. He set out to find insiders who had antic.i.p.ated the disaster, and, not surprisingly, some of the people he found had been under pressure over the years to improve their att.i.tude. Ivy Zelman, an a.n.a.lyst at Credit Suisse who foresaw the bursting of the housing bubble, "alienated clients with her pessimism, but she couldn"t pretend everything was good." Another a.n.a.lyst, banking expert Steve Eisman, faced criticism for putting a "sell" rating on a company because, as Lewis quotes him, "it was a piece of s.h.i.t. I didn"t know that you weren"t supposed to put a sell rating on companies. I thought there were three boxes-buy, hold, sell-and you picked the one you thought you should." He was, in other words, a holdover from a more rational approach to business, when the job of midlevel people was not just to soothe or flatter the men at the top. Lewis relates that Eisman "was pressured generally to be a bit more upbeat, but upbeat wasn"t Steve Eisman"s style. Upbeat and Eisman didn"t occupy the same planet." 24 24 When I talked to Eisman by phone a couple of weeks after Lewis"s article came out, he said the finance industry had "built a.s.sumption on top of a.s.sumption"-such as that housing prices would never fall-and that "no one saw any reason to question those a.s.sumptions." There was a good reason to remain silent about the enveloping madness, he told me: "Anybody who voiced negativity was thrown out." When I talked to Eisman by phone a couple of weeks after Lewis"s article came out, he said the finance industry had "built a.s.sumption on top of a.s.sumption"-such as that housing prices would never fall-and that "no one saw any reason to question those a.s.sumptions." There was a good reason to remain silent about the enveloping madness, he told me: "Anybody who voiced negativity was thrown out."
One such martyr to the cause of financial realism was Mike Gelband, who ran the real estate division of Lehman Brothers. At the end of 2006, Gelband was getting nervous about what looked increasingly like a real estate bubble. "The world is changing," Gelband told Lehman CEO Richard Fuld during his 2006 bonus review. "We have to rethink our business model." Fuld promptly fired the misfit and, two years later, Lehman went bankrupt. New York New York magazine reports that, as of late 2008, Fuld still had not absorbed what Gelband was trying to tell him: magazine reports that, as of late 2008, Fuld still had not absorbed what Gelband was trying to tell him: At night, Fuld has trouble sleeping. Most of the time, he lives in Greenwich, Connecticut, in one of his five houses. He can wander through the twenty rooms, eight bedrooms, the poolhouse, tennis court, squash court. Mostly, he sits and replays Lehman"s calamitous end. "What could I have done differently?" he thinks. . . . How, he wonders, did it all go so disastrously wrong? 25 25 Or we might cite the case of Armando Falcon, a government official charged with oversight of Fannie Mae and Freddie Mac. When he issued a report in 2003 warning that the two mortgage giants were in parlous financial condition that could result in "contagious illiquidity in the market"-that is, a general financial meltdown-the White House tried to fire him. 26 26 It"s almost impossible to trace the att.i.tudes of failed t.i.tans like Fuld to particular ideologues of positive thinking-the coaches and motivators who advise, for example, that one purge "negative people" from the ranks. Among top executives, there"s a degree of secretiveness about the use of coaches. In the UK, for example, an estimated one-third of CEOs of FTSE 100 companies used personal coaches in 2007, but as a writer in the Spectator Spectator commented, "Consulting a coach is still regarded by senior businesspeople as private and absolutely not something to declare openly." commented, "Consulting a coach is still regarded by senior businesspeople as private and absolutely not something to declare openly." 27 27 More likely, though, a top guy like Fuld didn"t need anyone whispering in his ear that he could have anything he wanted, if only he concentrated on it hard enough. At $60 million a year-his average compensation between 2000 and 2008-this was already his reality, without his even having to concentrate. More likely, though, a top guy like Fuld didn"t need anyone whispering in his ear that he could have anything he wanted, if only he concentrated on it hard enough. At $60 million a year-his average compensation between 2000 and 2008-this was already his reality, without his even having to concentrate.
