Thursday, May 20, 2010

Bright Spots and Silver Linings

In response to recent expressions of dismay at the economic and political unfoldings of late, I offer the following thoughts --

You may not believe in conspiracy theories. I do. It is plain to me, for example, that the FED is the head of a banking and financial cartel that conspires to manipulate the monetary system for its own benefit. It seems to me that humans are predisposed to seeking their own way through nefarious means, and if there can be a conspiracy big enough to hold sway over a nation's financial system, let alone one in charge of virtually every financial system on earth, e.g. a central bank in operation in virtually every country on the globe, it does not seem a stretch to think that there would be many others, though I do not claim to know much about them.

I find this situation disgusting and repulsive, but maybe that's just me. I, for one, would like to see their plans fail, and thanks to their colossal screw-ups of the past few years, it looks like this one probably will.  Many people now realize that something is fundamentally and terribly wrong with our financial system (though I still think that most do not). A fairly small minority of those that do recognize that there is a problem actually have a reasonably good idea of what it is, and of those, a tiny few could actually begin to describe a solution for it. But as the monetary system has become an intensely political animal, nothing can really be done until the thing falls completely apart and the masses can be persuaded that enough is enough, these jerks have had their turn and its time for something else. Such is the nature of "democracy." So long as the present system hobbles along well enough, bad as it may be, too much is invested in it and it will never be replaced. The conspiracy holds on, the present order is secure, and the scoundrels can't be dislodged. It must first be completely discredited, and thankfully the knuckleheads running the show are doing a glorious job of that. I have every confidence that they are up to the task of failing miserably and falling flat on their faces; unfortunately, even those who understand the problem and wish to avoid it will still have to endure a prolonged learning curve while everyone else figures it out. That is another feature of what democracy has become. It is all-encompassing and inescapable.

But the point is, one has got to get through all that to arrive at something better, or at least something else. One may complain about the present hardship and be apprehensive about the future, and with good reason, but what would be infinitely worse would be if the present system could be made to work indefinitely.

What many fail to realize is that it is not only present circumstances that are to blame. The bailouts, deficits and moneyprinting, however abhorrent one may find them to be, are in response to pent up forces that have been at work for a long, long time and were created by equally abhorent activities in the past. The FED and its ilk have been at their game for a long time. This is reality sinking in on a system that has been in a state of severe dysfunction for decades, even as people thought times were good and everything was going well. Underneath the fa├žade of prosperity, faux prosperity through fraud, the real economy was being destroyed. It decayed and rotted from within, and thanks to the perception of health from without, not one in a million could diagnose the damage until it was too late.

Broadly speaking, the American culture and spirit rotted along with it as well. Too much of one's conception of what constitutes reality is derived from experience. This is a built in feature of being a human, and when such forces are allowed to warp one's experiences for prolonged periods of time, it is an inescapable result that thinking will be skewed in an unhealthy way. Many unreasonable things can seem reasonable, even taken for granted, after one observes those things long enough. Why shouldn't one be able to collect interest on a bank deposit and spend the same money at will? It rarely occurs to anyone that, theoretically, money must be lent to collect interest, and if it is lent out it cannot also be spent by the lender. Any system of money which allows two people to spend the same money at the same time should seem unreasonable to a rational person, yet I can just hear the rationalizations now -- "You see, that is a complete mischaracterization. Fractional reserve accounting works thusly..." Thank you, I've seen enough of how it works. One observes accruing interest, the world doesn't end that afternoon, so clearly things are okay, even if one doesn't quite understand the thing.

Free checking? Zero percent interest rates? Quantitative easing? This stuff is nonsensical, isn't supposed to happen, and really hasn't been good for anybody. The whole idea that almost the entire world's manufacturing base has moved to places that have trouble keeping lead out of toothpaste and cadmium out of children's jewelry, and that the West can base the bulk of its economy on finance and services, and that it is all the result of natural market forces and is to be embraced as normal economic growth and development is utterly absurd. But that doesn't stop it from passing for conventional wisdom.

Too many stupid and pathological activities have been rewarded in this climate, where profitability has been warped by forces designed to corral the economy into a certain predetermined mold. Others have documented the social effects of inflation better than I could. Suffice it to say, inflation isn't healthy for a society, and America and the world has had quite enough of its corrosive effects. We should not be sad to see the financial system that enables prolonged inflation/societal destruction fall apart, we should be far sadder to see it continue. The fact that it is falling apart should be good news for anyone committed to free markets and liberty. Only when it has been thoroughly discredited and destroyed is there any chance of something better being erected in its place.

And there is good reason to believe that something better, if not actually perfect, might be in the offing. There is more than one bubble bursting, and the massive violation of trust which is unfolding will no doubt galvanize a substantial fraction of its victims and temper their heretofore gushing trust in paper promises from crooked politicians, corporatists, and banksters. And well it should. A little mistrust of government and too-good-to-be-true offers/scams is healthy. A little critical thinking can go a long way. Even better, perhaps there will be a resurgent interest in older wisdom in preference to the shiny new claptrap that passes for learnin' these days. We could do with a little more of the type of thinking that might best be summed up in the adage "you can't con an honest man." At the center of any successful conspiracy must be a good con, after all; the marks must be pulled in by something. Honesty is even tougher for the bad guys to deal with than cunning.

Anti-FED groups like mises.org and Ron Paul have been catapulted to center stage as a result of the meltdown, and for the first time in literally decades, large numbers of people are starting to take questions of monetary policy seriously instead of taking them for granted. Gold and silver are coming back in vogue, after many years of popular scorn and abuse. None of this is good news for central banks and their manipulations, but it is very good news for the forces of liberty.

Many are afraid of a Great Depression/World War type scenario, but a little reading should show that popular attitudes aren't quite what they were back then. Might I suggest Liberal Fascism by Jonah Goldberg or America's Great Depression by Murray Rothbard? Even Atlas Shrugged by Ayn Rand should give you an idea of the mentality of the times (and a healthy dose of Rand's retching response to it.) The whole idea that the right end of the political spectrum is fascist while the left is communist, when clearly Houdini couldn't fit a piece of tissue paper between these two ideologies, could appear true because, practically speaking, it was! The real, libertarian right had been wrongfully discredited by the lie that the Depression was an excess of capitalism. There weren't all that many open adherents of free markets anymore, as it could be dangerous to one's health. Practically speaking, the conservative/libertarian right ceased to exist, and the political spectrum broke off just to the right of fascist. Your choice was limited to what flavor of socialism you preferred.

Nowadays, that argument meets vociferous opposition. The populace might not be clearly in the pocket of capitalism, but at least it is clearly divided. Most people may be ignorant of the true causes of the crash, but at least many of them are now willing to entertain new ideas. Soon, more will. There will certainly be a major economic event, and there is a possibility of war, but it is not inevitable.

But perhaps the best thing about this crisis, and especially the sovereign debt crisis, is the way that it weakens and discredits centralized government. It is easier to evade "the man" and take him a little less seriously when his checks bounce. Undermining trust in "the system" is the surest way to shrink it. There will suddenly be plenty of opportunities to do so in the coming months and years. It is already happening in some places.

So -- take heart! The forces of liberty are on the move! The lies and contradictions are finally devouring a corrupt financial system and waking a sleeping populace to a terrible evil that has been lurking in its midst. Victory may not be certain, but at least it has become a possibility.

Defeat is hardly upon us. Hope should be.

No comments:

Post a Comment