This post appeared as an op-ed in Mint, India’s second largest business newspaper.
The financial market upheaval that started in May is a stark reminder that the conditions that produced the global financial crisis of 2007-08 have not been resolved. The sucking sound of deflation emanating from Europe and the creaking of bank balance sheets are calling into question the cheery assumption that patching up the financial system with baling wire and duct tape was a viable long-term plan.
With a large private sector debt overhang in most advanced economies, deflationary pressures are hard to forestall. It has become unacceptable politically to bail out banks, although monetary authorities such as the European Central Bank are creating SIV equivalents to do just that. Defaults look inevitable on a number of fronts, from homeowners in the US who are increasingly willing to abandon their mortgages, to the riskiness of not just Hungary, but other Eastern European borrowers as well (German investors have long expected serious trouble in Austria, whose banks were gateway lenders to Eastern Europe).
But why was the opportunity to restructure debts and revamp the financial system missed? In early 2009, the banking industry was on the ropes. Both the stock and the credit default swaps markets indicated that many of the big players were at serious risk of failure. But rather than bring vested banking interests to heel, the Obama administration and its counterparts in the UK and the European Union instead chose to reconstitute, as much as possible, the same industry whose reckless pursuit of profit had thrown the world economy off the cliff.
Why did we witness such a failure of imagination and will? Policymakers seem unable to recognize that they are in the middle of a breakdown of an economic paradigm.
In 1776, Adam Smith published The Wealth of Nations. In it, he argued that self-interested action sometimes produced, as if by “an invisible hand”, results that were beneficial to broader society. Smith also pointed out that self-interest could just as readily do harm. He fiercely criticized both how employers colluded to keep wages low, as well as the “savage injustice” that European mercantilist interests had “commit(ted) with impunity” in colonies in Asia and the Americas.
Smith’s ideas were cherry-picked and turned into a simplistic ideology that dominates university economics departments and policymaking. This theory proclaims that the “invisible hand” ensures that economic self-interest will always lead to the best outcomes imaginable. It follows that any restrictions on the profit-seeking activities of individuals and corporations are inefficient and nonsensical.
Uncritical allegiance to these precepts over the last 30 years has produced a world in which corporations, especially in finance, are far less restricted in their pursuit of profit. In my book Econned, I describe how this lawless environment allowed the financial services industry to pursue its own unenlightened self-interest. The industry has become systematically predatory. Its employees did not confine their predation to outsiders; their efforts to loot their own firms nearly destroyed the industry and the entire global economy. Similar destructive behaviour by other players, often viewed through a distorted lens that saw all unconstrained commercial behaviour as virtuous, added more fuel to the conflagration.
India, in rejecting much of this ideology, and maintaining firm control over its financial sector, escaped the worst of the crisis. But despite the abject failure of this line of thinking, its hold remains firm in the West. The parallels to the 1920s and the Great Depression are striking. The key elements of the current system then and now—lightly regulated financial firms and markets, comparatively unrestricted and destabilizing international capital flows, economic growth dependent on rising levels of consumer debt—are no longer viable. However, no one in authority seems able to see that the ancien regime is well past its sell-by date. They cling to it because the old system comported itself well for a protracted period, just as the now-repudiated crisis and deflation-generating gold standard once did. Thus, the authorities reflexively put duct tape on the machinery rather than hazard a teardown.
But is this paralysis just a failure of imagination on the part of policymakers? They are not just cognitively captured by the financial service industry’s “free markets” ideology. They are also beholden to banksters for campaign contributions and for their careers, both inside and outside Washington, DC. It is not a stretch to say that most central bankers, treasury officials, and Congressman are now sock puppets for global finanzkapital.
In the wake of the Great Depression, it took more than a decade of experimentation to construct a new architecture. Among its tenets was the recognition that successful markets depended on tough policing, and the importance of the prosperity of the middle class, which in turn meant workers should reap their fair share of productivity gains. But the amorphous and often contradictory “free markets” ideology has conditioned policymakers and the public to view unregulated commerce as virtuous, when unconstrained markets are, in fact, a brawl. In the Anglo-Saxon world where this model has been taken the furthest, we’ve seen shallow expansions, stagnant average worker wages and rising income disparity, with very big gains at the very top. That’s a particularly difficult model to dislodge. As former International Monetary Fund chief economist Simon Johnson has pointed out, reform programmes usually fail unless some members of the oligarchy break ranks. Unfortunately, it may take an unmanageable crisis to convince them.
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“But is this paralysis just a failure of imagination on the part of policymakers? They are not just cognitively captured by the financial service industry’s “free markets” ideology. They are also beholden to banksters for campaign contributions and for their careers, both inside and outside Washington, DC. It is not a stretch to say that most central bankers, treasury officials, and Congressman are now sock puppets for global finanzkapital.” Yves
Please tell me well what part of a government backed fractional reserve banking cartel in a government enforced money supply sounds like the “free market”?
We can attempt to “out-regulate” the rest of the world or we can take a truly principled approach to money creation according to principles of liberty and the rule of law.
Please read ECONNED. Over the course of about 1/3 of the book, I dissect both neoclassical economics (the dominant school as far as policymaking is concerned) and financial economics, and show how the efforts to mathematicize the discipline have led economics badly astray. I discuss specifically how some of the key proofs lead to internal contradictions and for several crucial ones, have later had their creators distance themselves from them. I further discuss how the “free markets” ideology is incoherent and riddled with internal contradictions, yet has served as the basis for a radical program of deregulation of the financial services industry, which was a particularly bad idea, given the inherent propensity of financial markets to boom-bust cycles.
The balance of ECONNED discusses the results: predatory behavior (and not at the retail end, which has been amply covered in the media, but in the institutional side of the business), looting, and played a direct role in the global financial crisis.
The book specifically discusses why even the less incoherent “free markets” formulation is an abstraction that can never be attained, and why efforts to move closer to that ideal will not necessarily lead to better outcomes which is a core hidden assumption of “free markets” advocates.
Trust me, I do have the goods.
@ F. Beard … Liberty and the “rule of law” sound great until we recognize that market players have consistently invoked Adam Smith’s system of “natural liberty” to pursue their own selfish ends. Unfortunately, while they channel the spirit of Adam Smith to justify their efforts in the market, their activities regularly undermine the spirit of the law in ways that lead to market imbalances and societal disconnect. These activities violate Adam Smith’s “laws of justice” and his “order of nature and reason” on such a regular basis that I’m baffled as to why predatory behavior and outright looting on the part of large firms surprises anyone today.
Still, people like Milton Friedman – who was a smart man – run with these simplistic caricatures of how (they think) our market world should be. This leads them to develop unrealistic “umpire” models of government which place market players on a pedestal. The result is a make believe world where some kind of virtuous Homo Economicus Man exists. Unfortunately their virtuous Homo Economicus Man resembles nothing anyone of us has seen on a regular basis, beyond a local market setting. Milton Friedman got alot of things wrong
(http://markmartinezshow.blogspot.com/2010/05/what-milton-friedman-got-wrong-exam.html), and his umpire model was one of them.
Read Econned (Full disclosure, I’m using it this fall in one of my classes). It really helps move us away from the unicorn theories of markets that continue to dominate our thinking on markets today.
– Mark
“Please read ECONNED. ” Yves
I will. It sounds very interesting.
“I further discuss how the “free markets” ideology is incoherent and riddled with internal contradictions, yet has served as the basis for a radical program of deregulation of the financial services industry, which was a particularly bad idea, given the inherent propensity of financial markets to boom-bust cycles. ” Yves
I’ve noticed a strange oversight on the part of economic analysts or perhaps it is a peculiarity of mine that it outrages me. That is that banks can create claims on legal tender (credit) in exchange for a promise to repay that credit. There is your boom-bust cycle right there. When the credit is extended it drives up prices causing a boom; when it is repaid the effective money in circulation shrinks and the bust ensues. Not to mention the interest which in principle (no pun intended) may not even exist in aggregate. Not to mention very real collateral to be forfeited if the “loan” defaults.
So, my point is that any solutions need to be applied to the source of the problem which is the bank’s ability to effectively counterfeit. What will regulation do? Limit the amount of counterfeiting? Prevent the credit from flowing to certain sectors? Do you see my point? How does one regulate an inherently dishonest business?
I agree that this is the right track to pursue if we want lasting solutions.
I recommend a little booklet called “The Ecology of Money” which looks, in a point by point fashion, at how private debt-money creation weds us to perpetual growth, which in turn engenders the boom bust cycle so damaging to society and environment. We end up slaves to money, insanely placing money as top priority above everything else. This has to be stopped.