Corporate leaders, in the finance sector and elsewhere, had ascended into a shimmering bubble of wealth floating miles above the anxieties and cares of everyone else. Between 1965 and 2000, the ratio of CEO pay to that of a typical worker soared from 24:1 to 300:1, and the gap also widened between the CEO and his or her third in command. 28 28 Robert Frank doc.u.mented the fabulous wealth at the top in his book Robert Frank doc.u.mented the fabulous wealth at the top in his book Richistan: A Journey through the American Wealth Boom and the Lives of the New Rich. Richistan: A Journey through the American Wealth Boom and the Lives of the New Rich. If, for example, you were in your Palm Beach home and found that you"d left the Chateau Latour in your Southampton wine cellar, a private jet could be dispatched to fetch it. If, for example, you were in your Palm Beach home and found that you"d left the Chateau Latour in your Southampton wine cellar, a private jet could be dispatched to fetch it. 29 29 Take the case of Jack Welch, whom we last saw in chapter 4, mowing down middle-cla.s.s jobs. He retired from GE with a monthly income of $2.1 million, as well as the use of a company-provided Boeing 737 and an $80,000-a-month Manhattan apartment, in addition to free security guards for his various homes. Take the case of Jack Welch, whom we last saw in chapter 4, mowing down middle-cla.s.s jobs. He retired from GE with a monthly income of $2.1 million, as well as the use of a company-provided Boeing 737 and an $80,000-a-month Manhattan apartment, in addition to free security guards for his various homes. 30 30 On one postretirement trip to London, the On one postretirement trip to London, the Independent Independent found him "installed in the suite of suites in the Lanesborough Hotel overlooking Hyde Park. Dark-suited flunkies with little GE lapel pins stand around looking menacing. One or two have earpieces and curly wires going back down their necks, like G-men protecting the President." found him "installed in the suite of suites in the Lanesborough Hotel overlooking Hyde Park. Dark-suited flunkies with little GE lapel pins stand around looking menacing. One or two have earpieces and curly wires going back down their necks, like G-men protecting the President." 31 31 One obvious price of this lifestyle is extreme isolation-what Dezenhall calls "bubble-itis." Subordinates suffer from "the galloping desire to bring good news" rather than honest reports, leading one billionaire CEO to complain to Dezenhall that "I"m the most lied-to man in the world." Dezenhall can"t offer examples from among his own clients, of course, but he points to the film Michael Clayton Michael Clayton, in which Tilda Swinton"s character arranges to have a whistle-blower murdered rather than confront her boss with the developing mess. Again, the defunct Lehman Brothers provides a case study. According to New York New York, by the summer of 2008: There was a disconnect to the outside world, and the risk was substantial. "The environment had become so insular," said one former executive. Fuld okayed decisions, but [Joe] Gregory packaged material so that the choice was obvious. And the executive committee offered no counterweight. . . . In truth, the relentless optimism, both inside and out [of the company], was probably doing as much harm as good. 32 32 Then there is the effect of being walled inside a world of unstinting luxury. Fuld had his five homes; Gregory commuted to work by helicopter from one of his "sprawling Long Island homes." 33 33 "The problem with this," Dezenhall and his coauthor write in a book on crisis management, "is that when a subject goes from a Gulfstream V airplane to a limousine to a catered meeting to a four-star hotel, he lives in an artificial bubble of constant, uncritical reinforcement. He becomes a demiG.o.d who is a consumer of rea.s.suring cliches, not of life"s friction." "The problem with this," Dezenhall and his coauthor write in a book on crisis management, "is that when a subject goes from a Gulfstream V airplane to a limousine to a catered meeting to a four-star hotel, he lives in an artificial bubble of constant, uncritical reinforcement. He becomes a demiG.o.d who is a consumer of rea.s.suring cliches, not of life"s friction." 34 34 And of course one thing that would be invisible from 30,000 feet up in a Gulfstream jet was the kind of everyday emergency that was derailing so many mortgage holders-a child"s illness leading to medical bills and days lost from work, a costly car breakdown, a surprise layoff. And of course one thing that would be invisible from 30,000 feet up in a Gulfstream jet was the kind of everyday emergency that was derailing so many mortgage holders-a child"s illness leading to medical bills and days lost from work, a costly car breakdown, a surprise layoff.
