“During times of universal deceit, telling the truth becomes a revolutionary act.” George Orwell
In a recent speech that got a lot of attention for the wrong reason, Barack Obama cited various things that help people directly and provide a functioning society where it’s possible for people to succeed at things like starting and building a business; public schools to educate them, roads and everything under the heading of “infrastructure”, even the internet (a DARPA project). He was pointing out to people, you didn’t build those things yourself, and they did help and do help you. People snipped out a pair of phrases from their context, and with the way he phrased the selected words, started saying “Obama says you didn’t build your business!”.
No, he didn’t. Even worse, it’s virtually impossible to explain to people who insist that he did.
(Incidentally, there are people who would refer to that particular short segment of Obama’s speech as a “gaffe”, a term that’s become a bit overused, but the only “gaffe” there is basically that he failed to phrase what he said in such a way that it could not possibly be misunderstood by anybody.)
What he said and meant don’t matter to them. They’ll believe what they want to believe. In this case, they’ll carefully snip phrases out of context to make it appear to be something much different, when you parse them alone, and insist that the speaker meant something very different, because it fits their internal model of what they want to believe he meant.
This is the kind of thing we get from people stuck in their tightly bound bubble world saturated by the noisy echo chamber of Fox News, AM talk radio droning, and the rest, where anybody existing outside that bubble are “leftists” with “liberal media bias” and “leftist radical propaganda”. They’re locked in.
But things just get weirder. Today, I find out that the GOP convention in Tampa is going to have a theme slogan: “We Built This“.
The punchline? It turns out that the arena where the convention is being held was built with 62% of the financing being public funds.
That’s just hilarious.
I got to thinking about the whole idea of people living in their own little bubbles of isolated existence, and a secondary item that came to mind was the notion of assorted financial/economic “bubbles”.
You know the stuff. We had the “housing bubble”, we had the “dot-com boom” (bust) bubble. More recently, we’ve had a “financial bubble”, and that doesn’t seem to be referred to as a “bubble” so much, and it’s extremely odd that so many people still refer to where we’ve been for the past four years or so as a recession. What has happened is a “recession” about like World War II was “a disturbance”.
It just astounds the hell out of me how many people still just don’t seem to grasp what happened, and the repercussions of it all. In the political lunacy that infects the US now, naturally, people try to make political power grabs by pointing at President Barack Obama, who walked into the White House in early 2009 as the financial train wreck was fully in action, and say “he’s been president three and a half years now, why hasn’t he fixed the economy?”. But, then, people were calling the mess “the Obama economy”, or at least Fox News and Republican politicians were, a few months after he took office.
Occasionally, I’ll take a chance to sit and watch some of whatever happens to be on at the time on CNBC.
I always feel a little weird, feeling the risk of becoming just ridiculously presumptuous and being regarded as a complete douchebag, any time I find myself needing to comment on some things affecting us in the realm of economics and finance, while I really know so little about it, when you get down to it. The thing is, while, on the one hand, what we’ve found ourselves in is incredibly, just incomprehensively complex, there is so much that should be more apparent to more people. It doesn’t require possession of an MBA or a PhD in economics to get the general picture.
We’ve had a few decades to get where we are now, although many people would argue it goes much further back to even more fundamental things.
Large corporations started a trend of shifting from being large companies devoted to a particular kind of work (that actually made them large companies to begin with) to becoming increasingly large sort of general holding companies where their original purpose (and value) got more and more obscured and dissipated (or even lost entirely) in favor of just doing whatever seemed to some executives to be the easiest and fastest way to accumulate as much money, any way possible, as fast as possible.
Concepts like “leverage” and fractional reserve banking were taken and run to the highest possible extremes, corrupting concepts of value and “wealth” into more and more complex games of debt and trick accounting.
Corporate management losing any sense of goal and purpose other than “cost cutting” gradually degraded or destroyed completely major amounts of the business of making things, and with that, maintaining an repairing things, along with local and regional business.
Eventually much of American enterprise came to revolve around notions of finance and assorted “market trading” as a realm unto itself, separated from ideas of investment in useful productive good work that generated actual value, and an ever increasing binge of perpetual outward expansion in building further suburban sprawl in increasingly shitty (yet progressively more expensive) buildings, both houses and commercial facilities.