In terms of money-alternatives, there is the work of Bernard Lietaer to look into, and also of course 100% reserve banking a la Irving Fisher as starting points. Important is that as many of us ‘plebs’ as possible understand money and press for a revolution in this field.
Enjoy Econned. It’s a very good read.
Oh, and Debunking Economics by Steve Keen is a forensic dismantling of pretty much the entire lexicon of orthodox economic theory. Nitty-gritty stuff but also valuable to the layman (like me).
@Toby,
Thanks. I saved your comment for future reference and hope to get around to those reading suggestions.
Gee wiz. I need to buy a good reading chair.
Money is fascinating, yes? One day may the Lord give me just enough. Actually, I think He always does.
Thanks,
FB
I’m 55, been in business 3 times, done ok.
Banking this decade most corrupt in my lifetime… by far. Especially for little guy (gross $2-5m) p/yr, I have seen every form of malfeasance imaginable. To name only a few…
* banker setting up promising startup to be swallowed by their larger clients
* reneging agreements, in direct contract stipulations, again… for mutual benefit of banker larger client. I’ve had ’em look me in the eye and call this a “business decision”.
* banker takes exhaustive research expressed in biz plan, hand delivers it to (again) well heeled competitor. (If you’re a smart, well planned startup… begin w/a very, very good lawyer, not a banker).
* Outright lies… well into a business cycle, to undermine said player for purposes of sending inventory into default, buy it at firesale prices, pocket larger profit on resale.
And that’s just a few.
The other thing this decade that escalated dramatically… saturating in scope, was entire abdication of due diligence: knowing their markets, researching their financial products, and putting the 2 together in a professional way.
I say all that to say this, regarding your question:
At beginning of this “crisis”, Barry Riholtz and a few others suggested a few things:
a) Don’t “fix it”, bypass WS all together.
b) Put together something akin to Manhattan project for finance/econ, identify priority development (energy for example), tap consensus best/brightest in targeted markets, and put all those Fed $$ into making it happen. And do all this under declaration of a state of economic emergency.
c) Fully explain to the public the process, over (at least) last decade, by which we got to present situation… most of Joe Q. Public has no clue about this… none. (That Obama never did this, even in small way, is among my biggest disappointments in the guy).
Personally, I don’t think it can be fixed. I think we need to throw it out, punish (jail) severely the perpetrators, and create a new paradigm.
Somehow, culturally, a premium value needs to be established on telling the truth. There just isn’t much of that left, and it’s eroding everything.
@jdmckay,
Thanks for confirming the diagnosis from your own experience. What scoundrels! As to your solution, I disagree. The solution is almost always more liberty not less. We need decentralization not more or alternative government backed centralization.
F Beard:
Worst of malfeasance of current crisis came from private sector.
I don’t really care where it starts (although I’m not really holding out that it’s going to start at all). But some principled launch point, w/enough consensus and mass, that’s my point.
At this point, my suggestion is really theoretical in that, yes… currently US gov (IMO) is incapable of executing this.
Re: “liberty” thing… whole lot of what got us here was in name of “liberty” and freedom, w/a bit of “patriotism” thrown in for good measure. Whatever words you choose, something conceived as solution is going to require some discipline which, at this point, is not in evidence.
“…efforts to move closer to that ideal [“free markets”] will not necessarily lead to better outcomes which is a core hidden assumption of “free markets” advocates”.
I’m really glad to hear that this issue is part of your book. I was very struck by it when I read Ormerod’s “The Death of Economics” back in the 90s. The idea that moving a little bit closer to the “ideal” will always have benefits that outweigh the costs is as you say pervasive and dangerously wrong, yet forms the unspoken basis of a lot of right-wing rhetoric.
My house is too full of books now, but you have given me a good reason to buy yours.
Re: we can take a truly principled approach to money creation according to principles of liberty and the rule of law.
Uh… Will the smart amoral scumbags agree to this?
That about NAILS IT! Principles are lovely things and I personally do my best to follow my own… however it is ridiculously naive to expect that of others (esp. in aggregate). Perhaps applying some principles of game theory and neuroeconomics we can come up with some simple regulations that discourage/minimize over-predation… but I would’nt count on it.
How about a maximum wage (total compensation)? A few million dollars yearly should be more than enough for pursuit of happiness. The goal would be to limit the amount of damage a single individual can inflict on society.
“Uh… Will the smart amoral scumbags agree to this?” NOTaREALmerican
Wisdom can defeat “smart”. And yes some folks may always want to cheat. But it is often said that if only a criminal would apply himself to honest endeavor he’d have no need for crime. Let’s remove the inherent dishonesty in our money and banking system and I’d bet that most people will find it pays to behave.
Nice goal, but an unattainable one.
The smart amoral scumbags always win.
I’m assuming here that “smart” is a (vague) combination of intelligence & cunning. “Amoral” is the blissful unawareness (even) of right and wrong (not immoral, amoral – ahhh, too be so lucky). And “scumbag” is some combination of duplicity and an ability to manipulate people. Basically, those who have achieved the highest point of human evolution – sociopaths.
Very tough to implement a system of “inherent honesty” when the best that humanity has to offer are sociopaths.
Well, I believe in a balance of power, sociopaths vs sociopaths is effective.. Free banking worked pretty well because banks would see that their competition had overextended their liabilities, collect them at a discount and demand redemption. When their competitors could not pay they got gobbled up. The predators kept each other in check.
““Amoral” is the blissful unawareness (even) of right and wrong (not immoral, amoral – ahhh, too be so lucky). ”
I know what you mean! I could have cut a wider swath than I did if I was not burdened by a Catholic conscience. If I were Jewish then I could have sowed my wild oats somewhat.
But back to economics. Let’s make sure the laws do not allow the amoral to do evil. Government backed fractional reserve banking is THEFT of purchasing power. It needs to be abolished.
F Beard:
Easy on the Catholic vs. Jewish theorizing. A “catholic conscience” didn’t prevent Joseph Kennedy from excelling at the Wall Street money game. The last thing we need is to convert a highly emotionally changed debate about nearly incomprehensible financial regulations into an even less coherent argument about theology or race.
People presented with tempting opportunities to do profitable but ethically questionable things tend to succumb for reasons that transcend our tribal categories.
What you are describing (sociopaths, narcissists) are cyclical behavior. Their behavior of dishonesty and theft create pain for the public. Pain is the collective catalyst of change. With each day more individuals are waking up. The plebs follow responsible leadership through example. Arizona decides to enforce immigration laws. Massachusetts follows. When it comes to banking, other States will charter a bank like in Nebraska. Those States will follow. It is the best method of slowly but surely rescinding power of Central Banking.
Another probability exists for a world war. While that is highly negative, it would accelerate the process of the demise of Central Banking.
It may ultimately be the final outcome of the sociopaths behavior. I am not advocating for such to occur, merely stating historic cause and effect.
F Beard:
You shoot low, you’ll get low.
That assessment is looooooowwwwww.
As a former Fannie Mae shareholder, I certainly felt “conned” by 90s era CEO Jim Johnson, whose qualifications for running a financial institution included serving as Walter Mondale’s campaign chief. Thankfully, I sold long before the crash.
But in terms of free markets, Yves, do you think they’re easier to provide with goods than with money? Isn’t it far more important to regulate banks than software developers?
I think it was a mistake to take down Glass-Steagall in the late 90s, but thankfully the FDIC didn’t go down with it.
I have examples in ECONNED of how the “free markets” paradigm works, using a historical example (non-financial services) and computers to show that the abstract “ideal” breaks down in practice.
The problem is, as I explain, that “free markets” means different things. To libertarians, it means relying only on contracts and courts to regulate commerce. The problem with that idea is that some damages cannot be adequately recovered via litigation (could anyone pay you enough for you to cut off your leg? Probably not. So if a defective medical device resulted in the loss of your leg, it follows that monetary damages would be inadequate). In addition, it takes time and money to litigate (the rule of thumb I’ve been given is that it isn’t worth it to litigate unless the matter is $300,000 or more. While small claims court is arguably an exception, judges here in New York tend to award the person making the complaint only half his damages, so you sent a lot of time to get only partial recovery. And in both cases, winning in court does not mean you get to collect the money, that’s another step that often fails. $300,000 is a high level, it provides a lot of air cover for bad behavior).
That’s a very long winded way of saying the success of day to day commerce is more dependent on regulations you tend to forget because they are well established and most people don’t think of them, basic consumer protection stuff like truth in advertising laws, rules prohibiting deceptive sales practices like bait and switch, requirements in most states that vendors accept returns of defective goods in a certain time period, disclosure, etc.
What I find interesting about this piece is not the central post-mortem thesis (with which I couldn’t agree more) but the notion that there are other, deeper cultural factors in play.
