Wednesday, October 22, 2008

Chicken Little: a Reinterpretation

Chicken Little got a bad rap. A couple of acorns hit her on the head and she made the assumption that the sky was falling. It’s a cute story for kids about the importance of proper scientific observation, right?

The sky has served as a source of great story ideas since the ancient Greeks. Remember Hercules' seven labors--the one where he holds up the sky for Atlas while Atlas goes to pick some apples from the gardens of Hesperus? Hercules simply had to hold up the sky for a few days. Chicken Little's fate was much worse and, therefore, her story a much more appropriate morality tale for today.

A fable is a metaphor for life writ large, so the lesson we draw from the tale of Chicken Little is not just about the importance of proper scientific observation, but of making good assumptions. Just because Ms. Little got hit by acorns and not, as she assumed, by pieces of the sky, does not mean that the sky wasn't falling or couldn't fall. After all, we used to assume (those of us that grew up in certain cities in New York and the Midwest) that a river couldn't catch fire. Our grandparents after World War One assumed that there would never again be another "war to end all wars." Democrats in November of 2004 assumed there was no way Dubya could "win" Florida again.

"The fundamentals of our economy are strong." Thank you Mr. McCain. You may be right, but to me, the "fundamentals" are like Chicken Little's acorns. They are the tangible evidence that we use to determine, scientifically, whether our economic "sky" is falling or not. Looking at the evidence it’s pretty clear the stock market IS falling, employment IS falling, gross domestic product (GDP) IS falling, and the country IS in a recession.

[Paradoxically, Exxon/Mobil earned more than it ever has in its most recent quarter--something along the lines of 58% or nearly $15 Billion. I say thank GOD for oil companies. Someone has to be obscenely rich or at least be the exception that proves the rule!]

Here's what happened in a nut--or acorn--shell. A bunch of foxes sold a bunch of homes to a bunch of people who couldn't afford them. Then the foxes bundled these high-risk mortgages and sold them as investment opportunities to quasi-government suckers named Freddie and Fannie--and a few others. To sweeten the pot, these foxes also created a new kind of insurance called debt-swap debentures (?) that made these high-risk, mortgage-based investments even more palatable. This attracted 401(K) mangers, hedge-fund operators and lots of other investor-types who decided to get into the act just in time for the house of cards built on these risky investments to collapse. And when it collapsed, it took down an entire industry (investment banking) with it.

At times like this we are all Joe the Plumber—you know, the guy who is neither. But it gets worse.

Pouring salt in wounds of this economic misery, we the tax-payers, in order to stabilize our more perfect union, have been forced to cover all this bad debt to the tune of $2,350 per person for every man woman and child alive in this country today, which means that all those things that the public dollar used to support like health care, education, and the arts and humanities are going to have to suck wind for a lotta years.

And all of this means what, besides being stuck with the tab…?

If you run a not-for-profit, it means your corporate contributions, including sponsorships and in-kind services, will start to dry up. It means your annual campaign (the one you do at the end of the year for that important "second" contribution) will be significantly lower. It means your fundraising dinner-dance and silent auction extravaganza will not sell enough seats, and your overall fundraising goals for the years will not be met.

There is a lot of information available on the web about what you, as an NFP manager, should be doing to prepare yourself for the coming recession. Sadly, or perhaps more pointedly, much of it focuses on what you should have been doing before now (but most likely weren't) to prepare for these times. But I say...who could have prepared for these times...? These times weren't supposed to happen. Our administration should have been looking out for the public interest right? Didn't they swear an oath to do that, or something?

Let’s get back to our friend, young Ms Little. Her story (the version I grew up with at any rate) ends with she and all her friends (Henny Penny, Drakey Lakey, Goosey Loosey, Turkey Lurkey, Ducky Lucky, and Cocky Locky) being turned into a barnyard feast by—you guessed it—Foxy Loxy.

I'm hoping like hell that isn't the fate of those of us in the arts and cultural sector. It's not that we don't like being special; nor that we don't consider the work we do to be special.

We just don't like being tonight's special.


Clair said...

Well Alex,
Thanks for the economic report in an acorn shell.

I can now see that there is an upside to being a perpetual starving artist: one has nothing to lose.

I've no stocks, no job, no savings, no IRA, no 401K, no money (i.e., no bank deposits over $250,000 in one bank), and my paltry SS check arrives every month.

Only trouble is heating fuel and gas.

So, I think I'm better off than a lot of folks! Let's hear it for the Starving Artists!

Alex Aldrich said...

My only regret is that this was written prior to Tuesday. I'd be nervous if I were one of the ubiquitous "foxy loxies" running around Washington DC (or Wall Street) looking for a post-W job.

Clair said...

It will be good for them to be out of a job, except that their pockets are likely so stuffed with money that their time of unemployment will be but a blip on their career radar.