Faces of Economic Death

No doubt, you know them both -- the green lizard's smile and
cockney accent feign earnestness while the aproned Flo goes for the same
effect through the saccharine enthusiasm of an "Office Space"
character. It's mildly cute, but don't be fooled: As the best-known
avatars of the insurance industry, these two are aggressively competing
for our cash through re-education-camp levels of repetition, hoping to
harass us into buying their product.

Certainly, there's nothing new about hard sells from TV charlatans.
But these two represent something different, something apocalyptic --
and I say that not merely because their maddening ubiquity has driven me
to the brink of insanity. I say it because they are peddling the kind
of commodity that offers little tangible worth, waging a fight that
promises no valuable innovation, and representing a larger insurance and
finance sector that's hollowing out our economy.

Think about it: The gecko and Flo do not embody the capitalist
vision of private competition fostering innovations that serve the
greater good. They are not, say, two private manufacturers grabbing for
customers in an entrepreneurial competition that will result in major
technological advances.

Instead, the gecko and Flo front an insurance and related banking
sector that is a government-supported endeavor -- car and health
insurance are mandated and/or subsidized by the state, and deposits are
federally guaranteed. This sector, which pools collective resources for
(theoretically) collective benefits, provides services that are
obviously crucial to the economy. But those services produce little
added value beyond their baseline functions -- and that's why the sector
was once regulated like a utility.

Of course, such regulations were eviscerated in recent years, with
the promise that competition would encourage self-regulating safeguards
and value-added innovation. But as the AIG collapse, the Wall Street
meltdown and periodic insurance premium increases exemplify, the effect
has been the opposite. Rather than building real wealth for society,
unregulated competition between the geckos and the Flos in the insurance
and finance sector has often meant fine-print terms like "recission,"
esoteric maneuvers like "securitization" and acronym-cloaked schemes
like CDOs -- that is, ever-more complex "innovations" to reduce customer
payouts, increase fees, maximize private profit and limit executive
liability, all under the TV-commercial guise of allegedly lower prices
and better consumer returns.

In the global economy's increasingly fierce fight for genuine value
and better living standards, this might not be so problematic if
America's wealth-creating sectors (i.e., making things or providing
valuable services) remained substantially larger than
wealth-cannibalizing sectors like insurance and finance. But since the
1980s' decline of manufacturing, the insurance and finance sector has
doubled its share of gross domestic product, hitting 8 percent last
year. That's twice as large as both the construction and information
sectors -- and ongoing taxpayer bailouts promise to exacerbate the
asymmetry even more.

This is certainly great for insurance companies -- for example, it
provides them excess billions to buy an absurd amount of ads. For the
rest of us, though, the growing imbalance between real wealth creation
and worthless paper pushing is bad news -- and that's why the gecko and
Flo are so deeply disturbing. More than just the moment's most annoying
shills, they are the cheeky visages of our nation's long-term economic
decline.