And yes — Adam Smith was NOT the 18th century version of CNBC! LOL
Getting back to “first principles” when it comes to different cultural sensibilities around business/finance is a giant can o’ worms. I just hope that this kind of discussion doesn’t degenerate into nationalism/xenophobia all around the world. For example, we’ll see what happens as the Trustee tries to avoid Lehman’s fraudulent overseas transactions leading up to bk. I’m afraid that’s going to ruffle a lot of sovereign feathers!
Very well said. This really distills the thesis of the book.
The reason it will take a decade to come up with a new system is because our elected officials will not even attempt a serious response until the psychology of debt repudiation has firmly taken hold with the electorate. This will require a couple more cycles of serious pain for borrowers and investors.
Then we have to hope the leaders are capable of responding constructively.
“Unmanageable crisis”? For whom? For the rest of us, it’s going to be very important to know how to grow our own food.
“beholden to banksters”
“sock puppets to global finanzkapital”
Catchy AND literally accurate!
As Steve Martin once said, “Some people have a way with words.
Some.
Not.
Have.
Way.”
You are in the first group.
“Policymakers seem unable to recognize that they are in the middle of a breakdown of an economic paradigm.”
Cane the guy most responsible for this .. Ben Bernanke!
This conniving scoundrel has made bailouts the norm, made moral hazard a virtue and shoved it up the tax-payers as much as possible!!
I agree with the fact that in US there has to be a middle class making an average wage to sustain the economy..i.e. paying the taxes, and earning enough to be a purchasing machine….however, I think the change we are looking at is global and it is necessary to rethink weath distribution world wide…
Sounds great. Let’s start by auditing your current and future assets so I can see how much of your wealth I can redistribute to my family’s account.
Oh ho! Do I discern that wasn’t the redistribution transaction you had in mind?
Where did he specifically talk about redistribution? Recognizing worldwide distributions and understanding how those who have less are going to try to take it from those who have more is not an active plea for redistribution. Still not getting it?
Also, what about free riding don’t you understand? Are you literally not smart enough to realize these preposterous examples of theft (and/or the absurd charity meme, “why don’t you just give your money away?”) do nothing, absolutely nothing, to repudiate calls to enforce community-wide participation for community expenses? It’s so embarrassing that people would put forth such puerile, easily refuted, nonsense, but you continue to do so nonetheless. What’s even more amazing about the whole thing is how smug you are in the process of unintentionally making a fool of yourself.
Question your own beliefs sometime. You will likely sound much less like a moron when you write stuff down.
Yves, I hope you will soon being doing Op-Ed pieces in American or at least European newspapers. By the way I am halfway through your book. Finance is not my area of expertise, but your writing strikes me as very learned. As a libertarian for many years now you pose questions that I can’t answer.
Personal liberty should not be conflated with free markets. At one time, Libertarians focused on individual liberty, suggesting policies that increased individual freedoms. Somehow that focus shifted toward lassiez faire economic policy, which in fact works to enslave individuals. This direction appears immutable within the Libertarian Party. Another good idea destroyed by monied interests.
Re: As a libertarian for many years now you pose questions that I can’t answer.
Dirk, come over to the dark side, perpetual socialism. It works! All you need to do is let yourself go, and be one with the scam. I’ve been participating in a financial scam for 15+ years now call Student Lending. We pimp loans to unemployed young people. We collect fees from the students in exchange for loans guaranteed by the government. No risk, and big fees. Life is good. We were so successful we eventually got bought by a huge bank, which is now one of the 2Big2Fail Banks! If this isn’t a scam nirvana, I don’t know what is (I’m one of the lucky ones, Dirk, but this could be YOU; but you’ve got to believe in socialism!)
And, Dirk, we’re never going back. Libertarianism is dead, there are too many smart amoral scumbags running about in the world.
Join us, Dirk.
Unable? They made themselves unable and unavailable to hear and see anything else than this:
As long as this parody of democracy (unless you want to tell me the above is a feature of a Republic…) keeps operating, no change we could believe in shall take place.
Good points; sock puppets of global finanzkapital are strangely myopic in their incapacity to recognize the breakdown of our current paradigms.
Which is odd, because presumably they’re paid to notice precisely the kinds of straws in the wind that signify the changes.
Too busy believing in the mathematized financial models to see what lies in front of their eyes, evidently. Exasperating.
I believe that an efficient economy requires that most utility functions should be served by not-for-profit businesses. This includes commercial banks. Simply put, if profit maximization were not the “prime directive” for banks they would be more likely to serve, rather than exploit, their customers. My banking reform would be quite simple. If you want access to the Fed’s facilities and wish to be backstopped by the FDIC, you must qualify as a not-for-profit business. Private investment houses would be free to dabble in derivatives to their heart’s content, but there would be no public backstop – just a remorseless court system to divvy them up once they fail. One would not need 2000 pages of gobbledegook to do this. Rather than trying to limit employee pay, simply tax high income earners at rates similar to those employed during the boom years of the 1950s. Of course, neither are likely to happen, but regulation will also fail. Entrenched money interest won’t let it succeed. Even a horrible depression would not change this.
Adam’s, i quite appreciate how screwed up Indian business culture is. The courts pretty much don’t work so all kinds of ripoffs are quite common etc, etc. BUT, the thesis of Yves’ piece was India, HARDLY to hold india out as a policy model. I think 1 sentence addressed India. Perhaps that was a minor suck up to the home team, but the article was 99% about western financial markets. Yeah, having anything positive to say about Indian financial markets or business culture in general is probably a stretch, but as far as i
read, she just had the one throw away line and your criticism is perhaps for writing the article she wrote and not one trashing India as well as the west which you would have prefered, but NOT what she was paid to write, obviously.
“India, in rejecting much of this ideology, and maintaining firm control over its financial sector, escaped the worst of the crisis.”
pls note this reply was to re the post below, i hit the wrong ‘reply’ button, sorry!
The guest poster is holding out India as a policy model?
Certainly neoclassicism has run amok, the banks must be restrained and the Western financial system reformed. Yes. But India? Come on. Its regulatory morass acts as a regressive tax, resulting in one of the world’s most unequal income distributions. Local and federal court approval is required for even the most benign changes to capital structure, such as a spinoff distribution. Its bureaucracy is frozen solid as a rusted bolt, making America look like a Singaporean model of efficiency. Endemic petty bribery is the de facto workaround, again a form of regressive tax.
The author argues India is a model because it did not suffer much in the recent panic. This is false logic. Many developing countries with immature financial systems were relatively unaffected. By the author’s reasoning, policy models should also include Bolivia, Papua New Guinea and the Democratic Republic of the Congo.
Economists of all stripes, especially in India, believe India is succeeding in spite of, not because of, its policy and regulatory regime. So this post is a real surprise.
see reply to post above (i hit the wrong ‘reply’ button, mean to reply to Adam’s post).
What economists think is hardly worth wasting our time on.
More important, you are arrogant to think that India could not have adopted a better policy and were smarter leading up to the crisis. You need to get a little better educated before you spout off on which you know little. Read the following for some idea of how India handled the banks.
How India Avoided a Crisis “But there was also another factor, perhaps the most important of all. India had a bank regulator who was the anti-Greenspan.”
Regulations shmegulations. As long as the elite are allowed access to the fractional lending punchbowl money allocation will be distorted and used to keep the system in place. It’s a big ivy league circle-jerk where cronyism and failure are protected at the expense of the innovative and hard-working.
Succinctly said!
This article speaks to the essence of the situation.Econned should be required reading for all who want to understand and act on the financial mess. It is “The World is Flat” all over again and on The topic of the day. It took me some googling and some three time rereads but it does present the material clearly.
It is interesting that no one has yet noticed how much the book deals with the complete lack of ethics amongd sales people and the removed and lazy finctioning of sales managers.In a manner quite similar to how Peter Drucker said that globalization has to be done right, Yeves delineates the boundaries of sane finance.
Four observations relative to the article and the book:1)some people who have read it are now insanely jealous of IB’ers and derivatives sales people.!! They wish they had been there.2)It is now an insider economy where positional standing trumps expertise and competence. 3)Nothing will easily change as long as 40% of national profit is in finance.Somebody actually has to DO something. 4) true reform will occur the year after energy independence and the year before the west gives up the concepts of colonialism and empire permanently.
Yves, I fear “an unmanageable crisis” may progress in time to become rather more dramatic than anything since about 1940-1941, if not as dramatic. The conditions of 1930-1935 created more than only a basis for change in the U.S.
It is so true that “…the authorities reflexively put duct tape on the machinary rather than hazard a teardown.”
The issue is now two-fold–the exact content of the duct tape and the content of the teardown and reconstruction.
