NEW YORK (Reuters) - If countries were fairytale characters, who would the United States be? New York Times correspondent Peter Goodman nominates Peter Pan, the boy who lives in a place called Neverland and refuses to grow up.
It was this Neverland mindset that led to credit, technology and housing booms and busts over the past 15 years, Goodman writes in a new book, “Past Due” (Times Books, $25).
“Americans have operated as if we can fly, borrowing increasingly enormous sums of money while making believe it need never be paid back, while Wall Street had cavorted across an island of unlimited adventure and no adult supervision,” he writes.
The results have devastated many people, and Goodman weaves in their stories to drive home that point.
Dorothy Thomas lived beyond her means for years, tapping credit cards to live in neighborhoods she otherwise could not afford so she could send her children to good public schools. Then a few bad moves — getting pulled over after failing to pay some motor vehicle fees — left her without a car, which in turn cost her a job and, eventually, her home.
Truck driver Greg Bailey turned down college scholarships to watch over his crack cocaine-addicted mother. Years later, he tried to break into the white-collar world by taking a training course, but still could not find a job that paid a living wage, let alone one in his chosen field.
Goodman acknowledges that his subjects made mistakes, but he pins most of the blame on corporate America, Wall Street and the government officials who deregulated banking and other industries.
And while many enjoyed a boom before financial markets crashed last year, the people hit hardest by the crash never even partook of the good times.
“Greg Bailey missed out,” Goodman writes. “His feet never left the ground. And yet he has been dragged down just the same by the collapse of make-believe, paying the costs of the reckoning now under way.”
Most of the book examines how the United States evolved into a place that allows so little room for individual error, but Goodman also spends several chapters on suggestions for how the economy can move beyond Neverland.
“A whole new kind of economy is required, one that replaces debt with savings and home equity loans with paychecks,” he writes. “One that generates growth not by conjuring up more make-believe finance but by producing goods and services of intrinsic value.”
He visits the Midwest, where some communities are holding their own as they produce solar panels and wind farm equipment, and North Carolina, where some unemployed textile workers are finding work in biotechnology.
In addition, he urges the United States to encourage foreign investors, a move he calls “insourcing” because it can help counteract the effect of jobs shipped overseas.
Finally, Goodman advocates a return to what he calls sensible regulation. “The market is a tool, not an all-encompassing system,” he writes. “It needs supervision to ensure that it functions in our collective interest.”
Reporting by Lisa Von Ahn; Editing by Eddie Evans