People viewing house values as something that would rapidly and perpetually increase bought these, many of them thinking that they could turn around and sell the place and make a nice profit, or extract cash from it in equity loans for various purposes (both serious and frivolous), bringing with it the concept of “flipping” houses as a nice little easy moneymaking venture.
The invention of the concept of “securitized mortgages” was probably regarded as something of genius by more than a few people in the financial world, one of the things that have come to be called “financial innovations” or “new financial products” in an example of both darkly comical euphemism and a fine example of massive hubris and shortsightedness leading to horrendous unforeseen consequences and repercussions.
Financial players looked at the idea of securitized mortgages and figured they could make piles of easy money by offering mortgage loans to anybody with a pulse for large amounts, being able to make money off of the deals whatever happened to the mortgage repayment, because they could immediately sell off the mortgage paper to somebody to throw into securitized mortgage bundles, which other people would then trade back and forth making their own cuts of profit. Apparently everybody involved in any of this any step along the way thought it was just easy money all around. (And anybody who might have been worried about whether the mortgage they just took on might be too much, there was that idea that they could just turn around, sell the place, pay off the note, and have a profit left.)
With the new financial games of securitized mortgages as a new market trading item to play with in games of accumulating money for nothing, financial geniuses created new lurking monsters of financial derivatives that appeared to be even more massive piles of easy money for some people, which actually quickly created all kinds of massive incomprehensible arrangements of debt, depending on how things went.
Then, in 2008, in a time when worldwide crude oil production rates had reached a wobbling plateau, starting around 2004, while worldwide oil demand continued to increase, the price of crude oil reach up to almost $150 per barrel.
The costs of this blasted through everything, virtually all business and personal finances, and among other things, this created severe problems for some people with their mortgage payments.
As people defaulted on mortgage repayments, this, evidently, caused all sorts of things to kick in through the convoluted world of financial derivatives connected to securitized mortgages, and, at that point, choose your metaphor.
People will almost certainly be writing about the era and all that has happened for a long, long time, and it’s no small matter to sort out and analyze, or even describe. The complexity and scope of the effects and repercussions are immense. The first impulse is to say that absolutely no good came of this mess. The only good I can see that might come of it is that maybe it was a kind of shock that woke people up and made them realize just what an insanely convoluted knot of absurd complexity, distorted value, and even outright fraud was created, with a lesson learned to not do that again.
When I occasionally take in a sampling of the barrage coming through a TV from CNBC, I sit and marvel at it all, and wonder. I can’t avoid the immediate and lasting sense that, as I watch and listen to the chatter from a parade of characters and the hosting regulars, watch the barrage of market data fight for attention in an array of screen sections, that these people are living in their own little world, more and more disconnected from reality and reason.
That’s the world they know and inhabit. They really want to believe that this is the real economy, that this is what really matters, no matter how convoluted, emphemeral, and mad it becomes.
It’s interesting and useful to read things written by people with maybe a bit better connection to reality and reason, like, for example, the piece The Stock Market Is an “Attractive Nuisance” and Should Be Closed by Charles Hugh Smith on his blog “Of Two Minds”. Smith continues on in his very next entry on the blog, Spreading Insolvency Around Does Not Create Solvency. Over on The Automatic Earth, another place where you can find people dealing in realism, read What Happened To The Debt?.
People talk about loss of wealth or capital disappearing from the system, but after a while of ignoring assorted PR sales hype and propaganda, and looking at things as they are as clearly as possible (not an easy thing for a variety of reasons), it starts to become very apparent that a lot “wealth” has mysteriously disappeared, “capital has left the system”, because much of it was never really there. It only existed as insanely complex creations of illusions of wealth in interwoven layered systems of debt, piled on debt, piled on debt, counted as assets and wealth, in what becomes something that looks less and less like wealth or assets, and more like the most massive system of accounting fraud in history.
While this monumental mess festers, turning to the TV money people gets comical gems like Larry Kudlow and colleagues and guests babbling about “animal spirits”, and one spit-take inducing pronouncement from some character from Forbes magazine suggesting that transportation stocks are the hot opportunity, because, according to this guy, “energy prices will go down if Romney is elected”. Delusions run wild.