First, it strikes me that the content of the duct tape, for the U.S., must include the period and policies from approximately 1880 to 2010 rather than simply 1980 to 2010.
To narrow the focus to simply the last 30 years is to end up misdiagnosing the problem (i.e. seeing the villians as primarily Big Financial Capital, neoclassical economic theory, and a modern revolving door.
My sweeping historical hypothesis for the period from 1880 to 2010 is that a series of crisis driven events and policies accelerated the centralization of power in the country.
This is another way of saying that the origins of our problem are anchored in an economic/political paradigm that began to be established in the 1890’s not in 1985.
Competitive entrepreneural capitalism started to fade in the 1860s to 1880 period.
The Great Depression of the early 1890s forced the by-then shakey entrepreneurial capitalism to change its operational rules.
This transitional strategy demanded greater state intervention with many corporate leaders realizing that such a transformation could only be worked out in partnership with the federal government. The state was the only political institution with the powers to unite diverse regions, classes, and industries into a more unified whole.
Through WWI,The Great Depression, WWII and post WWII the historic role of the state was to create the new collective forms of industrial labor, personal consumption, high technology, and social services that a more and more managerial capitalism required.
End result a society increasingly split between a managerial elite ( operating in both the Public and Private sectors with increasingly common interests) and consequently–an incresingly disempowered citizenry.
The MMT perspective, for example, only sees the economic problem as market based, which is only half-right. The other half of the problem is state-based.
The Libertarian right must develop a critique of big Capital and the liberal community must develop a critique of Big State.
Then, perhaps, a serious teardown and reconstruction can begin.
Re: Then, perhaps, a serious teardown and reconstruction can begin.
Shouldn’t that be: teardown and reconstruction by the smart amoral scumbags manipulating the peasants.
The smart amoral scumbags are always waiting in the wings, ready to run the next scam on the dumbasses.
^Hits the nail on the head… mos def
I graduated with a BA in Econ and am currently earning my masters in history. The insights I have learned from studying the history of banking and enterprise have blown away any notions I currently had about economics and the world of finance today. The Pop-Econ theory expunged by most pundits and, unfortunately, professors today starts with Keynes, ends in 2008 (because no one has really been able to properly contextualize the current clusterf*ck of a financial crisis we have ourselves in).
It is not a question of “regulate” or “deregulate”, it is not about neo-liberals or neo-conservatives. If you are on the road to the truth you must learn all the great ideologies and abandon them as soon as you love them because the comfort you feel from your “correctness” is a hindrance to any progress towards truth or innovation.
There is no answer to this mess, only understanding. The institutions that encompass our economic system are all emergent from mankind’s need for a way to exchange things with each other. Authoritarian institutions are created and empowered by the society they serve to prevent coercion by economic actors. To do this, they are given a monopoly on the use of legitimate violence. Every war ever in the history of the world has been these authoritarian institutions butting heads over who is the most “legitimate” form of violence. The US is currently the head hancho, but it comes at a huge cost (imperialism is very expensive, that is why it has been unsustainable EVERY SINGLE TIME in history). Financial Interests control the money, control the government, and use the institutional resources at their disposal for their own benefit, to perpetuate their dominance. It is all human nature, a deep-seated sense of insecurity over scarce resources that has manifested itself on an institutional level. Nothing short of a complete reorganization of society (like a meteor or nuclear war or superplague) will end it, and even then a similar system will likely emerge because we are all really just a bunch of stupid monkeys.
I don’t share your pessimism about us bunch of monkeys.
We have made progress as a society but seem to keep looking for silver bullet answers like Debra’s return to God solution for the morality/ethics answers. If you haven’t read enough history to get you past the Enlightenment then maybe some reflection on the current sexual abuse by those Debra would have lead us morally might make you think twice about returning to the dark ages.
I believe that it is possible to create a new paradigm that would reset the profits of societal interaction to benefit the majority rather than the current minority. Steps in this direction have been taken before. Society needs to express a will to terminate (possibly with prejudice) the current paradigm and inherent in that rejection(IMO) are the values for creation of a replacement one.
If 90% of Americans stormed D.C. to “express” as you said, you’d get a blurb on FOX News saying “a few radical socialists are threatening our Freedom.” Tall task, expressing this… the mediums of “expression” are as fouled as the financial system.
Agree, new paradigm needed.
What does it look like?
In response to comments by Jim…BTW, this site has the most confusing ‘reply to comment’ lay out of all.
I agree that the time frame addressed in most current discussion of the continuing financial crisis is incorrect, but the problem began as Jim points out here; ‘Competitive entrepreneural capitalism started to fade in the 1860s to 1880 period.’
How interesting that this is the period of the US Civil War!…and, for all intents and purposes the end of any meaningful individual states rights! At the end of the Civil War, once the south had surrendered to the north, European newspaper editorials stated frankly that the only possible future for the US was a totalitarian regime based on empire. How right they were!
I would place the date of US on the road to empire as the beginning of the US Civil War and the second act as the Spanish-American War 1898. The attack on Spanish colonies carried the legislature by one vote. After that, the US seemingly couldn’t avoid joining any fray no matter how distant from our shores…the costs of the fray were born by taxpayers and the spoils of victory were divied up among the rentier class.
Then there was the formation of the US Federal Reserve by banking interests and signed into law over a Xmas Holiday in 1913, when most of the legislative branch were on holiday. Later the president that signed the legislation said it was the single biggest mistake that he had ever made…and, he made many.
My point is that mistakes were made much earlier than the 1890s. Slavery should never have been allowed for reasons too obvious to enumerate. Once slavery was allowed, slaves quickly became the largest single asset class in America by a very wide margin and few individuals were willing to give up their assets then, any more than they are today.
Once the US Civil War ended many parts of the US emerged and continued a normal cycle of boom/bust capatilisim…but many parts of the Southern US did not emerge from the depression caused by the disruption of the civil war on the southern economy until LB Johnson became president…and offered up a wealth redistribution scheme called ‘the great society’ and an equally stupid war in Viet Nam, based on the Gulf of Tonkin lie, that wasted enormous numbers of dollars and destroyed untold amounts of lives and property.
Had you attended grade/high school in the rural south in the 1950-60s era you would have attended a segregated school and studied a history of the US that labled the US Civil War as ‘The Northern War of Aggression’…and Lincoln was hated passionately.
These are not my personal convictions but they are facts.
I watched with amusement/horror when the EU was formed. It was obvious to me from the beginning that a monetary union without a central government of some strength could not long function.
In effect, Europe did to themselves willingly what it took a civil war to accomplish in the US…but, I believe that they will rectify their problems without losing their national identities…something the US States failed to do.
The upshot of all this is that the US Government has grown by leaps and bounds since the US Civil War and the US in no way resembles what the founding fathers had in mind; ie, taxes to defend from foreign aggression and some regulation to smooth interstate commerce, common coinage, etc. Every layer of bureaucracy added is more taxes and rediculous amounts of regulation on the small businesses that are the backbone of the US economy. As Lord Acton famously stated ‘once a bureaucracy reaches a certain size the only way to get rid of it is through a total collapse of government’ (paraphrased).
I forsee a slow decline for the US and it’s citizens in coming years. The consumer model of the world economy is based on cheap oil…and that cheap oil is becoming more difficult to find and expensive to extract. Rome was neither built or declined in a day nor will the US. The only way out of the enormous debts built up in the world economy by consumers, localities, and soverigns, is by default or inflation. I relish neither.
BTW, never forget that ‘official’ history is usually written by the winners of wars and normally by the rentier class of the winners.
“The only way out of the enormous debts built up in the world economy by consumers, localities, and soverigns, is by default or inflation. I relish neither. ” Bates
BTW, the rest of your comment is excellent. History professor?
But as to default or inflation being the only options I believe you are wrong. A simple distribution of a sufficient amount of newly created legal tender fiat by the US Treasury to every US adult would:
1) Bailout underwater homeowners.
2) Compensate savers for years of suppressed interest rates.
3) Fix the banks in nominal terms
4) Fix state tax revenues.
Hyperinflation risk? Then raise bank reserve requirements to 100% to put banks out of the counterfeiting business.
Moral hazard? No, merely just compensation from the government to the victims for the damage caused by a government backed banking cartel.
(cf. Deuteronomy 15:1, Leviticus 25)
To F Beard…Thanks for your kind response. Your suggestions, as you must know, would cause spectacular inflation but probably not hyper inflation:
“But as to default or inflation being the only options I believe you are wrong. A simple distribution of a sufficient amount of newly created legal tender fiat by the US Treasury to every US adult would:
1) Bailout underwater homeowners.
2) Compensate savers for years of suppressed interest rates.
3) Fix the banks in nominal terms
4) Fix state tax revenues.”