Steve Eisman is far harsher about the executive mind-set that led to the market crack-up. He calls it "hedge fund disease" and says "it should be in the DSM-V [the latest manual of psychiatric disorders, currently in preparation]. It used to be suffered only by kings and dictators. The symptoms are megalomania, plus narcissism, plus solipsism." If you"re worth $500 million, he asks, "how could you be wrong about anything? To think something is to make it happen. You"re G.o.d." This is the state of mind promoted by every positive thinker from Mary Baker Eddy to Joel Osteen, from Norman Vincent Peale to Rhonda Byrne. Corporate chiefs had, perhaps somewhat cynically, long recommended it to their underlings. They had distributed motivational books and brought in motivational speakers to inspire people to visualize success, to work harder and complain less. The problem is that they came to believe it themselves, with the eventual result that, in a short period of time, about $3 trillion worth of pension funds, retirement accounts, and life savings evaporated into the same ether that had absorbed all our positive thoughts.
"Where were the grown-ups?" asked the commentators as the economy unraveled in 2008. Where were the regulators, the watch-dogs, the rating agencies, like Moody"s, that were supposed to make careful a.s.sessments of investment risks? Well, the rating agencies, as we have learned, were in the pocket of the very companies they were supposed to be judging-were even paid by them, perversely enough. 35 35 As for the public and quasi-public sector, it was in the grip of its own optimistic faith-market fundamentalism, or the idea that markets are self-correcting and in no need of burdensome regulation. One true believer was Alan Greenspan, chairman of the Federal Reserve until 2006, who had crowed in 2005 that "the impressive performance of the U.S. economy over the past couple of decades offers clear evidence of the benefits of increased market flexibility," with "flexibility" meaning freedom from regulation and burdensome trade unions. Three years later he was eating crow, famously admitting to a congressional committee that "those of us who have looked to the self-interest of lending inst.i.tutions to protect shareholders" equity are in a state of shocked disbelief." As for the public and quasi-public sector, it was in the grip of its own optimistic faith-market fundamentalism, or the idea that markets are self-correcting and in no need of burdensome regulation. One true believer was Alan Greenspan, chairman of the Federal Reserve until 2006, who had crowed in 2005 that "the impressive performance of the U.S. economy over the past couple of decades offers clear evidence of the benefits of increased market flexibility," with "flexibility" meaning freedom from regulation and burdensome trade unions. Three years later he was eating crow, famously admitting to a congressional committee that "those of us who have looked to the self-interest of lending inst.i.tutions to protect shareholders" equity are in a state of shocked disbelief." 36 36 And what was market fundamentalism other than runaway positive thinking? In the ideology that prevailed in the Bush administration and, to a somewhat lesser extent, the Clinton administration before it, there was no need for vigilance or anxiety about America"s financial inst.i.tutions, because "the market" would take care of everything. It achieved the status of a deity, this market, closely related to Mary Baker Eddy"s benevolent, ever-nurturing, and all-supplying universe. Why worry, when Adam Smith"s "invisible hand" would straighten everything out?
