EXCERPT: 'Hot, Flat, and Crowded,' by Thomas L. Friedman

So I have revised the opening three chapters to explain how and why the Market and Mother Nature hit a wall at the same time. After that, I pick up the narrative of the original book. The remainder of the first half looks at the impact that our reckless behavior has had on the planet, at a time when it is already becoming hot, flat, and crowded. The second half explains how we can use this crisis to reinvigorate and retool America, whose leadership—technological, financial, ethical, and ecological—will be vitally necessary for the whole planet to meet the unique challenges of this moment.

If I had to sum up what this challenging moment means to us, I would put it like this: Our parents were the Greatest Generation, building for us in America a world of freedom, abundance, and opportunity to a degree that no generation in history had ever enjoyed. My generation (I was born in 1953), the baby boomers, turned out to be the "Grasshopper Generation," a term inspired by the writer Kurt Andersen, who in a Time essay devoted to our recent age of excess (March 26, 2009) argued that Americans in the past thirty years let out our inner "grasshopper" and gorged on the savings and natural world that had been bequeathed to us—leaving our children huge financial and ecological deficits. We cannot afford to be grasshoppers any longer. And therefore we and our children are going to have to be the "Re-Generation," and summon the will, energy, focus, and innovative prowess to regenerate, renew, and reinvent America in a way that will show the world a new model for growing standards of living and interacting with nature that is truly sustainable, renewable, healthy, safe, fair, and creative of more opportunities for more people in more places than ever before.

The green revolution is not about the whales anymore. And it is not about "our children's children," a generation so distant it is really hard to get energized about it. This is about us. This is about the world we and our children will inhabit for the rest of our lives and whether we can find a way to create wealth—because everyone wants to live better—without creating toxic assets in the financial world or the natural world that overwhelm us. This is an urgent project, because the way of life we lapsed into in recent years cannot be passed on to another generation without catastrophic consequences. It is a tall order, a great challenge—one that our children did nothing to deserve but now can do nothing to escape.

As I said, the Market and Mother Nature hit the wall at the same time for basically the same core reasons, which we need to understand if we are going to avoid a repeat. I am going to focus on three: the systematic obscuring and underpricing of the true costs and risks of what we were doing; the pervasive application of the worst sort of business and ecological values, embodied by the catchphrase IBG/YBG—do whatever you like now, because "I'll be gone" or "You'll be gone" when the bill comes due; and the privatizing of gains and the socializing of losses.

Underpricing Risk

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