As you must also know any ‘newly printed fiat dollars’ given to ‘adults’ have the effect of making the ‘old fiat dollars’ in circulation worth less, or decrease their purchasing power, if you will. Since ~ 40% of FRNs are held abroad are we to send them some newly created fiat as well?
Mood has a lot of effect on economic outcome. Consumer sentiment (a fancy word for mood) is growing worse as the economy of the US grows worse. If you recall the ‘tax rebate’ checks sent directly to the population did not cause much new consumer purchasing, but instead much of the rebate money was used to pay down old consumer debt…which is deflationary since in a fractional reserve system when debts are repaid the money disappears as a function of bank balance sheet/double entry bookeeping.
The fact is; The Fed has the ability to create money but it does not have the ability to direct where the newly created money will flow to…especially if it reaches Main St. Economics is a soft science, unlike physics, math, chem, etc. In the realm of economics the ‘mood’ of the population is very important because it will effect ‘V’…Velocity of money in circulation (how fast it is spent and circulates), where MV=PQ. There can be no guarantee that newly created money will be used for the intention that it was created.
I sincerely wish that the solution of too much debt could be solved by your suggestion of the Fed printing more debt (Fed Reserve Notes) and distributing them directly to the people. But, I do not rule out the Fed/government trying this tactic, even though they know what the outcome will be.
The only cure for what ails us is a return of lots of jobs that have been sent to other countries. Excess savings from labor, placed in savings accounts, and then used to grow the economy, is the only way to lasting and sound economic growth…and even this path is frought with pit falls.
What we need is adult supervision and it is nowhere to be seen.
“As you must also know any ‘newly printed fiat dollars’ given to ‘adults’ have the effect of making the ‘old fiat dollars’ in circulation worth less, or decrease their purchasing power, if you will.” Bates
Sure. But during inflation, the first receivers of the money benefit at the expense of later recipients. I guess that isn’t relevant though since I advocate bailing out EVERY US adult. So who would suffer? I say no one except maybe the foreign holders of US dollars.
“Since ~ 40% of FRNs are held abroad are we to send them some newly created fiat as well?” Bates
If feasible, yes. The problem is that debt has been ratcheted up by what is essentially counterfeiting, money-for-debt (fractional reserve lending). The counterfeit money (credit) needs to be replaced with the real thing and the process banned.
“Mood has a lot of effect on economic outcome. Consumer sentiment (a fancy word for mood) is growing worse as the economy of the US grows worse. If you recall the ‘tax rebate’ checks sent directly to the population did not cause much new consumer purchasing, but instead much of the rebate money was used to pay down old consumer debt…which is deflationary since in a fractional reserve system when debts are repaid the money disappears as a function of bank balance sheet/double entry bookeeping.” bates
Yes, repaying FR loans is deflationary however I am talking about an injection of brand new legal tender Greenbacks at par with FRNs. That would not be deflationary. Furthermore, the savers would receive that money too. It would be a just boon for them to compensate them for artificially suppressed interest rates. That might easily stimulate spending too. There is no free lunch so where is the catch? Or is there? Money printing sure can’t create wealth but I’d bet it can prevent the destruction of it, which is now occurring.
“The fact is; The Fed has the ability to create money but it does not have the ability to direct where the newly created money will flow to…especially if it reaches Main St.” bates
Who needs the Fed? I’m talking about new legal tender United States Notes issued by the Us Treasury and mailed to every adult (or via electronic transfer).
“Economics is a soft science, unlike physics, math, chem, etc. In the realm of economics the ‘mood’ of the population is very important because it will effect ‘V’…Velocity of money in circulation (how fast it is spent and circulates), where MV=PQ. There can be no guarantee that newly created money will be used for the intention that it was created.” bates
Debtors would normally pay down their debt immediately to forego further interest charges. Savers could continue saving or consume. Banks could lend real money but not create credit (counterfeit). Yes, I love MV = PQ except I prefer MV = PY out of habit.
“I sincerely wish that the solution of too much debt could be solved by your suggestion of the Fed printing more debt (Fed Reserve Notes) and distributing them directly to the people.” bates
That’s not what I recommended as you now know.
“But, I do not rule out the Fed/government trying this tactic, even though they know what the outcome will be.” bates
It is not just a tactic, it is justice and furthermore is Biblical (Deuteronomy 15:1, Leviticus 25).
“The only cure for what ails us is a return of lots of jobs that have been sent to other countries.” bates
Then explain to me how our economy went from prosperity to depression virtually overnight without any physical damage to the economic base?
“Excess savings from labor, placed in savings accounts, and then used to grow the economy, is the only way to lasting and sound economic growth…and even this path is frought with pit falls.” bates
I agree that 100% reserve lending is a way to go. I do not say the solution I offer will grow the economy, merely that it will halt its destruction.
“What we need is adult supervision and it is nowhere to be seen.” bates
Then maybe we should take the Bible seriously with regard to economics. If we had, we would not be in this mess.
I like this post. It is interesting.
I agree with the diagnosis, except that as I mentioned before we already have the intuition that we need to be going WAY BACK beyond the 1890’s to look at the money problem. We are already opening up our Middle Ages history, and looking at it to see how our ancestors were doing business. Good for us.
I do NOT agree with the treatment, as I have already commented.
It is wishful thinking to imagine that we are going to solve problems of this magnitude by sticking policemen behind every corporation and citizen, or building up the tower of laws to a point where… we bottom out the LAW, too, as a viable concept for ourselves…
Hold on to your hats, folks…
I think that the problem is… NOT capitalism, but.. the absence of any ideology to exist as a counterforce for capitalism.
Francis Fukyama wrote a book that he was ridiculed for about the end of history. Francis had an intuition.
That capitalism needed… counterpowers. (Our government is structured around the idea of the necessity for counterpowers…)
I, for one, am returning to the inheritance that MY ancestors provided as a counterpower to capitalism.
Christianity.
After all… there is social control in edicting that unadulterated greed is a SIN.
It… HELPED to keep people toeing the line for several centuries at least. (Careful, I did not say that IT SOLELY was responsible for making them toe the line…)
Regulation ALONE will not solve our problems…
Agree. The only thing the smart amoral scumbags used to fear was the wrath of a kick-ass Deity.
Of course, you’ve got to somehow keep the smart amoral scumbags from capturing the religion (historically, that’s been a real tough one). But, for awhile here in the US, the rich Protestants were (at least) a bit guilty about showing their wealth in public. Hell, I’d be happier if the nobility just showed a bit less bling in public
But, America’s favorite Deity has been pissed out of his mind about “those fornicating harlots” for about 60 years now. Fornication – and the proper placement of the male’s 5th appendage – seems to have replaced greed as his primary obsession (some suspect it’s those “uppity liberal women” he’s pissed at).
Perhaps the liberals could capture the Deity from the conservatives and get guilt back on the short list again.
Good point about the old-fashioned idea of SIN.
“Proud to be an American” — Pride is a sin, no?
(try ‘lucky to be an American’, that’s more accurate)
I’ve been calling the Republican party of recent years (maybe since Reagan or so) the “God & Mammon coalition”. Their slogan would be: “God talk for the poor, bucketloads of cash for the rich!”
I keep waiting for the ever-so-vain-and-pompous so-called “Christians” who populate the airwaves to remember that Jesus had a few choice words for mammon-worship. But those loud-mouthed trumpet-sounders seem mostly to be scammers who know perfectly well there’s more money to be made in boosterism for the corporate oligarchy.
In Cultural Studies there is the notion of the psychic map, which refers to the way we mentally map the spaces we reside in. The psychic map is a diachronic notion – it traces the way we internalize space over time into manageable zones. It can be typically applied to the mapping of urban spaces – when you first move to a new city, there are no points of reference to guide you, but over time you create an internal map of the city, a kind of living image, which you use to manage your environment.
—–
If we take the above as a T/F statement and apply it to economics ideology, me thinks we could induce better mapping for tourists and travelers. This hole discourse over humanity’s need to classify its actions in a rather cerebral some what off world manner_seems to end up_in a un-ending maze of dead ends of group or individual think.
You would think with our computational power these days some one or group could build a sat-nav to rectify this dilemma, with up dates for more granular imaging, points of interest, historically important, etc…etc…one map for all to read and then comment on the scenery, how much they enjoyed the trip.
Skippy…my_life_as a rat!
PS. could some one build a economic compass that is impervious to ideological field induced false readings, its hard to shoot an azimuth with the needle bouncing between me_I_we_us and reduces me to visual land marks aka event horizon_if_observable for the trees aka short termism. BTW the old trick used to be never to walk around the right or left side of trees as it veers one of their azimuth, better to alternate until better line of sight can be established.