The purveyors of positive thinking did not slink off into the night like foreclosed-upon homeowners when the prospects for instant wealth tanked in the late years of the decade. Not at all. In fact, they seemed to redouble their efforts. Positive thinking has always thrived in adversity, with the Great Depression bringing forth such cla.s.sics of self-delusion as Napoleon Hill"s Think and Grow Rich! Think and Grow Rich! In late 2008, as the financial meltdown touched off general economic decline and widespread unemployment, as the commentators increasingly questioned the durability of capitalism itself, attendance was soaring at evangelical churches, including those offering the prosperity gospel. In late 2008, as the financial meltdown touched off general economic decline and widespread unemployment, as the commentators increasingly questioned the durability of capitalism itself, attendance was soaring at evangelical churches, including those offering the prosperity gospel. 37 37 Joel and Victoria Osteen took to the national media with their message of victory and faith, telling Larry King that their advice to people who had lost their jobs, their homes, and their health insurance was to avoid seeing themselves "as victims": "You"ve got to know that G.o.d still has a plan and that even if you lost your job, even if one door closes, G.o.d can open up another door." A new series of "Get Motivated!" seminars was announced, featuring Rudolph Giuliani, Robert Schuller, and veteran motivator Zig Ziglar. A speakers agency reported that requests from mortgage companies for motivational speakers rose 20 percent as the mortgage industry declined in 2007. Joel and Victoria Osteen took to the national media with their message of victory and faith, telling Larry King that their advice to people who had lost their jobs, their homes, and their health insurance was to avoid seeing themselves "as victims": "You"ve got to know that G.o.d still has a plan and that even if you lost your job, even if one door closes, G.o.d can open up another door." A new series of "Get Motivated!" seminars was announced, featuring Rudolph Giuliani, Robert Schuller, and veteran motivator Zig Ziglar. A speakers agency reported that requests from mortgage companies for motivational speakers rose 20 percent as the mortgage industry declined in 2007. 38 38 Employers turned to the motivation industry for the usual reason-to maintain discipline within a demoralized workforce. The pharmaceutical company Novo Nordisk, for example, bought up seven hundred "Positive Power" CDs from motivational speaker Ed Blunt, hoping they would serve as "a catalyst for employee productivity." 39 39 A late November 2008 conference on "Happiness and Its Causes" attracted, among hundreds of others, a senior vice president of a large mortgage company. As the A late November 2008 conference on "Happiness and Its Causes" attracted, among hundreds of others, a senior vice president of a large mortgage company. As the New York Times New York Times reported, she said that "she had laid off more than 500 people in the last six months, and was there to learn how to boost the morale of employees working weekends and holidays and making do with bonuses cut in half, . . . adding that companies like hers were not totally at fault for the mortgage crisis." reported, she said that "she had laid off more than 500 people in the last six months, and was there to learn how to boost the morale of employees working weekends and holidays and making do with bonuses cut in half, . . . adding that companies like hers were not totally at fault for the mortgage crisis." 40 40 The message to downcast employees could be fluffily optimistic, like Osteen"s, or downright harsh, like that of the motivational speaker who told a St. Petersburg, Florida, business conference that when people write to her saying "they can"t pretend to be upbeat at work when they feel so miserable," she tells them to "fake it." As for workplace "change," generally meaning layoffs, her advice is, "Deal with it, you big babies." The message to downcast employees could be fluffily optimistic, like Osteen"s, or downright harsh, like that of the motivational speaker who told a St. Petersburg, Florida, business conference that when people write to her saying "they can"t pretend to be upbeat at work when they feel so miserable," she tells them to "fake it." As for workplace "change," generally meaning layoffs, her advice is, "Deal with it, you big babies." 41 41 With real jobs disappearing, the positive thinkers counseled people to work ever harder on themselves-monitoring their thoughts, adjusting their emotions, focusing more intently on their desires. All the usual nostrums were invoked: Banish negative people and steer clear of "office water-cooler whinefests." 42 42 Limit your consumption of negative news. Even on the liberal news site the Limit your consumption of negative news. Even on the liberal news site the Huffington Post Huffington Post, a blogger advised, "Studies show that you will sleep better with less news intake late at night. Focus your mind on what is upbeat and positive." 43 43 Above all, it was important to be vigilant and learn how "to spot when negativity is sneaking up on you personally," according to an advertis.e.m.e.nt for a positive-thinking seminar directed both at managers and at "individuals who are experiencing a personal loss of drive and feeling of futility." Bear in mind that even in the worst catastrophe someone usually comes out on top, Tony Robbins a.s.sured viewers of the Above all, it was important to be vigilant and learn how "to spot when negativity is sneaking up on you personally," according to an advertis.e.m.e.nt for a positive-thinking seminar directed both at managers and at "individuals who are experiencing a personal loss of drive and feeling of futility." Bear in mind that even in the worst catastrophe someone usually comes out on top, Tony Robbins a.s.sured viewers of the Today Today show, citing Sir John Templeton, "the greatest investor of all time," who "made most of his money when markets were crashing." show, citing Sir John Templeton, "the greatest investor of all time," who "made most of his money when markets were crashing." 44 44 If just one person can get rich during a crash or economic downturn, then no one has an excuse for whining. If just one person can get rich during a crash or economic downturn, then no one has an excuse for whining.
