Sweet Little Lies

A record number of Americans now live below the poverty line. Four people lost their lives and hundreds were displaced by this week’s pipeline explosion in San Bruno. Two people lost their lives in Afghanistan during a protest of the threat of burning of sacred books. These are some of the facts that greeted humanity this week. And after we slowed down on the highway of life enough to create a traffic jam as we watched the stories unfold in disbelief, we passed another week with little more than a traffic jam. Next week, more headlines. Next week more cognitive traffic jams. Next week, more of…?

During the same week, violent clashes erupted in Guinea – the West African nation which is rich in aluminum and iron ore yet remains one of the most poverty ridden countries on earth with over 63% of the population officially under the poverty line according to UNICEF. The governor of New Ireland, Papua New Guinea, Sir Julius Chan was quoted this week in an interview by Radio New Zealand as saying, “We do not support the expansion of the mine [LIHIR just taken over by Newcrest] because we are not convinced that they are telling us the truth about the impact on the environment and the tailings dumped 150 meters down into the sea.” Marketed by Bloomberg Businessweek (August 30 – Sept 5, 2010) as “The Evangelist”, Thomas Kaplan was celebrated along with David Iben of Nuveen Investments (another Bloomberg hero) for their market savvy generating massive investment returns at the expense of thousands of people and generations of environmental destruction. At a recent meeting in Ulaanbaatar, I had the privilege of hearing Mr. Zorigt D., Minister of Mineral Resources and Energy of Mongolia and President Mr. Elbegdorj T. challenge a global audience to hold up a single example where a resource-rich country actually succeeded in aligning such prosperity with benefit to its people. The list, they both said, of failed experiments is quite long. However, the examples of success are isolated and short-lived.

Coming off the seven-week series on Integral Accounting, the headlines and celebrants of the past week were particularly poignant. Somewhere along the line, we’re going to find out that the pipeline in San Bruno had known problems and that it wasn’t “cost effective” to fix them. Just like it wasn’t cost effective to fix the bridge over the Mississippi prior to August 1, 2007. Somewhere along the line we’re going to find out that declaring a “war on poverty” is as effective as a “war on terrorism”. By picking an anonymous, de-humanized enemy, we can pretend to be doing something while accomplishing nothing substantive at all. Remember how well the “war on drugs” worked? Ask yourself how much we’re spending to “secure our borders” with Mexico and see if you can see why our reflexive response to things we don’t really care about changing is less than stellar in obtaining any outcome whatsoever.

Lyndon B. Johnson, during his State of the Union address on January 8, 1964 declared “War of Poverty”. To be clear, this week, we surpassed the poverty level that was the impetus for the war. Mission accomplished? I think not. Richard M. Nixon declared a “War on Drugs” June 17, 1971. This week, Obama and Secretary of State Hillary Clinton were sparring on whether Mexico was as bad as Colombia. Mission accomplished? I think not. In March of 1954, Joseph McCarthy declared “War on Communism”. A tired Fidel Castro told the Atlantic Magazine this week that “the Cuban model doesn’t even work for us anymore.” Mission accomplished? Hardly. In fact the last bastion of communist economic and social planning is the bank from which our capitalism is currently over-drafted. And in a recent op-ed in the Huffington Post, State of the World co-founder Jim Garrison laments that the fact that the forces aligned to tackle climate change and global warming have failed in their mission.

So I was thinking about what one can learn from legacy of the summer of 2010. In the past four weeks, we’ve seen ourselves as a human race come face-to-face with the reality that our Wars On… responses have all failed. Iraq is no safer and Afghanistan is seeing escalation in violence. Aging infrastructure is crumbling and exploding while “Jobs Stimulus” money is being used for repaving over our rotten pipelines. Democrats and Republicans volley accusations about what to do about the economy while the G-20 leaders hang their heads in exhaustion facing the realization that none of the levers that they used to wield seem to work on the economic locomotive currently hurtling out of control. And central bankers can’t even find respite fly fishing in Wyoming as they know that new bank regulations won’t change the fundamental problem.

Wars appear to work when people are ignorant of all the facts. Wars appear to work when frenzy can replace facts. Wars appear to work when ideologues replace civil, respectful repartee with rhetoric. Wars appear to work when we accept the lies we are fed by the purveyors of propaganda. We’ve got to end the policy of accepting lies as explanations for the way things are. Bush era tax cuts didn’t create jobs and extending them won’t do a thing. Throwing money at road projects while sewers, pipelines, bridges and oil platforms rust and fail doesn’t stimulate the economy. Promoting “democracy” at the end of a gun barrel where ideologies have never valued individual freedom doesn’t get us closer to human rights. Celebrating mineral investment returns while seeing growing environmental degradation is NOT acceptable. Bloomberg should tell the other stories and see how they’re received. This past week, we highlighted one of the biggest tax abuses in the U.S. – the research and experimentation tax credit. For the past five years, the Internal Revenue Service has had evidence of massive abuses in this credit – they’ve even written internal memos about how abuse-prone it is – yet the Obama administration has the audacity of suggesting that making this permanent will “stimulate the economy and create jobs”.

To turn this around, we need to reclaim dignity and integrity. Beginning this week, tell the truth and expect the same in return. Beginning this week, if you see a bridge that’s rusted, write a note to the department of transportation. If you see profits being celebrated, take the time to look behind the numbers and see if that cheap aluminum in the airplane manufacturer’s product is coming from Guinea. Look at your investments in your retirement account. If you don’t know how the money is being made – FIND OUT! The only way lying works is if people like you don’t care enough to fact check what you’re being told. And if you start fact checking and sharing what you find, others will too. I challenge you to the following. Add one piece of information that you didn’t know about one of your investments to the end of this blog so that others can see it. One of two things will happen. Either none of you will rise to the challenge and thereby reinforce my point that we’re too lazy to care… or… some of you will do it and we’ll all be better for it. In the first instance, we’re still better off because when we know we don’t care, we actually are close to realizing that WE are where transformation needs to start. Let’s declare peace with truth and see if the warring impulse fades.