| Progress
Backwards |
| On The
Sun-Kissed Shores Of Nicaragua, The Writer Enjoys The View... But Cannot
Help But Contemplate Its Cost |
| by Bill Bonner |
| "The mortgage-stones
that covered her, by me, removed - the land that was a slave is free..."
- Solon, recorded
by Plutarch, boasting of reducing Athens' debt burden by inflating the
currency
"Two years
ago, there was nothing on this beach. And nobody. The guy who lived here
with his family, he was just a caretaker." |
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| We were sitting
on the porch of a beach shack, on a small hill overlooking Los Perros beach.
The beach was broad, with white sand stretching out around a point of palm
trees and then continuing a mile or two to another clump of hills. The
effect of the green trees, white sand and blue water was a bit like a huge
flag laid out on the ground before us.
We sat on tree
trunks under a rusty tin roof, our backs against the rough boards of the
house, enjoying the warm breeze.
"When I was
a boy I used to come here to swim. This is the best swimming beach...and
there was never anyone on it."
But things
have changed. Now, your editor is building a house on the hills near the
beach. His children played in the surf as he and Antonio talked. And down
the beach, right on the high-tide mark, a developer has begun a group of
condominiums..."I
don't know what he was thinking," Antonio remarked. "I tried to tell him.
Anyone who knows the ocean can tell that he's too close. If we get a bad
storm, the river will rise on one side and the ocean on the other. He'll
have real problems." |
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| The last real
problems came about 10 years ago. A tidal wave washed away one of Antonio's
own houses. The old folks say that such a wave only comes along once every
100 years. The developer must have done the math; he, the buyers, and even
the insurers will be long dead before the next one hits.
So progress
continues. Now, at least, they put the footings deep in the sand...and
hope the building holds together in high water.
All over Nicaragua,
or at least everywhere we went, we saw evidence of progress. In Managua,
there are new roads, new buildings, new restaurants, and shiny new gas
stations on nearly every street corner.
Out in the
country, the progress one sees is yesterday's progress, not tomorrow's. |
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Offshore Resources Gallery
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Nicaragua
Land
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| The invention
of corrugated tin roofing changed the look of the place. Where once the
traveler only saw graceful old houses with their clay tiled roofs...or
hovels covered with palm fronds...he now sees cinder blocks and rusty tin.
Everywhere he looks, he sees tin in various stages of decomposition. The
tin is meant to be galvanized, of course, resistant to rain and weather.
But in this climate, Galvan's process seems to do little good. Rarely do
you see a piece of tin in good condition; it is almost always brown from
rust. Perhaps some day, rusty tin will be regarded as quaint or picturesque.
But for now, like leprosy in a Siamese brothel, it corrupts the beauty
of the tropics all over the world.
Another friend
has taken it upon himself to become the Freddie Mac of one little corner
of Nicaragua.
"You ought
to require tile roofs," we suggested.
"I put $5,000
into a building fund," he had explained. "I told the staff that it was
available to anyone who wanted to build a house. I just did it to try to
help these people. I don't really care if I get paid back or not." |
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| And so, by
an act of charity, people who never owed a penny to anyone are seduced
into the consumer credit economy. Previously, they might have spent the
day fishing...happy to catch only enough for dinner. Or, they might have
traded an extra fish with a neighbor and walked home with some rice and
beans, too.
But the new
mortgagee has no choice; he must work in the money economy in order to
make his payments. Soon, he will open an account at the local bank...and
get a credit card, too. He will borrow more to buy a car...and to install
central air conditioning. In a matter of time, he will not be able to do
without them. And then...what joy!...his living standards will rise to
those of Americans. He will have all the comforts of modern life...and
live paycheck to paycheck to pay for them. His debts may rise to the level
of Americans', too... |
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Offshore
Resources Gallery
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| and like them,
he will hope he never has to pay them. Progress comes in fits and starts...with
occasional tempests to carry off mistakes.
Plutarch tells
how the debt burden in ancient Athens rose so high that its "mortgage-stones"
had begun to crush the city. Solon, a famous politician from the 6th century
B.C., found a solution..."for he made a pound, which before had passed
for seventy-three drachmas, go for a hundred; so that, though the number
of pieces in the payment was equal, the value was less; which proved a
considerable benefit to those that were to discharge debts."
The old Solon
may or may not have been the first; he was definitely not the last. People
build up debts on sunny expectations...and hope some act of God will wash
them away. But it is not God, but man, who erases debt. And he does so
not by acts of nature...but by acts of fraud, that is, by cheating lenders.
Today, Americans put their faith in Alan Greenspan and the Feds, trusting
that these modern Solons have mastered the art.
Antonio stood
up and leaned against the porch post...looking down the beach.
"If he sells
those condos, he's going to build them all down the beach. I guess we could
turn this old place into a bar. Then, at least the people who buy there
will have a place to get a cold beer."
"Put some clay
tile on the roof," was our advice.
"We could keep
it just as it is," Antonio continued. "I think people would like it....they
could sit on these stumps...The guy who buys the condo will be able to
pay $5 and sit on this porch drinking beer just like the caretaker used
to."
The customer
will look out on the beach...with its new condos and new visitors. He can
sit and wonder how he will make his monthly payments...then, he will drink
his beer, served by a bartender with his own monthly payments to make.
He may have
paid $150,000 or so for the condo...maybe more. But even if he paid a million,
he'll never be able to enjoy the beach that the caretaker had, all to himself,
for free.
Is that progress,
or what?
Bill Bonner
The Daily
Reckoning. |
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Article
Index ~ Nicaragua
Index ~ |
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