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Paul Muldoon's 19th-century
circus fantasia
Point of Departure
Daniel Mendelsohn tells why those who study the classics
bear
a special burden of loss
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From the Current Issue
What the Earth Knows
Understanding the concept of geologic time and some basic science can give a new perspective on climate change and the energy future
Any serious conversation about the planet’s climate and our energy future must begin, paradoxically, with a backward look at geologic time. The reason for this is that the way forward is fogged by misunderstandings about the earth. Experts are little help in the constant struggle in this conversation to separate myth from reality, because they have the same difficulty, and routinely demonstrate it by talking past each other. Respected scientists warn of imminent energy shortages as geologic fuel supplies run out. Wall Street executives dismiss their predictions as myths and call for more drilling. Environmentalists describe the destruction to the earth from burning coal, oil, and natural gas. Economists ignore them and describe the danger to the earth of failing to burn coal, oil, and natural gas. Geology researchers report fresh findings about what the earth was like millions of years ago. Creationist researchers report fresh findings that the earth didn’t exist millions of years ago. The only way not to get lost in this awful swamp is to review the basics and decide for yourself what you believe and what you don’t.
Too Bad Not to Fail
Just what are derivatives, and how much more damage can they do?
In “Babylon Revisited,” F. Scott Fitzgerald’s 1931 short story about the aftermath of the 1929 Wall Street crash, Fitzgerald makes the point that such collapses are slips in morality as much as financial failures. Charlie Wales, the story’s emotionally fragile hero, returns to Paris in a desperate effort to regain custody of his nine-year-old daughter. “I heard that you lost a lot in the crash,” says the Ritz bartender. Implying his moral lapses, Charlie replies that yes, he did, “but I lost everything I wanted in the boom.” In fact, upper-middle-class people like Charlie hesitated during the first months of the market’s run-up—until early in 1928. That was when they joined the gambling frenzy, and that was when, as John Kenneth Galbraith wrote in The Great Crash, 1929, the “mass escape into make-believe, so much a part of the true speculative orgy, started in earnest.”
Eight decades later, stock-market investors like Charlie had no role in bringing on or profiting from the 2008 financial crisis. This time they stood on the sideline as major financial institutions engaged in a speculative orgy. Guided by no moral compass, the most sophisticated financial players in the world were betting big with one another about interest rates, commodity prices, and whether companies or governments would default.