Back in the political circus, the news turns up a story here and a story there about Republican presidential candidate Willard Romney making announcements about his intended “energy policy” if he were elected president, which, when you consider the petroleum situation, apparently consists entirely of delusions and wishes disconnected from reality, pandering to what people want to hear. And people gobble it up like kids who think it’s just great that somebody is offering them ice cream for breakfast, lunch, dinner, and snacks.
There’s an old story I vaguely recall that involves a group of blind men trying to identify an elephant by standing around it in different spots and feeling the thing up. Feeling different parts of the beast, they come up with wildly different, and wrong, answers about what the animal is.
There seems to be an awful lot going on that fits that story. Take a combination of a kind of tunnel vision, and a wish in people’s minds to hold on to some simplistic or even simply false notions about a subject because they think that, somehow, this simplifies their world. Add in a desire to be very careful not to accidentally think something different from their family, neighbors, friends, and associates (or bosses). Pile all that up, and you can count on all kinds of dysfunction and problems.
Evidence of that is piling up everywhere, but the dilemma is that the people suffering the very dysfunction I’m talking about can’t recognize the problems growing from this kind of thing. It’s some sort of negative feedback loop.
In short form, we’re talking about people who have absorbed so many lies, and so much of being told what to think, that they can’t tell which way is up anymore.
“A fire broke out backstage in a theatre. The clown came out to warn the public; they thought it was a joke and applauded. He repeated it; the acclaim was even greater. I think that’s just how the world will come to an end: to general applause from wits who believe it’s a joke.”
A few days ago, I was on one of my occasional grazes through cable television channels, and I came into the middle of some chat on Fox News on a show called The Five. The general form of the show seems to be having a group of people (against all odds, five of them) sitting around the table and just yapping continuously (and pointlessly for most of the time, based on occasional sampling). I came in on the middle of some argument/discussion.
The best I could gather, the topic of the moment was something generally about the fact that for decades, ever since World War II, the United States has spread the US military all over the planet, not so much a military force existing to protect the United States, more of some kind of worldwide military empire. Pundit Juan Williams, who seems to pop up on Fox News often, from what I’ve seen, was trying to reasonably point out that more than a few people elsewhere in the world view all that with some amount of resentment, viewing the United States military covering the planet and trying to dominate the world by force or intimidation or both as not a very good thing. Is this The Good Guys bringing freedom, justice, and peace to the whole planet, or meddling and coersion by bullies pushing around the rest of the world?
Completely predictably, that chat came to a majority concensus that is no surprise on the Fox News Channel; that the United States and our military forces spread all around the world are the Good Guys bringing goodness and right to everyone, and it’s only right and natural to see our nation as kings of the hill of planet Earth.
There’s a whole topic of serious discussion to examine there, not only about that subject, but how people in their cliques and clubs cannot, or will not, step back and try to look at the whole thing honestly. There are masses of people who seem unable to get their heads (and consciences) around a basic human hazard; if you view yourselves as The Good Guys as some kind of inherent absolute, and so anything you do is the right thing, at some point it’s almost guaranteed that you’ll become very profoundly not the good guys, and do terrible harm, because you’ve lost all sense of perspective and critical self-examination.
But that wasn’t the whole thing here. What really made my jaw drop was how that wrapped up. One of the group prompted the close of the topic by saying something to the effect that they should move on from that topic, and move on to something more important, like the subject of addressing and correcting the federal government budget deficit and debt.
They said this, with no dissent from the rest, as if this was a completely different subject.
Tunnel vision bubble worlds don’t get much more stark and definitive than that.
There are all sorts of terrible games of deception going on, delusions of “let’s pretend”, and so much of people lying to themselves and each other that the ability to even recognize reality seems to gone in many people.
I think that an awful lot of problems of failing to come to grips with all the situations that face us probably stem from an assortment of different forms of overspecialization. People so focused on their own little area of expertise, that they’re blind to what’s outside their realm, what they know, what they’re selling, what they would like to believe because they see something as suiting them.
We’re surrounded by all that. We’re full up. Enough. The universe is remarkably indifferent about altering itself to suit us, when we decide to believe some complete fucking nonsense because we think that suits us.