At Large : The stonewall metaphor
By Doug Cabral
Published: October 23, 2008
The dry stonewall that encloses our lot on two sides is ancient. In places it is nearly four feet high, elsewhere it is a tracing through the viburnum and poison ivy. It was built as storage for the irregular, common, but unwanted stones that wrecked a farmer's dream of wide, flat fertile fields planted in corn or oats. But, its utility was actually multifold. It kept the stock in, marked the boundaries, and cleared the rubble. Recently, it's assumed a new decorative responsibility, familiar in this modern economy but utterly unrelated to its inherent purposes or necessity.
Today, stonework is decorative, often mortared together so that the clever fitting required of a dry wall builder is unnecessary, or assembled as a façade with flat-backed stone bonded to a cement or cinder block structure. It is designed and built with imported stone as an architectural reminder of the work-a-day stonework that the farmer who built my walls created, with not a thought of embellishment in mind. Modern stonework is often merely an echo of life on real terms, when land is cleared for crops, not lawn, and trees are cut for firewood, not views, and houses are shelter not theme parks. Modern stonework - not always, of course, but often - is as unlike the old, original, and disintegrating wall around my lot as those pesky and incomprehensible derivatives and mortgage-backed securities that have been so troublesome lately are unlike mortgages, as we have generally known them. Stonework has become fieldstone accents, and borrowing has become leverage.
The modern economy is a mystery to most of us, and apparently it's at least a puzzle to the experts, who in their enthusiasm for profits thought they'd solved it. So, they blew up the old rules for borrowing, and they invented leverage of a new and astonishing order of magnitude. For each down payment dollar of your money, you could borrow 39. And, with those $40, you paid too much, but you got what you wanted. And, it was spectacular.
Then, because it was sold for $40 once, you offered it for sale for $45. Until, suddenly, no one was buying, and the deflation race was on. It was as if that stone in the way of the farmer's plow, the one he levered to the top of the wall he was building, miraculously came to command a $5 a pound price to the estate builder in Chilmark, plus trucking from fieldstone mecca Westport, Massachusetts, ferry, and wall-building labor charges, all to be paid by the wealthy summer resident who imagined his waterfront parcel bounded by ancient stonewalls, because such things were to him characteristic of Martha's Vineyard. The value, even of a worthless stone dug from the middle of a pasture, is in the eye of a beholder.
Now, lest you smile and think, "How quaint, this guy describes financial transactions in terms Fred Flintstone would understand," you should know that some of our most exalted citizens, including presidents past and presidential candidates past and present, have demonstrated as flimsy a grasp of economic and financial affairs. Or, at least, as they've touted their own plans they've enjoyed deriding their opponents' stabs at economic policy speechifying. You've heard of Nixonomics and Reaganomics, but have you heard of "Mother Hubbard" economics, Herbert Hoover's name for Franklin Roosevelt's policies. Then there are Clintonomics, Dubyanomics, and voodoo economics (the elder President Bush's description of Ronald Reagan's economic plans, before Bush lost and Reagan became the golden god of Republican politics). And who could forget "Elvis economics," also an elder-Bushism meant to ridicule the proposals of his 1992 opponent, Bill Clinton. These and more are reviewed in Hatchet Jobs and Hardball: The Oxford Dictionary of American Political Slang, edited by Grant Barrett and published by Oxford University Press, a political compendium delightful enough to take your mind off the tedious and relentless present presidential election competition.
The point is that neither candidate for the top job in 2008 is nearly as smart as the wizkids, tasked by Congress with spreading the American dream, who brought us derivatives, mortgage-backed securities, or credit default swaps, and ultimately the credit crisis and stock market collapse. With luck, one of the current aspirants to the top job may be wise enough to recognize a rock for what it is and what it's worth, and clever enough to keep the Congress from creating a financial environment which invites the wizkids to make their destructive magic.