Seems we are going to the right all the time now…sigh, and that is where our ancestors came from, we know how that worked out.
There are regulations already on the books that haven’t been enforced. How do you propose we (The People) ensure our leaders and the appointed regulations do their jobs?
Take Two: Carly Fiorina Hot Mic Gaffe
http://www.youtube.com/watch?v=MoB3AxtF6kg&feature=player_embedded
I can’t state the problem in sophisticated abstract macro economic models and charts, but for me, the identified culprits are a combination of elite country clubs, access to other people’s money, and limited liability, especially limited liability.
Matt 18:23-35
“The last thing we need is to convert a highly emotionally changed debate about nearly incomprehensible financial regulations into an even less coherent argument about theology or race. ” Seth
I like you Seth. Good point! touché!
“As the interference runner for the Peterson institute, Simon Johnson has pointed out…”
There. I fixed that for you.
It looks like NOBODY got my point, hein ?
The idea was… ideological COUNTERPOWER.
Building DIVERSITY of ideology.
I don’t share people’s contempt for ideology here.
I am not waiting for what I believe in to deliver presents under the tree in the morning.
Some ideologies are more rational than others ?
When man is irrational anyway, and WILL CONTINUE to be irrational whether we like it or not ? Thank God for that, too.
Skippy ? Making ONE map ? THAT’s the tower of Babel…
I hope I don’t live long enough to see THAT totalitarian effort pan out…
On the subject of the Church….
I have already said here, and I will resay that it is NOT because our institutions and our leaders betray ideas as beautiful as those that appear in the Christian Gospel that there is not food for thought in it.
Disqualifying the Gospel because our leaders don’t live up to it, and betray it is… throwing out the baby with the bath water.
And we need to crack the history books because the Catholic Church is JUST NOT the monster we want to paint it out to be. Sorry. Lots of historical propaganda around that one.
If we KEEP wanting perfection in this world, WE WILL ALWAYS BE DISAPPOINTED. If we keep wanting our leaders, our economics to be perfect, we will ALWAYS be disappointed. (And I’m NOT saying that there is no reason to be angry, careful… I am talking about the role of OUR disappointment in all this.)
That is the biggest problem here, I feel.
Our disappointment. It makes us very.. childish and vindictive.
Not up to the task in front of us.
i personally would not like events to take the course they did during the French Revolution for example. Taking out.. the King in France was A BIG BIG MISTAKE… One that France may STILL be paying for, in fact.
And HEARING the rhetoric that Adolf used to convince the German people to follow him along with some of the same ideas… THAT makes me kinda nervous too.
Doesn’t it make YOU nervous ??
I’ll just take your word for it, thanks.
No doubt. You aren’t Catholic by any chance, are you Debs?
And as long as we’re at it, what’s the lo-down on Joe Smith and his branch of the faith? (thanks in advance)
“It looks like NOBODY got my point, hein ?
The idea was… ideological COUNTERPOWER.” Debra
@Debra,
Does truth need a counterpower? Well maybe. How can truth be revealed otherwise? Liberty allows any number of counterpowers if we will just agree to respectfully disagree. Who has a corner on truth?
As for the Roman Catholic Church, let it sink or swim as the Lord wills. Let’s not prop it up just because we think we need a counterpower.
Aw, Francis, I think that you have got swallowed up in the truth debate.
I don’t believe in… the truth.
For as far back as I can see, people have been killing each other over the truth.
I don’t like that.
Is the truth worth killing people over ?
And.. if it isn’t worth killing people over, WHY BOTHER WITH IT ??
JESUS didn’t say that… (I don’t think. And if Jesus DID say that, then that is a part of HIS point of view that I am willing to disagree with.)
I allow myself the incredible LUXURY AND FREEDOM of not allowing ANYONE to tell me what to think, you know. Not when I can use my neurons, and my experience to figure out on my lonesome what I believe. And… to change my beliefs as events come up to infirm what I previously believed, for example.
Besides… believing, and believing IN are not the same thing at all.
I’m NOT propping up the Church. There is a difference between… the Gospels and the Church. Can’t you see it ?
It all comes down to… WHAT you believe in and what you are willing to do about what you believe in. WITHOUT killing. For me, at least.
It comes down to… the power of the people AND particularly THE UNIQUE INDIVIDUAL.
The people who believe IN SOMETHING. NOT the power of the people who believe something…
But I will say… that I do NOT believe in the law.
The law is… a tool. That means that it is secondary. The rules come AFTER what we believe in, and believing in “the rules”, well… that doesn’t take us nearly as far as… believing that man has an inherent capacity for good AND evil. And that HE is not evil OR good.
Ironically enough… I think that believing IN the law is inversely proportional to believing IN man, what he is capable of for better AND worse.
The MORE we believe in the law, the LESS we believe in man. (Personally, I have already said here that for structural reasons, I find it essential to couple belief in man with belief in God. This position is complex.)
I don’t see ANYBODY on this blog who is not nihilistic about what man is capable of. Who sees what he is capable of.. for the better. How he can be… noble. Altruistic. Self sacrificing, for instance.
And THAT is what is taking us down. Lack of hope. Nihilism and self destructive tendancies.
Lack of hope destroys your capacity to find imaginative solutions to problems.
It instills… inhibition.
A BAD thing, inhibition. (Yeah, that’s a judgment, I’ll admit.)
The arrogance of biblical man confounds me, too believe that the Universe cares what humanity needs or wants in order to pave its road to understanding, in and of it self, the Cosmos bellows SEE ME and yet we moan there is not enough MONIES to fix our problems.
When we put aside our folly’s and learn about what surrounds us and how to live with it, with out killing it, then maybe we will get some where.
Skippy…our ancestors lack of definition for the sky’s, day or night, became the very impetus for both Science and Deity’s, one rooted in measurable observation, the other in fearful conjecture, take your pick.
Debra,
You state:
“I don’t see ANYBODY on this blog who is not nihilistic about what man is capable of. Who sees what he is capable of.. for the better. How he can be… noble. Altruistic. Self sacrificing, for instance.”
A bit sweeping wouldn’t you say? Or is your reference only for the respondents on this particular topic?
Whether this economic paradigm is dying or not is debatable, but what can be put in its place – a viable alternative – is what is wanting. Going to leave it at that for now as I don’t have the time to run with this now… But previous posts pointing to ESP – equitable, sustainable, and profitable – with a bit more “meat” on the bone is where “we” might want to start, focusing on GENDER, the ENVIRONMENT, and LABOR. Can’t elaborate now.
Give just a little bit more, and take a little bit less.
I like sweeping generalizations, Mickey.
They go with my rather.. dramatic personality that I don’t feel like apologizing for (any more…)
Ooh… that “gender” word..
I still feel that we are walking down the primrose path to totalitarianism with the best intentions.
It ALWAYS works that way, you know.
You didn’t really think that our ancestors started out wanting to fuck things up ??
Hindsight is always 20/20… (an illusion of course, but “modern man is incredibly hubristic. In general…)
Skippy illustrated my point about the ideas behind our nihilism with his remarks about our place in the cosmos.
This place (in the cosmos…in our heads…) is not a particularly uplifting one.
It is not good for our collective narcissism.
And the shrink says that… narcissism is a good thing.
Try getting along WITHOUT it and see.
Sounds more like frustration and despair on your part – not faith and hope – undoubtedly attributable to your self-proclaimed DRAMATIC personality cult…
It’s easy to see why you move from blog to blog… Thanks for your insight. Bon voyage!
“Is the truth worth killing people over ?
And.. if it isn’t worth killing people over, WHY BOTHER WITH IT ??
JESUS didn’t say that… (I don’t think. And if Jesus DID say that, then that is a part of HIS point of view that I am willing to disagree with.)” Debra
The truth is worth not killing people over it. As for Truth:
‘Jesus said to him, “I am the way, and the truth, and the life; no one comes to the Father but through Me. ‘ John 14:5-7 (New American Standard Bible)
Yep, Jesus said that.
I believe that… when Jesus was saying that, he was affirming that the ultimate VALUE of existence lies within the INCARNATED FLESH AND BLOOD UNIQUE INDIVIDUAL, and not some abstract disembodied idea that we will kill each other over. (That idea could be “God”, moreover… it has been in the past…)
Look at what Jesus says.. he says… “I”. “I” am…
The incarnated flesh and blood individual. The SUBJECT “I” (Word…) incarnated in the flesh and blood individual.
And unique. The supreme value of… Judaism.
Unique for.. “Hear, o Israel, the Lord our God is ONE.” One in the sense of “unique”… NOT DUPLICABLE. NOT IDENTICAL TO ANY OTHER ENTITY.
