Anonymous
Ms. Mills
English 1A
19 February 2010
The Great Recession and the Environment
Grammar version

Pulitzer Prize winning New York Times author Thomas L. Friedman uses his book Hot, Flat, and Crowded as a vehicle for the promotion of social change.  Friedman uses the economic meltdown of 2008, which he terms the Great Recession, and the environmental problems we are facing like global warming as examples of how we, the people of the United States, have been living beyond our means.  The opening chapter entitled “Why Citibank, Iceland’s Banks, and the Ice Banks of Antarctica All Melted Down at the Same Time,” (3) functions as Friedman’s explanation for these crises and how they are related in principle.  Thomas Friedman faults our unsustainable and reckless behavior for the Great Recession and the damage currently being done to the environment.  In his argument he focuses on how the banks and lending firms used the concept of IBG/YBG (I’ll Be Gone, You’ll Be Gone), the imbalance of profits and losses he calls the “privatization of gains and socialization of losses,” (9) and the investment in real wealth.
	What sparked the Great Recession, according to Friedman, were the banks and lending firms making short-term, risky economic decisions based on the concept of IBG/YBG.  IBG/YBG emboldened those making these risky decisions because, according to Friedman, they believed they would escape blame before anything could go wrong.  The banks first, undervalued the risk in allowing subprime mortgages to be issued to those who were unable to pay them and second, undervalued the probability of the housing market collapse.  With the assistance of the federal government by way of deregulating banks and exempting derivative sales from federal oversight, the banks were allowed not only to provide subprime mortgages to those who could not afford them, but also to bundle these subprime mortgages into mortgage backed securities which they then sold to larger banks like Freddie Mac and Fannie Mae.  Corporations like AIG then insured these securities through credit default swaps. Those who started this risky business would be gone before anything could begin to go wrong by selling these securities to the next available buyer. Similarly, Friedman believes that the same IBG/YBG mentality is also causing harm to the environment.  According to MIT’s Integrated Global System Model, if human beings continue to live at the current rate of carbon emissions by 2100 the earth will experience temperature changes unlike any mankind has ever experienced.  The next generation will be left to suffer the consequences of our current lifestyle because we are operating with the mentality that we will be gone before things get really bad.  Friedman makes the claim that it has been our inability to think in the long-term that has caused such irresponsible behavior not only on Wall Street but on Main Street as well.
	Friedman also makes the point that the economic failures of the Great Recession and the damage to the environment are both the result of privatization of gains and socialization of losses.  What he means by this is that there is a collective loss from both the economic recession and the environmental damage while those who profit are in the minority.  Friedman uses the multimillion-dollar contractual bonuses and “golden parachutes (payment after resignation)” that were handed to CEOs of banks like Merrill Lynch as an example of a profit to a minority.  Meanwhile, the United States taxpayers are paying a $700 billion bailout to those very financial institutions, which Friedman uses as an example of the recession’s collective loss.  By underestimating the damage of our carbon emissions, the people of this planet have been in a number of ways profiting from damaging the environment. By being unable to set a price on carbon emissions or greenhouse gas emissions, there has been very little attention paid to the risk in allowing this unchecked behavior to exist; leading to privatizing the profit and socializing the loss. The next generation, and quite possibly this current generation, will be collectively suffering from undervaluing of our environmental impact.
Another component of Friedman’s argument is the investment in sustainability and innovation to promote real wealth.  According to Friedman, real wealth occurs when one may pass something on for a future generation’s benefit.  He asserts that the way to real wealth is through sustainable action.  The subprime mortgage scheme is not an example of real wealth.  But, in his thesis Friedman claims that America can get back on track by allowing government policies and new technologies to change the way we live our lives; thus, becoming an example of how to conquer global problems.  
	Using the Great Recession and the environment as examples of how our lifestyle of excess and irresponsibility have resulted in a privatization of gains and a socialization of losses, Friedman argues that we have undervalued the risks we have taken with the economy and with the environment.  By providing his readers with the tools with which to consider these hefty issues, Friedman’s purpose is ultimately not only to win their confidence, but also to win their participation in the movement toward sustainability.