While in LA this weekend, I crossed another item off my bucket list: a visit to the La Brea Tar Pits (www.tarpits.org). Ever since I was a (somewhat nerdy) little kid obsessed with dinosaurs and fossils, I’ve wanted to visit the Pits. For those of you who had other interests when young, the Tar Pits are a natural formation where gooey tar from deep inside the earth seeps up and forms sticky pools. When covered with rainwater that floats atop the tar, the Pits look like innocuous ponds. To prehistoric animals, they looked like a friendly watering hole. Woolly mammoths, saber-toothed cats, and all manner of iconic Ice Age animals would wander down for a drink, step into what looked like water, and sink into the tar. The more they struggled, the deeper they sank, until they finally succumbed and were entombed in the tar, preserved forever. Today these thousands of individual animal tragedies provide us with an amazing fossil record of Ice Age life.
Today the Tar Pits are still seeping away in the very heart of Los Angeles, surrounded by museums and an excellent burger place called The Counter. On Saturday, I was working my way through a, um, mammoth bacon-cheese while gazing out at the Pits, and thinking about how debt is just as beautiful and deadly a substance, one that now has mired so many of us as individuals—and whole countries—in its grip.
We all know how when real estate prices were rising, our home equity looked like a pretty attractive ATM we could tap to buy that new car or invest in more real estate. And governments looked at cheap debt— and the power of the currency printing press—as a way to live beyond their means, funding welfare and wars and whatnot that they couldn’t possibly afford. But like the tar, debt had such an appealing sheen … the water looked so clear and fresh… and then too many of us, and our governments, found ourselves stuck with no easy way out.
Today we hear about a cycle of global “deleveraging,” which simply means the laborious process of trying to lift ourselves out of the mire of debt, personal and sovereign. This is going to take quite a while, not only because debt has a powerful grip, but also because some governments (our own, notably) still want to believe that the watering hole isn’t really all that dangerous. You see, paying off debt is only one-half of the equation. The other half is not wriggling deeper into it. That means austerity and fundamental changes in the rate at which we spend our personal and national dollars, euros, yen, and pounds sterling— and it means focusing on growing the economy. It means not going to the wrong watering holes. But do we have the willpower?
If there is a lesson from the past ten years of out-of-control borrowing, personal and governmental, it is the lesson of the La Brea Tar Pits. There is a reason that woolly mammoths and saber-toothed cats are extinct. Let’s not let the same fate befall us.
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