But for sure… Jesus was a GREAT intellectual, teacher, and poet. He had a poetic gift with words, and he will NOT be pinned down. That’s why what he said has stuck with us, and allowed us to dream for such a long time, by the way. He refuses to be stuck under a microscope and pinned down. Impossible to fix ANY ONE meaning to what he says. It’s too rich. Too polysemic.
Skippy… it is unfortunate that your vision of God is that of a tough guy daddy ready to beat up his disobedient progeniture at the drop of a hat.
That is… a bit of propaganda that you have been fed. Sorry.
And there is a route other than the POLARITIES you outlined above (“fearful conjecture/measurable observation”). There are more alternatives than you seem to believe..
(Lol, Francis, I said “the truth is NOT worth killing people over it”, and you seemed to quote me as saying… ” the truth is worth not killing people over it”. Was that intentional ? It doesn’t mean the same thing…)
Debra said…Yep, Jesus said that.
—–
You have had conversations with him[?] or parroting what some one said, he said, in one of the numerous revisions decades too centuries after his death.
If the above is NO then every thing you have stated is conjecture of the worst sort, extended fabrication premised upon someones conjecture of which there is no interview to verify aka fact check.
Aw, Skippy, you went down that “historical truth” (!!!) rabbit hole.
Diversion, I say.
The idea of a “fact” is a diversion too.
What’s so bad about going back to dust ?
Since when was THAT the end of the world ?
How about… going back to dust and NOURISHING the earth to grow new stuff ? (My daddy was a forensic pathologist and I compost…)
Who was Jesus ? I don’t know… Is it important for him to be God ?
I don’t know. I like what he said. It gets me out of bed in the morning.
That’s a good thing…(for me.. Actually what he said gets a lot of people out of bed in the morning…)
Actually Francis, you should check out what I’m writing on my (and Toby’s) blog so we can wrangle about this so as to not irritate jdmkay who likes HIS paradigms more on topic than I like mine…
We can talk about “the Word” in a quieter more intimate setting..
Hope Toby doesn’t mind…
“We can talk about “the Word” in a quieter more intimate setting..
Hope Toby doesn’t mind…” Debra
Nice try but I recognize a Delilah when I hear her. Can I expect the Federal Reserve to try to bribe me next? Not that I’d accept but it would be nice to know I’m not wasting my time.
Some cucumbers are pickled, where as others choose to stay natural, ideological or theological fashions come and go with humanistic climate change, need to contend with perceived needs unfulfilled.
40 days and nights are a cake walk, try 6 months with out human contact and see what pops out the other side.
Rabbit holes you say, you mean the one that make up stuff for the lack of a better explanation, fear change, vertical structure, makes promises, breaks down the entire universe in to two camps, has more loopholes than the current regulatory structure in DC etc…etc.
Skippy…Thanks debra, but no thanks…but I’ve seen what it offers first hand and in its many guises around this world. It’s much safer to just admit humanity is half crazy and has a long way to go before it can manage its actions, with out all this killing and desperate flailing.
“But for sure… Jesus was a GREAT intellectual, teacher, and poet. He had a poetic gift with words, and he will NOT be pinned down. That’s why what he said has stuck with us, and allowed us to dream for such a long time, by the way. ” Debra
If Jesus is not God then who else could He possibly be?
As for our flesh, the normal destination for that is back to dust. Sorry, but a body centric point of view is meaningless.
How about the Torah? I am astounded by it. The truth will set you free and I believe it is found in the Old and New Testaments.
“I said “the truth is NOT worth killing people over it”, and you seemed to quote me as saying… ” the truth is worth not killing people over it”. Was that intentional ? It doesn’t mean the same thing…)” Debra
Yes, I said what I meant to say.
I wisecrack from time to time.
Consider it an attempt at humor, which I wish I were better at.
As for Delilah… I’m 54 and, well, that was rather flattering, shall we say.
That was an invitation I extended. Nothing more. (But frankly, with more than 10 000 kms between us, and we not being gone to our bodies on the Internet, how much of a risk IS THERE anyway ?)
Since you know your Torah so well… you know that GOD was the initial seductor. It… sets things in motion.
Moving from blog to blog ?? I’ve hung out at the same blog for over four years now.
NOT this one because it’s new, and the topics change too fast for me.
We’ll see if I stay… No promises.
“Since you know your Torah so well… you know that GOD was the initial seductor.” Debra
Well, He did seek an occasion against the Philistines. Notice how principled the Lord is. He clearly wanted to lift the oppression of the Hebrews but yet He needed a justification. The Lord is fascinating. He cannot be pinned down as you say because He is Alive.
As for knowing the Torah, I must keep reading it because either my memory is faulty or the Lord rewrites it in real time. In that sense alone the Word of God could be called “Living” as it is in Hebrews 4:12.
Ya lost me there.
You sure you don’t want to be seduced ? ;-)
Thanks dear but I’d be wise to stick with believers even though I am fascinated that you love Jesus. BTW, He is in the Old Testament too if you like Him so much. The Bible will stretch your mind but it will also restore sanity (slight, well intentioned hint) :)
Ahhh… you know, Francis, when I came back to the States four years ago I was truly amazed at all the time Americans seem to spend passing diagnostic judgment on their neighbors..
Could it be that… diagnosis is yet another MODERN strategy for this ?
A strategy that makes it… more acceptable ? The more things change, the more they stay the same, you know..
As a former shrink who has walked through the valley of the shadow of death, and intimately knows… the shadows, I don’t point a diagnostic finger any more. Or try NOT to, to the best of my ability.
I don’t believe that Jesus is in the Old Testament.
I’m not sure that many Jewish people would thank you for THIS perception, either, while we’re at it.
I believe that Jesus truly introduced a paradigm shift into Judaism, and that in the end, well… even HE couldn’t ignore that, and the consequences that his.. Jewish HERESY entailed. (Heresy : you come to the father THROUGH me. Incarnation itself : heresy.) Those consequences took him out.
There are things about the Old Testament God that I love and respect, and growing up in the Protestant Church I was bottle nursed on the Old Testament, but well, Jesus himself is less interested in vengeance.
And as for love, well, you know, the heart has its reasons that reason ignores, doesn’t it ? Pascal.
I am not an expert on the Bible. Not at all. What I don’t know has already filled many, many volumes.
But… unless you are a Jewish rabbi working full time on it (and that’s just the OLD testament…) YOU aren’t either. NOBODY, and certainly no Christian, knows the Bible the way a Jewish rabbi does…
And quoting from it… doesn’t necessarily mean that you KNOW it or understand it.
Funny.. I had a friend on another blog who was passionate about fractals. And he strung together observations about fractals everywhere.
But.. he seemed content to stick them down without tieing them into the discussion. That’s not really critical thinking according to my understanding.
I have attempted AND continue to attempt constructing my own personal beliefs. (Life is.. short and long, right ?)
That means… picking and choosing. And of course… I don’t and CAN’T know everything. That wouldn’t be human, now, would it ??
I think I will dig into some analysis of the Genesis creation story from a structural linguistic standpoint on my blog one of these days.
You are welcome to check it out. When/if you have finished disqualifying my thinking through diagnosis…
Dear,
I would love to spend loads of time correcting your thinking (if our time together was otherwise rewarding, I have needs unfortunately) and I don’t judge you. But truly I did attempt to diagnosis you, not as a put down but because I sympathize. I was once an outrageously free thinker too. Now I’ll just refute one of your assertions:
“I don’t believe that Jesus is in the Old Testament.
I’m not sure that many Jewish people would thank you for THIS perception, either, while we’re at it.” Debra
Isaiah 53:
Isaiah 53: Isaiah 53 refers to Jesus Christ because New Testament writers freely relate the prophet’s words to Christ. John 12:37-38 and Romans 10:16 use Isaiah 53:1 to state Israel’s rejection of Christ despite His many miracles in their presence. Matthew 8:16-17 describes Christ’s healing ministry, using Isaiah 53:4 to show Jesus assuming our infirmities and carrying our sorrows. Luke 22:28 reminds us that Jesus was familiar with suffering, as Isaiah 53:3 noted. Yet, as John 14:27, 15:11, and 16:33 stress, Jesus turned all His adversity into victory by submitting it to God’s will. He knew the cost imposed by ministering (Luke 8:46), but never whimpered or complained about how tough life had been, or if He had known it would cost so much, He wouldn’t have come. Instead, at the end, as He had throughout His life, He bequeathed His JOY and PEACE to them and us
Bah…more at:
http://www.allaboutjesuschrist.org/isaiah-53-faq.htm
I’ve got time so I’ll attempt another refutation though on shakier ground since I myself am not Jewish as far as I know (could be though and would not mind in the least).
