With the brokered sale of Bear Stearns, the nationalization of the GSE, and now the $2,000,000,000,000 bailout of financial US firms—good things must come in threes. So here is my list of the top three myopic myths of the financial times:
1. Myth One: History is 50 years old.
It must be, because every life-long financial analyst, advisor, and investor is quick to quip how his life-time of experience explains away the potential woes of governmental involvement in our free-no-longer market. These “experts” explain how the Harry-Potter like magic used to create upwards of $2,000,000,000,000 from nowhere probably won’t cause inflation, how the Fed is too smart for that, how tax payers likely aren’t going to lose money, and might even make money as the Fed sells off these assets. (If they could be sold for more than what someone is currently willing to invest in them, wouldn’t someone want to invest in them?). Note the repetitive use of the subjunctive—might, could, would, should, may, possible, likely, probable. And in defense, these “experts” can point back to what? Well, to 50 or 60 years in the lifespan of their experience.
Where is the long-term historian among these experts—who looks back over a period of 500 years and says, “Once Government takes over an area of society, it never relinquishes it back; never—short of a revolution. Never. “ Never. Read my lips, “NEVER.” The myopic blindness that resulted in this financial crisis was caused by the very same approach that says, “In my experience, as an expert…”
While we can justly say that the governing bodies of these financial institutions were stupid, we cannot say they were dumb—and they drew from their experience as experts. And now we are to trust that the Fed is “smarter than that” or “too smart” to cause inflation?
It is the lesson of history, for those willing to learn it—that there are opportunities to avoid disaster that lie far beyond the scope of our years and experience—beyond the last 50 (even 100) years.
2. Myth Two: Governments—like God and magicians—can make things from nothing.
We have allowed ourselves to be reclassified. No longer are we Countrymen, or Citizens—humans as imago dei. We are now consumers. As such, our status is not dependent upon a common participation in a common society. Instead, we have been monetized in a fiat system for political means. No longer neighbors in communities—more often we are residences of subdivisions. No longer husbands and wives—more often we have become cohabitating civil unions. No longer fathers, mothers, sons, daughters, and friends—we are only consumers, workers, and the struggling Middle Class. (Thanks to constant government entitlements, we don’t have to call ourselves lower class.)
Having allowed ourselves to be so redefined in relationship to country and government—we become Gnostic believers in a pagan state whose god is money—in this God we trust. Gnostic—because, far from owing our personal responsibility in a government “by the people,” we plead ignorance and demand recompense, allowing the elite (those highly trained and educated experts in the secret formations of higher governance) to rule “for the people.”
We hear it every time a community suffers some disaster—some neighbor says to the camera, “Something has to be done! This isn’t right! If it was a terrorist attack, the government would be here! Why aren’t they here now?”
In a word—entitlement, expectation…or some other people might say, comeuppance.
3. Myth Three: The US is Saving the World by this Bailout.
Having been reduced to the struggling masses of a recent history and Gnostic approach to governance—it is only natural that we would see the actions of our government (and our nation) as “saving” the world. In the past, in some wars, tragedies, and the financial woes of other nations, we have done just that.
Not so today. In fact, this problem is ours. We caused it, and the culmination—of a consumption-driven economy (vs. a production driven economy), the abuse of monetary production (inflation) and the willingness of neighboring countries to buy and hold our debt—is all on us. Though the US news agencies don’t report it in so many words—the rest of the world knows this is our problem.
Moreover, they are taking steps to protect themselves from the impact of our fiat, financial tomfoolery. That is why Russia, China, and Iran (whose own Oil Bourse will not accept US dollars) are meeting regularly—in the Shanghai Cooperation Organization. Russia and the EU are meeting in what has been dubbed EATO, or the “Euro-Atlantic Treaty Organization.” Japan has entered into closer bilateral ties to China than with any other nation (including the US)—revealed after Japan’s Emperor Akihito met with Chinese President Hu Jintao three times in the month of May. Even Latin American countries have begun to take the same steps.
Friends, Countrymen, we are not saving anybody—not ourselves and, least of all, the rest of the world.
Media talks about the historic presidency, but I suggest that in 100 years that we had a black president or that we had a female vice president will be little discussed. Of much remembrance will be what was done today—whether we allow the separation of powers between private and governmental realms to safeguard the continuance of our fundamental and Constitutional (not entitlements) freedoms; or whether, in our rush to ensure the status quo of comfort, lulling us toward totalitarianism, we sacrifice what cost us (personally and individually) very little but is of inestimable value.
Either way, a century from now, someone will be able to say of this period what Paul Johnson wrote concerning the shift in Asian powers leading up to World War II, “There now followed one of those decisive historical turning-points which, though clear enough in retrospect, were complicated and confused at the time” (Modern Times, 194).