This post takes its name from this week’s episode of This American Life. As always, these guys do a great job of putting together a solid and informative weekly public radio show, and this particular episode struck me so much that I felt like writing about it.
The episode itself deals with the sub-prime mortgage crisis. From the website:
We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.
Of course, I am highly recommending that you listen to this show if you want to know more about the crisis that is rocking the real estate market and the nation. But the thing that struck me the most was this part in the show, where they are talking about the Giant Pool of Money:
Most people don’t think about it, but there’s this huge pool of money out there, which is basically all the money the world is saving now. Insurance companies saving for a catastrophe, pension funds saving money for retirement, the Central Bank of England saving for whatever Central Bank’s save for. All the world’s savings…a lot of money. It’s about 70 trillion.
The program goes on to talk about the people who manage that money, the investment bankers and Wall Street tycoons who obsessively search for stable, high yielding investments in which to store the money. The program continues:
This number doubled since 2000. In 2000 this was about 36 trillion dollars. So it took several hundred years for the world to get to 36 trillion, and then it took six years to get another 36 trillion. How does the world get twice as much money to invest? There are lots of things that happened, but the main thing is that all sorts of poor countries became kind of rich, making TVs and selling us things like oil. China, India, Abu Dabi, Saudi Arabia, made a lot of money, and banked it.
So, during a time when a record amount of wealth was generated, the familiar story of the ever-widening gap between rich and poor, in my own mind at least, bears its ugly head. And this, mind you, a phenomenon that is affecting even the most educated among us.
In this debate, my two cents have very little do with tax or trade policy, instead I would like to draw the reader’s attention to the issue of natural resources. To think, in the very title of the radio program and this post, that money is “pooling” itself, concentrating in fewer areas and in fewer hands, is in and of itself disturbing. But, to think more deeply about what this money is, what it represents, is more disturbing still. This money is our forests cut, our mineral wealth extracted, processed and burned, our soils depleted, our air contaminated, and our hard human labor exploited…and pooled.
I would not be so naive to say that globalization has not benefited many of us, but the cost may be too great to bear for ourselves and for future generations. And the very fact that these resources that belong to all of us, especially our human labor, are somehow pooling in the hands of fewer and fewer people, is by its very nature a call for revolution.