“But… unless you are a Jewish rabbi working full time on it (and that’s just the OLD testament…) YOU aren’t either. NOBODY, and certainly no Christian, knows the Bible the way a Jewish rabbi does…” Debra
True, maybe, since I don’t read Hebrew. But in theory, as a Christian, indwelt by the Holy Spirit since all Christians are thusly indwelt, I could claim to understand it better. In fact, I see the Lord Jesus Christ in the Old Testament just as I see Jehovah in the New Testament. I find the two Books entirely consistent. Vengeance (see The Book of Revelation) is in the New Testament too and it belongs to the Lord, Jesus Christ and love, mercy, kindness, compassion and forgiveness is in the Old Testament as well as the New Testament.
“And as for love, well, you know, the heart has its reasons that reason ignores, doesn’t it ? Pascal.” Debra
I would say “The heart has reasons that it ignores reason.”
OK, I’ll visit your blog. Link?
How’d we get from:
>> Death of a Paradigm
to
>> Read your history, Catholic Church ain’t so baaaaad
Reminds of Robin Williams:
“Re: “liberty” thing… whole lot of what got us here was in name of “liberty” and freedom, w/a bit of “patriotism” thrown in for good measure.” jdmckay
What got US here is not liberty but the following:
Government backed fractional reserve banking in a government enforced monopoly money supply.
That is the root. Kill that and we will have a golden age for a while,imo.
Yes, discipline will be required and cooperation too but let’s have a firm, principled understanding of what the problem is first. The most pressing thing though is to keep the patient from dying while we fix the system. A legal tender bailout of EVERYONE in the US would buy US time.
I don’t think so, no.
Any system is corruptible… any one. The integrity of the system is maintained by the integrity of it’s participants. When enough critical mass takes hold on the criminal side, things break down. When they get hold of power levers, much less convince the little people it’s all ok, things stay that way.
We got here because of thieves in high places. And whether you acknowledge it or not, these guys sold current system wrapped in “liberty”. Hell, CATO staffed Bush’s 1st WH.
“Any system is corruptible… any one. The integrity of the system is maintained by the integrity of it’s participants. When enough critical mass takes hold on the criminal side, things break down. ” jdmckay
Certainly. But the current system is a trap even for the bankers who run it. They literally don’t know how to do money properly because the current crooked, unstable, unprincipled, secretive, coercive system has worked well enough over the centuries.
“Hell, CATO staffed Bush’s 1st WH.” jdmckay
Ah yes, the Belt-way “libertarians”. I share your disdain.
Down South, in some of his recent blog posts, has been quoting some of the insights of Michael Allen Gillespie in his recent “The Theological Origins of Modernity.”
Near the end of his analysis Gillespie states that “What actually occurs in the course of modernity is thus not simply the erasure or disappearance of God but the transference of his best attributes, essential powers and capacities to other entities or realms of being. The so-called process of disenchantment is thus also a process of reenchantment in and through which man and nature and infused with a number of attributes and powers previously ascribed to God. To put the matter more starkly, in the face of the long drawn out death of God, science can provide a coherent account of the whole only by making man or nature or both in some sense divine.”
In my opinion Gillespie gets at the key cultural issue involved in the transition to a new political/economic paradigm.
Again this issue is extremely sensitive for both the libertarian and liberal communities. The libertarians seem to belief that the market offers enough cultural glue to hold things together while the liberal community seems to believe that we have somehow transcended what they call religious superstition and the issue of what, if anything, we submit to is not that important.
My guess is that how this issue is reconceptualized and articulated in the 21st century may be the key to shifting the present economic/political paradigm.
Down South, in some of his recent blog posts, has been quoting some of the insights of Michael Allen Gillespie in his recent “The Theological Origins of Modernity.”
Near the end of his analysis Gillespie states that “What actually occurs in the course of modernity is thus not simply the erasure or disappearance of God but the transference of his best attributes, essential powers and capacities to other entities or realms of being. The so-called process of disenchantment is thus also a process of reenchantment in and through which man and nature and infused with a number of attributes and powers previously ascribed to God. To put the matter more starkly, in the face of the long drawn out death of God, science can provide a coherent account of the whole only by making man or nature or both in some sense divine.”
In my opinion Gillespie gets at the key cultural issue involved in the transition to a new political/economic paradigm.
Again this issue is extremely sensitive for both the libertarian and liberal communities. The libertarians seem to believe that the market offers enough cultural glue to hold things together while the liberal community seems to believe that we have somehow transcended what they call religious superstition and the issue of what, if anything, we submit to is not that important.
My guess is that how this issue is reconceptualized and articulated in the 21st century may be the key to shifting the present economic/political paradigm.
Really interesting. But isn’t there a problem in the idea of.. “science” providing a coherent account of the WHOLE ?
Doesn’t that simply shift science into the place “liberated” by God ?
And then science becomes.. a religion ? (I think it already has, by the way.)
(I like to say… throw God out the door, and he comes back in through the window…)
How does science make nature “divine” ? Look around you at the “natural” world. Is our modern society treating it with the respect that “the divine” normally elicits ? I think not.
Are you saying that you believe in… science ? That’s called.. scientism.
In the medieval paradigm, all knowledge emerged as knowledge of God, and guaranteed by God.
I believe that the long, slow rise of analytical science with the Renaissance (secularization) constitutes the gradual draining of what is SUBJECT towards the OBJECT side of the grammatical phrase (subject VERB object). The monotheistic vision of God is a vision of God as PURE subject, and as such the garant of the SUBJECTIVITY of MAN too. (To avoid man becoming… pure object.)
Remember that.. man was created in “the image of God”. That means that man’s identity in our tradition depends on.. God’s identity.
The convenience of God is… that it is possible to imagine “him” as an incarnate being at the same time as he is an abstract entity, an idea (in the Christian tradition, not in the Jewish). Big theological battles were fought with cause, over the trinity. I can’t say any more about this ; I am ignorant about it.
And incarnation and identification go together. And identification creates a feeling of connectedness. Empathy.
“Science” just doesn’t turn me on the way… Jesus does. Sorry. It’s hard to identify with… science.
The major problem I have with these ideas is that it is essential for us to maintain DIFFERENCES in order for our words to mean, and… all of our social structures are based on our language. When too many of the differences disappear, or when certain critical differences disappear, well… the social body breaks down AS language and meaning break down too.
And the distinction/difference creator/created seems to be a universal and fundamental one. It is and has been a fundamental one for our civilization. If we attack this difference, well, we have more than two thousand years of history behind us.. We ignore it at our risk and peril. Ignoring it constitutes hubris. A Greek word. The Greeks too, were conscious of what the elimination of CERTAIN differences set off. High tragedy.
I don’t think, at this time that we can emerge AS A CIVILIZATION from our monotheistic tradition (and we have been trying for a while, now… WW2 was ALSO about trying to emerge from the monotheistic tradition). I used to think maybe, but, now I don’t think so. We will “survive”, but not as a living civilization. Read Joe Bageant for his take on it… Or Jacques Barzun.
Last problem. Man is an animal that does not live by bread alone, or trade. He needs something (and often someone…) to believe in.
Ignoring that is… folly. And hubris.
Yves,
Thank you for another fine column. I am coming to the conclusion that Milton and the rest of the Chicago school were not just wrong, but worse, they were unknowingly shilling for the money classes. Their supporters were in on the con, and Wall Street, corporate America, and the comfortable found in their teachings the theoretical cover to hide under to enable them to pursue their unfettered greed. I want to see capitalism survive and thrive but with the necessary adult supervision. Hopefully. the Obama administration will be able to pull another rabbit out of the hat, as they did with HealthCare.
Debra
Your thoughts on the “draining of what is subject towards the object side” to me is an excellent summary of the process of modernization and the system of domination it imposes.
Any alternative cultural/political/economic paradigm which I would view as attractive would be involved in asserting a real not an artificial subjectivity.
Again, you thoughts on the importance of maintaining difference also strike me as a necessary ingrediant in any cultural shift, especially when one thinks of the two main
homoginizing forces of modernization–the market and the state.
As far a hubris, I personally struggle with it all the time, although three-way kisses with my dog and wife sometimes come close to nirvana!
LOL. I live on a busy street and we go off on vacation for too long, otherwise I would have my own dog to kiss.
As it is, I have a pretty good time kissing other people’s dogs…
True, Indian bureaucracy is hardly a role model, but the point is India’s govt controlled Central Bank (RBI) could very well have followed the western central banks and doomed the economic progress of the country for a decade. Indeed then RBI chief was under pressure from private banks and international banks in India and preached to by every visiting western delegation. The fact that he took his own decisions (wisely!) and saved India’s life (literally for many who would have dropped right back under the poverty line) is quite remarkable on its own – irrespective of other structural problems india faces.