the nasty side of positive thinking, autumn leaf, the arrogance that crashed aig

Barbara Ehrenreich: The Relentless Promotion of Positive Thinking Has Undermined America

Positive thinking is different, she says, from being cheerful or good-natured — it’s believing that the world is shaped by our wants and desires and that by focusing on the good, the bad ceases to exist.

Ehrenreich believes this has permeated our culture and that the refusal to acknowledge that bad things could happen is in some way responsible for the current financial crisis.

In her new book, Ehrenreich examines how the positive-thinking movement was started by Mary Baker Eddy, the founder of Christian Science, and an amateur metaphysician named Phineas Parkhurst Quimby in response to Calvinism; how being positive became mandatory in corporate culture; and how she thinks prosperity preachers, such as Joel Osteen of Lakewood Church in Houston encouraged a culture of debt by telling their congregations that God wants them to have a big house and a nice car.

Its not difficult to find friends, co-workers or media pundits to tell us the sky is falling. Then alternately claim a little positive thinking is all the magic required to make things better. I’ve seen people unable to get through the work day because of the emotional upheaval over their bad transmission. Obviously most of us can be devastated by bad news, thus learning to put things in perspective is required to function, but mindless invocation of happy thought self therapy is not the answer either. The positive thinking culture does seem to be linked to the get yours now culture. Implied in that, intentional or not, is damn the consequences. The endless commercials coupled and invocations from pulpits has created the easy payment run to get more stuff culture. With everyone thinking positive thoughts, carefully considered consequences got lost and remains so. All the shiney happy thoughts in the world will not change the usery level interest rates that eat up that low monthly payment. Often times for crap that breaks down by the time one makes their last payment. Those one assumes the joy of repeating the cycle. Happy thought delusions also play a large role in our national denial. I’m doing OK. I must be virtuous. Those not doing OK are bad people, lazy ne’er-do-wells and welfare queens . Luck, life circumstances, wealthy family connections, helpful friends, cultural trends – well we just won’t acknowledge those things because they detract from my luck which I’m damn sure is the one hundred percent the result of my brilliant mind, hard work and a laser sharp focus on thinking in the affirmative. Cold hard cynicism or all doom and gloom is just as bad. There is a middle ground.

autumn leaf

What happened with A.I.G or more precisely A.I.G. Financial Products unit. This essay by Michael Lewis narrows it down, The Man Who Crashed the World

At the time A.I.G. F.P.’s losses were reported, it became known that a handful of traders in this curious unit had sold trillions of dollars of credit-default swaps (essentially unregulated insurance policies) on piles of U.S. subprime mortgages, but its employees hadn’t yet become the leading examples of Wall Street greed.

[   ]…This, naturally, infuriated Joe Cassano, who, says one trader, thought Park was being lazy, dreaming up reasons not to do the deals that would require work. Confronted with the new development—his company was insuring not consumer credit generally but subprime mortgages—Cassano didn’t blink. He simply claimed that the fact was irrelevant: for the bonds to default, U.S. house prices had to fall, and Cassano didn’t believe house prices could ever fall everywhere in the country at once. After all, Moody’s and S&P still rated this stuff AAA! (bold mine)

I remember reading this news story earlier this year about positive thinker Cassano, Pin AIG woes on Brooklyn boy: Joseph Cassano walked away with $315 million while company staggered. AIG is one of those notorious too big to fail inistitutions, but at the time its regular insurance divsion was not particularly corrput or addicted to the kind of risks that was bound up with the credit-default swaps. They held insurance for some regualr working folks and small orgainizations,

The suit by the Jacksonville Police and Fire Pension Fund charges Cassano and his pals “knew or recklessly ignored facts indicating that AIG faced mounting losses” even as they assured investors all was well.

magical stairs