Tuesday, December 21, 2010

re: Failure of Economic Happy Talk

This is in reply to an article at today's Daily Bell. The original article can be found here:


"...but the change in the global social structure has created a psychological crisis in the US."

I don't believe Americans are having a psychological crisis because the Chinese or Indians are catching up. Few Americans have ever even seen anything of these countries, and for those who haven't, most likely continue to be blinded by the arrogance of the now certainly false American exceptionalism. No, most Americans are either a) not aware enough of the world around them, or b) believe the US is so far ahead of the unwashed third world to say the psychological crisis is caused by this reality of the world catching up.

Certainly, for the source of any psychological crisis one need look no further than home, both in today’s stories and those passed down by parents and grandparents. Such a national psychosis is not born in one’s own head, but is consciously and subconsciously passed along and increased from one generation to the next. For many, the dots are not consciously connected, yet certainly they must somehow be related…to the extent one is even aware of the history.

The Constitution. A wonderful document. Yet in it was enshrined the idea of slavery. Well, it was the best we could do, many said. But was it? Why did anything need to be "done"? And to enshrine this sickness so quickly after "We hold these truths to be self evident..."

The war of 1861. Lincoln saved the republic. Or did he? There are certainly many from that generation who believed otherwise: both in the north and in the south. These were the children of the founding generation. They understood freedom. They understood checks and balances. Many were not so easily fooled. Of course, in the aftermath, all that was left was to go along and get along. But this knowledge – a very conscious knowledge – did not leave them. One way or another, they passed this on to their children.

The terrible year of 1913: the income tax, direct election of senators, and the Federal Reserve all hoisted on the people in one fell swoop and all in a less than transparent manner. What harm, under the surface, might these have caused to a people who still understood “real” money and the freedom from paying homage to the national government? What about the nagging feeling that the control was now more permanently moved from the local state to the national government, especially to those somehow aware of the true implications of Lincoln’s war? These events were immediately followed by the Great War. For some reason perhaps not quite understood by the masses, the US got involved, despite a population at that time quite firmly against such foreign entanglements. Was this somehow connected to the events of 1913? Somewhere, if only in the subconscious, many must have struggled with this question. These people were the same people who only a short time before lived in a reasonably uncontrolled society. To them, perhaps the full picture was not clear, but certainly something inside was beginning to nag them.

Within a generation, the suffering of the Great Depression. But the ‘20s were roaring. How could this happen? A decade of financial calamity. Still not resolved, they find themselves maneuvered into fighting a war that, prior to the day that will live in infamy, few wanted to fight. This war, always called “the good war,” resulted in the deaths of millions and contributed to the subjugation of hundreds of millions behind an iron curtain. Somewhere, in the minds of anyone with a pulse, nagged the question: Is Hitler really worse than Stalin? Especially when, almost immediately after the war it was “decided” that Stalin’s empire was the new enemy. This could not be conciously resolved.

After the war, seeming calm for a time. However, in order to mask the underlying decay brought on by events earlier in the century, a new enemy was created. A Cold enemy. Wars, some larger, some smaller were fought indirectly in places few heard of. The Great Society was born, a race to the moon for further diversion. The gold standard, no longer maintainable, was ushered off in a summer day in 1971 – the second major default since the advent of the Fed. But, this only unleashed the economic calamity, culminating in a decade of high inflation and high unemployment, only resolved (on the surface at least) by high double digit interest rates and two additional significant recessions. Again, the dots were not connected consciously by most, but the mind is a wonderful instrument, able to subconsciously understand and integrate what the conscious does not.

The ‘80s. Reagan. Happy, upbeat, defeat the commies. Stock markets only go up. Bond markets only go up. Real estate only goes up…well except for a nasty little downturn in the early ‘90s. But look at how quickly that was “fixed.” Debt crisis in Mexico. Debt crisis in Asia. Wait, why is the US Fed involved in these? Well, never mind: we have dotcoms, we will all retire as millionaires. But perhaps questions lingered deep down inside. Then, another blowup in 2000. The market crashed.

September 11. Somehow the story doesn’t quite make sense. Some are quite aware and make a point to say so. Qualified engineers, for example, state that buildings cannot collapse like this. Other point out a collapsed third building that was not hit by anything. Where are the airplane remains? But for most, the policy is: Don’t ask, don’t tell. This may pacify the conscious mind, but the subconscious is not so easily fooled. The diversion comes: here comes a real estate boom to save the day. And we can all buy new cars and flat screens every year. There is no calamity too large for this wonderful machine. Happy days, but is the mind fully content? How can it be? Too many unresolved traumas passed along from one generation to the next.

2008, the economic charade is fully exposed. No happy retirement, no social security, no Medicare, no 401K. Heck, no jobs. But they do see theft. From the Fed to Wall Street. From the government to the cronies. They conclude there is little to be done about it and how hopeless they truly are, or they don’t want to admit the true ramifications behind the facts of the cronyism…at least not consciously. Somewhere deep down inside, they know the system does not work for them; it is designed to use them for the benefit of others. They know that what they have been taught over a lifetime is false, but who can easily admit that the lessons of a lifetime were, in fact, some sort of brainwashing? But subconsciously they know it is over, the lessons past along subconciously from one generation to the next tell them this is so. The only question is when, and exactly how.

They know, deep down inside, that they are staring a kind of death in the face, without knowing anything of the means or the timing. Only knowing, somewhere deep down inside, that the one they trusted to be their friend and to take care of them, is the one who lied to them all along and has brought on all this pain.

They have known this through several generations, going back to their grandparents in the time before 1913, perhaps even before 1861 or 1789. Such psychological trauma does not spring forth in one generation: it takes several generations of abuse. Whether or not parents know it, they pass this on to their children, and on it goes generation after generation.

The US does not have to look outside for the source of its psychological crisis. It was homegrown, over generations, with the lessons subconsciously passed from one generation to the next.

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