Some recommended positive thinking as a cure not only for the individual"s plight but for the entire economic mess. What is a recession, anyway, but a ma.s.s outbreak of pessimism? An op-ed in the Chicago Tribune Chicago Tribune a.s.serted that "the constant bad-mouthing, beyond what reality requires, got us to where we are now, turning a limp economy into a poor one, threatening to turn a recession into a depression." The solution? "Knock off the bad-mouthing. Brush off the accusations of being Pollyannaish, naive, or worse. . . . Exult in the prospects, understand that we can pour whatever trillions we can get our hands on into the economy, but it won"t do any good unless we, ourselves, look forward with trust and confidence." a.s.serted that "the constant bad-mouthing, beyond what reality requires, got us to where we are now, turning a limp economy into a poor one, threatening to turn a recession into a depression." The solution? "Knock off the bad-mouthing. Brush off the accusations of being Pollyannaish, naive, or worse. . . . Exult in the prospects, understand that we can pour whatever trillions we can get our hands on into the economy, but it won"t do any good unless we, ourselves, look forward with trust and confidence." 45 45 Similarly, the broker who handles my dwindling retirement account suggested wistfully that "if only people would get out and buy things again . . ." But at the time of this writing, Adam Smith"s idea that the self-seeking behavior of individuals would add up to the general welfare of all no longer seems to apply. As individuals, we know that it would be suicidal to get deeper in debt to indulge our acquisitiveness, even if doing so could jump-start the economy, so we each hunker down and try to make do with less. The easy credit is gone; the reckless spending looks more self-destructive by the moment. Besides, we already tried all that. Similarly, the broker who handles my dwindling retirement account suggested wistfully that "if only people would get out and buy things again . . ." But at the time of this writing, Adam Smith"s idea that the self-seeking behavior of individuals would add up to the general welfare of all no longer seems to apply. As individuals, we know that it would be suicidal to get deeper in debt to indulge our acquisitiveness, even if doing so could jump-start the economy, so we each hunker down and try to make do with less. The easy credit is gone; the reckless spending looks more self-destructive by the moment. Besides, we already tried all that.
EIGHT
Postscript on PostPositive Thinking
What can we be if not positive? "I do believe in the power of positive thinking," veteran newspaper editor Ben Bradlee wrote recently. "I don"t know any other way to live." 1 1 We"ve gone so far down this yellow brick road that "positive" seems to us not only normal but normative-the way you We"ve gone so far down this yellow brick road that "positive" seems to us not only normal but normative-the way you should should be. A restaurant not far from where I live calls itself the "Positive Pizza and Pasta Place," apparently distinguishing itself from the many sullen and negative Italian dining options. A veteran human resources executive, baffled by my questions about positive thinking in the workplace, ventured hesitantly, "But isn"t positive . . . be. A restaurant not far from where I l